OrganiGram Stock Down Due to ‘Elevated Bacteria’ in Cooling Towers

OrganiGram Stock

OrganiGram stock is down over 4% today after emails obtained by CBC News show "elevated bacteria counts" were found in several of OrganiGram Holdings' (TSX:OGI) (NASDAQ:OGI) cooling towers.

Could OrganiGram Be Responsible for Legionnaires' Outbreak?

OrganiGram Holdings is yet to comment on the reports that have emerged after CBC News obtained an email sent to employees saying that the cooling towers in its Moncton, New Brunswick facility had been shut down and cleaned due to the elevated level of bacteria. The email was sent on the evening of August 13, which coincides with an outbreak of legionnaires' disease that health department officials say originated from cooling towers in western Moncton. The department did not identify the source location, but it could be very bad news for OrganiGram stock.

"Following acceptable test results over the past 18 months due to preventative maintenance systems … for all cooling towers, we received an unexpected report of elevated bacteria counts in our NEW cooling tower system for Phase 4A. Please note this system is external and does not impact air quality within the facility, or the health of our products," says one part of the email from OrganiGram's director of human resources.

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Could OrganiGram Stock Be Further Effected?

Dr. Yves Léger, a New Brunswick regional medical officer, confirmed to reporters on September 5 that the outbreak had originated from cooling towers located at a business in western Moncton and cited August 13 as the day the towers were shut down and cleaned. Legionnaires' disease is an extreme form of pneumonia that can be fatal, and 16 people were hospitalized following the Moncton outbreak before it was contained on September 10. If the outbreak is traced back to the company, it could have a drastic effect on OrganiGram stock.

This is not the first contaminant issue at OrganiGram Holdings after the company recalled certain lots of its cannabis product in December 2016 after it emerged that a certain pesticide not registered for use on marijuana under the Pest Control Products Act was detected. A lawsuit has been brought against the company in relation to this recall and will go to trial in a Nova Scotia court. OrganiGram stock is down over 50% from a 2019 peak of $8.35 and could be set to fall further as more details on contaminant issues emerge.

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