New Brunswick-based cannabis producer Organigram Holdings reported an improved fiscal third quarter, with revenue rebounding to 20.3 million Canadian dollars ($16 million), up almost 40% over the previous three-month period.
Net loss also improved. The company lost CA$4 million in the quarter ended May 31, an improvement over the second quarter’s CA$66.4 million loss.
Organigram has lost CA$104.7 million through the first nine months of its current fiscal year.
The improved third quarter was driven by higher adult-use cannabis sales, which grew 40% over the second quarter to CA$16.8 million, according to the company’s financial statements released Tuesday.
“On the expense front, we are encouraged by the progress we have made in reducing cultivation costs and capturing economies of scale as we ramp up cultivation,” Organigram Chief Financial Officer Derrick West said.
Greg Engel, longtime CEO of the Moncton-based producer, stepped away from the struggling business late in the quarter.
Also during the quarter, tobacco giant British American Tobacco (BAT) took a nearly 20% stake, valued at CA$220 million, in Organigram.
The company provided guidance on the upcoming quarter, saying it expects sales to continue to rise, largely stemming from:
- Market growth as COVID-19 restrictions lift across Canada.
- The number of retail stores continues to grow in most major markets.
- Being better able to fulfill demand with increased staffing.
Organigram said it expects to generate new revenue from the launch of soft-chew products in the fourth quarter.
The company has CA$222 million in cash and short-term investments.
Shares of Organigram trade as OGI on the Toronto Stock Exchange and the Nasdaq.