Organigram Reports Second Quarter Fiscal 2022 Results


  • Achieved gross revenue of $43.9 million, up 128% from the same prior-year period and consistent with Q1 Fiscal 2022, despite the impact of seasonality
  • Continued record growth in net revenue, reaching $31.8 million, the highest in the history of the Company, up 117% from $14.6 million in the same prior-year period and 5% from $30.4 million in Q1 Fiscal 2022
  • Achieved positive Adjusted EBITDA of $1.6 million, two quarters ahead of the Company’s initial estimate
  • Reached 8.2% market share1 in February 2022, the #3 position among Canadian licensed producers for the second month in a row1
  • Maintained #1 position in dried flower, the largest category, which represents approximately half of the Canadian cannabis market1
  • Launched 18 new products, including extensions to the SHRED’ems gummies line and two new premium strains to the Edison brand, bringing the total number of core SKUs in market to 69
  • Shipped 1,692 kilograms of high margin flower to Israel and Australia, marking the highest quarterly International B2B shipments in the history of the Company
  • Acquired Quebec-based hash and craft cannabis producer Laurentian, an immediately accretive transaction providing the Company with a broadened product portfolio and increased footprint in Quebec 
  • Increased investment in Hyasynth, a pioneer in cannabinoid science. Once Hyasynth commences commercial production, the Company has the option to purchase Hyasynth’s proprietary biosynthesis-generated cannabinoids at a discount to the wholesale market price
  • Launched SHRED-X vapes, 510 vape cartridges with flavour profiles inspired by the unique flavours of the SHRED milled flower products
  • Received $6.3 million investment from BAT through the exercise of its rights pursuant to an Investor Rights Agreement with BAT, to enhance its equity ownership position in the Company from 18.8% to 19.4% as at the date hereof
  • Subsequent to quarter-end, leveraged the high visibility of the SHRED brand to introduce two new products. SHRED-X kief-infused blends, is a 50%/50% blend of kief and the popular SHRED milled flower – yet another innovative product that combines potency and flavour with convenience, and SHRED’ems POP!, gummies in the classic pop flavours of cola, root beer and cream soda

April 12, 2022 06:00 AM Eastern Daylight Time

TORONTO–(BUSINESS WIRE)–Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), the parent company of Organigram Inc. (together, the “Company” or “Organigram”), a leading licensed producer of cannabis, announced its results for the second quarter ended February 28, 2022 (“Q2 Fiscal 2022”).

“We are also progressing well with the Laurentian integration. In less than three months we have been able to significantly increase distribution and begin to implement the synergies planned at acquisition. Automation to optimize production is also underway and expected to be complete by the end of Fiscal 2022”Tweet this

“The culture of innovation and consumer focus we are building at Organigram has enabled us to not only create brands that are embraced by consumers, but continually innovate within those brands and across multiple product lines. We expect that leveraging these brands will allow us to continue to drive market share,” said Beena Goldenberg, Chief Executive Officer. “In addition to our continued success at building beloved brands, our ability to increase sales in international markets and capitalize on our accretive acquisitions, such as Laurentian and EIC, continue to contribute to our solid gains in market presence and sales growth.”

“We are also progressing well with the Laurentian integration. In less than three months we have been able to significantly increase distribution and begin to implement the synergies planned at acquisition. Automation to optimize production is also underway and expected to be complete by the end of Fiscal 2022,” added Goldenberg.

Select Key Financial Metrics (in $000s unless otherwise indicated)Q2-2022 Q2-2021 % Change
Gross revenue43,934 19,292 128 %
Excise taxes(12,098) (4,649) 160 %
Net revenue31,836 14,643 117 %
Cost of sales24,955 31,146 (20) %
Gross margin before fair value changes to biological assets & inventories sold6,881 (16,503) nm
Realized fair value on inventories sold and other inventory charges(5,314) (7,208) nm
Unrealized gain (loss) on changes in fair value of biological assets7,502 6,516 nm
Gross margin9,069 (17,195) nm
Adjusted gross margin18,255 (680) nm
Adjusted gross margin %126 % (5) % nm
Selling (including marketing), general & administrative expenses213,998 10,329 36 %
Adjusted EBITDA11,556 (7,840) nm
Net loss(4,047) (66,389) nm
Net cash used in operating activities(803) (10,430) nm

1 Adjusted gross margin, adjusted gross margin % and adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meaning under IFRS; please refer to the Company’s Q2 Fiscal 2022 MD&A for definitions and a reconciliation to IFRS. 
2 Excluding non-cash share-based compensation. 
nm – not meaningful

Select Balance Sheet Metrics (in $000s)FEBRUARY 
28, 2022
31, 2021
 % Change
Cash & short-term investments150,745 183,555 (18) %
Biological assets & inventories56,187 48,818 15 %
Other current assets29,627 28,242 5 %
Accounts payable & accrued liabilities25,551 18,952 35 %
Current portion of long-term debt80 80 — %
Working capital189,597 234,349 (19) %
Property, plant & equipment240,924 235,939 2 %
Long-term debt192 230 (17) %
Total assets585,102 554,017 6 %
Total liabilities71,716 74,212 (3) %
Shareholders’ equity513,386 479,805 7 %

“The additional revenue from Laurentian, and continued growth in recreational and B2B sales, combined with improving margins through improved operational efficiencies, allowed us to achieve positive Adjusted EBITDA two quarters earlier than originally projected,” stated Derrick West, Chief Financial Officer. “Our strong balance sheet and cash position as well as the completion of our facility expansion to meet market demand, positions us well to deliver sustained value to our shareholders.”

Key Financial Results for the Second Quarter Fiscal 2022

  • Net revenue:
    • Compared to the prior year, net revenue increased 117% to $31.8 million, from $14.6 million in Q2 Fiscal 2021. The increase was primarily due to an increase in adult-use recreational revenue and international revenue, partly offset by lower average net selling price (“ASP”) due to product mix and a decrease in medical revenue.
  • Cost of sales:
    • Q2 Fiscal 2022 cost of sales decreased by 20% to $25.0 million, from $31.1 million in Q2 Fiscal 2021. The decrease to cost of sales during a period when there was a large increase in sales was due to lower production costs, the elimination of unabsorbed overheads and significantly reduced inventory provisions.
  • Gross margin before fair value changes to biological assets, inventories sold, and other charges:
    • Q2 Fiscal 2022 margin improved to $6.9 million from negative $16.5 million in Q2 Fiscal 2021 largely due to higher net revenue and lower cost of sales as described above.
  • Gross margin:
    • Q2 Fiscal 2022 gross margin increased to a positive result from negative Q2 Fiscal 2021 gross margin largely due to higher Q2 Fiscal 2022 gross margin before fair value changes to biological assets and inventories sold as described above, as well as net non-cash negative fair value changes to biological assets and inventories sold in Q2 Fiscal 2022.
  • Adjusted gross margin2:
    • Q2 Fiscal 2022 adjusted gross margin was $8.3 million, or 26% of net revenue, compared to negative $0.7 million, or -5%, in Q2 Fiscal 2021. This was largely due to the higher overall sales volumes combined with lower cost of production.
  • Selling, general & administrative (SG&A) expenses:
    • Q2 Fiscal 2022 SG&A expenses increased to $14.0 million from $10.3 million in Q2 Fiscal 2021, primarily due to the higher spend to support the growth to the business combined with the acquisition of Laurentian.
  • Adjusted EBITDA3:
    • Q2 Fiscal 2022 adjusted EBITDA improved to positive $1.6 million compared to negative $7.8 million in Q2 Fiscal 2021, primarily due to the increase in adjusted gross margins, partially offset by the increase in SG&A expenses.
  • Net loss:
    • Q2 Fiscal 2022 net loss was $4.0 million, compared to a net loss of $66.4 million in Q2 Fiscal 2021, the reduction in the net loss is primarily due to the higher sales and gross margins in the current quarter.
  • Net cash used in operating activities:
    • Q2 Fiscal 2022 net cash used in operating activities was $5.3 million: this was primarily driven by the increase in inventories. In Q2 Fiscal 2021, net cash used in operating activities was $10.4 million, which was primarily driven by the loss from operations.

The following table reconciles the Company’s adjusted EBITDA.

Adjusted EBITDA Reconciliation (in $000s unless otherwise indicated) Q2-2022 Q2-2021
Net loss as reported $ (4,047) $ (66,389)
Financing costs, net of investment income (217) 669
Income tax recovery (97) 
Depreciation, amortization, and gain (loss) on disposal of property, plant and equipment (per statement of cash flows) 11,024 5,222
Impairment of intangible assets  
Impairment of property, plant and equipment 2,000 
Share of loss and impairment loss from loan receivable and investments in associates 499 844
Unrealized (gain) loss on changes in fair value of contingent consideration 666 154
Realized fair value on inventories sold and other inventory charges 5,314 7,208
Unrealized gain (loss) on change in fair value of biological assets (7,502) (6,516)
Share-based compensation (per statement of cash flows) 877 1,167
COVID-19 related charges, net of government subsidies  (2,709)
Legal provisions  500
Share issuance costs allocated to derivative warrant liabilities and change in fair value of derivative liabilities (10,633) 37,659
Incremental fair value component of inventories sold from acquisitions 663 
Acquisition transaction costs 1,148 
Provisions and impairment of inventories and biological assets and provisions of inventory to net realizable value 711 13,549
Research and development expenditures 1,150 802
Adjusted EBITDA $ 1,556 $ (7,840)

The following table reconciles the Company’s adjusted gross margin:

Adjusted Gross Margin Reconciliation (in $000s unless otherwise indicated)Q2-2022 Q2-2021
Net revenue$ 31,836 $ 14,643
Cost of sales before adjustments23,581 15,323
Adjusted Gross margin8,255 (680)
Adjusted Gross margin %26 % (5) %
Provisions (recoveries) and impairment of inventories and biological assets686 10,050
Provisions to net realizable value25 3,499
Incremental fair value component on inventories sold from acquisitions663 
Unabsorbed overhead 2,274
Gross margin before fair value adjustments6,881 (16,503)
Gross margin % (before fair value adjustments)22 % (113) %
Add/(Deduct):Realized fair value on inventories sold and other inventory charges(5,314) (7,208)
Unrealized gain on changes in fair value of biological assets7,502 6,516
Gross margin(1)9,069 (17,195)
Gross margin %(1)28 % (117) %

Canadian Recreational Market

SHRED X 510 vape cartridges

  • In February 2022, the Company launched SHRED X vape cartridges in the 510 format. This new line of vapes is offered in flavours of the popular milled flower product: Tropic Thunder, Megamelon and Gnarberry, and are blended with a unique terpene blend to create a true cannabis flavour.

SHRED X kief-infused blends

  • Building on its leadership position with SHRED, the best selling milled flower product, the Company in March introduced a new innovative product consisting of a 50%/50% blend of SHRED combined with high quality kief. SHRED-X combines the convenience of milled flower with the higher potency of kief.

Edison new strains

  • The Company solidified the premium positioning of Edison, its flagship brand, by introducing two new strains of premium flower to its lineup. This includes Edison Kush Cakes, an indica-dominant cultivar with a high potency of 22-28% THC, and Edison Frozen Lemons, a sativa-dominant strain with a lemon flavour and aroma, and a potency of 20-26% THC.

SHRED’ems line extensions

  • SHRED’ems gummies, launched in August 2021, leveraged the popularity of the Company’s SHRED milled flower products, and quickly grew to a #3 position4 in the gummies category. Building on the success of the initial launch, the Company launched five new flavours, bringing a total of eight SHRED’ems SKUs to the market.

Big Bag O’ Buds line extension

  • To further differentiate its offering in the value segment, the Company introduced Pink Cookies to its Big Bag ‘O Buds product line. Pink Cookies is an indica-dominant strain with a potency of 18-24% THC. The Company now has five core Big Bag ‘O Buds SKUs available in the market, reflecting increasing consumer demand for variety in the value segment.

Research and Product Development

Product Development Collaboration (“PDC”) and Centre of Excellence (“CoE”)

  • In Fiscal 2021, Organigram launched the PDC with BAT which was established to focus on research and product development activities for the next generation of cannabis products, with an initial focus on CBD. R&D efforts are progressing well and the Company will be applying these discoveries and deep scientific knowledge to both strengthen its existing in market products, as well as the development of novel and new consumer-centric innovations.

Plant Science, Breeding and Genomics R&D in Moncton

  • Organigram’s cultivation program is a key strategic advantage for the Company and focuses on cultivating a pipeline of unique and sought-after genetics, maximizing flower quality in terms of THC yield, terpene profiles and general plant health to meet evolving consumer demand. The Company is aggressively expanding its in-house breeding program, and will be launching the first of many in-house genetic in the coming months.

Strategic Investment in Hyasynth Biologicals Inc. (“Hyasynth”)

  • Following the most recent investment of $2.5 million in December 2021, Organigram has invested a total of $10 million in Hyasynth through the participation in three tranches of convertible debentures. The Company has appointed two nominees to Hyasynth’s Board of Directors and has the option to purchase Hyasynth produced cannabinoids at a discount to the wholesale market price for a period of ten years from the date of Hyasynth’s commencement of commercial production.


  • In Q2 Fiscal 2022, the Company made two international shipments. In February, the Company shipped 1,692 kilograms of dry flower to Israel under its agreement with Canndoc and to Australia through Cannatrek.
  • Recent political changes and cannabis election ballot initiatives for medical and recreational use in the United States suggest that the potential movements to U.S. federal legalization of cannabis (THC) have increased momentum, but the timing and outcome remain difficult to predict. Organigram continues to monitor and develop a potential U.S. THC strategy and evaluate CBD entry opportunities in the United States.

Liquidity and Capital Resources

  • On February 28, 2022, the Company had unrestricted cash and short-term investments balance of $151 million compared to $184 million at August 31, 2021.
  • Organigram believes its capital position is healthy and that there is sufficient liquidity available for the near to medium term.

Capital Structure

in $000sFEBRUARY28, 2022 AUGUST31, 2021
Current and long-term debt272 310
Shareholders’ equity513,386 479,805
Total debt and shareholders’ equity513,658 480,115
in 000s   
Outstanding common shares313,690 298,786
Options7,783 7,797
Warrants16,944 16,944
Top-up rights6,382 6,559
Restricted share units1,352 1,186
Performance share units269 472
Total fully-diluted shares346,420 331,744

Outstanding basic and fully diluted share count as at April 11, 2022 is as follows:

in 000s APRIL 11, 2022
Outstanding common shares 313,690
Options 7,764
Warrants 16,944
Top-up rights 6,541
Restricted share units 1,352
Performance share units 269
Total fully-diluted shares 346,560


Net revenue

  • Organigram currently expects Q3 Fiscal 2022 revenue to be higher than Q2 Fiscal 2022. This expectation is largely due to ongoing sales momentum, stronger forecasted market growth, the Company’s expanded product line in multiple segments, greater capacity to meet demand at the Moncton Campus, increased throughput at the Winnipeg facility and the Laurentian acquisition.
  • Net revenue growth is expected from the Company’s products as evidenced by Organigram’s growing national adult-use recreational retail market share (“market share”) from 7.6% in Q1 of September 2021 to 8.4% in March 20226.
  • In addition, the continuation of shipments to Canndoc in Israel and Cannatrek in Australia is expected to generate higher sequential revenue in Fiscal 2022 as compared to Fiscal 2021. The Company believes it is better equipped to fulfill demand in Fiscal 2022 with larger harvests expected compared to Fiscal 2021. Revenues in Fiscal 2022 to date included two shipments to Canndoc that totaled approximately $7.0 million, and one shipment to Cannatrek for approximately $1.0 million. Orders received from other international customers support the Company’s expectation of continued revenue growth from Fiscal 2021 to Fiscal 2022.
  • Organigram expects to be positioned to generate further revenue growth from the production of soft chews/gummies and other edible products.
  • The Company also expects to realize additional revenue through the recent acquisition of Laurentian and will make growth-focused capital expenditures at Laurentian which have the potential to further increase EBITDA generation. Since the acquisition, the Company has accelerated the distribution and sale of Tremblant Cannabis, its flagship hash brand in Ontario, increasing distribution from 25% to 40% of retail stores and growing quarterly sales by 21% compared to Laurentian’s sales in the three months ended November 30, 2022. By leveraging Organigram’s industry-leading national distribution and field sales network, Laurentian products will be available in all Canadian provinces in Fiscal 2022.

Adjusted gross margins

  • The Company expects to see a sequential improvement in adjusted gross margins in Q3 Fiscal 2022 and has put measures in place that it expects will further improve margins over time.
  • The overall level of Q3 Fiscal 2022 adjusted gross margins versus Q2 Fiscal 2022 will also be dependent on other factors, including product category and brand sales mix.
  • Organigram has identified the following opportunities which it believes have the potential to further improve adjusted gross margins over time:
    • Economies of scale and efficiencies gained as it continues to scale up cultivation, including the grow rooms that will be available after completing the construction of Phase 4C of the Moncton Campus;
    • Changes to its growing and harvesting methodologies, design improvements and environmental enhancements which should improve operating conditions of the Moncton Campus, resulting in higher-quality flower and improved yields;
    • Continued investment in automation which will drive cost efficiencies and reduce dependence on manual labor;
    • Continued investment in the Edison brand, including product innovations across multiple categories and increased investment in building brand equity within the premium segment, both geared toward securing higher margins;
    • Additional innovative product launches such as Edison Jolts, SHRED’ems, Monjour and most recently SHRED X kief-infused blends, which represent new potential avenues for growth with expected attractive long-term margin profiles for the Company; and
    • Margin contribution from the addition of the Laurentian portfolio of products.

Second Quarter Fiscal 2022 Conference Call

The Company will host a conference call to discuss its results with details as follows: 
Date: April 12, 2022 
Time: 8:00am Eastern Time 
To register for the conference call, please use this link:

To ensure you are connected for the full call, we suggest registering a day in advance or at minimum 10 minutes before the start of the call. After registering, a confirmation will be sent through email, including dial in details and unique conference call codes for entry. Registration is open through the live call.

To access the webcast:

A replay of the webcast will be available within 24 hours after the conclusion of the call at will be archived for a period of 90 days following the call.

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