Organigram is Going Coastal with its Cannabis Distribution

In this market news, Organigram Holdings Inc. (TSXV:OGI), one of the Canadian marijuana stocks, said it has signed a supply agreement with the BC Liquor Distribution Branch


SmallCapPower | November 5, 2018: Organigram Holdings Inc. (TSXV:OGI), one of the Canadian cannabis stocks, announced recently that it has signed a supply agreement with the BC Liquor Distribution Branch. This is the eighth such provincial supply agreement out of 10 provinces that have finalized supply agreements and aligns well with the Company’s increasing focus on producing and selling cannabis, with a shift away from its clinic operations. The agreement puts Organigram on par with industry majors such as Canopy Growth Corporation (TSX:WEED) and Aurora Cannabis Inc. (TSX:ACB), which also have supply agreements across Canada.

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To capture the large recreational cannabis opportunity that has opened up recently in Canada, Organigram has embarked on a massive expansion program that will quadruple its production capacity to 113,000kg annually by Q4 2019 from the current 36,000kg. With distribution agreements in place across Canada, the Company should have an easier time selling its additional production. The Company has already developed a portfolio of recreational cannabis brands including The Edison Cannabis Company, Trailblazer, Ankr Organics and Trailer Park Buds.

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Organigram CEO Greg Engel said, “Organigram’s strategic vision has always been to establish a definitive national footprint. We are proud to realize that vision and offer Canadians from coast to coast access to our growing recreational product portfolio.”

Organigram currently trades at a market cap of $753 million, or 61.5x its trailing 12 months sales of $12.25 million.

Disclosure: Neither the author nor his family own shares in any of the companies mentioned above.

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