With four quarters of profitability under its belt, Organigram Holdings Inc. is an anomaly in the Canadian cannabis market.
Organigram’s streak of profitability comes as the industry undergoes a period of significant upheaval. CannTrust Holdings Inc., previously considered one of the more reputable pot companies, plunged 48 per cent last week after Canadian regulators said it grew cannabis in unlicensed areas of its greenhouse, forcing it to halt all sales and shipments of its products.
No other large Canadian pot producer has managed to post such a long string of positive Ebitda. However, although it’s one of the best-performing pure-play pot stocks this year, up 64 per cent, its valuation as measured by its price-to-sales ratio is well below those of its largest competitors. The problems at CannTrust and Canopy signal a shakeout in an industry that’s still maturing nine months after Canada legalized recreational pot. Organigram is lucky because it had its wake-up call early, said Engel.
Organigram has developed a rapid-onset technology that will allow its drinks to take effect within 10 to 15 minutes, similar to alcohol, and has also created a flavorless cannabis powder that can be added to any beverage.