Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) announced its financial results for the second fiscal quarter ending February 28, 2023. Organigram reported that its net revenue increased 24% to $39.5 million, from $31.8 million in the same time period in 2022. The company attributed the increase to an increase in international revenue, partly offset by a decrease in medical sales.
Organigram also reported that it had a net loss of $7.5 million versus last year’s net loss of $4.0 million in 2022. The company said that the net loss increased due to the change in the fair value of derivative warrant liabilities which was a gain of $2.4 million during Q2 Fiscal 2023 compared to a gain of $10.6 million in Q2 Fiscal 2022, as movements in the Company’s share price had a greater absolute impact on the fair value of the derivative warrant liability in the prior year period.
“We are pleased with our results in a quarter with typical seasonality. Our market position remains competitive, supported by our leading brand portfolio, strong international sales, and customer-focused innovation,” said Beena Goldenberg, Chief Executive Officer. “Just 12 months after adding hash to our portfolio with the acquisition of our Lac Supérieur facility, we gained the number one position in the hash sector and launched SHRED X Rip-Strip Hash, the first product of its kind in Canada.”
The net cash used in operating activities in the quarter was $19.7 million, compared to $0.8 million cash used in 2022 for the same time period. This was attributed to higher working capital needs in the current year period resulting from the growth in receivables from increased revenues and a decrease in accounts payable and accrued liabilities.
“In the quarter, we continued to see aggressive pricing pressure in our markets, particularly in large format flower SKUs,” added Goldenberg. “While this impacted revenue in the quarter, we are confident that our branding and marketing expertise, proven track record of innovation and operational efficiency will deliver long-term success and leadership in the cannabis industry.”
Organigram currently expects the net revenue in the fiscal third quarter of 2023 to be higher than that of the fiscal third quarter in 2022 and the previous quarter in 2023. The company based the optimism on the expectation for growth from innovation, its expanded product line in multiple segments, greater capacity to meet demand at the Moncton Campus, increased throughput at the Winnipeg facility, and contributions from the Lac-Supérieur facility.
In addition, the anticipated continuation of international shipments is expected to generate higher net revenue in Q3 Fiscal 2023 as compared to Q3 Fiscal 2022.
April 12, 2023 at 9:38 pm
The Canadian cannabis companies seem to do a little better than US cannabis companies. Their problem is Canada has a small population, a stoner population that feeds a robust illegal market, Their supply and demand of weed in Canada, a population of only 39 million, rises and falls faster The Canadian companies still borrow too much.