Organigram Holdings Inc. (NASDAQ: OGI) is buying Laurentian Organic Inc. for C$36 million, plus earnouts. The Laurentian acquisition further strengthens Organigram’s position in the Canadian market through the expansion of the company’s portfolio into premium products, including hash and craft cannabis, in addition to providing an important presence in the province of Quebec through scalable cultivation and operational footprint.
Laurentian is one of the leading hash companies in Quebec and has the current capacity to cultivate approximately 600 kg of flower and one million units of hash annually. The company said that expansion efforts are expected to increase that to approximately 3,000 kg of flower and two million units of hash by the second half of 2022. Laurentian is also expected to benefit from access to additional high-quality indoor flower supply and input material for hash from Organigram’s Moncton facility, which is expected to produce 70,000 kg of annualized production capacity by the end of fiscal 2022.
Over the last 2 months, Laurentian said it has been averaging an annual gross and net revenue run rate of $22 million and $17 million respectively, and an annual EBITDA run rate of $6 million based on its presence in Quebec, Manitoba, Saskatchewan, and most recently, Canada’s largest province, Ontario. Leveraging Organigram’s direct sales team and national distribution, Laurentian’s products will gain access to major markets currently not penetrated, including BC, Alberta and Atlantic Canada. Between local expansion planned at Laurentian’s site, synergies expected to be realized with Organigram and entrance/scale-up into new/existing markets the Company is forecasting revenues from the Laurentian and Tremblant brands to grow beyond the Company’s Fiscal 2022 year-end of August 31, 2022.
“The Laurentian acquisition marks yet another important milestone for Organigram as we continue to deepen the focus of our core business on delighting consumers with innovative products and brands that deliver unique and memorable experiences,” said Beena Goldenberg, Chief Executive Officer of Organigram. “Not only does Laurentian add two great new brands to our portfolio, it also brings us new premium product offerings with its Afghan hash and artisanal craft flower, as well as a footprint in the important market of Quebec. We look forward to building on the momentum that Laurentian has established to bring these products to even more Canadian provinces and territories.”
Laurentian was co-founded by Eric Brosseau, Mathieu Lahaie and Eric Verdier, a trio of highly passionate Quebecers who parlayed their love of cannabis into a successful cannabis company operating near the iconic Mont-Tremblant, specializing in high-quality, artisanal craft cannabis and premium Afghan hash. The hash category in Canada is increasing in importance and leveraging Organigram’s national sales and distribution network, the company believes that Laurentian’s product offerings will continue to grow nationwide at an accelerated pace, bringing Laurentian’s high-quality craft cannabis products to more consumers.
“We founded Laurentian with the goal of bringing the highest quality hash and cannabis to consumers across Canada. We are thrilled to be joining Organigram where we will have the opportunity to leverage their expertise and distribution capabilities to make this expansion goal a reality,” said Eric Brosseau, Co-Founder of Laurentian. “The Organigram team has an unrivaled customer service experience through its rigor and professional standards and dedicated national sales force and we are thrilled to be able to work with their team through the next phase of growth.”