Organigram Expands US Presence while raising Capital

The TDR Three Takeaways for Organigram:

  1. Organigram’s strategic investment in Open Book Extracts signals a significant push into the US market, highlighting its international expansion ambitions.
  2. The partnership with Open Book Extracts allows Organigram to leverage the growing US hemp derivatives market, positioning it for future product launches.
  3. Organigram’s recent public offering aims to fund growth initiatives, underscoring its commitment to expanding its footprint both in Canada and internationally.

Organigram Holdings Inc.,a Canadian cannabis company, has recently undertaken significant steps to broaden its market presence, particularly in the United States. This move is demonstrated through a substantial investment in Open Book Extracts (OBX), a North Carolina-based company known for its focus in hemp-derived extracts and products. Organigram’s foray into the US market with this investment marks a pivotal moment for the company, indicating a strategic expansion aimed at capturing a share of the growing  hemp derivatives market.

The investment in OBX serves as Organigram’s inaugural venture through its Jupiter investment pool, shedding light on the company’s strategic priorities. With OBX’s expertise in cannabinoid ingredient production and its state-of-the-art facilities within the Research Triangle, this partnership not only strengthens Organigram’s supply chain but also positions it to significantly benefit from the expanding legal landscape for hemp derivatives in the US.

Paolo De Luca, Chief Strategy Officer at Organigram, emphasized the scalable platform, differentiated products, and the strong team behind OBX as key factors in their investment decision. This move reflects Organigram’s growing international ambitions and its strategy to establish a foothold in significant markets outside Canada.

On the financial front, Organigram announced an overnight marketed public offering aimed at raising approximately C$25 million. The proceeds from this offering are earmarked for funding growth initiatives and general corporate purposes, including potential acquisitions and investments in both the Canadian and international cannabis and hemp markets. This strategic capital raising initiative underscores Organigram’s intent to strengthen its market position and deliver long-term value to shareholders.

However, this expansion and the associated capital raising efforts come with considerations for current shareholders, particularly regarding dilution. It’s crucial for stakeholders to weigh the potential benefits of market expansion against the immediate impacts of dilution. Organigram’s investment in OBX and its fundraising activities reflect a calculated risk, aiming to secure a stronger market position and capitalize on emerging opportunities in the hemp derivatives sector.

Through its partnership with OBX, Organigram is not just investing in a company but is also investing in its future within the US market. This collaboration is expected to facilitate product launches in the US, leveraging OBX’s research capabilities and EU GMP certification to explore international markets further. Want to keep up to date with all of TDR’s research and news, subscribe to our daily Baked In newsletter.   

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Organigram invests in Open Book Extracts, marking a strategic move into the US market to capitalize on the growing hemp derivatives sector.

One Sentence Summary

Organigram’s investment in Open Book Extracts underscores its strategic expansion into the US, aiming at the burgeoning hemp derivatives market.

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