Organigram loss narrows on brisk cannabis sales

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New Brunswick cannabis producer Organigram’s loss narrowed to 1.3 million Canadian dollars ($1 million) as adult-use sales soared over 70% compared to the comparable year-ago period, according to the company’s first-quarter financial results released Tuesday.

In its financial report for the quarter ended Nov. 30, 2021, Organigram said gross sales of recreational marijuana grew to CA$38.8 million, up from CA$22.5 million in the same period a year earlier.

Net revenue, which strips out excise taxes, was CA$30.4 million for the quarter.

Compared to the previous quarter, net sales grew 23%.

Organigram’s international wholesale sales of medical cannabis for the September-November period were CA$3.4 million, up from CA$240,000 a year earlier.

The company fared considerably better than large rivals over the past year in terms of sales and market-share growth.

The company grew its share of the Canadian market from 4.4% in the first quarter of fiscal 2021 to 7.5% as of November 2021, the fourth-best in the industry, according to Organigram.

The company also signaled that it will be profitable one quarter earlier than expected.

“While we previously projected to achieve positive adjusted EBITDA in Q4, with the purchase of Laurentian that will be accelerated to Q3 fiscal 2022,” CEO Beena Goldenberg said in a statement.

Organigram’s adjusted EBITDA loss of CA$1.9 million in the quarter was ahead of analyst expectations, which was a consensus loss of approximately CA$5.3 million.

In December, Organigram acquired Quebec producer Laurentian Organic in a deal worth at least CA$36 million.

Then, in January, Organigram increased its investment in cannabinoid biosynthesis company Hyasynth Biologicals.

In a note to investors, ATB Capital Markets analyst Frederico Gomes said Organigram is closing in on the No. 3 position in market share in Canada. Rival producer Canopy Growth currently holds the No. 3 spot.

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“While the Canadian recreational cannabis market remains fragmented and highly competitive, we believe that OGI is one of the best positioned LPs due to its capital position, diverse brand and product portfolio, and credible path to profitability,” Gomes wrote.

Organigram shares trade as OGI on the Nasdaq and the Toronto Stock Exchange.