Organigram Holdings

Organigram Holdings Inc. is a TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada.

Organigram is focused on producing the highest-quality, indoor-grown cannabis for patients and adult recreational consumers in Canada, as well as developing international business partnerships to extend the company’s global footprint.

In anticipation of the legal adult use recreational cannabis in Canada, Organigram has developed a portfolio of brands including The Edison Cannabis Company, Ankr Organics and Trailer Park Buds.

Organigram’s primary facility is located in Moncton, New Brunswick and the Company is regulated by the Access to Cannabis for Medical Purposes Regulations (“ACMPR”).

Investor Presentation

LP

Manuf.

Medi.

R&D

overview

Overview

OrganiGram, through its subsidiaries, produces and sells medical marijuana to individuals and physicians in Canada. It offers marijuana plants, seeds, and cuttings; cannabis oil; and dried flower and cannabis.

The company sells its products through phone and online store. It also operates healing centres that offer treatments for post-traumatic stress disorders, chronic pain, and trauma therapy.

OrganiGram Holdings Inc. was founded in 2013 and is based in Moncton, Canada.

Differentiators

  • Very strong oil sales and patient growth in 2017
  • Very high quality medicinal marijuana producer
  • It has self-financed its growth through share issues and the development of its facility in Moncton
  • Very low price-to-book ratio and low valuation ($500m as at January 2018), make this one of the best value LP’s to invest in
  • Acquisition of Trauma Healing Centres in 2017 creates a great pipeline for their medicinal products
  • Industry leading products with multiple award winners at the Cannabis Awards
  • With two funding rounds of $50m and $100m, the company is fully funded for all expansion plans at its production facility

Highlights

OrganiGram has a phenomenal opportunity to create a niche in the medical cannabis space with its premium high-quality and low-cost product compared to its competitors, and with the medical market projected to grow to 1.2 billion by 2021, the
company is currently well-positioned to be the top player in that space.

  • Premium high-quality product
  • Existing established customer base
  • Increase production capacity in advance of adult recreational market launch
  • Leadership among the competition – setting standards for product quality
  • Corporate social responsibility – educating consumers on responsible usage
  • Create and develop branded and differentiated products

brands

Organigram’s emphasis on quality and premium product suggests their strategy is to dominate the medical cannabis space in Canada, a unique niche where customers demand the highest-quality cannabis.

The Green Solution

  • Exclusive Canadian brand licensing, product development and distribution agreement
  • Proven market leader base in Denver, Colorado
  • $100M + in cumulative product sales
  • 13 retail locations
  • 225+ unique cannabis products in portfolio
  • Recognized and award-winning premium brands and product lines
  • Consulting Organigram for development of:
    • Commercial scale extraction and processing
    • Formulated product development

Trailer Park Boys

  • Exclusive Canadian licensing agreement
  • Cannabis producer
  • Business partner and brand developer
  • Organigram will develop branding, packaging and competitive product portfolio for recreational market
  • Distributed exclusively by Organigram

Shubie Oil

While their increase in patients and grams and oils sold are great indicators that the company’s revenues should continue to grow in the 2018 fiscal year, it is expected that oil sales will be the best growth prospect in their arsenal.

The company is working extensively to market their oil products. Their revenues will also increase due to legalisation coming to Canada which is expected in July/ August of 2018.

Marijuana sales also began on January 1st, 2018 in California, where the state holds a population larger than Canada. If Organigram can begin to make earn some of the market share in California, this will also allow for strong growth in their revenues. Already the signs of this strategy yielding results in Q1 with significant growth in the sale of Shubie Cannabis Oil with a high CBD content.

Real benefits are the fact that it has a very low level of THC with the one of the lowest price per ml. This product is seen as the most important catalyst in Organigram achieving analyst’s expectations of revenue forecast.

facilities

Moncton Facility

  • One of the lowest cost locations in Canada
    • Operating cost
    • Real estate
    • Utilities
    • Wages
      • High levels of unemployment in the area, means access to low cost employment is readily available
  • Low and predictable base power rate of 5.2/kWh
  • Significantly cheaper (up to 50% cheaper) than Ontario
  • Skilled & motivated workforce
  • Bilingual branding and services
  • Lowest general corporate income tax in Atlantic Canada
  • 3-level growing technology – maximises footprint
  • Present Capacity of 16,000kg.

growth

Moncton Facility

On November 28, 2017, Organigram announced it was looking to expand their operations by adding another 255,000 square feet of space to their facility. This would increase their total operation space to 429,000 square feet and would allow the company to increase their annual output from 25,000kg of cannabis to 65,000 kg.

With the company’s unique three-level canopy growing system, the 23 planned cultivation rooms represent an additional 10,800 kg/year of production capacity increasing the Company’s capacity from approximately 5,200 kg/year to an estimated 16,000 kg/year.

The Phase 3 expansion currently under construction and scheduled to be completed in May of 2018 will see the Company’s production increase to 25,000 kg/annum.

A fully-funded Phase 4 expansion currently scheduled to start construction in April will bring the Company’s production to 65,000 kg/annum in three stages over the next two years.

  • Significant growth in medical patients seen in 2017
  • Complimented by very strong growth in CBD oil sales
  • 9,450ml in 2016 to 584,450ml in 2017

growth

Grams Sold - Dried Flower

The company quantifies dried flower sold in the measurement of grams

ML Sold - Cannabis Oil

The company quantifies dried flower sold in the measurement of millimetres and started selling the product in August 2016

management team

Greg Engel – CEO and Director

Mr. Engel is a senior executive with 30 years of National and International experience in the pharmaceutical, biotechnology, cannabis and consumer packaged goods industries.

Mr. Engel has led the creation, development and growth of several companies over the span of his career.

Mr. Engel graduated from the University of Guelph with an Honours Bachelor of Science in Microbiology.

Jeff Purcell – Vice President and COO

Mr. Purcell assumed the position of Vice President of Operations of Organigram Inc. on June 12, 2017. He is filling a key role on the company’s Senior Leadership Team, as a seasoned professional in the areas of large scale production and facility expansion.

Mr. Purcell brings over 25 years of experience to the role, most recently as Vice President of Operations at Ganong Bros. Limited with responsibilities including implementation of quality systems, safety, and continuous improvement initiatives.

Mr. Purcell holds a Bachelor of Commerce degree, from St. Mary’s University.

Paolo De Luca – CFO

Mr. De Luca joined Organigram on December 19, 2017 bringing over 20 years of diversified financial business experience.

Mr. De Luca has held senior financial, investor relations, and accounting leadership roles at companies including West Face Capital, one of Canada’s leading alternative asset management firms; Meridian LNG; Potash Ridge; C.A. Bancorp; and TD Securities.