Organigram Reports Third Quarter Fiscal 2023 Results
- Year-to-date Canadian recreational business grew 10% versus prior year driven by continued focus on consumer-centric products and brands
- Strategic investments in Phylos and Greentank strengthen Organigram’s position as an industry leader in cannabis innovation, solidifying long-term competitive advantage
HIGHLIGHTS
- Recreational net revenue was $92.5 million for the nine months ended May 31, 2023, an increase of $8.0 million over the same prior-year period
- Increased sequential net revenue from Canadian recreational business by 7% vs. Q2 driven by continued success in hash and rebound in flower
- Organigram regained the #3 position in May and held it through June with 6.7% national market share1
- Held the #1 position in milled flower, the #1 position in concentrates, and moved into the #2 position in gummies nationally in May1
- International sales for the first nine months of fiscal 2023 of $18.4 million exceeded the $9.5 million realized for the same prior-year period by 94%
- Completed first U.S. investment in Phylos Bioscience Inc. (“Phylos”) to commercialize THCV and transition a portion of production capacity to more cost-effective and consistent seed-based production over time
- Completed investment in Green Tank Technologies Corp. (“Greentank”) for initial exclusive access to new vapour heating technology
- Product Development Collaboration with BAT moving rapidly toward product commercialization
- SHRED brand is one of the largest cannabis brands in the Canadian market approaching $190 million in retail sales in the last 12-months2
- Successfully launched 28 SKUs in the quarter for a total of 127 in market
- Completed ramp up of SHRED X Rip Strip production and distribution to meet strong consumer demand
- Announced supply agreement with Sanity Group GmbH (“Sanity Group”) to supply medical cannabis to the promising German market
- Strong balance sheet with $75 million in cash and negligible debt
TORONTO–July 13, 2023, (BUSINESS WIRE)–Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), (the “Company” or “Organigram”), a leading licensed producer of cannabis, announced its results for the third quarter ended May 31, 2023 (“Q3 Fiscal 2023”). All financial information in this press release is expressed in thousands of Canadian dollars (“$”), except for references to $ millions.
During the quarter, we continued to demonstrate our responsible leadership in the Canadian cannabis industry. We focused on the ongoing execution of our strategy of sustainable long-term growth by delivering disruptive consumer-focused innovations, while driving costs out of our operation and improving productivity.
Beena Goldenberg, Chief Executive Officer
We are very pleased with the growth of our Canadian recreational business and our outlook moving into next year remains positive with the foundation now in place to deliver continued growth.
In Q3, the Company observed the increasingly common practice of THC-inflation, what it believes to be the practice by some licensed producers of inflating THC values on their labels though selective sampling and lab shopping. At the same time there is no standardized testing for cannabis potency regulated by Health Canada which has resulted in inconsistent practices designed to inflate THC potency. For example, in one large national retail chain, the total number of SKUs labelled 30%+ THC increased ten-fold since last year3. Organigram was disproportionately negatively impacted by THC-inflation this quarter due its strength in flower categories and this had a profound impact on the size of the impairment the Company took this quarter. Organigram remains confident that is has positioned itself for long term success through responsible capital stewardship, a commitment to efficient operations, and industry leading R&D bolstered by an impressive list of strategic partners who share Organigram’s commitment to innovation.
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