Calgary-based cannabis producer Sundial Growers is hitting back at claims the company misled investors over a massive recall of tainted pot.

A class-action suit launched against the licensed producer claims a customer returned 554 kilograms of cannabis worth $2.25 million that was contaminated with mould and pieces of rubber gloves.

In the complaint filed Sept. 25, a plaintiff claims the product return wasn’t disclosed to investors before Sundial issued its initial public offering (IPO) and that shareholders lost “significantly” due to the resulting fall in stock value.

But the company insists only a “fraction” of the cited amount was returned by Vancouver-based licensed producer Zenabis.

“The return represented a minimal percentage of our total production to date, had no impact on our second-quarter financial results and is expected to have a negligible impact on our third-quarter earnings,” Sundial said in a statement.

In the statement, Sundial CEO Torsten Kuenzlen said the company provided all required information to prospective investors in their IPO.

“We are therefore confident that the class-action lawsuits filed against Sundial are completely without merit and intend to vigorously defend our company in these matters,” said Kuenzlen.

Contracts with customers allow for product returns, it states, and “at no point have our facilities stopped producing and selling our high-quality cannabis products.”

The company produces cannabis at its flagship facility in Olds, north of Calgary.

In the class-action suit filed by investor Yimin Huang on Sept. 25, it’s alleged the cannabis was visibly mouldy and contained pieces of rubber gloves and other foreign material.

It alleges those details also weren’t disclosed to investors during a promotional road show in Toronto.

A number of Sundial board members and executives, including Kuenzlen, are named in the action, along with the company’s underwriters.

None of the allegations has been proven in court.