Welcome to our first edition of our licensed producer series. We are extremely excited to be rolling out a company overview every Friday. Each week, we’ll talk about each licensed producer’s history, products, facilities, partnerships, sales and more. For our inaugural series, we’ve chosen Organigram, one of Canada’s finest. Let’s begin.
Organigram – Volume 001
Organigram Holding Inc. (OGI-V) is a TSX Venture Exchange listed firm based in Moncton, New Brunswick. Organigram boasts 227,500 sq. ft. of fully-built and operational production space from over $90 million in capital investment, making it one of the largest medical marijuana firms in this part of the country.
The Organigram Approach
With its HQ, production facility, and R&D lab all located in two buildings sitting on 14 acres of land in Moncton, Organigram is quite an interesting company. Unique in some way from other licensed marijuana producers in Canada, the company sells select strains depending on the medical conditions of their patients. This is a great approach to providing medical marijuana since the strains used have been tested and are directed to help treat specific ailments. The strains offered by Organigram vary in price, between $6-$9 per gram (at the time of this writing). They also offer free shipping and eligible patients can enjoy a compassionate pricing discount.
Organigram was founded by Jim Laffoley, on the idea of building strong roots with their clients, plants, and company. This concept directs their company culture, ethics, and corporate identity. All their cannabis products undergo third-party laboratory testing, periodic testing of inputs such as seeds and growing mediums and a transparency policy of posting all Certificates of Analysis.
With the announcement that cannabis will be made legal for adult recreational use on, or before July 1, 2018, by the Canadian Federal Government, Organigram is strategically set to benefit as an authoritative brand in both the medical and adult recreational marketplace.
Organigram has managed to create and develop different products which are doing well in the market. They have also created a robust brand image, thanks to high-quality standards, company policies, and corporate social responsibility. The current expansion scheduled to be completed by Q4 2017 of the production facility is also set to boost production and revenue exponentially.
Organigram ACMPR Licenses
Organigram is licensed by Health Canada under the ACMPR program and was first licensed back in 2014 to cultivate medical cannabis. In 2016, the license was amended to include the production and sale of both dried medical cannabis products as well as oil extracts.
- Dried cannabis culivation
- Dried cannabis sale
- Cannabis oil production
- Cannabis oil sale
Organigram Products & Revenues
By the end of the 3rd quarter, OGI was producing 5,200kg/yr of products. However, thanks to a fully funded facility expansion that is currently underway, by the end of 2017, production is projected to be at 16,000 kg per year and 26,000 kg per year by end of 2018. It has already recorded a 31% sales growth in gross sales between the third quarters of 2016 and 2017.
On average, Organigram sells a gram of dried cannabis to medical patients at $8.83 with a cost of only $2 per gram. In terms of revenue, OGI raked in $7.5 million as of May 31, 2017, with a market capitalization of $299 million.
As of the end of March 2017, medical marijuana market consisted of 167,000 patients, who bring in a revenue of $435 million annually according to Health Canada. This is a consistent 10% increase in revenue every month since 2015. Organigram is well poised to take advantage of the legalization of adult recreational marijuana on July 1, 2018, which is projected to boost sales exponentially. They recently announced a landmark supply agreement with the province’s government in partnership with Canopy Growth (the owners of Tweed Farms, Spectrum-Mettrum, etc.).
By 2021, OGI projects the total revenue from medical and adult recreational marijuana to be well over $8.6 billion. This is roughly 40% of the Canadian alcohol market.
Organigram Subsidiaries & Partnerships
Organigram has an exclusive brand licensing, product development and distribution agreement with The Green Solution, a market leader based in Denver Colorado. The Green Solution has been able to make over $100 million in cumulative product sales. It owns 13 retail outlets, a portfolio of over 225 unique cannabis products, some of which have been recognized and awarded. The Green Solution consults Organigram for the development of large-scale extraction and processing, as well as formulated product development.
Trailer Park Boys is another business partner to the Company. The two have an exclusive Canadian licensing agreement for cannabis production and brand development. Organigram will handle the marketing and distribution in exchange for exclusivity rights to the brand in Canada.
In a bid to scale up and achieve their expansion goals, the Company acquired Trauma Healing Centers, the only organization in Canada focused on Canadian Veteran Community. They have 7 locations and 4,000 patients. Trauma Healing Centers owns and manages Clinics serving veterans specifically. They boast of a sizeable team of physicians, psychologists, physiotherapists, dieticians, therapists, and counselors.