Article by Grant Robertson, The Globe and Mail
A federally regulated medical marijuana company caught selling products tainted with a banned pesticide that can cause debilitating health problems has been unable to determine how the chemical got into its supply, raising new questions about the oversight of the industry.
Organigram Inc. said on Monday that it has wrapped up an internal investigation into a product recall announced in December, but has turned up “inconclusive findings” with “no hard evidence leading to the source of the contamination.”
The company also said it would offer full refunds to customers who purchased the tainted product, after initially refusing over the past two months to give patients their money back. The refunds will cost $2.26-million, Organigram said, which represents a significant financial hit to company. The writedown is worth slightly more than the total sales reported by Organigram in its most recent quarter.
The decision to refund customers’ money comes as Organigram faces the prospect of a class-action lawsuit over the tainted cannabis, which some patients say has left them experiencing serious health affects, including lung problems, rashes, and persistent nausea and vomiting. At least two law firms are looking at launching actions that would force the company to surrender profits related to the tainted product.
Organigram is one of three medical marijuana companies caught up in a banned-pesticide scare that has swept through the medical marijuana industry and raised concerns about Health Canada’s oversight of the sector – particularly as Ottawa prepares to legalize cannabis for recreational use, creating what is expected to be a highly lucrative business.
Mettrum Ltd., Organigram Inc., and Aurora Cannabis Inc. announced late last year that they were recalling products after the pesticide myclobutanil was discovered in medicine sold to clients. Myclobutanil is outlawed on plants that are smoked because it produces hydrogen cyanide when heated and can cause serious health problems.