Canada's Organigram shops for U.S. pot businesses with backing from British American Tobacco

MW Canada's Organigram shops for U.S. pot businesses with backing from British American Tobacco

By Steve Gelsi

Legal cannabis company grows revenue and narrows its loss as it continues its acquisition push

Canadian cannabis company Organigram Holdings Inc. said Wednesday it plans to continue shopping for U.S. pot businesses with backing from British American Tobacco as it posted a narrower loss and a 22% jump in revenue on Wednesday.

Organigram's stock $(OGI)$ was up by nearly 10% in premarket trading on Wednesday.

The company drew in C$124.6 million ($87 million) from British American Tobacco (UK:0A76) a year ago and has created an investment pool called Jupiter to grow its footprint outside of Canada through acquisitions.

Organigram had already invested in Phylos Bioscience Inc., a U.S.-based specialist in seed technology.

But it's still on the hunt for more deals.

"Organigram is exploring additional U.S. and international investment opportunities that align with the company's strategy to establish itself as a global leader and enhance profitability," the company said.

Organigram's move to buy more businesses comes after it said earlier this month it would pay up to C$100 million for Motif Labs Ltd. in a move to become the largest cannabis company by market share.

In its fourth quarter, Organigram said its net loss narrowed to C$5.4 million from C$26.6 million in the year-ago period, due partly to increased adjusted gross margins and a drop in impairment costs.

Revenue rose 22% to C$44.7 million, ahead of the FactSet consensus estimate of C$44 million, on a boost from recreational cannabis sales in Canada and an increase in international business.

While others such as Canopy Growth Corp. $(CGC.AU)$ have struggled in the Canadian market, Organigram has managed to gain traction.

However, the much larger U.S. market continues to beckon Organigram and other companies.

Tilray Brands Inc. $(TLRY)$ has been buying U.S. beer brands, while Canopy Growth has launched its Canopy USA unit with components Wana edibles, Jetty Extracts and cannabis-store operator Acreage.

As of Tuesday's close, Canopy Growth's stock has risen 22.9% in 2024, while Tilray's has fallen 46% and Canopy Growth's has fallen by 40%.

-Steve Gelsi

This content was created by MarketWatch, which is operated by Dow Jones & Co. MarketWatch is published independently from Dow Jones Newswires and The Wall Street Journal.

(END) Dow Jones Newswires

December 18, 2024 08:43 ET (13:43 GMT)

Copyright (c) 2024 Dow Jones & Company, Inc.