Organigram Archives - Green Market Report

Debra BorchardtDebra BorchardtJanuary 15, 2020
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5min3040

Canadian-based cannabis company Organigram Holdings Inc. (NASDAQ:OGI) reported that its first-quarter 2020 revenue rose by 102% over last year to $25.15 million, which beat analyst estimates by $10.24 million. Last year the company reported $12.4 million for the first quarter of 2019. The earnings per share reported by Organigram were flat, but that also beat the estimates by two cents.

Organigram delivered a net loss of $0.9 million compared to net income from continuing operations of $29.5 million last year for the same time period saying it was “largely due to non-cash fair value changes to biological assets and inventories in the prior-year quarter.”

“Despite ongoing industry challenges, we are pleased with solid Q1 2020 results and our return to positive adjusted EBITDA during the quarter,” said Greg Engel, CEO. “Our team was also successful in shipping the first of our Rec 2.0 products as planned and on schedule in December of 2019. We also look forward to the launch of the remainder of our vape pen portfolio followed soon after by our premium cannabis-infused chocolate products. In addition to an exciting line-up of 2.0 products, we are rolling out a couple of new core strains, such as our high THC Edison Limelight, across the country following their success as limited-time-offers in smaller markets.”

The company also noted that it had $1.1 million in a provision for product returns and price adjustments. This compared to the fourth quarter 2019’s  $3.7 million in a provision for product returns and pricing adjustments. “The majority of the Q1 2020 provision was related to THC oils which have seen less than anticipated demand in the adult-use recreational market. The majority of the Q4 2019 provision was related to two slower selling stock-keeping units sold to the Ontario Cannabis Store, comprised of a bespoke order of lower THC dried flower intended to fulfill a supply gap in the market earlier in calendar 2019 and THC oils.”

Putting On The Brakes

The company also stated that it had a total target production capacity of 89,000 kilos per year, it was going forward at a more slow pace. Engel said on the company’s conference call, “We believe consumer demand in Canada continues to be suppressed by the lack of retail stores, particularly in the most populous provinces of Ontario and Quebec. We can more effectively manage cash allocation and put some of the capital to better use elsewhere. And the decision to delay completion as originally designed allows us to preserve flexibility to use portions of the 4C space for other strategic purposes. We will continue to monitor market conditions and believe we can finish foreseeing a relative short time frame should consumer demand warrant.”

Canada 2.0 Rollout

Engel also said on the call that the company’s Rec 2.0 rollout plans include three SKUs of its Trailblazer vape cartridges, and they were pleased with the response to date. “We expect to make our first shipment of our three SKUs of our Feather Edison pens as early as next week. And our PAX Edison cartridge, we expect to have out in calendar Q2. Our chocolate Edison truffle bites are expected to be in market soon as well followed by Trailblazer bars and Edison bars. And rounding out our portfolio of 2.0 products is our dissolvable powder product. Our R&D team has developed a proprietary nano-emulsification technology that is anticipated to provide an initial absorption of cannabinoids within 10 to 15 minutes.”

Capital

The company said that it has $34 million in cash and short-term investments and still has $30 million in available capacity on a term loan, which remains undrawn. CFO Paolo De Luca said, “Given our cash and short-term investments of $34 million, our $30 million of untapped committed credit facility, up to $25 million available under the revolver and a potential uncommitted $35 million under the credit facility plus the $22 million raised under the ATM, we believe we have created the necessary capital and liquidity cushion to write out any volatility in the capital markets.”


Debra BorchardtDebra BorchardtNovember 25, 2019
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5min5800

Organigram Holdings Inc. (OGI) (OGI) reported that its gross revenue grew to $19.2 million for the fourth quarter ending August 31, 2019, versus $3.1 million for the fourth quarter in 2018. The net loss for the 2019 fourth quarter was $22 million versus last year’s net income of $18 million for the same time period. The larger loss was due to “non-cash fair value changes to biological assets and inventories.”

For the full year, Organigram delivered net revenue of $80.4 million, which grew 547% over 2018’s $12.4 million. The net loss for 2019 was $9.5 million versus 2018’s net income of $22.1 million.

“Our 2019 results reflected a successful year for Organigram. Not only did we report strong top-line growth and establish an enviable national market share position in Canada, we generated positive adjusted EBITDA – one of the key measures we use to evaluate our performance,” said Greg Engel, Chief Executive Officer. “In 2019, we increased staffing and capacity to meet forecasted demand and maintain inventory in the market. Industry structural issues have challenged supply and demand dynamics in the short-term but we believe the growth opportunity in the Canadian cannabis market remains intact.”

Lower Sales Sequentially

The company’s fourth-quarter net revenue dropped to $16.3 million versus the third-quarter net revenue of $24.8 million. Organigram had warned the market about a $3.7 million in a provision for product returns and pricing adjustments. “The majority of the provision was largely related to two slower selling stock-keeping units (SKUs) sold to the Ontario Cannabis Store (OCS), comprised of a bespoke order of lower THC dried flower intended to fulfill a supply gap in the market earlier this year and THC oils which have seen less than anticipated demand in the adult-use recreational market.”

The company also said that the “lack of a sufficient retail network and slower than expected store openings in Ontario continued to impact revenue growth in Q4 2019 and were further exacerbated by increased industry supply. Quarter to quarter revenue is expected to continue to be volatile due to the timing of large pipeline orders for Ontario, in particular, where there is a centralized distribution model and where store additions are difficult to forecast.”

Year to date, Organigram said it estimates it has approximately 10% national market share based on its analysis of available data including, but not limited to, market share data from select provinces and various public data.

Cultivation Costs Come Down

The fourth-quarter “all-in” costs of cultivation of $0.66 and $0.94 per gram of dried flower harvested, respectively, dropped from $0.95 and $1.29 per gram in Q3 2019 as yield per plant increased in line with historical levels following a temporary decrease in Q3 2019 (Q4 2019: 148 grams compared to 110 grams in Q3 2019). As a result, the Q4 2019 harvest increased to 7,434 kg from 6,052 kg in Q3 2019.

Looking Ahead

Organigram said it took delivery of its high speed, high capacity, fully automated chocolate production line in October 2019. The installation has been almost completed, and the company expects to commission and license products in time for initial sales in Q1 calendar 2020.  The company said it now expects to launch powdered beverage products in Q2 calendar 2020 based on expected licensing timing for the production area and equipment delivery and commissioning schedules.

The company also stated that Q1 2020 net revenue is expected to be higher than Q4 2019 on increased sales to provinces and higher wholesale revenue. It expects increased efficiencies and economies of scale from more capacity to decrease cultivation costs in Q1 2020 from Q4 2019. Labour costs are not expected to increase commensurate with production, processing and sales volume.

“As we were one of the first success stories to supply the market in the early days of legalization, we have had visibility for some time now on ultimate sell-through to consumers and have adapted our production mix and product strategy to align with our understanding of emerging consumer preferences. We have a great conviction in our strategy and ability to onboard the new retail store openings and to launch a portfolio of edible and derivative products appealing to adult consumers. ”

The stock was up over 3% and lately trading at $2.72.


Debra BorchardtDebra BorchardtNovember 12, 2019
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5min6150

Organigram Holdings Inc. (NYSE: OGI) saw its stock plunged by almost 20% after the company slashed its guidance for the fiscal fourth quarter that ended in August after the market close on Monday. The stock was lately trading $2.74. The company said it will report earnings before the market opens on November 25.

Organigram said it now expects fiscal fourth-quarter net revenue of C$16.3 million or $12.3 million, a huge drop from the third quarter revenue of C$24.8 million.  FactSet had analyst estimates at C$27.9 million for the fourth quarter.

Organigram said it shipped about $20 million worth of cannabis during the quarter and blamed a lack of retail stores and slower store openings for the decline. The company said it expects to have roughly $47.9 million in cash and equivalents by the end of the quarter.

“While Q4 2019 did not meet our overall expectations, we have not only emerged as one of the national leaders in the industry with significant growth expected in net revenue and strong market share, we expect to report positive adjusted EBITDA for the year,” said Greg Engel, CEO. “And we remain relentlessly focused on running a profitable business which earns attractive returns on investment for our shareholders over the near and long term. We are encouraged by Ontario’s recent announcement to expand the retail network and believe this should be an important catalyst to drive further growth for us and the industry as a whole.”

In a company statement, Organigram said, “The lack of a sufficient retail network and slower than expected store openings in Ontario continued to impact sales in Q4 2019 and were further exacerbated by increased industry supply. The majority of the product returns and price adjustments (of about $3.7 million) was largely due to returns and price adjustments for two slower selling SKUs sold to the Ontario Cannabis Store (OCS), comprised of a bespoke order of lower THC dried flower intended to fulfill a supply gap in the market earlier this year and THC oil which has seen less than anticipated demand in the adult-use recreational market.”

“Since we were one of the first success stories following legalization, we had early visibility of product sell-through. As such, we are already well underway in aligning our strategy and production mix to emerging consumer preferences,” said Mr. Engel. “We have also piloted ‘limited time’ offers of other strains. Two, in particular, have been met with exceptional customer feedback: Edison Limelight (sativa) and Edison El Dorado (hybrid) and as such, we are incorporating these new strains into our core offerings.”

Looking to 2020

Beyond fiscal Q1 2020, Organigram said it remains on track to launch vape pens in mid-December followed by cannabis-infused chocolate products in calendar Q1 2020 and now expects its shelf-stable, water-compatible, flavorless nano-emulsion powdered beverage product in calendar Q2 2020 based on expected licensing for the production area and equipment delivery and commissioning schedules. Organigram submitted new product notifications to Health Canada for a vape pen portfolio and cannabis-infused chocolates last month.

Organigram said it expects to report about $47.9 million in cash and short-term investments and about $49.6 million in current and long-term debt, which primarily represents the carrying value of its term loan. Subsequent to Q4 2019, an additional $15.0 million was drawn on its term loan leaving about $50.0 million in the available capacity of the total term loan of $115.0 million. The company also has a revolver of up to $25.0 million available to be drawn against specified receivables. On November 4, 2019, Organigram filed a preliminary base-shelf prospectus for an amount up to $175.0 million.


StaffStaffAugust 20, 2019
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7min5290

It’s time for your Daily Hit of cannabis financial news for August 20, 2019.

On The Site

iAnthus

Multi-state operator iAnthus Capital Holdings, Inc. (CSE: IAN)(OTCQX: ITHUF) said that it has entered into a senior secured term loan of up to $50 million from one or more investment funds managed by Torian Capital Partners. The loan will be doled out in two tranches of $25 million each with similar terms.

iAnthus said it will use the money for its expansion efforts in Florida and the company’s new Be. retail locations in Nevada, New Jersey and New York. The company is expected to report its second-quarter earnings on August 27.  Last month the company noted that its CBD For Life products will be sold in Dillards Department Stores.

BDS Analytics

Cannabis data company BDS Analytics announced that it closed on $7 million in new financing, led by KEY Investment PartnersAltitude Investment Management, and 7thirty, with participation from other investors. A part of the financing deal, Pete Karabas of KEY Investment Partners will be joining the board of directors. BDS said it will use the money to expand coverage of emerging cannabis markets and strengthen its operating infrastructure with investments in machine learning, marketing and sales, and strategic partnerships.

“As the global cannabis economy continues to expand, it is imperative that we’re able to scale alongside it to remain an indispensable asset for key decision-makers in the industry,” said Roy Bingham, CEO, and Founder of BDS Analytics. “We’re excited about this new round of funding, which will allow us to further enhance our GreenEdge platform and expand our capabilities to the entire addressable cannabinoid market.”

In Other News

Organigram

Organigram Holdings Inc. (NASDAQ: OGI) (TSX VENTURE: OGI) received final approval for the listing of its common shares on the Toronto Stock Exchange (“TSX”). Organigram’s common shares will commence trading on the TSX at the opening on Thursday, August 22, 2019, continuing to trade under the symbol OGI. To ensure continued and seamless trading for the Company’s shareholders and as a result of the graduation, there will be no further trading on the TSX Venture Exchange after Wednesday, August 21, 2019. Organigram’s common shares will be delisted from the TSX Venture Exchange at the commencement of trading on the TSX.

Empower Clinics

Empower Clinics  (CSE: CBDT) (OTC: EPWCF) a vertically integrated and growth-oriented CBD life sciences company, and a multi-state operator of medical health & wellness clinics in the U.S., announced that its common shares will begin trading on the OTCQB Venture Market at the opening of the market on August 20th, 2019 under the stock symbol (OTC: EPWCF). “Our listing on the OTCQB Venture Market in the United States complements Empower’s listings on the Canadian and Frankfurt Stock Exchanges, respectively, broadening our investment base as we accelerate our growth strategy in the global medical cannabis and wellness sectors,” said Steven McAuley, Empower CEO.  “This is a timely milestone, as we have a robust pipeline of activity tied to product development, business development, M&A and, overall company expansion.”

Acquired Sales Corp.

Acquired Sales Corp. (OTC Pink: AQSP) announced that it has signed a definitive merger agreement to acquire 100% of CBD LION LLC (www.CBDLION.com), Mundelein, Illinois, for consideration of $2 million in cash, plus 5 million shares of Acquired Sales Corp.’s common stock. Acquired Sales Corp. also announced that it has loaned $300,000 to CBD LION LLC that will be used as growth capital.


Debra BorchardtDebra BorchardtJuly 15, 2019
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6min7970

The parent company of Organigram Inc., Organigram Holdings Inc. (NASDAQ: OGI) (TSX VENTURE: OGI) reported its revenue of $24.8 million for the third quarter ending May 31, 2019, fell sequentially from the second quarter net revenue of $26.9 million. However, it was a 621% increase over last year’s net revenue of $3.4 million.

The company said that the third-quarter net revenue reflected significant sales growth from Alberta and Atlantic Canada offset by the timing of shipments to Quebec that occurred subsequent to quarter-end, a large pipeline fill in Q2 2019 for Ontario in advance of opening retail stores that were not fully matched by reorders in Q3 and fewer reorders from British Columbia in Q3 (as demand for legal products remains generally under indexed in that province). The gross revenue of $30.3 million was a 784% increase over last year’s gross revenue of $3.4 million.

The company also delivered a net loss of $10.2 million or $(0.07) per share. The company said the net loss was largely due to non-cash fair value changes to biological assets in inventory. This was a 429% increase over the net income of $4 million for the same time period last year. Year to date, net income from continuing operations was $12.9 million or $0.09 per share on a diluted basis

“We continued to report strong sales in our third quarter and now have distribution in all ten provinces. In our fiscal year to date, we have generated strong operating and financial results, placing us among the leaders in the Canadian industry. While we saw a temporary reduction in yield per plant in Q3 due to temporary changes in growing protocols, not only have our yields returned to historical levels, but we have seen a meaningful increase in average cannabinoid levels in harvests to date in Q4” said Greg Engel, Chief Executive Officer of Organigram.

Cost To Grow Got More Expensive

The third quarter cash and “all-in” costs of cultivation of $0.95 and $1.29 per gram of dried flower harvested4, respectively, increased from $0.65 and $0.95 per gram in Q2 2019 almost exclusively due to a temporary decrease in yield per plant as a result of a change in growing protocol. The company said it returned to proven growing methods and yield has returned to previous levels toward the end of Q3 and in Q4 (to date).

The change in growing methods also affected the gross margins which decreased to $12.3 million or 50% from the second quarter’s 2019 adjusted gross margin of $16.0 million or 60%5 largely due to production costs, the temporary decrease in yield per plant and write-downs of legacy packaging materials that were replaced with new, more consumer-friendly packaging. Q3 gross margin was negative $0.2 million largely due to fair value changes in biological assets and inventory sold.

Getting Ready For Edibles & Vapes

The company said its production and product development teams have made significant preparations to execute its strategy and plans for the derivatives and edibles launch later in 2019. Organigram has chosen to initially focus on the two most popular product forms based on US state sales data: vaporizer pens and edible products.

Organigram said it expects the construction of additional in-house extraction capacity to be completed by the end of calendar 2019. However, it said it has the capacity to fill vaporizer pens in its existing facility ahead of the licensing of Phase 5 in order to be ready to sell the products as soon as authorized for sale in December 2019. During the quarter, Organigram announced a $15 million investment commitment in a high speed, high capacity, fully automated production line with the ability to produce up to 4 million kilograms of chocolate edibles. The investment will provide the company with a state-of-the-art chocolate molding line and a fully integrated packaging line that includes advanced engineering, robotics, high-speed labeling, and automated carton packing. Organigram expects to take delivery of the equipment in the fall of 2019 and complete installation and commissioning in time for initial sales shipments in early calendar 2020

“We have seen adult recreational cannabis sales highly correlate to the presence of physical retail stores based on a comparison of the provinces in Canada. The Canadian market is positioned to grow significantly with more retail stores opening – particularly in the two most populous provinces of Ontario and Quebec – and the upcoming legalization and availability of edibles and derivative products..”


Debra BorchardtDebra BorchardtMay 20, 2019
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4min9190

Canadian-based Organigram Holdings Inc. (TSX VENTURE: OGI) (OTCQX: OGRMF)  will begin trading on the NASDAQ Global Select Market on May 21, 2019. The company will continue to list its common shares on the TSX Venture Exchange under the symbol “OGI.”

“As a management team we are seeing increased interest from investors in the U.S. and internationally and believe that having a listing on the NASDAQ will facilitate trading,” said Paolo De Luca, Chief Financial Officer of Organigram. “In addition, based on precedents in the cannabis space, we expect trading volumes to increase which should result in increased liquidity for all investors”.

The company has also hired Native Ads, Inc. to manage a digital media marketing campaign and entered into an agreement with Hybrid Financial Ltd. to provide marketing services to advisors, brokers and institutional investors in North America.

Organigram has developed a portfolio of legal adult use recreational cannabis brands including The Edison Cannabis Company, Ankr Organics, Trailer Park Buds and Trailblazer. Organigram’s primary facility is located in Moncton, New Brunswick and the Company is regulated by the Cannabis Act and the Cannabis Regulations (Canada).

Investment in Chocolate

Organigram also announced a $15 million investment commitment in a high-speed, high-capacity, fully-automated production line with the ability to produce an estimated 4 million kilograms of exceptional chocolate cannabis edibles per year. Organigram said it expects to take delivery of the line in the fall.

The company said that the line is expected to allow Organigram’s product development team to introduce chocolate innovations unique not only to the cannabis industry but to the chocolate industry as a whole.

“Over the last number of years, Organigram has become known for its best-in-class cannabis production facility and high-quality products,” says Greg Engel, CEO, Organigram. “With this investment, we will soon also be known for our world-class chocolate production capability.”

Organigram’s foray into chocolate is led by a product development and production team with more than 25 years of combined chocolate experience and expertise. As previous Vice President, Operations at Ganong Bros Limited, Jeff Purcell, Organigram’s Senior Vice President of Operations, will leverage his many years of chocolate experience to implement and manage the project. The company has also recruited a marketing, product development and a research team led by Ginette Ahier, previously of Adorable Chocolate, and Mouna Gharsallah, previously of Tunisia based Sotuchoc.

The full Organigram chocolate offering that is under development is expected to be supported by a carefully curated collection of partners and suppliers identified for their own global expertise and unwavering commitment to quality. The investment will contribute to a state-of-the-art chocolate molding line and a fully integrated packaging line, that includes advanced engineering, robotics, high-speed labeling, and automated shipping carton packing.

“Not only have we invested in exceptional technology, but we have also brought an outstanding team to the table,” says Engel. “I don’t believe there is another team assembled out there that can rival ours when it comes to understanding – and reimagining – the potential of chocolate cannabis-infused edibles.”


Debra BorchardtDebra BorchardtApril 15, 2019
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5min6070

Organigram Holdings Inc. (TSX: OGI) (OTCQX: OGRMF) announced its results for the second quarter ending February 28, 2019 with net revenue of $26.9 million, a 693% increase over last year’s net income $3.3 million. The net loss from continuing operations was $6.4 million or $(0.05) per share on a diluted basis versus $1.2 million net income, or $0.01 per share on a diluted basis for the same time period in the previous year.

The adjusted EBITDA of $13.3 million or 49% (of net revenue) was positive for the third consecutive quarter and increased from an adjusted EBITDA loss of $0.3 million in Q2-2018 driven by exponentially higher unit sales.

“For the second consecutive quarter, our results reflected operational excellence which translated into record revenue for the Company, industry-leading adjusted gross margin, and positive adjusted EBITDA, all of which differentiates us from most of the Canadian industry today,” said Greg Engel, Chief Executive Officer. “Our team has already progressed several key initiatives in preparation for the derivative and edibles launch in the fall of 2019.”

Q2-2019 gross revenue of $33.5 million included the first full quarter of adult-use recreational sales and increased 1,044% over the previous year’s gross revenue of $2.9 million. The cash cost of cultivation was $0.65 and “all-in” cost of cultivation of $0.85 (including non-cash depreciation and share-based compensation) per gram of dried flower harvested decreased from $1.24 and $1.48, respectively, in Q2-2018 largely due to higher yields per plant.

Adjusted gross margin (a non-IFRS measure that excludes the effects of fair value adjustments on biological assets and inventories) increased to $16.0 million or 60% (of net revenue) from $1.8 million or 52% (of net revenue) in Q2 2018 as explained by increased unit volume sales. Q2-2019 reported gross margin (includes fair value adjustments on biological assets and changes in inventory) equaled $8.0 million compared to $6.2 million in Q2-2018.

Sales and marketing and general and administrative expenses were $5.7 million (excluding non-cash share-based compensation), up from $2.7 million in Q2-2018. As a percentage of net revenue, SG&A expenses excluding share-based compensation decreased to 21% from 79% in Q2-2018 as management continued with their disciplined approach to overhead spending during this high growth period.

Edibles & Beverage Launch

Organigram said it is well-positioned for the launch of the derivatives products in the fall of 2019. The company is currently focusing its interests on vaporizable pen technologies and a selection of edible products.  A chocolate molding line and additional fully automated packaging equipment for product lines such as edibles and other derivative based products have been ordered and short path distillation equipment for edibles and vape pens has been purchased.

Organigram said that it believes it has also developed a shelf stable, water-soluble and tasteless cannabinoid nano-emulsion formulation that provides an initial onset within 10 to 15 minutes if used in a beverage. Non-cannabis formulations with a similar molecule size are water-soluble in humans (i.e., absorbed through the bloodstream rather than requiring first-pass liver metabolism, which results in longer onset and duration). The company expects to receive appropriate research and development licensing in the very near future at which point it will be able to confirm the onset of action and duration of effect. At this point, the company is not planning to launch its own cannabinoid infused beverages and is actively seeking a strategic partner with proven experience in beverage product development.

It is expanding capacity with the Phase 4 and Phase 5 expansions of its Moncton facility as well as the extraction agreement with Valens.  The company has an exclusive consulting agreement with TGS International LLC, a vertically integrated cannabis company and proven market leader in Colorado, to better understand the demand for certain derivative-based products, market share trends over time and for the development of commercial-scale extraction and product development and processing.


Video StaffVideo StaffFebruary 1, 2019

3min17571

SLANG Worldwide went public this week using the symbol SLNG and trading on the Canadian Securities Exchange. The shares were priced at $1.50 and jumped 33% on the first day of trading to $1.99. The company is a merger between Slang and Organa Brands, the vape powerhouse that has done over $100 million in sales since 2014. Firefly is also included in the new company.

Organigram Holdings Inc. reported its first fiscal 2019 quarter results with net sales for the three months ending November 30, 2018, of $12.4 million, up 419% from $2.4 million in Q1’2018.  Sales rose 287% sequentially as the impact of legal adult use sales in Canada continues to be felt on the income statement. Net income for the quarter was $29.5 million

Sproutly Canada, Inc. announced financial results for the quarter ending November 30, 2018. The company reported a net loss of C$2.8 million or $0.02 per diluted share for the quarter versus last year’s net loss of C$473,405 for the same time period. In the filing, Sproutly noted that it has not generated any revenues from operations and has incurred losses since inception. The company has an accumulative deficit of $12,312,832

Innovative Properties Inc. d/b/a Nabis Holdings entered into an agreement with Canaccord Genuity Corp. and Eventus Capital Corp. for a brokered private placement of debenture units of up to C$30,000,000.

Dixie Brands Inc.  (CSE: DIXI.U) and Khiron Life Sciences Corp. (OTCQB: KHRNF) have signed a binding letter of intent to establish a 50/50 joint venture to introduce a full line of cannabis-infused products to the Latin American market.

Israel is set to pass a law allowing exports of medicinal cannabis, the Finance Ministry said last week, as the county ramps up its attempt to woo more investment and bolster state coffers. The bill passed its third reading in the Israel parliament in December and is now waiting for the cabinet and Prime Minister Benjamin Netanyahu to sign it into law.

 


Debra BorchardtDebra BorchardtJanuary 31, 2019
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3min6650

 Organigram Holdings Inc. (OTCQX: OGRMF) has surpassed making one million cannabis pre-rolls since the legalization of adult use recreational cannabis in October 2018. The company said that it credits the automation of its processes along with surging consumer demand for the success of its large-scale production.

“At Organigram, we are proud to be among a select group of licensed producers who have been able to rise to the challenge of large-scale pre-roll production,” says Greg Engel, CEO, Organigram. “Our operations team has done an amazing job introducing automation to important parts of our process, building our overall capacity while retaining our focus on product quality.”

Organigram said that very few licensed producers have been able to supply the market with dried cannabis pre-rolls which are in very high demand. The demand can be blamed partly on the limitations the country set at the onset of legalized adult use sales. Vaping products and edible won’t be available for purchase until later this year. Making pre-rolls the most convenient of options for consumers.

Knowing these limitations, Organigram said it expected demand for cannabis pre-rolls to be in line with other regulated markets at approximately 10%, although sales to this point have surpassed that due to high customer demand and industry under-supply. The company said that pre-rolled products represent approximately 12% of all its gross sales. Organigram currently supplies Edison Cannabis and Trailblazer 0.5g pre-rolls to nine provinces from coast to coast.

“We take our commitments to our partners and customers very seriously,” says Engel. “Through an aggressive but highly actionable growth strategy, meaning that with the expansion of our team, its expertise, and our facility, we are on track to deliver on our strategic promises.”

Expansion Update 

Organigram also gave an update on the expansion of its Moncton Campus located in New Brunswick. Phase 4A,  is currently underway and will offer the Organigram team 31 new grow rooms and a new mechanical room. As the Company’s Phase 4A construction progresses, Phase 4B construction also begins to take shape with 32 new grow rooms. Phase 4C will follow with 29 new grow rooms.



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