OrganiGram tightens medical marijuana production after 2016 recall

OrganiGram Inc. has tightened up the way it produces medical marijuana after a recent recall, says the CEO of the Moncton company.

Denis Arsenault says he was in shock when he found out that unapproved pesticide had been detected in the product.

"We sold wholesale product to a competitor and they tested for it and that's how they became aware of it and this was in December, as you know." Arsenault said.

The company issued a voluntary recall for 69 lots of medical marijuana supplied between August 2016 and December 2016.

On Jan. 9, Health Canada issued a statement saying the voluntary recall had been expanded to include dried marijuana and cannabis oil produced between Feb.1, 2016, and Dec. 16, 2016.

The statement says: "5lots of product tested positive for the presence of low levels of myclobutanil and/or bifenazate which are not found in the 13 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."

Health Canada also said no reports of any adverse reactions has been reported.

Organigram is the only producer of medical marijuana in New Brunswick that has been approved by Health Canada.

Financial update released

The company has just released a financial report and update on what's happened.

I think it's not just the shock that was the issue, it was howdid it happen? How can it happen?- Denis Arsenault, OrganiGram CEO

Arsenault said that although the company continues to grow and generate cash flow, the recall did cost it $499,857 for the three months ending Nov. 30, 2016.

He says in the past, the company didn't test for pesticides because Organigram Inc. is an organic company.

"I think it's not just the shock that was the issue, it was how did it happen? How can it happen? So your mind immediately goes to that," he said.

Arsenault says the company started searching for the problem.

• Trailer Park Boys and Organigram partner in pot products
• OrganiGram strikes $9M stock deal with Dundee Capital

"You isolate a period and then you isolate all the products that came into your facility during that period and then you test the products that come into your facility during that period like the fertilizers, the soils, the coco coir, the peat moss all of these various items. This is the process how you work towards identifying the cause." he said.

Arsenault said final testing is being done but the company is still not sure exactlyhow the pesticide came in contact with theproduct.

Organigram is now changing procedures to make sure nothing like that happens again.

"What we're doing right now is we're testing all of the inputs that come into our facility," said Arsenault. "Inputs can be anything from the soil that we grow in the fertilizers, the various other products that go in that touch the plant.And we're working with Health Canada.

"I think what the industry has to realize is that we need to also test what's coming in to our facility not just test what's going out of our facility."