Organigram Reports Second Quarter Fiscal 2024 Results

Published: May 15, 2024

Organigram Reports Second Quarter Fiscal 2024 Results
  • 21% growth in recreational net revenue year-over-year
  • First Jupiter private placement tranche closed adding $41.5 million of cash bringing Organigram’s closing cash balance at quarter-end to $83.6 million
  • Subsequent to quarter end, closed $28.8 million oversubscribed marketed offering, which when combined with the remaining two anticipated Jupiter tranches will increase cash position by additional $110 million
  • Company’s recent investment in Steady State LLC (d/b/a Open Book Extracts) (“OBX”) adds to growing U.S. portfolio, which includes Phylos Bioscience Inc. (“Phylos”)
  • Organigram’s U.S.-based strategic investments may benefit from expected change in rescheduling of cannabis by the Drug Enforcement Administration from Schedule I to Schedule III


  • Held the #1 position in milled flower, #1 in hash, #1 in ingestible extracts, #1 in pure CBD gummies, #2 in edibles, #2 in infused pre-rolls, #3 in pre-rolls, #3 in dried flower, and held the overall #3 market position in Canada1
  • #1 market share position in Atlantic Canada, #3 in Ontario, and a top 5 licensed producer in every Canadian province1
  • The Company’s SHRED brand surpassed $200 million in annual retail sales as a result of brand loyalty, product quality, and consistent innovation1
  • Completed first international flower shipment to Sanity Group GmbH (“Sanity Group”) in Germany and first flower shipment to 4C Labs Ltd. (“4C Labs”) for UK distribution
  • Subsequent to quarter end, signed two new international supply agreements in Australia and the UK
  • Successfully completed preliminary European Union Good Manufacturing Practices (“EU-GMP”) audit of the Moncton facility
  • Manufacturing equipment for nano-emulsion technology delivered to Winnipeg facility to begin scale up and anticipated gummy launch in the fall
  • Closed strategic investment in OBX of US $2 million structured as a convertible note
  • Completed first harvest of seed-based production and planted additional seed-based grow rooms resulting from technology acquired from the strategic investment in US-based Phylos
  • Company has achieved over $3.7 million in domestic THCV retail sales since launch in August 20231 and subsequent to Q2 shipped first international THCV flower, further leveraging Organigram’s strategic investment in Phylos
  • Pro-forma cash position of approximately $1952
Organigram Holdings Inc., a leading licensed producer of cannabis, announced its results for the second quarter ended March 31, 2024 (“Q2 Fiscal 2024”).

“We are pleased with our performance against the strategic priorities we laid out at the beginning of Fiscal 2024,” said Beena Goldenberg, Chief Executive Officer. “Organigram is now the only licensed producer among the top three licensed producers in Canada with significant cash, negligible debt, and sizeable funds earmarked for strategic international investment. We have also made solid progress toward our goal of diversifying our exposure to international markets through our Jupiter fund and increasing our customer base abroad. Domestically, we grew our market share throughout Q2 Fiscal 2024 and we remain focused on driving additional gains in the back half of Fiscal 2024 by expanding distribution, introducing new products, and executing high-impact retail campaigns.”

Canadian Recreational Market Introduction Highlights
As an industry leader and pure-play cannabis company, Organigram remains committed to delivering consumer focused innovations and products to the Canadian market. Q2 Fiscal 2024 saw the introduction of 16 new SKUs to the market for Organigram. Some notable highlights include:

SHRED Rainbow Oz. Dartz – A variety pack containing seven packs of our popular Dartz, for a total of 70 joints per package

Big Bag O’ Buds Serial Jealousy – A new Organigram cultivar in a one ounce bag which hit $1 million in sales in its first 2 months in market

SHRED Supersonic Citrus – A new addition to our milled flower lineup containing our exclusive whole-flower THCV flower

SHRED Guava Lime Go-Time THCV Heavies – Each diamond, distillate and terpene infused pre-roll contains a 3:1 ratio of THC and THCV

Monjour Me-Time Mango – 30 x 50mg CBD gummies featuring a delicious mango and strawberry flavour

Research and Product Development

Product Development Collaboration (“PDC”) and Centre of Excellence (“CoE”)

  • Organigram and BAT continue to work together through their PDC on new workstreams to develop innovative technologies in the edible, vape and beverage categories in addition to new disruptive inhalation formats aimed at addressing the biggest consumer pain points that exist in the category today. Organigram is preparing to deliver new products in these spaces and the launch priority includes gummies which will feature a new nano-emulsion technology

  • The PDC has completed pharmacokinetics studies regarding the onset and bioavailability of our nano-emulsion technology, and is now analyzing preliminary results to substantiate functional consumer claims

Follow-on Strategic Investment from BAT and creation of the Jupiter Investment Pool

  • In January 2024, Organigram shareholders voted to approve the $124.6 million investment from BAT and the Company completed the first of three tranches of the investment for proceeds of $41.5 million

  • In March 2024, the Company announced a U.S. $2 million investment into OBX in the form of a convertible note. The investment marked Organigram’s second investment in a U.S.-based company operating in the cannabis industry, and the inaugural Jupiter investment.

  • OBX specializes in legal cannabinoid ingredient production and serves as a one-stop formulation and finished goods manufacturer, simplifying its clients’ supply chains. The investment in OBX provides a further footprint in the U.S, which was a strategic priority set out in the Jupiter investment strategy.


  • In Q2 Fiscal 2024, the Company completed its first shipments to Sanity Group in Germany and to 4C Labs for UK distribution, and reported international shipments totaling $2.1 million

  • Subsequent to quarter end, the Company signed two new international supply agreements in Australia and in the UK

  • The Company is evaluating more international expansion opportunities in the US and overseas, propelled by the Jupiter strategic investment pool

Liquidity and Capital Resources

  • On March 31, 2024, the Company had cash (restricted & unrestricted) of $83.6 million

  • In January 2024, Organigram closed the first of three tranches from BAT’s follow-on $124.6 million strategic investment for gross proceeds of $41.5 million.

  • In March 2024, the Company announced an underwritten overnight financing which was oversubscribed and closed in April 2024 for gross proceeds of $28.8 million

  • On a pro-forma basis, Organigram will have a cash position of approximately $195 million upon closure of the anticipated tranches of BAT’s follow-on strategic investment

Key Financial Results for the Second Quarter 2024

  • Net revenue:
    • Q2 Fiscal 2024 recreational net revenue increased 21% to $33.1 million from $27.4 million in the second quarter ended February 28, 2023 (“Q2 Fiscal 2023”)
    • Compared to the prior period, overall net revenue decreased 5% to $37.6 million, from $39.5 million in Q2 Fiscal 2023 primarily due a reduction in international revenue

  • Cost of sales:
    • Q2 Fiscal 2024 cost of sales decreased to $26.4 million, from $29.6 million in Q2 Fiscal 2023, primarily due to higher inventory provisions in Q2 Fiscal 2023 of $3.2 million related to net realizable value adjustments of inventories

  • Adjusted gross margin3:
    • Q2 Fiscal 2024 adjusted gross margin was $11.6 million, or 31% of net revenue, compared to $13.4 million, or 34%, in Q2 Fiscal 2023. The decrease in the adjusted gross margin rate was primarily due to lower international sales

  • Selling, general & administrative (SG&A) expenses:
    • In Q2 Fiscal 2024, the Company recognized a $4.2 million provision for a receivable associated with its Israeli customer Canndoc
    • SG&A expenses, adjusting for the Canndoc provision, decreased to $15.9 million from $16.1 million in Q2 Fiscal 2023. The decrease was the result of lower costs associated with implementing a new ERP system

  • Net Loss:
    • Q2 Fiscal 2024 net loss was $27.1 million compared to $7.5 million in Q2 Fiscal 2023. The increase in net loss from the comparative period is primarily due to lower unrealized gain on changes in the fair value of biological assets and change in fair value of derivative liabilities of $12.5 million

  • Adjusted EBITDA4:
    • Q2 Fiscal 2024 adjusted EBITDA was negative $1.0 million compared to $5.6 million adjusted EBITDA in Q2 Fiscal 2023. The decline was primarily attributable to lower international sales compared to Q2 Fiscal 2023, which negatively impacted the adjusted gross margin rate compared to the prior year period

  • Net cash used in operating activities before working capital changes:
    • Q2 Fiscal 2024 net cash used by operating activities was $8.3 million, compared to $2.5 million cash used in Q2 Fiscal 2023, which was primarily due to lower international sales and adjusted EBITDA