The Supreme Court of Nova Scotia has approved a $2.31 million settlement following a class action lawsuit filed against New Brunswick cannabis producer Organigram for its use of prohibited pesticides in 2016.

The class action was filed in 2018 after Organigram faced scrutiny and product recalls due to the detection of trace amounts of unauthorized pesticides.

The producer reached a settlement in the case earlier this year when the Supreme Court of Nova Scotia approved the notice of settlement, which was sent to class action members on June 24. The court held a scheduled hearing on August 31 to consider whether to approve the settlement.

As part of the settlement, Organigram agreed to pay an aggregate of $2,310,000 which the court has now approved.

The settlement will be used to provide Class Members with a refund of the amounts paid to purchase the voluntarily recalled product, minus any refunds they have already received, as well as the payment of legal fees. Organigram has also agreed to pay the third-party claims administration costs.

In 2020, the Canadian Supreme Court declined to hear an appeal of a Nova Scotia court ruling dealing with a claim against Organigram for using unauthorized pesticides.

The appeal sought to overturn a ruling in a previous appeal heard in the Nova Scotia Court of Appeal that said that public injury claims made against Organigram Inc. by patients who consumed their cannabis products cannot be established.

The original case filed in early 2018 came after a class action suit which consisted of a group of people who had been using the medical cannabis producer’s products. The patient and plaintiff argued they had experienced negative health effects after consuming cannabis from the producer which had been found to have been using an unapproved pest control product, myclobutanil. 

The judge in Nova Scotia’s Court of Appeal’s case agreed with Organigram that there was little evidence, or methodology, to prove the health claims made could be connected to their cannabis products. The patient sought to overturn that ruling in the Canadian Supreme Court but was not successful. 

The judge agreed and dismissed this aspect of the class action. The associated reimbursement payments that are also part of the class action suit were allowed to remain and made up the current settlement agreement. Organigram said in the past that they would continue to challenge these as they have already provided refunds. 

Organigram’s unauthorized use of myclobutanil and/or bifenazate triggered public recalls for the cannabis producer in 2016 after testing by a third-party lab discovered evidence of unauthorized pesticides. In addition to the product not being allowed for cannabis production in Canada, Organigram was also certified as organic by Ecocert, a third-party organic certifier, who also disallowed those products. After initially losing their certification from Ecocert, they received it again in 2018.

Following the recalls, a class action suit was initiated by patients who said they had experienced negative health issues related to using their cannabis which potentially contained trace amounts of bifenazate and/or myclobutanil.

The burden of proving this array of negative health effects was a tough case to make, which helped guide the judge’s most recent decision, stating that the adverse health claims were “too generic.”

The court also noted that the generic testing described by the plaintiff’s doctor did not meet the “workable methodology” requirement of the law.

Among one of the concerns raised by the plaintiff was the fact that when combusted myclobutanil releases hydrogen cyanide, which has numerous negative health concerns. 

The plaintiff had argued that the symptoms she had experienced “coincided” with those associated with exposure to hydrogen cyanide, including lightheadedness and gastrointestinal symptoms. 

In support of its decision, the court noted research that showed that cannabis itself also releases hydrogen cyanide, and in far greater amounts than would be attributed to any myclobutanil on the cannabis the patients in question consumed. The court document shows the judge stating “The amount of hydrogen cyanide produced by myclobutanil is obviously infinitesimal compared to the amount produced by smoking cannabis in the ordinary way.”

The recalls associated with the product noted that the levels of myclobutanil found on the cannabis products were incredibly low, up to 20 parts per million (ppm), potentially because the pesticide was applied at a very early stage in the plant’s growth, not in the flowering stage. 

For reference, one ppm is one part in one million. One ppm is comparable to one second in 11.5 days or four drops of ink in one 55-gallon barrel of water.