Organigram’s First Deal Since Obtaining a $ 176 Million Investment from BAT Will Expand Line of Cannabis Edibles

EIC, based in Winnipeg, Manitoba, was co-founded by AgraFlora Organics International Inc. AGRA and James Fletcher, CEO of Cavalier Candies, one of Canada’s oldest confectionery companies. The company operates from a 51,000-square-foot manufacturing facility to produce cannabis edibles. He currently has a research and processing license and is in the process of applying for a license to sell Cannabis 2.0 products, the name given to the second phase of the full legalization of the plant in Canada, when edibles and others were allowed. non-floral products. . The company expects to make its first EIC soft chews sales in its fourth fiscal quarter. Watch now: Hexo to buy Zenabis in the latest alliance in the cannabis industry that is experiencing a burst of M&A activity “The EIC integration will continue to provide our consumers with access to innovative cannabis products while leveraging the national network of Organigram sales and distribution, “Organigram Chief Executive Greg Engel said in a statement. Raymond James analyst Rahul Sarugaser said the deal will help consolidate Organigram’s already strong position in the Canadian grocery market and add expertise in making quality soft chews to its chocolate product line. “While the nascent Canadian grocery market represents only about 4% of the adult-use market today, over the next several years we expect this regulatory-restricted and COVID-hampered market to follow a similar trajectory to those seen in the states. cannabis ripens from the US, where edibles claim a market share of more than 10%, and soft chews and chocolates represent the two most important product segments in this category, ”the analyst wrote in a note to the Customers Read Now: Cronos Shares Fall After Larger Than Expected Loss, But Revenue Boosted By Canadian Adult Cannabis Market Organigram said the deal will also diversify its R&D and manufacturing base , in addition to those that are already destined for a Center of Excellence that is being built in collaboration with BAT BTI, -0.72% BATS, + 1.66%. bacalera said it would work with Organigram to develop the next generation of cannabis products, with an initial focus on CBD, the non-psychoactive ingredient in the cannabis plant believed to have wellness properties. Don’t Miss: If you want to get rich off marijuana stocks, you need to know the crucial difference between American and Canadian companies.The two also hope to break out of the US cannabis market, which is expected to be reformed under the administration of the President. Joe Biden, who has pledged to reform strict cannabis laws that continue to classify the plant as a Schedule I drug, grouping it with heroin. That has hampered the development of the legal sector, which is limited primarily to those states that have been legalized for adult medical or recreational use, and has left businesses largely excluded from the federally insured banking system and capital markets. In February, Senate Majority Leader Chuck Schumer said he would make legislative reform a key priority in the current Congress, bolstering hopes of ending the federal ban and helping fuel a widespread rally in the sector. . Hopes for reform rose last week when New York finally legalized cannabis for recreational use by adults, ending years of lobbying and political infighting. New York is expected to become the second largest cannabis market in the US after California. Don’t Miss: New York’s 13% Cannabis Tax May Be Too High As The State Has ‘One Of The Most Sophisticated Black Markets’ In The US, Says An Expert Raymond James Sarugaser Said The Market Cannabis 2.0 from Canada, which went into effect early last year “has yet to find its rhythm.”

A slower-than-expected launch was exacerbated by disruptions in COVID manufacturing and Health Canada licensing, it said. “Should retail cannabis stores begin to reopen in earnest during the second half of this year, we expect the adult cannabis market, and the grocery market in particular, to accelerate materially, with OGI well positioned to get a head start, “wrote the analyst. . “With this capacity-building transaction, we believe OGI is skidding to where the puck is going, not where it is today.” Raymond James rates Organigram’s stock as outperforming. Organigram’s shares fell 4.9% on Tuesday, but are still up 150% year-to-date, after the entire sector rallied at the beginning of the year. The Cannabis ETF THCX, -1.21% has gained 56% so far this year, while the S&P 500 SPX, + 0.05% has gained 8.6%.