Organigram Holdings is Set to Roll into Germany

In this market news, Organigram Holdings Inc. (TSXV:OGI), one of Canadian marijuana stocks, said it recently acquired a 25% stake in Germany’s alpha-cannabis Pharma GmbH

SmallCapPower | October 23, 2018: Organigram Holdings Inc. (TSXV:OGI), one of the Canadian cannabis stocks, announced recently that its wholly-owned subsidiary has acquired a 25% stake alpha-cannabis Pharma GmbH (ACG) as per agreement dated October 10. The Company will acquire 8,333 common shares of ACG for aggregate proceeds of €1,625,000. Additionally, it will pay ACG a consideration of €875,000 payable in common shares of Organigram contingent to achieving certain milestones, which will be valued with a volume-weighted average price formula described in the investment agreement. The closing is subject to regulatory approvals.

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ACG is a Germany-based medical cannabis company, well positioned to capitalize on growing cannabis demand in the German markets. Operating in Germany provides a strategic gateway for supplying to other European markets. ACG enjoys a strong network of professional partners throughout Germany and recently launched a CBD kit, which will be available in over 20,000 pharmacies throughout Germany, Austria and Switzerland.

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OGI’s wholly-owned subsidiary, Organigram Inc., will enter into two supply agreements with ACG: one for the supply of cannabidiol isolate from ACG to Organigram Inc., and the other for the supply of dried cannabis flower from Organigram Inc. to ACG. Additionally, both the Companies will enter into an agreement to jointly evaluate and bid on certain licenses to supply medical cannabis to the German market. This agreement is contingent to the closing of the alpha-cannabis Pharma transaction.

Greg Engel, CEO at Organigram said, “As we continue to build the framework of our international medical business, finding the right partners in the right markets has been a priority for our company. This relationship is a perfect example of two companies coming together towards a common goal, and we’re very excited to build our business in Germany through our partners at alpha-cannabis Pharma GmbH.”

ACG’s Managing Directors Alexander Klomsdorff and Dr. Volker Christoffel stated, “We look forward to a strong and fruitful partnership with our Canadian partners as we see significant potential in jointly materializing the medicinal benefits of Cannabinoids.”

Organigram Holdings trades at a market capitalization of C$873.6 million with a price-to-book multiple of 5.14x.

Disclosure: Neither the author nor his family own shares in the company mentioned above.

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