Organigram Holdings, Inc. (OTCQB: OGRMF) is engaged in the medical marijuana business in Canada. Shares of the Canadian marijuana company are diving 10%, through afternoon trading on Wednesday, March 8, 2017. Over the past month, Organigram Holdings, Inc. has seen average daily volume of 173,947 shares. However, volume of 442,982 shares or dollar volume of $642,323, has already exchanged hands on Wednesday.
Shares of Organigram Holdings, Inc. is diving 10% on Wednesday, after the company released a response to the proposed class-action suit. The class-action suit deals with a Canadian court decision relating to voluntary recall medical marijuana products. Under the proposed suit, Canadian medical marijuana consumers are able to sue marijuana companies that had trace elements of pesticides, which are illegal to use in licensed growing operation. Here is the full press release detailing of the proposed class-action suit:
Organigram Holdings, Inc. Press Release
MONCTON, NEW BRUNSWICK–(Marketwired – Mar 7, 2017) – Licensed marijuana producer Organigram Inc. and its parent company Organigram Holdings, Inc. (TSX VENTURE:OGI)(OGRMF) (collectively, the “Company” or “Organigram“) will launch a strong defense against a proposed class-action suit related to recent voluntary product recalls.
The Company was served with notice of the proceeding yesterday. The proposed suit was filed with the Supreme Court of Nova Scotia by a Halifax-based law firm. The filing seeks to represent Organigram clients who purchased and consumed medical marijuana that was later found to contain trace elements of the pesticides myclobutanil and bifenazate which are not approved for use by licensed growers.
Denis Arsenault, Organigram’s Chief Executive Officer, said the Company offered all non-insured clients impacted by the voluntary recall an account credit equal to the full purchase price of the recalled product. He also noted that public comments made yesterday by the lawyer seeking to bring the action had erroneously stated Organigram had offered refunds to its clients instead of providing account credits and newly harvested marijuana. “We have been in constant communication with clients who purchased recalled product. We have been clear that Organigram will meet their needs by providing account credits valued at 100 per cent of that product’s value and will make freshly harvested and tested product available to them. The majority of our clients are very satisfied with this action and are already using their credits.”
“In terms of the proposed class-action suit, we intend to vigorously defend our company and its actions related to the product recall,” stated Arsenault. “We have already engaged Borden Ladner Gervais LLP, one of Canada’s leading class-action defence law firms, to assist with our defence.” The Supreme Court of Nova Scotia will likely take a number of months to determine if it will allow the proposed suit to proceed as a class action. “In the meantime, our primary focus will be on meeting the needs of our clients,” he said.
“From a financial perspective, we believe there is very little exposure for Organigram going forward,” said Arsenault. “We have already allocated $2.26 million this quarter to cover losses associated with the recalls,” he said. “We are also talking with our insurer about the company’s coverage related to the proposed class-action suit should the court allow it to proceed.”
Organigram recently completed a thorough investigation into events that led to the December and January voluntary recalls. As a result of that investigation, the company put a number of new growing and harvesting protocols in place. All marijuana harvested since the recall has tested negative for pesticides. “We have also decided to post all testing results on our website beginning next week,” said Arsenault. “With the new procedures in place, we are fully confident in our ability to deliver high-quality product to our clients.”
About Organigram Holdings, Inc.
Organigram Holdings, Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of medical marijuana in Canada. Organigram is focused on producing the highest quality, condition specific medical marijuana for patients in Canada. Organigram’s facility is located in Moncton, New Brunswick and the Company is regulated by the Access to Cannabis for Medical Purposes Regulations (“ACMPR“).
Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.
This news release contains forward-looking information which involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectation. Important factors – including the availability of funds, the results of financing efforts, crop yields, outcome of litigation – that could cause actual results to differ materially from the Company’s expectations are disclosed in the Company’s documents filed from time to time on SEDAR (see www.sedar.com). Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this press release. The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward looking statements, whether as a result of new information, future events or otherwise.