Is OrganiGram Really A 10X Bagger ???
OrganiGram Holdings Inc., through its subsidiaries, produces and sells cannabis and cannabis-derived products in Canada. It offers cannabis flowers, cannabis oils, and pre-rolls for adult recreational consumers.
Organigram said it plans to pursue vape pens and edible products, which it says are the two most popular derivative-products forms in the U.S. In addition the company expects to open more stores in Ontario and Quebec, the most populous two provinces of Canada.
NOTE:
A vape cart is a glass cartridge pre-filled with cannabis oil that contains cannabinoids. Vape cartridges work in conjunction with vape pen batteries. The vape battery will power an atomizer in the cartridge that heats up the oil, activating the oil into smoke which is inhale.
However, the CEO Greg Engel said it will take a few more quarters before the industry can generate predictable results and felt the company won't hit any sense of normalcy or predictability until the fourth quarter of this year.
Although the cannabis industry has been a certifiable mess throughout North America, there's little denying its long-term potential. With most Wall Street firms calling for at least $50 billion in annual pot sales by 2030, Canadian licensed producer (LP) OrganiGram Holdings (NASDAQ:OGI) shouldn't have an issue grabbing its piece of the pie.
Unlike other LPs that overextended their balance sheets through acquisitions and opened up far too much cultivation space, OrganiGram has entirely focused on its Moncton facility in New Brunswick.
Additionally, OrganiGram's Moncton facility is utilizing a three-tiered growing system that'll produce yields per square foot that are two to three times better than the industry average. When coupled with the company's focus on high-margin derivatives, a $3 billion market valuation by 2030 doesn't seem so far-fetched.
Organigram had a first to market move with Cannabis 2.0 products like Flicker and Trailblazer Spark when those products were launched in December 2019. Then in May, Organigram offered some of its Cannabis 2.0 recreational products as medical cannabis. Then in June, OrganiGram announced a major deal to supply up to 6,000 kilograms of cannabis flower to Israel-based medical cannabis company Canndoc.
But recently, OrganiGram announced that it was cutting 25% of its workforce based on current market conditions. The company also announced that this quarter revenue will decline compared it previous quarter. Organigram has posted significant losses this year, but nothing near those of its larger peer, which had to close various facilities and take on more debt and/or find financing.
Thus, when the the sector starts to turn around definitively, keep Organigram on your radar. For now, from a technical viewpoint, the low in the stock appears to be $1.00 and I would not take the stock serious until we see closes above $3.00 on the weekly chart.
This post is my personal opinion. I’m not a financial advisor, this isn't financial advise. Do your own research before making investment decisions.
Posted Using LeoFinance
