OrganiGram Holdings: One of the Most Overlooked Marijuana Stocks

November 6, 2018, By fierceinvestor,
OrganiGram Holdings

OrganiGram Holdings Inc. (OGRMF) is still one of the most overlooked marijuana stocks, notes Beacon Securities.  In fact, analysts believe there’s plenty of upside, untapped potential.

“We continue to view OGI as an overlooked investment opportunity, offering investors low-cost, large-scale production of quality cannabis products, with both a national sales footprint in Canada, and demonstrated progress on its international plans,” noted the firm, as quoted by the Cantech Letter.

In addition, the company is still ramping up production to capitalize on new market opportunities as an existing licensed producer.  Its active expansion includes a 15,000 sq. ft. extract processing facility that could prove quite useful, as the market begins to explode.

OGRMF agreement with Nova Scotia Liquor Corporation

“We are pleased to announce our supply agreement with NSLC,” says Greg Engel, Organigram’s CEO. “Our home markets have always been a key priority for Organigram and this announcement solidifies our position as the market leader here in the Maritimes. With supply arrangements in place in six provinces, we take great pride in our place as a national leader working towards a sustainable and successful adult-use recreational cannabis market.”

The company also signed a supply agreement with BC Liquor, the sole wholesale distributor of cannabis to the Canadian recreational market. As far as other catalysts, Beacon Securities pointed to the company’s fourth quarter results out in December 2018.  In addition, there’s the potential for a listing on the TSX.

We have to consider the potential for further growth

At the moment, the company has production capacity of 36,000 kg/year.  By April 2019, it’s expected to reach 62,000 kg.  By August 2019, it’s expected to reach 89,000 kg.  And by October 2019, production capacity could be as much as 113,000 kg/year.

In addition, the company has great international exposure with partnerships.

For example, it partnered with Eviana Health Corporation, a Serbian-based hemp far.  It also partnered with Pharma GmbH, a German-based medical marijuana company.  It also has a strategic partnership with CannaTek, an Australian based medical marijuana company.

OrganiGram Holdings is Profitable

In late July 2018, the company recorded net sales for both the three-months and nine-months ended May 31, 2018 of $3.7 million and $10.1 millionrespectively vs. $1.9 million and $3.6 million respectively for 2017.  It also posted record sale volume of cannabis oil for the three-monthsended May 31, 2018 (768,400 milliliters) up 39% from Q2/18 (552,250) and up 452% from Q3/17 (139,200milliliters).

Net income of $2.8 millionwas an increase of 162% compared to $1.1 million in Q2-2018 and a loss of $2.3 million in Q3-2017.

Beacon Securities recently maintained its Buy rating on the stock with an $11.50 price target.

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