Recent Cannabis Product Liability Class Action: A Cautionary Tale for Cannabis Companies

As cannabis legalization moves north of the border, companies in Canada will inevitably face legal issues similar to those faced by their peers in the United States, where the decriminalization of cannabis in several jurisdictions has been accompanied by a new set of product liability class actions.

A class action against a medical cannabis producer with headquarters in Moncton, New Brunswick was recently certified in Downton v Organigram, 2019 NSSC 4 – the first of its kind in Canada. The action was commenced after Organigram, in conjunction with Health Canada, issued voluntary recalls of a number of its products after some of the products were found to contain traces of pesticides that are not authorized for use on cannabis plants under the Pest Control Products Act, S.C. 2002, c. 28. Organigram found out about the trace pesticides when one of its wholesale recipients advised that one of its cannabis lots had been tested by a third-party laboratory. The plaintiff claimed that she suffered adverse health consequences as a result of consuming the recalled cannabis and claimed various remedies including general and punitive damages.

While the outcome of the action (and whether or not certification was appropriate, if the decision is appealed) has yet to be determined, the cautionary tale is clear: licensed producers must be aware of, and adhere to, the applicable pesticide regulations and should consider vigilant testing of crops to ensure all safety standards are met and are consistent with brand marketing. Class actions of this nature are by no means limited to medical cannabis producers, and may very well affect the recreational industry as well.

Our recent post on the Downton decision in our Canadian Class Actions Monitor blog contains further discussion as well as our prediction as to how the case law relating to cannabis product liability will develop.

 

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