Canadian firm OrganiGram Holdings announced that it has closed on a $3 million round of financing, which the company will use to bolster its medical cannabis production site in New Brunswick.
Duce Holdings and Denaco Group will provide $1 million in exchange for 200,000 common shares of OrganiGram’s stock, while Farm Credit Canada will provide a $2 million long-term loan. Farm Credit recently doled out the first $1 million and will provide the rest of the loan over time.
The deal is particularly notable given that some licensed cannabis companies in Canada are struggling with lower-than-expected patient counts and competition from illegal dispensaries in the western part of the country.
Still, the industry is expected to get a big boost from a recent decision by the country’s top court to allow the use of cannabis oils. Canada’s health agency has since cleared the way for licensed companies to begin producing and selling the oils, which could have a big impact on their bottom lines.
OrganiGram secured $5 million in credit earlier this year and finished building out four new grow rooms, which the company said will help it meet a rapid increase in demand.