Why the early market hype surrounding the sector has died down, explosive growth is still a reality for investors looking to capitalize on the relatively young industry that is the cannabis sector. Organigram Holdings Inc (TSXV: OGI), parent company of Organigram, announced today their first quarter results for fiscal 2019. The figures, which show a dramatic 287 percent increase in sales, encompassed all operations up to November 30th, 2018 – which included the impact of Canada’s federal legalization on October 17th.
As a major producer of cannabis, Organigram’s main product is extracted cannabis to other companies. Major figures in the financial announcement include net revenues of $12.4 million, up drastically over the previous quarter, along with an adjusted gross margin of 71 percent. Overall, sales for the quarter were up 419 percent from $2.4 million last year, as well as up 287 percent from the $3.2 million in Q4 2018.
“The first quarter of 2019 is just the start of what we expect to be a year of tremendous growth,” said CEO Greg Engel. “We’ve always believed the Moncton Campus would be a competitive advantage for us being able to produce high-quality indoor-grown product at low cash cost of cultivation. Our first quarter results confirmed that as we reported an adjusted gross margin of 71%. While we continue to work hard to take advantage of our enviable inventory build to drive increase sales we are already well underway preparing for the derivative and edibles launch during the fall of 2019.”
The company predicts that 2019 will continue as a strong year, with most of their sales coming from adult-use recreational cannabis. Organigram also produces medical marijuana for patients, taking a multi-disciplinary approach to treating conditions like chronic pain, PTSD, and various trauma therapies. At the same time, they’ve been considering entering the cannabis edibles market, partnering with one of Canada’s leading food product development companies in the process, Smartest Kitchen. The edibles market is estimated by some analysts to be worth $4.1 billion between Canada and the United States by 2022.
At the same time, Organigram is dealing with a class action lawsuit filed with the Supreme Court of Nova Scotia concerning potential damages done by faulty products containing trace quantities of pesticides not approved for use by licensed producers in Canada. While tarnishing the company’s reputation, the development hasn’t hurt Organigram’s sales. In response to the financial news, Organigram stock jumped over 18 percent in today’s trading.
Organigram Holdings Inc Company Profile
Organigram Holdings Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada. Organigram is focused on producing the highest-quality, indoor-grown cannabis for patients and adult recreational consumers in Canada, as well as developing international business partnerships to extend the company’s global footprint.
Organigram has also 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). – Organigram Holdings