Organigram facility in Moncton (Image: Submitted)

The Supreme Court of Nova Scotia has approved a $2.31-million settlement in a class action lawsuit against Organigram Holdings Inc. over tainted cannabis.

Kate Boyle, the partner with Wagners Law Firm who argued the case before the court, said the settlement is, in essence, a refund of the amount of money spent on the affected product.

“That is kind of the nature of the consumer claim – that are the economic damages arising from the breach of contract and the fact that, basically, class members didn’t get the product they bargained for,” Boyle said.

The settlement will cover a large portion of the refunds for the 3,544 members involved in the class action lawsuit against Organigram, minus any funds they’ve already received.

In 2016 and 2017, trace amounts of pesticides bifenazate, myclobutanil, and malathion – substances that aren’t authorized for use on cannabis plants – were found in some of Organigram’s medical cannabis products.

Organigram voluntarily recalled 74 batches but the class action concerns consumers who bought the tainted cannabis before the company recalled it.

Boyle said Wagners was unable to advance claims of adverse health consequences against class members.

“We attempted to certify the adverse health consequences claims as our representative plaintiff and a number of other class members had complained of a myriad of symptoms they suffered after consuming marijuana that had myclobutanil and bifenazate,” Boyle said.

Wagners initiated the lawsuit following an initial statement of claim filed March 3, 2017.

In the lawsuit, class members alleged that they didn’t receive the product they bargained for and should be provided with a return of the purchase price.

The lawsuit initially focused only on refunds but was later expanded to include personal injury claims, with class members complaining of symptoms while consuming the product.

Boyle said the adverse health consequences claim was certified by the Nova Scotia Supreme Court but Organigram appealed that and the certification was overturned by the Court of Appeal.

Wagner and Organigram wrangled in court over whether personal injury claims were valid in a series of appeals.

In the process, Organigram argued that it was impossible to determine whether it was specifically the pesticides that caused symptoms, or whether it was cannabis use, in general, that caused them.

“We sought leave to appeal to the Supreme Court of Canada, so basically, we exhausted the appeal process with respect to that, but we were denied leave,” said Boyle.

According to documentation from Wagners relating to the lawsuit, that appeal, sought in June 2020, was dismissed the following November.

“We were kind of left with the consumer claims because of the other aspect of the case – it wasn’t allowed to go ahead based on the decision of the court of appeal,” Boyle said.

Wagners and Organigram agreed on the settlement in June, and the Supreme Court of Nova Scotia approved it at an Aug. 31 hearing. Boyle said the first payments to class members are expected to be made in late October.

Huddle reached out to Organigram for comment but did not receive a response before our publication deadline. Organigram, a subsidiary of Organigram Holdings Inc., operates in New Brunswick, Quebec, and Manitoba.

At the time of writing, two days after the settlement was approved, Organigram’s shares on the Toronto Stock Exchange were up 2.2 percent.

Sam Macdonald is a reporter with Huddle, an Acadia Broadcasting content partner.