Canadian cannabis producer Organigram Holdings acquired The Edibles & Infusions Corp. (EIC), a cannabis edibles manufacturer, from AgraFlora Organics International and other shareholders.
Organigram paid 22 million Canadian dollars ($17.5 million) worth of shares for the acquisition, with further share payments worth up to CA$13 million if EIC hits milestones, including:
- Listing Organigram-branded products for sale in Ontario or Alberta before the end of 2021.
- A net revenue and adjusted EBITDA target for 2022.
Moncton, New Brunswick-based Organigram, which already owns a cannabis-infused chocolate production facility, said the acquisition would allow the company “to manufacture future confectionary product lines and undertake additional R&D at a facility dedicated for this purpose.”
“EIC has the capability to produce a wide range of cannabis-infused products in various formats and dosages including pectin, gelatin, and sugar-free soft chews (gummies), toffee and caramel with novel capabilities such as infusions, striping and possibility of using fruit purees,” Organigram noted in a Tuesday morning news release.
Sales of cannabis-infused edibles saw brisk growth in Canada last year, rising 150% between the first and third quarters, according to the latest data from Statistics Canada.
Organigram expects to start selling EIC-produced soft chews in the fourth quarter of its 2021 fiscal year, which ends on Aug. 31, “subject to the timing of receipt and commissioning of certain ancillary equipment, completion of quality assurance documentation and hiring of requisite staff.”
EIC was co-founded by AgraFlora and James Fletcher, CEO of Canadian confectionary manufacturer Cavalier Candies, according to the release.
The Winnipeg EIC facility measures 51,000 square feet and “employs state-of-the-art equipment designed to produce highly customizable, precise, and scalable cannabis-infused products, including edibles.”
AgraFlora owned 43% of the business, according to a news release from the Vancouver, British Columbia-based company.
In the release, AgraFlora CEO Elise Coppens said “AgraFlora is now better positioned with its net share of the transaction proceeds to explore new opportunities, potentially in the United States.”
Organigram recently signed a CA$220 million deal with a subsidiary of British American Tobacco.
Shares of Organigram trade as OGI on the Toronto Stock Exchange and the Nasdaq.
AgraFlora shares trade as AGRA on the Canadian Securities Exchange.