Cannabis producer Organigram reports CA$248 million loss, massive excise bill

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Canadian cannabis producer Organigram reported a loss of 248.6 million Canadian dollars ($185 million) in the 2023 fiscal year, postponed its free cash flow guidance and appointed a permanent chief financial officer.

The Toronto-based company also reported paying a massive excise bill for the fiscal year ended Sept. 30 to Canada’s federal government amounting to CA$72 million.

That’s just under one-third of Organigram’s revenue for the year.

The industry has been trying to convince the federal government to ease up on its tax burden, but so far to no avail.

Organigram said the cannabis sector remains saddled by a high excise tax regime and, in some cases, restrictive regulations.

“The company, which is current on all its excise tax remittances, is aware of other LPs (licensed producers) who are in arrears, which is effectively acting as a source of alternative financing as taxes are collected from provincial distributors but not remitted to the Canada Revenue Agency on the required date,” Organigram said in a news release.

Organigram’s 2023 loss was 1,641% higher than the one recorded in fiscal 2022, largely because of impairments on property, plant and equipment, intangibles and goodwill, the company said.

Partly because of the loss, the company postponed its guidance of generating positive free cash flow to the second half of fiscal 2024.

A day before disclosing its fiscal 2023 earnings, Organigram announced that cannabis industry veteran Greg Guyatt is taking over as the company’s chief financial officer on a full-time basis effective Jan. 8.

Guyatt, who was CEO of defunct cannabis producer Pheona Holdings, will replace Paolo De Luca, who had been interim CFO since the departure of Derrick West in November.

Organigram reported some improvements, however.

In fiscal 2023, net revenue grew 11% year-over-year to CA$161.6 million.

International sales for the year were CA$18.9 million, an increase of 25% over 2022.

Adjusted EBITDA, or earnings before interest, taxes, depreciation and amortization – an alternative gauge of a company’s financial performance – for the year was CA$6 million.

That’s 71% better than 2022’s CA$3.5 million.

Organigram said it ended the year in the No. 2 market share position across Canada.

The company’s shares trade as OGI on the Nasdaq and Toronto Stock Exchange.