Organigram (OGI.V) announces weed recall five minutes before close on last Friday of 2016

pesticide

When your reason for being, when your very sales pitch in a competitive industry is that you’re organic and the others aren’t, the last thing you want is to announce that, ‘Oops! Testing found pesticide in our product, dudes.’

Oh dear, Organigram (OGI.V).

According to a news release that just went out minutes after the close of trading for the last Friday of the year (hello Xmas News Dump), Organigram “is voluntarily recalling certain lots of medical marijuana which were supplied between August and December 2016 due to the detection of amounts of an unapproved pesticide not registered for use on marijuana under the Pest Control Products Act.”

The punchline:

“The source of the substance is unknown as Organigram is a certified organic grower and does not use compounds of this nature in its production processes.”

Well, apparently it does, and that’s going to be something that’ll need to be explained.

While OGI isn’t naming the chemical in question, the Globe and Mail’s Grant Robertson managed to learn yesterday that an earlier recall by Mettrum (MT.V) included not just a pesticide that wasn’t approved for use, but one that is actively banned because it is know to “emit hydrogen cyanide when heated.”

Oddly, Mettrum (which was prepping for a takeover by Canopy Growth Corp (CGC.T) when it was busted) and Health Canada both opted not to inform the public about the details of the recall.

Says Robertson, “Lawmakers in the three U.S. states moved quickly to ban myclobutanil, in some cases enacting emergency legislation when they discovered growers using it.”

Meanwhile, according to in Health Canada, you don’t really need to know you might be inhaling hydrogen cyanide so go ahead and stick it in your mouth.

“When Mettrum was later asked why the company hasn’t acknowledged the discovery of the banned pesticide in a press release, the company said in a statement to The Globe that its plan to communicate only with customers was approved by Health Canada. The company said only “trace levels of myclobutanil” were found.”

Gross.

Organigram’s triple-buried news release just now takes that level of obfuscation and doubles down on it, in a flagrant attempt to hide important news from investors.

I mean, sure, it’s hypothetically possible that they just got the news and hurried it out and just beat the end of the last trading day of the year, right before a weekend and holiday, by seconds, but if you believe that, you’re still sitting on Bre-X shares ‘because you never know.’

Organigram, at least, include the line, “In the event that the number of contaminated lots significantly increases, the Company’s operating revenue could be negatively affected,” so fair warning to investors who now have to sit on their OGI stock for the coming three days before they can even think of selling.

I’ve seen some dodgy shit pulled by marijuana companies over the last few years, such as Aphria’s ‘let’s squeeze veterans’ plan and Mettrum’s ‘we found some stuff, but you don’t need to know what the stuff is, shh, nothing to see here’ recall that Robertson just busted.

But dumping potentially company changing news a few minutes before the close for the year, while people are going on vacations and not knowing how much their shareholding is going to be cratered by the time they can sell it on Tuesday, is gross. It’s the sort of bullshit market move that regulators should be all over.

How long did Organigram sit on this news as the clock of the year wound down? How many people bought into the stock, unaware that ‘operating revenue could be negatively affected’? Was it days? Weeks? Months?

This is IMPORTANT news about a public company and the company in question has CLEARLY delayed releasing it until they can get it out to the smallest audience possible, with the biggest possible delay before they can act on it. That’s a shitty move, and CEO Denis Arsenault should resign because of it.

That won’t happen because, Arsenault doesn’t make any move unless it benefits him personally. He’s the same guy who, when the company was going to market, infamously told reporters (myself included), “I don’t give a shit about share price, and I don’t give a shit about what investors think.”

Today’s news release is evidence that thinking hasn’t changed.

— Chris Parry

FULL DISCLOSURE: The only company I’ve ever done business with that has left me with an unpaid bill? Organigram. I’m conflicted. But I stand behind every word.

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8 Comments on "Organigram (OGI.V) announces weed recall five minutes before close on last Friday of 2016"

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zender
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zender
2 months 27 days ago

He’s the same guy who, when the company was going to market, infamously told reporters (myself included), “I don’t give a shit about share price, and I don’t give a shit about what investors think.”

Do you have a source for this? Would be interested to learn more about the context of the discussion.

Thanks

Derek
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Derek
2 months 25 days ago

Hey Chris How do I email you directly? concerning this topic? would like a more private area.

Derek
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Derek
2 months 25 days ago

No spam! not a troll! just would like to contact Chris.

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