Canadian cannabis producer Organigram said it has reached a “proposed settlement” over a class action lawsuit regarding pesticide-contaminated medical marijuana that the company recalled in late 2016 and early 2017.
The settlement, if accepted, would be worth 2.31 million Canadian dollars (roughly $1.8 million), according to Organigram’s late Thursday news release.
The settlement has not yet been approved by the Supreme Court of Nova Scotia, which will hold an Aug. 31 hearing to consider the proposal.
If the proposal is approved, Organigram said, the funds “will be used to provide class members a refund of the amounts paid to purchase the voluntarily recalled product, less any refunds they have already received, as well as the payment of legal fees.”
Organigram will also pay third-party claims administration costs, the company said.
The class action lawsuit was originally proposed in 2017, after Organigram voluntarily recalled medical cannabis that contained several pesticides unauthorized for use in cannabis production.
The scope of the lawsuit was later expanded to include allegations that patients were sickened by the contaminated medical marijuana.
However, in 2020 the Nova Scotia Court of Appeal ruled out “claims for damages for adverse health effects” as part of the class action, according to an Organigram regulatory filing.
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Organigram said in 2017 that it could not determine how the pesticide contamination occurred, and offered refunds to affected customers.
The suit was certified as a class action in early 2019.