Fresh off its biggest deal yet, Organigram Holdings (Nasdaq: OGI) is now refocusing its attention beyond Canada’s borders.
The cannabis producer’s executives painted an ambitious picture during Wednesday’s earnings call, detailing plans to dive deeper into Germany’s medical market while squeezing more value from their recent Motif Labs purchase.
“There’s lots of demand” in Germany, where medical cannabis sales have surged since April, Organigram CEO Beena Goldenberg told analysts. The problem? Getting enough product to patients. “What you hear from most of the players in Germany is that they have less sales on the table, they haven’t had access to enough flower.”
That bottleneck could soon ease for Organigram. The company expects to secure a crucial EU certification in early 2025 that would allow it to ship directly to European buyers at premium prices. The company is also deepening ties with German partner Sanity Group, which is looking to join the country’s new recreational cannabis pilot program in three major cities.
Back home, Organigram is still integrating its C$90 million Motif Labs acquisition, which closed earlier this month. The deal vaulted Organigram to the top spot in Canadian market share, but executives say the real prize lies in the C$10 million they expect to save over the next two years through combined operations.
One key advantage: Motif’s warehouse in London, Ontario. That central location should help Organigram get products to customers faster than shipping everything from its New Brunswick base, according to Chief Commercial Officer Tim Emberg.
Politics could throw a wrench in the works, though. With Canada’s Conservative Party surging in polls, analysts pressed Goldenberg on what a change in government might mean for the cannabis industry. She thinks that while conservatives haven’t exactly embraced cannabis, they might be more willing than the current Liberal government to fix thorny issues like taxation.
“This is an industry that grew from effectively nothing six years ago to over C$5 billion on recreational legalization,” Goldenberg said.
Meanwhile, Organigram seems to be getting more scientific about growing cannabis. Its plants yielded 187 grams each last quarter – up from 131 grams in fiscal 2022 – thanks in part to expanded use of seed-based cultivation. The company plans to grow up to 30% of its crop from seeds next year, cutting costs further.
The company is also cautiously eyeing the U.S. market. Its new “FAST” cannabis technology, developed with British American Tobacco, could be its ticket in through hemp-derived products. The technology, which promises quicker effects in edibles, just launched in Canada.
“We know that the hemp delta-9 market in the U.S. is really a way to get into the U.S. market in a compliant way,” Goldenberg said, pointing to opportunities in both gummies and drinks.
BAT’s backing hasn’t hurt either. The tobacco giant’s final C$41.5 million investment is expected in February, padding Organigram’s already healthy C$133.4 million cash pile – though about C$55 million of that went to the Motif deal.
[[{“value”:”The company currently holds the top spot in Canada’s cannabis market, but its leaders have their sights set on bigger prizes overseas.
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