The stock of Canadian cannabis company Organigram Holdings Inc. (OGI) surged 10% in premarket trading on Monday following the announcement of a substantial investment from British American Tobacco Plc (BATS).
Investment Details
Organigram will receive a substantial investment of C$124.6 million ($91.3 million) from British American Tobacco. Out of this total amount, C$83.1 million will be allocated to the creation of "Jupiter," a strategic investment pool aimed at exploring emerging growth opportunities and expanding Organigram's geographical reach. The remaining C$41.5 million will be utilized for general corporate purposes.
Strong Partnership and Focus on Innovation
"This transaction furthers BAT's support of Organigram as a trusted partner and accelerates the focus on innovative cannabis science and R&D outside of combustibles," stated Organigram in an official statement. The collaboration between BAT and Organigram commenced in 2021 and has already paved the way for exciting developments.
Exciting Prospects for Product Development
Through their product development collaboration (PDC), Organigram and BAT are currently in the final stages of developing a range of emulsions, novel vapor formulations, flavor innovations, and packaging solutions. These cutting-edge advancements are planned to be integrated into specific products within Organigram's portfolio by calendar year 2024.
Market Performance
While Organigram's stock has experienced a decline of 64% year-to-date, the AXS Cannabis ETF (THCX) dropped by 36%, and the S&P 500 (SPX) gained 13.5% during the same period. As the company continues to forge strategic partnerships and invest in innovative research, it aims to regain strength in the market.
This investment from British American Tobacco Plc marks a significant milestone for Organigram Holdings Inc., providing the necessary resources for expansion and further innovation within the cannabis industry.
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