Canadian cannabis cultivator and manufacturer Organigram Holdings plans to consolidate its shares on a 4-to-1 basis in order to maintain its U.S. equity listing on the Nasdaq exchange.
Nasdaq warned Organigram in January that its share price had fallen below the exchange’s $1 minimum bid price requirement for 30 consecutive days, risking possible delisting.
Organigram’s shares have lost value since then, opening at $0.40 on the Nasdaq on Wednesday.
The share consolidation is also meant to “reduce volatility and to enhance the marketability of the common shares to institutional investors,” Organigram said in a news release.
The reverse share split is expected to take place July 7 and will affect Organigram’s shares listed on the Toronto Stock Exchange (TSX) in Canada.
Both exchanges must approve the consolidation.
Organigram isn’t the only cannabis company to face issues complying with stock exchange requirements.
Hexo Corp. consolidated its shares in December 2022 in order to meet Nasdaq’s minimum bid price.
Aurora Cannabis consolidated its New York Stock Exchange-listed shares in 2020 and later moved its U.S. listing to the Nasdaq, where it has been under a minimum bid-price warning since March.
Another Canadian cultivator, Canopy Growth Corp., was recently cut from the benchmark S&P/TSX Composite Index, although its TSX share listing remains intact.
Organigram posted a net loss of 7.5 million Canadian dollars ($5.7 million) for the quarter ended Feb. 2 on CA$39.5 million of net revenue.