Massive sales spikes in cannabis oil and flower boosted both profits and sales for Organigram Holdings, as the Canadian company returned to the black during the latest quarter while it charts a path for international expansion.
The Moncton, New Brunswick-based licensed cultivator posted net income of 1.1 million Canadian dollars ($860,000) in the three months ended Feb. 28, rebounding from red ink of CA$5.7 million during its fiscal second quarter a year earlier.
The rebound came as Organigram recorded gross sales of CA$3.2 million in the latest quarter, up from CA$1.45 million a year earlier.
Cannabis oil sales tripled and cannabis flower sales grew 68%, boosting gross sales to a new record high.
During the quarter the firm sold 552 milliliters of cannabis oil compared to 139 milliliters in the same quarter of 2017.
The company is also increasing growing capacity in anticipation of Canada’s recreational marijuana market opening this summer.
The company’s marijuana production capacity has grown from 5,000 kilograms to roughly 22,000 kilograms in the last year, Organigram CFO Paola De Luca told Marijuana Business Daily. By the end of 2020, the firm expects to produce up to 113,000 kilograms a year.
That would position the firm as a “major player” in the Canadian market with a more than 10% stake in the country’s legal cannabis production, he said.
Organigram closed on two major financing efforts in the quarter, which will be used to fund the company’s massive expansion efforts, De Luca said.
An equity financing effort raised gross proceeds of CA$57.5 million, and a convertible debenture offering raised CA$115.
The company is also looking to international markets, with potential announcements coming next quarter.
“The rest of the world is finally catching up to what we’re doing in Canada,” De Luca said. “The opportunities seem to be the best in Australia, Germany, Italy and other countries in the EU.”
De Luca said Organigram is exploring opportunities to export from Canada or develop production facilities in lower-cost areas of the European Union.
Organigram shares (OTCQB: OGRMF) were trading at $3.03 in over-the-counter trading on Thursday afternoon Eastern time, down from $3.06 at Wednesday’s close.