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Canadian court hands Organigram partial win in ‘edible’ cannabis dispute

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Health Canada breached its duty of procedural fairness when it decided that licensed producer Organigram Holdings’ lozenges should be classified as “edible” cannabis rather than extracts, a federal justice said in granting the company’s application for judicial review.

Justice Cecily Strickland kicked the decision back to Canada’s health department to review its initial decision and make a new determination involving the lozenges, known as Jolts.

Millions of dollars could be at stake in the outcome of the legal dispute, given that cannabis extracts are potentially a much more lucrative product than edibles under Health Canada’s classification system for ingestibles.

In an interview with MJBizDaily, Organigram CEO Beena Goldenberg said the decision is a “win” for the company, even though Health Canada might ultimately return the same decision.

“Our decision to seek a judicial review was unprecedented in the cannabis industry,” she said.

Still, the federal court did not address Organigram’s key assertion: Health Canada had treated the company unfairly by deciding Organigram needed to yank the lozenges from store shelves years after they were introduced into the market.

The justice also did not rule on the “reasonableness” of Health Canada’s initial decision.

Moncton, New Brunswick-based Organigram had asked the court to quash the Health Canada decision, saying the ruling effectively killed off the market for the products, which had become an increasingly popular segment of the struggling cannabis sector.

Historic decision

Still, Strickland’s decision is historic when it comes to the cannabis industry.

It was the first time a licensed producer applied for a judicial review of a decision made by Canada’s federal government.

Organigram originally launched Jolts in August 2021. Health Canada’s crackdown on extracts wasn’t evident until early 2023.

The distinction between a cannabis edible and extract has major implications for the marketability of those products in Canada.

That’s because any cannabis product classified as an “extract” has 100 times more allowable THC per package than a product classified as an “edible,” making it more appealing to some consumers.

Health Canada did not immediately respond to queries from MJBizDaily, so it’s unclear how long the regulator will take in making its redetermination.

“Essentially what she (the justice) is saying to Health Canada is they have to reissue the compliance letter, and you have to give Organigram the opportunity to respond to it, including the issues raised at the 11th hour,” Trina Fraser, a partner at Brazeau Seller Law in Ottawa, Ontario, who leads the firm’s cannabis practice, told MJBizDaily in a phone interview.

“And then you have to make the decision over again.

“Organigram went to the federal court with a plea that the minister’s decision was unreasonable. But. unfortunately, we didn’t get a decision on that issue.”

The ruling

Strickland said the Canadian government failed to give Organigram an adequate opportunity to respond to one of the key factors on which Health Canada relied when making its decision.

“When all of the circumstances of the case are taken into account, I find that there was a breach of procedural fairness arising from inadequate notice of Health Canada’s reliance on a factor contained in the Compliance Promotion Statement and, as a result, that Organigram was not afforded a meaningful opportunity to respond to that concern and thereby prejudiced in its ability to respond to that concern,” the justice noted in her decision.

According to Strickland, Health Canada made the key decision based in part on an internal document called the Classification Policy, which was not referenced in the federal agency’s decision involving the lozenges.

The Classification Policy focuses on the classification of ingestible cannabis products and is dated Sept. 8, 2022.

“The specific concerns raised in the notice of noncompliance are said to have been based on the classification factors of product representation, product format, and public perception or history of use,” Strickland wrote.

“These are the three factors set out in the Classification Policy, which appears to be an internal Health Canada document.”

However, the Classification Policy is not referenced in the notice of noncompliance provided to Organigram and other licensed producers.

Strickland also said the lack of notice and disclosure of Health Canada’s concerns arising from a fourth factor – the physical characteristics of the Jolts – “precluded Organigram from responding to concerns not previously raised in the notice of noncompliance.”

The justice added that Health Canada introduced the fourth factor in its decision – the product’s sensory and physical characteristics – but that was omitted from the notice of noncompliance sent to the company.

In effect, Strickland ruled that Organigram was not given an opportunity to respond to Health Canada’s objection to Jolts’ size and shape or suitability for sublingual use, which was one of the key reasons Health Canada rejected the lozenges being classified as an extract.

In her ruling, the justice “found no evidence in the record before me to support (Health Canada’s) inference that the size and shape of the Jolts may cause consumers to not follow the instructions for use.”

Organigram’s Goldenberg, for example, told MJBizDaily the instructions on the Jolts package “say to put it under your tongue or between your gum and cheek for sublingual absorption.”

Strickland also flagged Health Canada’s procedures.

“The process by which Health Canada assesses the classification of products, as submitted by producers, as either edible cannabis or cannabis extract, is relatively new and appears to have been in transition during the time leading up to the making of the decision,” she said.

“Health Canada should consider clearly identifying the policy(s) and procedures upon which it will rely in making determinations of noncompliance based on the classification of cannabis products and inform concerned parties concerned accordingly,” she suggested.

‘Action plan,’ if necessary 

For her part, Goldenberg called the decision a “win.”

“I think the verdict was a win for Organigram in that Health Canada was found to have procedural unfairness, they had brought other factors into their determination of Jolts as an ‘edible’ than what was in the original guidance to licensed producers in terms of product classification,” she said.

Goldenberg said the company plans to provide the agency with some relevant facts.

“For example,” she said, “one of the points Justice Strickland made was that Health Canada added a factor (in its final decision) of the physical size and shapes of the Jolts.”

Goldenberg contends Health Canada’s point of view was that, given the size and shape, the product doesn’t fit well under the tongue.

“But our product was designed specifically for that use (to fit under a tongue or between a gum and cheek),” she said.

“We have some new information to share with Health Canada. Maybe they might not consider it; maybe they will come to the same determination.

“But they have to go back and revisit it, and they have to provide us a chance to provide that information.”

What happens if Health Canada still renders the same decision?

“We’re assessing various options with respect to what we want to do with the future of Jolts, based on whatever Health Canada’s reconsideration is,” Goldenberg said.

“At this point, we don’t want to go down that path until the door is (fully) shut on what was a successful product.

“Depending on how quickly this reassessment happens, we will have an action plan in place.”

The justice’s decision is available here.

Source: https://mjbizdaily.com/canadian-court-hands-organigram-partial-win-in-edible-cannabis-dispute/

Business

EU Pressure Builds on Google as Regulators Face Calls for Massive Fine Over Search Practices

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A growing coalition of European industry groups is intensifying pressure on regulators to take decisive action against Google over allegations of unfair search practices that could reshape competition rules across the region’s digital economy.

Investigation Under Digital Markets Act Gains Momentum

The case is being examined by the European Commission under the European Union’s landmark Digital Markets Act (DMA), introduced to curb the dominance of major technology platforms and ensure fair competition.

Launched in March 2024, the investigation focuses on whether Google has been prioritising its own services in search results, potentially disadvantaging rival businesses that rely on online visibility to reach customers.

Industry Groups Demand Swift Action

Several prominent European organizations have jointly urged regulators to conclude the probe without further delay. They argue that prolonged investigations allow alleged anti-competitive practices to continue, putting European companies—especially startups—at a disadvantage.

Signatories include the European Publishers Council, the European Magazine Media Association, the European Tech Alliance, and EU Travel Tech.

In a joint statement, these groups warned that delays in enforcement are affecting innovation, profitability, and growth prospects for regional businesses competing in digital markets.

Google Denies Allegations

Google has rejected claims of bias, stating that its search algorithms are designed to deliver the most relevant and useful results to users. The company has also proposed adjustments to address regulatory concerns.

However, critics argue that these changes are insufficient and fail to address the core issue of market dominance.

Potential Billion-Euro Penalties

If found in violation of the DMA, Google could face significant financial penalties. Under EU rules, fines can reach a substantial percentage of a company’s global turnover, potentially amounting to billions of euros.

Regulators may also impose corrective measures requiring changes to business practices, which could have long-term implications for how digital platforms operate in Europe.

Wider Implications for Big Tech

The case highlights ongoing tensions between European regulators and major U.S. technology firms. In recent years, the EU has taken a more aggressive stance in enforcing competition laws, aiming to create a level playing field for local businesses.

A final ruling against Google could set a major precedent, influencing future enforcement actions and shaping the regulatory landscape for global tech companies operating within Europe.

As scrutiny intensifies, the outcome of the investigation is expected to play a critical role in defining the future of digital competition across the European Union.

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AI & Technology

Amazon Faces Potential Criminal Trial in Italy Over €1.2 Billion Tax Evasion Allegations

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Milan: U.S. tech giant Amazon is facing the prospect of a major legal showdown in Italy, after prosecutors in Milan formally requested a court to move forward with criminal proceedings over alleged tax evasion totaling approximately ₹12,500 crore (€1.2 billion).

The case targets Amazon’s European division along with four senior executives, marking one of the most significant tax-related investigations involving a global e-commerce platform in Europe.

Trial Push Despite Multi-Million Euro Settlement

The move comes even after Amazon reached a financial settlement with Italian tax authorities in December, agreeing to pay around ₹5,500 crore (€527 million), including interest, to resolve part of the dispute.

Typically, such settlements lead to the closure of criminal investigations. However, Milan prosecutors have opted to proceed, signaling a tougher stance on alleged corporate tax violations.

A preliminary hearing is expected in the coming months, where a judge will decide whether to formally indict the company and its executives or dismiss the case.

Allegations of VAT Evasion Through Marketplace Sellers

At the center of the investigation are claims that Amazon’s platform enabled non-European Union sellers to avoid paying value-added tax (VAT) on goods sold to Italian consumers between 2019 and 2021.

Prosecutors allege that the company’s marketplace structure allowed thousands of foreign vendors—many reportedly based in China—to operate without fully disclosing their identities or tax obligations. This, authorities argue, led to substantial VAT losses for the Italian government.

Under Italian law, online platforms facilitating sales can be held partially liable if third-party sellers fail to comply with tax requirements, a key point in the prosecution’s case.

Italian Government Named as Affected Party

In their filing, prosecutors identified Italy’s Economy Ministry as the injured party, citing significant financial damage resulting from the alleged tax evasion.

Legal experts say the outcome of the case could have wide-ranging implications across the European Union, where VAT systems are harmonized and similar compliance rules apply to digital marketplaces.

Multiple Investigations Add to Pressure

The VAT probe is just one of several legal challenges facing Amazon in Italy. The European Public Prosecutor’s Office is reportedly examining additional tax-related issues covering more recent years.

Meanwhile, Milan authorities are pursuing separate investigations into alleged customs fraud linked to imports from China and whether Amazon maintained an undeclared “permanent establishment” in Italy—potentially exposing it to higher tax liabilities.

In a separate regulatory action, Italy’s data protection authority recently ordered an Amazon unit to stop using personal data from over 1,800 employees at a warehouse near Rome.

Amazon Denies Allegations

Amazon has consistently denied wrongdoing and indicated it will strongly contest the allegations in court if the case proceeds. The company has also warned that prolonged legal uncertainty could impact investor confidence and Italy’s appeal as a destination for international business.

Broader Impact on Europe’s Digital Economy

If the case moves to trial, it could become a landmark moment for the regulation of global e-commerce platforms in Europe. Governments across the region are increasingly scrutinizing how digital marketplaces handle tax compliance, especially in cross-border transactions.

With online retail continuing to expand, regulators are under mounting pressure to ensure that multinational platforms and third-party sellers adhere to the same tax rules as traditional businesses.

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Aviation

IndiGo Crisis Exposes Risks of Monopoly: What If Telecom or E-commerce Collapses Next?

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Airports across India witnessed scenes of distress and confusion as thousands of passengers were stranded due to IndiGo’s massive flight disruptions. Families with medical emergencies, funerals, and personal crises were left helpless as the airline cancelled hundreds of flights without adequate communication or support.

Passengers described desperate situations — a mother pleading for sanitary pads for her daughter, a woman unable to transport her husband’s coffin, and others stranded while trying to reach family funerals or hospitals. “It was like a lockdown at the airport,” one passenger said, describing the panic that unfolded as IndiGo’s mismanagement crippled operations nationwide.

Root Cause: IndiGo’s Market Monopoly

The turmoil, industry experts argue, stems from IndiGo’s monopolistic control over India’s domestic aviation market. The airline operates nearly 2,100 flights daily and holds around 60% market share — meaning every second plane flying within India belongs to IndiGo.

This dominance has given the company unparalleled influence. When IndiGo falters, the entire aviation system suffers. Passengers are left with few alternatives, as other airlines lack capacity to absorb stranded travellers. The result: skyrocketing ticket prices, chaos at terminals, and total dependence on a single private operator.

Aviation pioneer Captain G.R. Gopinath, founder of Air Deccan, criticised the government’s inaction, noting that on some routes, IndiGo’s economy fares surged to ₹1 lakh. He compared the situation to a hostage crisis, writing that the airline “held the system ransom” and forced regulators to defer new safety rules meant to protect pilots and passengers.

Government Intervention and Regulatory Weakness

The crisis erupted after IndiGo failed to comply with the Flight Duty Time Limitations (FDTL) — rules introduced by the DGCA in January 2024 requiring adequate rest for pilots. Despite having nearly two years to adapt, IndiGo blamed the rule for operational disruptions, citing a shortage of pilots.

Under mounting public pressure, the government stepped in, temporarily relaxing FDTL norms and capping airfare hikes. Officials claimed the move was to protect passengers, but analysts say it exposed the state’s vulnerability to corporate monopolies. “The government had no option but to yield,” said one aviation policy expert, pointing out that ignoring safety regulations for short-term relief could have long-term consequences.

The crisis also rekindled memories of the June 2025 Air India crash near London, which claimed over 240 lives. Experts warn that compromising pilot rest and safety standards to maintain flight schedules could risk another tragedy.

If Telecom Giants Fail: A National Paralysis

The article raises a troubling question — what if a similar crisis struck the telecom sector, where Jio and Airtel together control nearly 80% of subscribers and serve over 780 million users?

If both networks failed simultaneously, the repercussions would be catastrophic. Internet shutdowns would halt UPI transactions, online banking, OTP verifications, video calls, OTT streaming, and emergency communications. Critical services such as airports, hospitals, stock exchanges, and small businesses — many of which rely on WhatsApp and digital payments — would come to a standstill.

In essence, a telecom breakdown could paralyse India’s digital economy, exposing the nation’s dependence on a duopoly.

E-commerce Monopoly: Another Fragile Ecosystem

The same risk looms over the e-commerce sector, where Amazon and Flipkart dominate nearly 80% of the market. A disruption similar to IndiGo’s could cripple daily life — halting delivery of groceries, medicines, and essential goods, freezing refunds and customer support, and leaving small sellers without platforms to trade.

Local retailers, freed from competition, might exploit shortages by inflating prices. Such a scenario underscores the perils of market centralisation in sectors critical to everyday living.

A Wake-Up Call for Regulators

The IndiGo crisis, analysts say, is a warning shot for policymakers and regulators. A single company’s operational failure exposed systemic weaknesses in India’s infrastructure and consumer protection mechanisms.

As the aviation regulator DGCA investigates and IndiGo works to restore normalcy, the broader lesson remains clear: unchecked monopoly power in any essential service — whether air travel, telecom, or e-commerce — poses a direct threat to economic stability and citizen welfare.

Without stronger competition laws, redundancy frameworks, and regulatory oversight, India risks repeating this crisis across multiple sectors — each time with millions of citizens paying the price.

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