Investors are expecting the first wave of big Q1 results starting this week, including big bank stocks. However, a couple of noteworthy companies also reported their quarterly results on Tuesday. One of which was a Canadian cannabis producer called OrganiGram Holdings (NASDAQ: OGI). Shares shot up after the company reported a very impressive first quarter. In turn, other pot stocks were edging higher in anticipation of what could be a great quarter for the industry.
OrganiGram announced that its net revenue for the quarter more than doubled from last year to $31.8 million, up 117%. Despite lower selling prices on average, the company said that adult recreational revenue and international revenue were the main drivers for what was a fantastic quarter.
“In addition to our continued success at building beloved brands, our ability to increase sales in international markets and capitalize on our accretive acquisitions, such as Laurentian and EIC, continue to contribute to our solid gains in market presence and sales growth,” said OrganiGram CEO Beena Goldenberg.
Net loss came in at $4.0 million, which was a significant improvement from the $66.4 million net loss OrganiGram reported a year ago. The company also recently announced that it would be buying out one of the larger cannabis brands operating out of Quebec, Laurentian, for $36 million.
Shares were up around 12% following the news. Although OrganiGram is just a small-cap pot producer, the news could be indicative that the cannabis sector could be staging a return. Aurora Cannabis (NYSE: ACB) and Canopy Growth (NYSE: CGC) were both up a bit on the news.
The general state of the cannabis sector is still murky. The big catalyst investors have been hoping for years now is a legalization bill in the states. Although one such legalization bill passed through the house, it faces a firm uphill battle in the Senate. Democrats would need the backing of every one of their members, as well as support from at least 10 Republicans to make the bill law.
While cannabis investors have been waiting for years for this to happen, shares of popular pot stocks have been steadily tumbling. Both Canopy Growth and Aurora Cannabis, which once commanded billion-dollar-plus valuations, have steadily plummeted over the years to just a fraction of their former size. The post-Covid era hasn’t been particularly kind to pot stocks either.
Although companies themselves are struggling, the industry itself has been steadily growth. Global consumer spending on marijuana is expected to grow from $25.1 billion in 2021 to over $37.0 billion by 2023. A lot of this growth is coming from Europe as opposed to North America, especially as medical marijuana is growing substantially faster overseas than it is domestically.
The current banking situation in America means that companies have another regulatory hurdle to pass through, given cannabis’ is still being federally illegal. Canadian and European cannabis firms don’t have to deal with this problem.
OrganiGram Holdings Company Profile
Organigram Inc. is a Canadian licensed producer of cannabis products. Organigram focuses on producing exceptional, indoor-grown cannabis for patients and adult recreational consumers, as well as developing global business partnerships. – Warrior Trading News
