Organigram Reports Q3 Fiscal 2023

LOS ANGELES- Organigram Holdings Inc. a licensed producer of cannabis, today unveiled its financial outcomes for the third quarter ending May 31, 2023. The period was marked by remarkable resilience and growth in the company’s Canadian recreational cannabis sector, alongside strategic advancements in cannabis innovation, even as the industry faced significant market challenges.

Key Highlights of Q3 Fiscal 2023:

•  Growth in Recreational Sector: Organigram’s Canadian recreational net revenue escalated to $92.5 million in the nine months up to May 31, 2023. This represents an $8.0 million increase over the same period in the previous year.
• Sequential Revenue Increase: The company recorded a 7% sequential revenue growth in its Canadian recreational business compared to Q2, driven by strong sales in hash and flower products.
• Market Share Growth: Organigram re-established itself as the third-largest player in the Canadian market in May, capturing a 6.7% national market share.
• International Sales Surge: The company also reported a substantial 94% increase in international sales, reaching $18.4 million in the first nine months of fiscal 2023.
• Investments in Innovation: Strategic investments in entities like Phylos Bioscience Inc. and Green Tank Technologies Corp. have bolstered Organigram’s standing in the realm of cannabis innovation.

Financial Performance and Strategic Developments:

• Consumer-Centric Approach: CEO Beena Goldenberg highlighted the company’s dedication to consumer-centric products and brands, which contributed to a 10% growth in the Canadian recreational business year-to-date.
• U.S. Market Expansion: The company’s first U.S. investment in Phylos aims to commercialize THCV and transition to seed-based production.
• Collaboration with BAT: The partnership with British American Tobacco is rapidly advancing towards product commercialization.
• Brand Success: The SHRED brand continues its market dominance, nearing $190 million in retail sales over the past year.

Challenges and Adjustments:

• Revenue and Profitability Concerns: The third quarter witnessed a dip in gross revenue to $48.4 million, a 12% decrease from the previous year. The net loss expanded to $213.5 million, primarily due to an impairment loss of $191.2 million, reflecting the downturn in flower sales and market capitalization trends.
• Addressing THC Inflation: CFO Derrick West discussed the impact of THC inflation on pricing, with adjustments being made in production to align with consumer demands while maintaining operational efficiency.

Outlook and Future Projections:

• Optimistic Future Outlook: Despite the challenging quarter, Organigram remains upbeat about its prospects, anticipating a return to positive Adjusted EBITDA in Q4 Fiscal 2023.
• Strong Financial Position: With $75 million in cash reserves and minimal debt, the company is strategically positioned to navigate the fluctuating market landscape.

The third-quarter results of Organigram signify its adaptability and resilience in a fluctuating market. Through strategic investments and an emphasis on innovation, the company is poised for continued growth. Facing the challenges head-on, Organigram is reinforcing its stature as a frontrunner in the cannabis industry.