Adam JacksonOrganigram Holdings Inc. (Nasdaq: OGI) reported Tuesday that its first-quarter revenue rose 17% to $42.7 million but fell short of analyst expectations, while the company posted a wider net loss amid recent moves to expand market share.
The revenue missed the average analyst estimate of $48.93 million, according to Yahoo Finance data, though it marked growth from $36.45 million in the same period last year.
The company recorded a net loss of $23 million versus a loss of $15.8 million in the same period last year. The increased loss was primarily due to fair value adjustments related to British American Tobacco’s investment rights, the company said.
CEO Beena Goldenberg said the results mark an “exciting time” as Organigram begins fiscal 2025 as Canada’s largest recreational cannabis company by market share following its December acquisition of Motif Labs Ltd.
“Our strategic priorities for the fiscal year focus on integrating Motif to maximize operational synergies, continuing to expand our presence in international markets, and driving even more innovation,” Goldenberg said in a statement.
The $90 million Motif acquisition, which closed in December, added two cannabis processing facilities in Ontario and is expected to generate over $10 million in annual cost savings within 24 months.
CFO Greg Guyatt noted that Organigram maintains “one of the strongest balance sheets in the industry.” The company reported cash and short-term investments of $71.2 million as of December 31.
International sales grew by $2.3 million versus the prior year period, reaching $3.3 million. The company expects further international growth pending European Union Good Manufacturing Practice certification of its Moncton facility, anticipated in spring 2025.
According to regulatory filings, Organigram harvested 21,087 kilograms of dried cannabis flower during the quarter, with 21% coming from what it describes as more efficient seed-based cultivation methods.
The company’s adjusted gross margin improved to 33% from 31% year-over-year, which management attributed to lower cultivation costs and reduced inventory provisions.
Organigram expects to receive the final $41.5 million tranche of a strategic investment from British American Tobacco this month. The tobacco giant announced a $124.6 million follow-on investment in November 2023, creating what the companies have called the Jupiter strategic investment pool for international expansion.
Organigram said it aims to leverage its newly launched Edison Sonics gummies featuring proprietary fast-acting technology, which clinical validation shows has up to 50% faster onset compared to traditional edibles, according to the company.
