- Q4 2020 net revenue increased 25% to $20.4 million from
$16.3 million in Q4 2019
- Q4 2020 gross revenue increased 32% to $25.4 million from
$19.2 million in Q4 2019
- Launched 40 new stock keeping units (“SKUs”) since July
2020, including new high THC strains, and further value segment
offerings and expect to launch up to 18 more new SKUs in Q2 2021 as
part of the Company’s product portfolio revitalization
- Subsequent to quarter-end, invested an additional $2.5
million in Hyasynth Biologicals Inc. as the biotech partner
completed a milestone linked to the first commercial sale of
cannabinoids produced via biosynthesis
- Subsequent to quarter-end, raised ~$69 million in gross
proceeds from an underwritten public offering including the
exercise in full of the over-allotment option
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 fourth quarter ended August 31, 2020 (“Q4” or
“Q4 2020”).
Select Key Financial Metrics (in
$000s) unless otherwise indicated
Q4 2020
Q4 2019
% Change
Gross revenue
25,389
19,235
32
%
Excise taxes
(4,989
)
(2,945
)
69
%
Net revenue
20,400
16,290
25
%
Cost of sales
29,007
15,543
87
%
Gross margin before fair value changes to
biological assets & inventories sold
(8,607
)
747
-1252
%
Fair value changes to biological assets
& inventories sold
(20,149
)
(11,806
)
71
%
Gross margin
(28,756
)
(11,059
)
160
%
Adjusted gross margin1
6,156
1,491
313
%
Adjusted gross margin %1
30
%
9
%
21
%
SG&A2
10,830
13,883
-22
%
Net loss
(38,590
)
(22,456
)
72
%
Adjusted EBITDA1
(2,663
)
(7,163
)
-63
%
Net cash used in operating activities3
(10,128
)
(15,722
)
-36
%
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 Q4 2020 MD&A for definitions and a reconciliation to
IFRS. 2 Sales and marketing and general and administrative expenses
(“SG&A”) excluding share-based compensation 3 Q4 2020 net cash
used in operating activities has been calculated based on a
correction of a presentation error of Q1 to Q3 Fiscal 2020 net cash
used in operating activities.
Select Balance Sheet Metrics (in
$000s)
31-Aug-20
31-Aug-19
% Change
Cash & short-term investments
74,728
47,935
56
%
Biological assets & inventories
71,759
113,796
-37
%
Other current assets
23,717
34,550
-31
%
Accounts payable & other current
liabilities
29,081
43,864
-34
%
Working capital
141,123
152,417
-7
%
Property, plant & equipment
247,420
218,470
13
%
Long-term debt
103,671
46,067
125
%
Total assets
435,127
428,525
2
%
Total liabilities
135,600
101,519
34
%
Shareholders’ equity
299,527
327,006
-8
%
“We are excited about Organigram’s prospects as we continue to
reinvigorate and diversify our product portfolio with new offerings
aimed at delivering the attributes that matter most to consumers,”
said Greg Engel, CEO. “Overall, we are very encouraged by the
initial responses to our new products and the increased awareness
and traction they are receiving against a backdrop of national
retail store growth and a growing legal market that continues to
displace the illicit market. Our team is more focused than ever on
enhancing our agility and execution to capture top-line growth and
we believe we have the capital resources and liquidity to support
us. We have always operated with financial discipline to pursue
profitable growth which is again reflected in positive adjusted
EBITDA in full-year fiscal 2020 for the second year in a row.”
Key Financial Results for the Fourth Quarter Fiscal
2020
- Net revenue:
- Q4 2020 net revenue of $20.4 million compared to $16.3 million
in Q4 2019 primarily due to:
- Higher flower sales on higher volumes due to the large format,
value segment growing and the Company having a number of offerings
in this segment
- Adult-use recreational derivative and edible (“Rec 2.0”)
product sales that were not yet legal in Q4 2019 and a significant
increase in international sales largely due to the supply agreement
with Canndoc Ltd., leading Israeli medical cannabis producer, that
did not exist in Q4 2019; and
- A lower sales provision for returns and price adjustments in Q4
2020 compared to Q4 2019.
- Gross revenue:
- Q4 2020 gross revenue of $25.4 million compared to $19.2
million in Q4 2019 primarily due to similar factors impacting net
revenue described above.
- Q4 2020 gross revenue increased 32% from the prior year period
compared to the 25% increase in net revenue reflecting more
shipments and the increase in excise taxes as a percentage of gross
revenue in Q4 2020.
- Cost of sales:
- Q4 2020 cost of sales of $29.0 million compared to Q4 2019 cost
of sales of $15.5 million.
- Higher cost of sales in Q4 2020 was primarily due to:
- Increased sales volumes in Q4 2020;
- Q4 2020 write-offs of excess and unsaleable inventories of
$11.1 million, of which $8.3 million related to excess trim and
concentrate; and $2.8 million of write-downs and adjustments to net
realizable value and
- $3.5 million in unabsorbed fixed overhead as a result of lower
production volumes, and $0.2 million related to lump-sum payments
paid to temporarily laid-off workers in Q4 2020.
- Gross margin before fair value changes to biological assets and
inventories sold:
- Q4 2020 negative gross margin before fair value changes to
biological assets and inventories sold of $8.6 million compared to
positive $0.7 million in Q4 2019.
- Negative and lower gross margin in Q4 2020 was largely due to
higher cost of sales as described above.
- Adjusted gross margin1:
- Q4 2020 adjusted gross margin increased to $6.2 million from
$1.5 million in Q4 2019 primarily due to a lower sales provision
for returns and price adjustments in Q4 2020 compared to Q4 2019 as
discussed above.
- Gross margin:
- Q4 2020 negative gross margin of $28.8 million compared to Q4
2019 negative gross margin of $11.1 million, largely due to
negative Q4 2020 gross margin before fair value changes to
biological assets and inventories sold as described above as well
as greater net non-cash negative fair value changes to biological
assets and inventories sold of $20.1 million in Q4 2020 versus
$11.8 million in Q4 2019.
- Selling, general & administrative (SG&A) expenses:
- Q4 2020 SG&A of $10.8 million decreased 22% from Q4 2019’s
amount of $13.9 million and Q4 2020 SG&A as a percentage of net
revenue was 53% compared to 85% in Q4 2019.
- Q4 2019 SG&A included approximately $2.0M of licensing and
professional fees that were not expected to recur at the same level
and Q4 2020 SG&A reflected the Company’s reduced spending
during the ongoing COVID-19 pandemic.
- Q4 2020 SG&A was largely in line with Q3 2020 SG&A of
10.3 million and declined from Q3 SG&A as a percentage of net
revenue of 57%.
- Adjusted EBITDA1:
- Q4 2020 negative adjusted EBITDA of $2.7 million improved from
Q4 2019 negative adjusted EBITDA of $7.2 million primarily due to
higher adjusted gross margin in Q4 2020 as discussed above.
- Net Loss:
- Q4 2020 net loss of $38.6 million, or ($0.199) per share on a
diluted basis, compared to Q4 2019 net loss of $22.5 million, or
$(0.144) per share, largely due to greater negative gross margin in
Q4 2020 as described above.
- Net cash used in operating activities:
- Q4 2020 net cash used in operating activities of $10.1 million
decreased from $15.7 million used in Q4 2019 largely due to the
prior period’s increase to working capital assets as the Company
scaled operations ahead of Rec 2.0 legalization.
Canadian Adult-Use Recreational Market
The Company has been revitalizing its product portfolio with the
launch of 40 new SKUs since July 2020 since July 2020, including
new high THC strains and additional value segment offerings.
Further, the Company expects to launch up to 18 new SKUs in Q2
2021.
Rec 1.0
Value Segment Offerings
- Dried flower remains the largest category in the Canadian
adult-use recreational market of all product form factors and the
Company believes this category will continue to dominate for the
foreseeable future based on the sales history in mature adult use
recreational legal markets in the U.S. (California, Colorado,
etc.).
- The Company has noted the significant growth in the dried
flower value category of the market with intensifying competition
including recent entries of lower priced offerings which have
caused significant market share shifts within dried flower to the
value segment. In response, the Company launched “Buds”2 in Q3 2020
along with a number of other dried flower offerings in larger
format sizes of 7g and 15g under the Trailblazer value brand in
early Q4 2020. The Company believes Buds is a differentiated
single-strain value product and it has been well-received by
consumers since it is at an affordable price point but does not
have to compete on price alone since it is indoor-grown, whole
dried flower and strain specific.
- Further, the Company’s value segment strategy also includes
dried flower offerings that were launched in larger format sizes of
7g and 15g under our Trailblazer brand in July 2020.
- Subsequent to quarter-end in mid-September 2020, Organigram
expanded its strong value portfolio with the launch of SHRED, a
high quality, high potency and affordable dried flower blend that
is pre-shredded for consumer convenience. SHRED offers three
pre-milled varieties, all with THC of 18% or higher. It is made
from whole flower, does not contain any shake or trim and is milled
to the same specifications as the Company’s existing pre-roll
products. SHRED is currently Organigram’s most affordable dried
flower option (on a per gram basis).
New High THC Strains
- Cannabis consumers continue to gravitate towards both high THC
dried flower products and cultivar diversity and novelty as
supported by available sales data. In early August 2020, the
Company announced the launch of three new strains of Edison
Cannabis Co. (“Edison”) dried flower products, with higher THC: The
General (Grapefruit GG4), Chemdog and limited time offering,
Samurai Spy (Ninja Fruit). Going forward, the Company has decided
to change naming conventions for many of its offerings to align
with the street genetic names for dried flower products as it
believes these names will better resonate with consumers.
Rec 2.0
Cannabis-Infused Chocolates
- At the end of July 2020, the Company announced the launch of
Trailblazer Snax, a value-priced, cannabis-infused chocolate bar
which is made with premium quality ingredients including cocoa
butter, all-natural flavors and distillate, while remaining an
affordable cannabis-infused option. It is available in either mint
or mocha flavours in a 42g bar with 10mg of THC. Each bar can be
broken into five sections and is suited for both micro-dosing and
full consumption.
- Organigram’s investment in state-of-the art chocolate equipment
and manufacturing processes means that each of the five sections of
the Trailblazer Snax bar are filled separately, allowing for higher
accuracy of infusion. The Company’s chocolate portfolio also
consists of Edison Bytes truffles which are available in both milk
and dark chocolate formulations. These products are available as
single chocolates containing 10 mg of THC each or sets of two
truffles containing 5 mg each.
- In addition to a seasonal offering of Trailblazer Kushmas Stix,
the Company is also offering Canadian cannabis consumers delicately
spiced gingerbread flavours mingled with Edison Bytes’ signature
rich milk chocolate. These limited time offerings are available in
a two-per-pack format, with each truffle containing 5 mg THC for a
total of 10 mg total in the box.
Vape Portfolio
- The Company expects to launch Trailblazer Spark, Flicker and
Glow 510-thread Torch vape cartridges in a new 1g format before the
end of Q2 Fiscal 2021 which will extend Organigram’s line up to a
suite of trial-size 0.5 g and full-size 1 g cartridges for the 510
vaporizer. Trailblazer Torch offers customers 510 cartridges,
high-quality CO2 extract and three unique terpene-infused
flavours.
- In addition to the Trailblazer Torch value-segment offerings,
the Company’s vape portfolio also includes products for the
mainstream and the premium segments: Edison + Feather ready-to-go
distillate pens and Edison + PAX ERA® distillate cartridges.
Powdered Beverage Launch
- Subsequent to quarter-end in November 2020, Organigram launched
Edison RE:MIX dissolvable cannabis powder. The pre-packaged powder
format makes it easy to mix Edison RE:MIX into beverages quickly
and discreetly, so the product can be enjoyed, based on the
consumer’s own preference, in a wide variety of settings and on
occasions of their choosing.
- Edison RE:MIX is available in three formats: two sachets with 5
mg THC per sachet; two sachets with 5:5 mg THC:CBD per sachet; and
five sachets with 10 mg CBD per sachet.
- The results of a recent Organigram survey suggest a significant
majority of current cannabis consumers (74%) would prefer to add
cannabinoids to their beverages by themselves (vs. a pre-mixed
beverage). The discreet nature of the product also addresses
consumer concerns related to open cannabis consumption.
- According to recent sales data in Colorado, cannabinoid-infused
powders have rapidly risen to the top of the beverage category in
popularity, representing 55% of the state’s beverage market sales.
In fact, 46% of cannabis consumers reported enjoying
cannabinoid-infused beverages multiple times a day (Headset –
Colorado Market Insights – July 2020). In Canada, estimates suggest
the recreational cannabis beverage market represents a $467M
category opportunity and it is expected to increase by 15x its
current market size over the next five years (Brightfield Group –
Canadian Market Size Insights – July 2020).
- As previously announced, Organigram’s researchers have
developed a proprietary nano-emulsification technology that
generates nano-droplets which are very small and uniform; this
provides improved absorption compared to traditional edibles and
beverages, potentially allowing for a more reliable and controlled
experience.
- With traditional edibles, beverages, and ingestible oil-based
extracts, the body spends significant time breaking down fat
soluble cannabinoid particles which are then absorbed and
metabolized in the body before the effects are felt.
- The nanoemulsion technology is also anticipated to have
increased stability to temperature variations, mechanical
disturbance, salinity, pH, and sweeteners. The powdered formulation
holds the potential to offer consumers a measured dose of
cannabinoids which they can then add to liquid, such as a beverage
of their choice, while also offering the discretion, portability
and shelf life expected of a dried powder formulation.
Phase 4 Expansion
- As previously disclosed with Q3 2020 results, the Company
decided to indefinitely defer final completion of Phase 4C for
additional cultivation capacity (the final stage in Phase 4
cultivation expansion) as originally designed due to excess
cultivation capacity versus the current demand in Canada.
- During the quarter, Phase 4C was substantially completed such
that it can be occupied, and the Company retains the option to
potentially use the space for other opportunities (if and when
strategic and/or market factors dictate).
Phase 5 Refurbishment
- Phase 5, while already housing additional post-harvesting rooms
(including drying rooms) and a dedicated derivatives and edibles
facility, is expected to add additional functionality with expanded
extraction capacity at the Moncton Campus.
- Phase 5 was substantially complete at year end. The Company is
continuing to work on the installation and commissioning of certain
equipment in its edibles and extraction area including its
hydrocarbon extraction equipment.
Outlook
- Organigram remains positive on the cannabis market both in
Canada and abroad. The most recent data available from Statistics
Canada shows that Canadian adult use market sales (which represent
the majority of legal cannabis sales in the country) tallied $256
million3 for just the month of September 2020. This represents an
annualized run rate of approximately $3.1 billion, which is a
record since adult use was legalized in October 2018.
Month-over-month sequential growth rate was 5.2% and year-over-year
growth for September was 108.5%.
- The Company believes there are a few factors that are providing
tailwinds to further industry growth. First the legalization in
October of 2019 of Rec 2.0 products has attracted consumers who
were not interested in smoking or vaping. New categories such as
vape pens, edibles (soft chews, chocolates), beverages to name a
few have significantly expanded the addressable market. Second, the
number of brick and mortar retail stores has increased
significantly particularly in the back half of calendar 2020.
Third, the industry as a whole has made a concerted effort to match
or beat illicit market pricing which has helped accelerate the
conversion of consumers from illicit to legal consumption.
- Notwithstanding the above, the cannabis industry in Canada
remains highly competitive and generally oversupplied versus the
current market demand considering both regulated licensed producers
and the still unfettered illicit market. In early July 2020, the
Company announced it had reduced its workforce by 25% in an order
to better align its production capacity to prevailing market
conditions. After two years of adult-use recreational legalization
in Canada, consumer trends and preferences continued to solidify,
including significant growth in the large format value segment, a
desire for higher THC potency particularly in dried flower as well
as a penchant for newness including new genetic strains and novel
products. Organigram began a product portfolio revitalization
earlier this year in an effort to address what it believed to be
some of the biggest trends in order to grow sales and capture
market share.
- At the same time, the number of retail stores in Canada began
to grow meaningfully for the first time since legalization and in
September 2020, Ontario’s cannabis retail regulator began doubling
the number of licenses from 10 to 20 per month and is now on pace
to add up to 40 stores per month, resulting in accelerated growth
for Canada’s largest adult-use cannabis market. Since July 2020,
the number of retail stores in Canada’s 10 provinces grew one-third
and increased approximately 140% in Ontario alone.
- With a leaner workforce, the Company experienced some
reductions in production, cultivation, processing and packaging
capacity. At certain times, this contributed to delays in the
product launches for its portfolio revamp and hindered consistent
order fulfillment, particularly for high velocity items. The
Company believes this resulted in some meaningful missed revenue
opportunities in Q4 Fiscal 2020 and in Q1 Fiscal 2021. With
substantial retail store growth in play, the Company is evaluating
its processes and supply chain, including the benefit of gradually
scaling up staffing, to help ensure improved order fulfillment
rates and in turn, potentially realize greater sales opportunities.
Further, as many of the Company’s product launches are recent and
some are still to come, the Company believes it will still take
time for the new products to reach their full potential and gain
market share to drive meaningful sales growth.
- Organigram also continues to make investments in new genetics
and improved cultivation processes to increase THC potency and
introduce new strains into the highly important dried flower and
pre-roll categories. As discussed in the “Phase 4 Expansion”
section of this press release, the Company intends to cultivate at
less than its full cultivation capacity for the foreseeable future
partly to help increase THC potency in its plant, which is
anticipated to result in a negative non-cash adjustment to cost of
sales for unabsorbed fixed overhead costs.
- In addition to Rec 1.0, the Company plans to continue to expand
on Rec 2.0, which it believes will increasingly become a larger
relative category in line with mature U.S. legal markets. As
indicated in previous quarters, the Company expects some production
inefficiencies to persist in the near term and impact gross margin
while it continues to launch new Rec 2.0 products and optimize
production. Outside of Canada, the Company continues to serve
international markets (Israel and Australia) from Canada via export
permits and looks to augment sales channels internationally over
time. International sales increased significantly in Q4 Fiscal 2020
from the prior year period as Organigram shipped its first product
to Canndoc Ltd. in August 2020 under its supply agreement with the
Israeli cannabis medical producer. In early Q1 Fiscal 2021, the
Israeli Ministry of Health Israel amended its quality standards for
imported medical cannabis. The Company has identified a pathway for
demonstrating compliance with these updated standards and has
initiated a process which, if completed successfully, will allow it
to continue to supply product into the Israeli market.
- Recent political changes and cannabis election ballot
initiatives for both medical and recreational use in the United
States suggest that the potential move to U.S. federal legalization
of cannabis (THC) has increased momentum but the timing remains
difficult to predict. As the Company continues to monitor and
develop a potential U.S. THC strategy, it continues to evaluate CBD
entry opportunities in the United States.
Liquidity and Capital Resources
- Organigram ended the quarter with $74.7 million in cash and
short-term investments compared to $47.9 million at August 31,
2019, an increase of $26.8 million which is a result of the two
at-the-market (ATM) equity offerings and draws against the
Company’s term loan facility, offset by investments in working
capital and property, plant and equipment. During the quarter, the
Company drew an additional $30 million under the term loan such
that no available capacity remained at quarter-end.
- On November 12, 2020, the Company closed an underwritten public
offering (the “Offering”) of 37,375,000 units (the “Units”) at a
price of $1.85 per Unit, including the full exercise of the
over-allotment option. Each Unit is comprised of one common share
of the Company and one-half of one common share purchase warrant of
the Company (each full common share purchase warrant, a “Warrant”).
Each Warrant will be exercisable to acquire one common share of the
Company (a “Warrant Share”) for a period of three years following
the closing date of the Offering at an exercise price of $2.50 per
Warrant Share, subject to adjustment in certain events. The Company
expects to use the net proceeds from the offering working capital
and other general corporate purposes and to pay down its term loan
balance as described below.
- On November 27, 2020, the Company amended its Facilities
pursuant to an amended and restated credit agreement (“Amended and
Restated Credit Agreement”) with BMO and the syndicate of lenders
to: (i) reduce the Term Loan amount from $115 million to $60
million based on a repayment of $55 million to be made on December
1, 2020 of the outstanding Term Loan balance of $115 million; (ii)
have repayments on the balance of the Term Loan commence on
February 28, 2021 in an amount equal to $1.5 million per quarter;
(iii) reduce the Revolver commitment to $2 million from up to $25
million; (iv) adjust the minimum quarterly EBITDA covenants to be
maintained by the Company commencing on February 28, 2021 and
continuing through to maturity, thereby removing this covenant for
the fiscal period ended November 30, 2020 and eliminating the
reversion of the financial covenants to that of the original
structure on November 30, 2021; (v) modify the applicable margin
pricing and standby fee terms to reflect current market conditions;
and (vi) reduce the minimum unrestricted cash balance requirement
to $20 million, which is already inclusive of the $8 million
restricted investment currently outstanding. The interest rate
margin will be fixed from November 27, 2020 through to maturity on
May 31, 2021.
- As at November 29, 2020, excluding the $8.0 million of
restricted investment (GIC), the Company had $135 million in cash
and short-term investments. After completing the $55 million term
loan repayment on December 1, 2020, on a pro forma basis the
Company would have $80 million in cash and short-term investments
and $60 million in long-term debt.
Capital Structure
in $000s
31-Aug-20
31-Aug-19
Current and long-term debt
115,266
49,576
Shareholders’ equity
299,527
327,006
Total debt and shareholders’ equity
414,793
376,582
in 000s
Outstanding common shares
194,511
156,196
Options
9,029
8,833
Restricted share units
893
842
Performance share units
127
-
Total fully-diluted shares
204,560
165,872
Outstanding basic and fully diluted share count as at November
24, 2020 is as follows:
in 000s
24-Nov-20
Outstanding common shares
232,088
Options
8,144
Restricted share units
871
Performance share units
125
Total fully-diluted shares
241,228
Fourth Quarter and Full Year Fiscal 2020 Conference
Call
The Company will host a conference call to discuss its results
with details as follows:
Date: November 30, 2020
Time: 8:00am Eastern Time
To register for the conference call, please use this link:
http://www.directeventreg.com/registration/event/4687978
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:
https://event.on24.com/wcc/r/2625442/2C164D33CA068A822C82053411FBA767
A replay of the webcast will be available within 24 hours after
the conclusion of the call at https://www.organigram.ca/investors
and will be archived for a period of 90 days following the
call.
Non-IFRS Financial Measures
This news release refers to certain financial performance
measures (including, target production capacity, and adjusted
EBITDA) that are not defined by and do not have a standardized
meaning under International Financial Reporting Standards (“IFRS”)
as issued by the International Accounting Standards Board. These
non-IFRS financial performance measures are defined below. Non-IFRS
financial measures are used by management to assess the financial
and operational performance of the Company. The Company believes
that these non-IFRS financial measures, in addition to conventional
measures prepared in accordance with IFRS, enable investors to
evaluate the Company’s operating results, underlying performance
and prospects in a similar manner to the Company’s management. As
there are no standardized methods of calculating these non-IFRS
measures, the Company’s approaches may differ from those used by
others, and accordingly, the use of these measures may not be
directly comparable. Accordingly, these non-IFRS measures are
intended to provide additional information and should not be
considered in isolation or as a substitute for measures of
performance prepared in accordance with IFRS. Please refer to the
Company’s Q3 2020 MD&A for definitions and, in the case of
adjusted EBITDA, a reconciliation to IFRS amounts.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a NASDAQ Global Select Market and a
Toronto Stock Exchange listed company whose wholly owned
subsidiary, Organigram Inc., is a licensed producer of cannabis and
cannabis-derived products in Canada.
Organigram is focused on producing high-quality, indoor-grown
cannabis for patients and adult recreational consumers in Canada,
as well as developing international business partnerships to extend
the Company's global footprint. Organigram has also developed a
portfolio of adult use recreational cannabis brands including The
Edison Cannabis Company, SHRED and Trailblazer. Organigram's
primary facility is located in Moncton, New Brunswick and the
Company is regulated by Health Canada under the Cannabis Act
(Canada) and the Cannabis Regulations (Canada).
This news release contains forward-looking information.
Forward-looking information, in general, can be identified by the
use of forward-looking terminology such as “outlook”, “objective”,
“may”, “will”, “could”, “would”, “might”, “expect”, “intend”,
“estimate”, “anticipate”, “believe”, “plan”, “continue”, “budget”,
“schedule” or “forecast” or similar expressions suggesting future
outcomes or events. They include, but are not limited to,
statements with respect to expectations, projections or other
characterizations of future events or circumstances, and the
Company’s objectives, goals, strategies, beliefs, intentions,
plans, estimates, forecasts, projections and outlook, including
statements relating to the Company’s future performance, the
Company’s positioning to capture additional market share and sales,
expected improvement to gross margins before fair value changes to
biological assets and inventories, the Company’s plans and
objectives including around its credit facility, availability and
sources of any future financing; expectations regarding the impact
of COVID-19, expectations around market and consumer demand and
other patterns related to existing, new and planned product forms;
plans for further construction or expenditures at the Moncton
Campus, estimates of costs for completion of those Phases and uses
of spaces therein; timing for launch of new product forms, ability
of those new product forms to capture sales and market share,
estimates around incremental sales and more generally estimates or
predictions of actions of customers, suppliers, partners,
distributors, competitors or regulatory authorities; statements
regarding the future market of the Canadian cannabis market and,
statements regarding the Company’s future economic performance.
These statements are not historical facts but instead represent
management beliefs regarding future events, many of which, by their
nature are inherently uncertain and beyond management control.
Forward-looking information has been based on the Company’s current
expectations about future events.
Forward-looking information involves known and unknown risks,
uncertainties and other factors that may cause actual events to
differ materially from current expectations. Important factors -
including the heightened uncertainty as a result of COVID-19
including any continued impact on production or operations, impact
on demand for products, effect on third party suppliers, service
providers or lenders; general economic factors; receipt of
regulatory approvals or consents and any conditions imposed upon
same and the timing thereof, ability to meet regulatory criteria
which may be subject to change, change in regulation including
restrictions on sale of new product forms, timing to receive any
required testing results and certifications, results of final
testing of new products, timing of new retail store openings being
inconsistent with preliminary expectations, changes in governmental
plans including related to methods of distribution and timing and
launch of retail stores, timing and nature of sales and product
returns, customer buying patterns and consumer preferences not
being as predicted given this is a new and emerging market,
material weaknesses identified in the Company’s internal controls
over financial reporting, the completion of regulatory processes
and registrations including for new products and forms, market
demand and acceptance of new products and forms, unforeseen
construction or delivery delays including of equipment, increases
to expected costs, competitive and industry conditions, customer
buying patterns and crop yields - that could cause actual results
to differ materially from the Company's expectations are disclosed
in the Company's documents filed from time to time under the
Company’s issuer profile on the Canadian Securities Administrators’
System for Electronic Document Analysis and Retrieval (“SEDAR”) at
www.sedar.com and reports and other information filed with or
furnished to the United States Securities and Exchange Commission
(“SEC”) and available on the SEC’s Electronic Document Gathering
and Retrieval System (“EDGAR”) at www.sec.gov including the
Company’s most recent MD&A and AIF available from time to time.
Readers are cautioned not to place undue reliance on these
forward-looking statements, which speak only as of the date of this
news release. The Company disclaims any intention or obligation,
except to the extent required by law, to update or revise any
forward-looking statements, whether as a result of new information,
future events or otherwise.
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 Q4 2020 MD&A for definitions and a reconciliation to
IFRS.
2 In Q3 Fiscal 2020, the Company launched its first value
offering of dried flower in a large size format of 28g under
Trailer Park Buds (TPB) brand. In early Q4 Fiscal 2020, the Company
announced it is making changes to the TPB brand and logo but in the
immediate terms has moved to a modified version of TPB, “Buds”.
3 Statistics Canada, Cannabis Stats Hub, Accessed: November 26,
2020,
(https://www150.statcan.gc.ca/n1/pub/13-610-x/cannabis-eng.htm)
View source
version on businesswire.com: https://www.businesswire.com/news/home/20201130005350/en/
For Investor Relations enquiries: Amy Schwalm
Vice-President, Investor Relations amy.schwalm@organigram.ca
416-704-9057
For Media enquiries: Marlo Taylor Gage Communications
mtaylor@gagecommunications.ca
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