Organigram (OGI.V) recall situation is as bad as we thought

The company isn’t taking calls right now (literally, we spent 20 minutes last night trying every option on their phone system and couldn’t get through to customer service in any way), but the expanded product recall situation at Organigram (OGI.V) is every bit as bad as we feared, according to information posted by Health Canada Wednesday night.

Turns out the recall, which the company admitted in a brief news release a few days ago had been ‘expanded’, but opted not to explain how, or for what, is a big one.

After initially recalling product sold recently, the expanded recall includes flower and oil products sold all the way back to February of last year.

That’s correct – almost a whole year of Organigram’s business, in which they sold millions of dollars of medicine to Canadian patients, has to be sent back and/or destroyed.

Additionally, Health Canada explained why the product was tainted:

On December 28, 2016, Organigram Inc. initiated a voluntary Type III recall after 5 lots of product tested positive for the presence of low levels of myclobutanil and/or bifenazate which are not found in the thirteen pesticides that are authorized for use on cannabis plants under the Pest Control Products Act. These two ingredients are found in pest control products that are approved for use in food production.

On January 9, 2017, Organigram Inc. initiated a voluntary Type II recall, following subsequent testing which identified additional lots containing residual levels of myclobutanil and/or bifenazate that exceeded any of the levels permitted in food production for these two pesticides. As a precautionary measure, Organigram Inc. expanded the voluntary Type II recall to include all products produced between February 1 and December 16, 2016.

So here’s what Health Canada is saying, in layman’s terms. It’s saying those two chemicals can be used in food production, but not in weed production. But that the earlier Organigram weed was using it at levels that even exceed food production guidelines.

organigram-organicNOTE: Organigram is an ORGANIC CERTIFIED weed producer. That means it’s not supposed to be anywhere near chemicals like these. Of all LPs growing and selling cannabis in Canada, the one least likely to have a situation like this should be Organigram.

Look, it even says so right there on the right: No chemical pesticides. —>

When Mettrum had the same issues, that sucked, because myclobutanil, when burned, produces hydrogen cyanide. It is banned almost everywhere for use in cannabis products for this reason. In fact, other jurisdictions treat its presence as a big deal, and shut down places where it’s found. Health Canada doesn’t appear too bothered, but they’re alone on this front.

But patients looking for the best, purest medicine look to organic producers, precisely because they don’t want pesticides in their weed. Organigram has not just screwed up, but they’ve done so over almost a year, and negatively affected an unknown number of thousands of patients in the process.

Will Organigram refund the price difference to angered users who paid a premium for supposed organic product? Will they my ass: If you call the customer support line, you get tangled in a series of options that send you repeatedly back to the main menu. We tried most of last night and couldn’t get anywhere after repeated attempts.

The Organigram Twitter feed is also silent, not having posted anything since December, and the company’s news releases have, of late, been sent out scant of detail (at least regarding the recall scandal), and usually after close (or five minutes before the last trading day of the tear, right before a three-day weekend).

This. Is. Unacceptable.

The stock is taking it in the ass while competitors are racing, the public perception of the company couldn’t be lower, trust in the company to deliver a good clean organic product must now be non-existent, investors have now seen that when the news is negative, the company will choose not to share it in a meaningful and actionable way, and what is the company actually talking about to investors?

That it bought a vacant lot that was so important to the future of the company that it sat for sale since mid 2015 with no offers.

Health Canada’s warning tells consumers, “Health Canada recommends that any individual affected by the recall immediately stop using the recalled product and to contact Organigram Inc. at the following number 1-855-961-9420.”

We tried. They ain’t answering. (UPDATE: They’re answering now, power of the press!)

Perhaps the investor relations folks will. Here are some questions to ask them:

  1. How much is it going to cost Organigram to recall product going all the way back to February 2016?
  2. How much existing product will have to be destroyed, and at what cost?
  3. How the FUCK did this happen, in an organic facility, when your organic nature is your very selling point?
  4. Why are you asking investors to trawl the Health Canada website for information on this rather than offer up that information like you’re supposed to with a material disclosure?
  5. Why are you calling patients with information about the situation but not calling investors?
  6. Why are you not answering your customer support line?

Time to step aside, Denis. You’re not up to the challenge.

UPDATE: Just got off the phone with an Organigram customer who is talking class action lawsuit. He says OGI offered him 20% off his next order to make him happy (initially), and later amended that to a 40% discount on his next purchase. He’s not interested in another purchase, he wants his money back because he bought specifically because OGI is supposed to be pesticide free and didn’t get what he paid for.

Same guy says the company claims the chemicals came in through soil delivered to them, and that the situation is, as such, not their fault. To that, I’ll point to the graphic above that says Organigram uses ‘regulated soil’, and if their regulated soil was sub-standard, and they didn’t determine that for almost a year, that’s most definitely the company’s fault.

Also, for those calling Organigram looking for a better deal, our friend says he was offered the 40% “plus $100” to go away, once he said he would be talking to lawyers. So that’s your new baseline, friends. Keep calling, and keep reminding OGI that a deal that forces you to do more business with them to get any benefit is NOT an acceptable compensation for having sold you non-organic poison.

— Chris Parry

FULL DISCLOSURE: The only unpaid client bill my company has sat on for the last two years has been to Organigram. That’s obviously a conflict, but we’ve published positive things about the outfit in the past when they’ve acted in the interests of shareholders. They’re not doing that here.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

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25 Comments on "Organigram (OGI.V) recall situation is as bad as we thought"

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M.F.
Guest
No one thinks the OGI is great at the moment. However, the way you present the article here undercuts your criticism in many ways. It’s written as a rant in a child-like manner, and as such, it may have the opposite effect to what you’re intending. I would rather read an honest article that takes a serious evaluation at the problems at hand, rather than a diatribe that seems to be compensating for an unpaid bill. That being said, OGI does deserve heat over this issue and it’s nice that you’re providing that, however too bad it’s in a manner… Read more »
Scott
Guest
I have purchased all my MMJ from organigram from august to December of 2016. I was at the hospital ER day after I used the product I purchased from organigram. I was showing symptoms of cyanide poisoning but my doctors couldn’t figure it out as I had no idea I had been exposed to the hydrogen cyanide which is produced when Myclobutanil(banned pesticide use by ORGANIGRAM) is smoked or vaped. Respiratory issues, difficulty breathing, muscles tremors, vision probs, rashes, muscles pain, joint pain, night sweats are just some of the side effects I have been experiencing since August when I… Read more »
Victoria McHaffie
Guest

I too had symptoms uncommon to me after consumption of Organigram’s contaminated products such as :
Nausea,dizziness, headaches and probably others that I didn’t even associate. I’m so upset to have been given tainted products and the response (Or lack thereof) from Organigram has been infuriating.

Victoria McHaffie
Guest

@Scott Please connect with me as I am also an Organigram consumer! vickimchaffie@gmail.com

scott
Guest

Victoria, sorry for the late response, I just saw your comment on this thread. I just emailed your gmail.

David
Guest

Hi Chris, thanks for all your beta! Sorry to post an unrelated question to this article but I’m interested in your thoughts on Supreme.

thanks

John
Guest

Aurora Cannabis is also affected since they curate from Organigram LP. I just received a recall notice from Aurora today. This might be more widespread to medical clients then the LP’s are letting us know. I still had some the recalled curated product which I ended having destroyed. Hold on to your records as this may up being a class action suit. Reason I went with Aurora was due to no pesticides use/organic grown medicine. So much for that idea…

BOB
Guest
WELL AS AN ORGANIC FARMER OF 40 YEARS I HAVE SEEN SO MANY LOWLIFES CLAIM PERFECTION…THIS IS JUST ANOTHER ONE…THE COMPANY THEY USE FOR CERTIFICATION IS BASED IN MONTREAL??????THE GRAFT CENTER OF CANADA THE RULES SET DOWN BY SOME OF THESE REGISTERING BODIES ARE OFTEN SET TO AN EASILY ACHIEVABLE SET OF GUIDELINES..AFTER ALL IF NOBODY REGISTERS WITH YOU YOU GET NO MONEY….. THERE IS NO WAY THIS SOIL WOULD PASS BY PROPER INSPECTION ,,BUT WHAT ARE THE REQUIREMENTS FOR REGISTRATION FROM ECOCERT???? I TRIED TO FIND THIS OUT AND WAS SHUFFLED ABOUT… TO GROW MJ INDOORS COMPLETELY CHEMICAL FREE… Read more »
Todd
Guest
So I just got an email from Organigram offering me a credit for this fiasco. Here’s the kicker…it’s nice that they’re offering 20% back from your purchases of poisoned weed, but the really sad part is that you “HAVE” to be a client. If you are no longer a client you are not eligible for the credit! WTF?!? What kind of BS is this? I left your company cause your prices were too high and your product was tainted with pesticides and poisons. So now I HAVE to be a customer get my credit? Class action suit anyone? I read… Read more »