This error may occur, even if the calendar has been shared with other people. It appears that if you start typing the recipient's email address, it may default to entering an email address or information from a local contact card. This results in the error message: "Problem: Your organization's policy does not allow you to share with this recipient"
Solution:
When addressing the email to the recipient, ensure that you click on the "To" box and select them from the Global Address List.