Organigram reports CA$66.4 million loss on falling cannabis sales

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New Brunswick-based cannabis producer Organigram’s net revenue fell to a multiyear low of 14.6 million Canadian dollars ($11.6 million) in its December 2020-February 2021 quarter, the company said Tuesday.

Organigram’s revenue has trended lower since reaching an all-time high of CA$26.9 million in the quarter ended Feb. 28, 2019 – the first full quarter of legalization.

The recent decline stemmed partly from “significantly lower” wholesale revenue and a lower average selling price, Organigram said in a news release announcing its second-quarter results.

The company said it was forced to shut down its Moncton facility for “deep cleaning” after identifying positive COVID-19 cases that forced a significant number of employees to isolate.

Organigram said it was unable to fulfill demand for products worth approximately CA$7 million because of the production and processing constraints.

The lower revenue contributed to a net loss of CA$66.4 million and a loss from operations of CA$29.3 million.

The company also said its sales were negatively impacted by provincial wholesalers lowering inventory levels, namely Alberta Gaming, Liquor & Cannabis (AGLC).

Medical sales also fell.

Direct-to-patient medical revenue in Canada declined slightly from the previous quarter to CA$2.2 million.

Adult-use recreational wholesale revenue dropped to CA$16.5 million, 27% lower than the previous quarter.

Organigram said it applied for a government wage subsidy of CA$2.7 million for the second quarter. The subsidy, paid by the federal government, is for Canadian employers whose business has been affected by COVID-19.

In March, the Atlantic Canada-based marijuana producer signed a CA$220 million strategic collaboration with a subsidiary of cigarette maker British American Tobacco.

Earlier this month, Organigram acquired The Edibles & Infusions Corp. (EIC), a cannabis edibles manufacturer, from AgraFlora Organics International and other shareholders.

Organigram said it currently has CA$232 million in cash and short-term investments.

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