|Bid||6.16 x 800|
|Ask||6.18 x 1100|
|Day's Range||6.09 - 6.39|
|52 Week Range||5.40 - 8.44|
|Beta (3Y Monthly)||2.30|
|PE Ratio (TTM)||N/A|
|Forward Dividend & Yield||N/A (N/A)|
|1y Target Est||N/A|
The big item in cannabis last week was Curaleaf Holdings, Inc. (OTC: CURLF) (CSE:CURA)’s acquisition of multi-state operator Grassroots for $875 million in cash and stock. M&A expert Evan Eneman, CEO of MGO|ELLO Alliance, told Benzinga another move toward consolidation “means that the industry is maturing.
Curaleaf is buying expansion with its $875 acquisition of Grassroots. Meanwhile, OrganiGram reported Q3 results, and Aurora Cannabis had a good news/bad news week.
For investors looking for positive earnings sooner rather than later, OrganiGram Holdings (OGI) has been one of the favorites of the cannabis sector. While it under performed in its last earnings report, for the most part, it is a correctable situation that has already been resolved.CEO Greg Engel said the drop in plant yield in the reporting period was temporary, and "not only have our yields returned to historical levels, but we have seen a meaningful increase in average cannabinoid levels in harvests to date in Q4."That said, OrganiGram shareholders will have to temper their short-term expectations concerning derivative sales, as Health Canada has pushed back the date of first delivers to mid-December 2018; originally initial sales was expected to come in mid-October. It will also be rolled out on a staggered basis, meaning it'll take some time to sell derivative products to the point of making a positive impact on the results of the company.For that reason investors will probably have to wait until the earnings report from the first calendar quarter of 2020 before seeing an impact from derivative products on the performance of OrganiGram.Its failed experimentEven though a number of companies failed in similar experiments, OrganiGram, for some reason, thought replicating it within their facilities may work. They were wrong.What the company attempted was called 'cloning,' which in the cannabis industry refers to cutting small parts of an existing plant and using it to produce plants instead of using seed. This is fairly common with some fruits, vegetables and herbs, outside of the sector.The difference here and within the cannabis sector, was the company took pieces of plants at an earlier stage of growth than normal.The company did use a smaller sample to try it out first, but when attempting to scale with more strains, the experiment failed.Consequently, growing costs soared almost 50 percent more in cash, having a negative impact on earnings, which in the last few quarters had been positive.All-in costs related to cultivation jumped from from C$0.65 and C$0.95 per gram in the prior quarter, to C$0.95 and C$1.29 per gram in the earnings period, according to MarketWatch.The time lost in the grow room impacted by the experiment was from "four to six weeks," said Engel.As for product mix, it sold 5,090 liters of cannabis oil and 3,926 kilograms of dried flower in the fiscal third quarter.Outlook for fiscal 2020Engal said the company expects to generate a record harvest in the first half of fiscal 2020 for its dried flower grown in its indoor facilities. It also sees positive growth catalysts coming from derivative products associated with edibles and vape pens.One thing investors in Canadian-based companies need to understand in order to manage short-term expectations, is Health Canada has pushed back the date derivative products in the country will be sold and distributed to mid-December. Initially it was set to launch in mid-October. It also said product approvals will be staggered, meaning it's going to take some time for all derivatives to be legally sold.I'm looking at the first calendar quarter as being the first one that will have any significant impact on the performance of OrganiGram, or any other cannabis company based in Canada.As for its existing business, its performance should align with guidance and expectations. Concerning additional revenue and earnings from derivatives, that's now further out.For investors not taking that into account, the company could appear to underperform over the next couple of quarters, when it's in fact something that is outside of its direct control.ConclusionOrganigram is getting close to finishing its Phase 4 production expansion, which when complete and fully operational, will boost its capacity to an annual run-rate of 113,000 kilograms. That should be completed by the end of 2019.Once it's ready to go, and the company is able to ramp up sales of higher-margin derivatives edibles and vapes, the company has a very visible path to growing revenue, margins and earnings going forward. It just needs to not get too cute with its experiments at such large levels.Finally, I also like its discipline on taking its time to enter international markets like the U.S., which I think some Canadian companies have prematurely entered, with the risk of legalization of recreational pot far from a surety, and scaling across the country still a significant challenge in other segments of the market.In the end, other than that temporary experiment blip and some issues in Ontario, the company appears to be on a upward growth trajectory that should reward shareholders nicely over time.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here. Read more: Organigram (OGI) Reported a Strong Quarter, But Don’t Buy the Stock Just Yet More recent articles from Smarter Analyst: * Top Analyst Shares Two Cents on Amazon (AMZN) Stock as Earnings Approach * Should You Buy Namaste Technologies (NXTTF) Stock Following Recent Earnings? Probably Not * Curaleaf Helping to Put U.S. Cannabis Sector on the Map * Netflix’s (NFLX) Original Content Strategy Is Failing; The Stock Is Overvalued
With some cannabis industry players in disarray, Organigram (OGI) proved that a focus on reasonable operations is still the best path to rewarding shareholders.The stock has rallied over 17% this week following a solid FQ3’19 quarter and the company appears poised for more success. Whether or not the stock rallies back to previous highs near $8.50 is a far different story.Focused GrowthOrganigram is focused on domestic Canadian growth and the results are backing up this concept. The stock never got the wild valuations, but the FQ3 results are impressive considering that Canada isn’t producing the expected growth rates.The company saw FQ3 revenues dip to C$24.8 million from C$26.9 million or the equivalent of about $19.0 million. The numbers continue to suggest that demand in Canada is questionable due to the impacts of the thriving illegal market and lack of legal retail stores, but the company is thriving regardless.The reason the story works is that Organigram doesn’t need 10-fold production growth to meet operational costs. In the last quarter, the company only sold 3,926 kg of dried cannabis and 5,090 liters of oil.With only C$11.1 million in quarterly operating expenses, Organigram is able to overcome the cannabis market weakness from a lack of retail stores in Ontario and the delay in Cannabis 2.0 products. In addition, the focus on the right balance of production growth has cash costs under control during the ramp up phase.The company now has licensed capacity of 61,000 kg/yr with production capacity headed to 113,000 kg/yr by the end of 2019. With C$94.2 million in inventory, Organigram is taking the prudent move to reasonably expand production capability preparing the company for legitimate recreational cannabis growth in 2020.Positive EBITDA Instead of burning cash as the Canadian market slowly expands and chasing global markets not ready for commercialization, Organigram is focused on profitable growth. The company generated an incredible adjusted EBITDA profit of C$7.7 million in the last quarter or good enough for 30% EBITDA margins.The company is not focused purely on massive cultivation numbers and the results are paying off. The stock has a market valuation of ~$1 billion now so sales around $175 million for FY20 won’t offer much of a bargain for the stock in a sector where sentiment is frayed.Maintaining EBITDA margins in the 30%+ range will provide a boost to the stock as the year progresses. If FY20 EBITDA tops $50 million, the stock will eventually rally from higher EBITDA targets for FY21.TakeawayThe key investor takeaway is that Organigram Holdings is a prime example of prudent growth winning out in the end. The Canadian cannabis company has costs under control leaving the company not reliant on wild industry growth in order to survive and thrive like industry players with substantial EBITDA losses.Organigram likely outperforms the larger Canadian players with rich valuations, but the stock isn’t likely to see a big rally with the current negative sentiment in the sector. As cannabis-infused edibles and beverages hits the market at the end of 2019, the stock will likely offer a better entry point with a strong catalyst to rally than now.To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.Disclosure: No position. Read more: Does OrganiGram Rely Too Much on Recreational Cannabis? More recent articles from Smarter Analyst: * Top Analyst Shares Two Cents on Amazon (AMZN) Stock as Earnings Approach * Should You Buy Namaste Technologies (NXTTF) Stock Following Recent Earnings? Probably Not * Curaleaf Helping to Put U.S. Cannabis Sector on the Map * Netflix’s (NFLX) Original Content Strategy Is Failing; The Stock Is Overvalued
When it comes to the cannabis industry, the only real debate seems to be around how big it's going to get. Modest estimations put the industry at $40 billion by 2024. And there are few cannabis companies that catch the eye of investors quite like CGC stock.Source: Shutterstock But Canopy Growth (NYSE:CGC) hit a snag last week after it came out that the former CEO and co-founder Bruce Linton was fired. The company issued a press release saying that Linton has stepped down from his role as CEO and from the Board of Directors. Then in an interview with CNBC, Linton revealed that he was fired.Many investors were surprised to learn that Linton was let go, but this doesn't change the fundamentals of the company. Canopy Growth is still one of the most valuable cannabis stocks in Canada. Here are three reasons why Linton's firing was good news for CGC stock:InvestorPlace - Stock Market News, Stock Advice & Trading Tips The Numbers Just Weren't ThereLinton did many things right during his run at Canopy. He secured a $4 billion investment from Constellation Brands (NYSE:STZ) and oversaw a number of important acquisitions. * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip However, when Constellation Brands made this investment, it earned a 37% stake in the company. It also earned the right to nominate four members to the six-member board. And when Canopy Growth reported losses of C$98 million during its fiscal fourth quarter, this hurt Constellation's bottom line as well. According to Constellation's fiscal first-quarter results, the company reported losses of $54.4 million tied to Canopy Growth. Going forward, Constellation Brands will likely find a replacement that is more interested in improving Canopy's bottom line. CGC Stock Is Ready for New LeadershipCanopy's recent financial performance probably had a lot to do with Linton's firing. But the company may also be looking to transition to new leadership, which isn't uncommon for a maturing company. After all, it takes a different skillset to build a company than it does to run a billion-dollar global brand. According to the press release, Mark Zekulin will act as sole CEO of the company while the board looks for outside leadership. This seems to indicate the company is looking for a new leader going forward, not Zekulin or another co-CEO. The company needs to prove it can find the right person to build on Canopy's momentum going forward. The Cannabis Industry Is ChangingLinton's firing will result in a major leadership change going forward. The change caught most investors off guard and the company's shares dropped roughly 5% that day. However, the stock quickly rebounded. After all, Linton is not the first CEO to be ousted from a cannabis company he founded. Aphria (NYSE:APHA), CannTrust Holdings (NYSE:CTST), and Organigram Holdings (NASDAQ:OGI) all replaced their original CEOs with more seasoned management.The cannabis industry as a whole is changing as it moves from its entrepreneurial beginnings to becoming a major consumer products industry. As the industry continues to change, investors will begin holding these companies to a different standard where profitability is the biggest determination of success. As of this writing, Jamie Johnson did not hold a position in any of the aforementioned securities. More From InvestorPlace * 2 Toxic Pot Stocks You Should Avoid * 9 Retail Stocks Goldman Sachs Says Are Ready to Rip * 7 Services Stocks to Buy for the Rest of 2019 * 6 Stocks to Buy and 1 to Sell Based on Insider Trading The post 3 Reasons Lintonas Firing was Good News for Canopy Stock appeared first on InvestorPlace.
OrganiGram remains on track to complete its Moncton campus by year's end, and is eagerly awaiting the launch of derivative cannabis products in December.
Organigram Holdings Inc. said Monday that growing marijuana cost it nearly 50% more in cash and harmed its earnings last quarter because the cannabis company tried — and failed — to develop a more efficient growing technique.
(Bloomberg) -- With four quarters of profitability under its belt, Organigram Holdings Inc. is an anomaly in the Canadian cannabis market.Organigram has higher margins than most of its peers and one of the lowest costs per gram in the industry even though it grows indoors, generally considered the most expensive method of production. Chief Executive Officer Greg Engel attributes this to its ability to get higher yields from its pot plants than companies that grow in greenhouses, as well as its automated packaging lines.“We built a facility and designed a facility that was very focused on high-quality product because we felt there was a market opportunity that was sustainable,” Engel said in an interview at Bloomberg’s Toronto office.Organigram’s streak of profitability comes as the industry undergoes a period of significant upheaval. CannTrust Holdings Inc., previously considered one of the more reputable pot companies, plunged 48% last week after Canadian regulators said it grew cannabis in unlicensed areas of its greenhouse, forcing it to halt all sales and shipments of its products.That came less than a week after Canopy Growth Corp. fired co-CEO Bruce Linton amid shrinking margins and a C$323 million net loss in its most recent quarter.Lower ValuationMoncton, New Brunswick-based Organigram, meanwhile, reported its fourth consecutive quarter on Monday of positive adjusted earnings before interest, taxes, depreciation and amortization, or Ebitda. Revenue of C$25 million ($19 million) missed estimates and gross margin fell to 50% from 60% in the previous quarter, but Eight Capital analyst Graeme Kreindler said he views this as an “isolated event” related to a temporary change in cultivation protocols and the timing of shipments to provinces.Organigram said it cost 95 cents to produce a gram of dried flower in its most recent quarter. That was up from 65 cents in the previous quarter but still compares favorably with C$1.42 at Aurora Cannabis Inc. and $1.48 at Tilray Inc.No other large Canadian pot producer has managed to post such a long string of positive Ebitda. However, although it’s one of the best-performing pure-play pot stocks this year, up 64%, its valuation as measured by its price-to-sales ratio is well below those of its largest competitors.Engel is unperturbed. “At the end of the day, the worst thing that can happen to a company is you’ve got an artificial stock price that you can’t sustain,” Engel said.Competitors also spend a lot on stock promotion, he said. This “may in the short term be helping their stock price, but I’m not sure that’s sustainable without ongoing spending,” he said.The problems at CannTrust and Canopy signal a shakeout in an industry that’s still maturing nine months after Canada legalized recreational pot. Organigram is lucky because it had its wake-up call early, said Engel.The company had to recall several lots of its medical pot in late 2016 and early 2017 after it was found to contain an unapproved pesticide. Engel, who was CEO of Tilray Inc. at the time, was hired after the recall to “make a major cultural shift,” he said.“As a result of that recall, we had monthly ongoing inspections by regulators, and historically the industry was always complaining or defensive about the inspections,” Engel said. “My approach was to embrace them. At the end of the day it’s a partnership, not an adversarial relationship.”In the interview, Engel shared his views of the nascent industry:Beverages and EdiblesOrganigram isn’t being coy about its desire for a partner that can help it develop cannabis-infused beverages, similar to Constellation Brands Inc.’s investment in Canopy, Tilray’s partnership with Anheuser-Busch InBev SA or Hexo Corp.’s joint venture with Molson Coors Brewing Co.Organigram has developed a rapid-onset technology that will allow its drinks to take effect within 10 to 15 minutes, similar to alcohol, and has also created a flavorless cannabis powder that can be added to any beverage.“We wanted to go to these negotiations offering as much as possible,” Engel said. Organigram is seeking a partner from the alcohol industry that can help it develop beverages infused with THC, the cannabis compound that gets you high. It’s also seeking a consumer packaged goods partner for drinks infused with CBD, a non-intoxicating substance that’s thought to have health and wellness properties.BiosyntheticsEngel hopes Organigram’s investment in Montreal-based Hyasynth Biologicals Inc. will also help it lure a partner. Hyasynth is developing large-scale biosynthetic production of cannabinoids, or the active compounds found in cannabis. This method, which uses yeast to produce the compounds in a lab, is cheaper than extracting them from plants and will help lower production costs for products like beverages, edibles and vape pens, said Engel.U.S. Market“We’re very actively looking at the CBD market in the U.S.,” where the substance is legal at the federal level as long as it’s derived from hemp with very low THC content, Engel said. Organigram doesn’t plan to grow its own hemp but is looking at a range of possibilities, including investments in existing brands, products and companies.Corporate GovernanceOrganigram has a fully independent board of directors, a rarity in the cannabis sector. The CEO sees good corporate governance as essential to a well-run pot company.“This is an industry that’s still very much moving from founders and executives being chairmen or multiple insiders on boards, and I think some of the challenges we’ve seen in the industry have been because of a lack of governance,” he said. “You have to have independent governance that has oversight and holds management accountable.”To contact the reporter on this story: Kristine Owram in Toronto at email@example.comTo contact the editors responsible for this story: Brad Olesen at firstname.lastname@example.org, ;David Scanlan at email@example.com, Jacqueline ThorpeFor more articles like this, please visit us at bloomberg.com©2019 Bloomberg L.P.
The looming merger in big entertainment seemingly has a deadline, and a big reason for a marijuana stock's quarterly loss is revealed.
Organigram earnings missed Q3 views. Aurora Cannabis got two new cultivation licenses. Organigram, Aurora and other marijuana stocks rose.
The shortfall could reinforce worries about recreational marijuana demand in the year after Canada legalized such sales in October 2018.
Cannabis company OrganiGram Holdings Inc. (NASDAQ: OGI) released its third-quarter financial report Monday morning. Organigram reported a quarterly net loss from continuing operations of CA$10.2 million or 7 cents per share on a diluted basis.. Benzinga's Cannabis Capital Conference heads to Detroit on Aug. 15 -- Click here to learn more!
The U.S.-listed shares of OrganiGram Holdings Inc. turned lower in premarket trading Monday, to a loss of 6.0% after being up as much as 2.4% earlier, after the Canada-based cannabis company reported a 7-fold increase in fiscal third-quarter net revenue but swung to a surprise loss amid fair value changes to biological assets in inventory. The company reported a net loss of C$10.2 million ($7.8 million), or 7 cents a share, after a profit of C$2.8 million, or 3 cents a share, in the year-ago period. Gross revenue increased nearly 9-fold to C$30.4 million, while net revenue including excise taxes rose to C$24.75 million ($19.0 million) from C$3.4 million. The FactSet consensus was for a profit of 3 cents and revenue of C$29.7 million. Cash and all-in-costs of cultivation increased to C$0.95 and C$1.29 per gram of dried flower, respectively, from C$0.65 and C$0.95 per gram in the sequential second quarter, due primarily to a "temporary" decrease in yield per plant resulting from a change in growing protocol. The company said yield returned to previous levels toward the end of the third quarter and into the fourth quarter. The stock has shed 8.3% over the past three months through Friday, while the ETFMG Alternative Harvest ETF has slid 13.1% and the S&P 500 has gained 3.7%.
Earnings reports, M&A deal updates and a potential update regarding CannTrust Holdings Inc (NYSE: CTST ) -- Here's what scheduled to take place this week in the cannabis industry. Organigram, Canopy Rivers ...
MONCTON, New Brunswick-- -- Q3 and year to date 2019 1 net revenue of $24.8 million and $64.1 million, respectively, and Q3 net loss and net income from continuing operations of $10.2 million and $12.9 million, respectively Q3 and year to date gross margin, which includes the impact of fair value adjustments was and $59.5 million, respectively. Excluding the impact of non-cash fair value adjustments, ...
NEW YORK, NY / ACCESSWIRE / July 15, 2019 / OrganiGram Holdings, Inc. (NASDAQ: OGI ) will be discussing their earnings results in their 2019 Third Quarter Earnings to be held on July 15, 2019, 2018 at ...
CANNABIS WATCH Organigram Holdings Inc. is expected to report fiscal third-quarter earnings Monday before the opening bell. The company says it will host a conference call at 8 a.m. Eastern time. What to expect Earnings: On average, analysts polled by FactSet expect Organigram Holdings Inc.
Organigram Holdings Inc. is a NASDAQ Global Select and TSX Venture Exchange listed company whose wholly owned subsidiary, Organigram Inc., is a licensed producer of cannabis and cannabis-derived products in Canada.