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Monday, May 20, 2024
Mugglehead Magazine
Alternative investment news based in Vancouver, B.C.

Cannabis

Organigram secures first cannabis supply agreement in United Kingdom

The company will be supplying 4C Labs with 600 kg of medical cannabis flower over the next year

Organigram enters the United Kingdom through new distribution agreement
Photo via Organigram Holdings

Toronto’s international cannabis distributor Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) has expanded its global footprint through a new supply agreement in the United Kingdom.

The company announced the deal with the country’s pharmaceutical company 4C Labs on Tuesday and will be providing approximately 600 kilograms of medical cannabis flower through the agreement over the next year. Limited strain exclusivity will also be granted to 4C Labs for the cultivars it distributes in the U.K.

“Medical cannabis has been legal in the U.K. since 2018. However, due to significant energy cost premiums compared to Canada, access to consistent, high-quality products in this market is limited, making importing medical cannabis an attractive option for this growing market” said Organigram’s CEO Beena Goldenberg.

Read more: Israel to loosen restrictions on medical cannabis, revoke license requirements for patients

Read more: Canopy Growth reports net revenue of $109M in Q1 2024

At the beginning of August, Organigram also launched two new 0.4-gram tube-style pre-rolls in 10 packs utilizing organic hemp paper: Holy Smokes and SHRED Dartz.

The company has been making investments in rare cultivars and expanding its international presence in other countries as well in recent days.

In May, Organigram announced its first-ever investment in the United States in which it provided $8 million to Oregon’s Phylos Bioscience to help commercialize tetrahydrocannabivarin (THCV) gummies and vapes — expected to be available by the end of this year.

Earlier in May, Organigram entered Germany’s medical cannabis market through a supply agreement with Berlin’s Sanity Group. The company now has supply agreements in the U.K., Germany, Israel and Australia.

As the demand for medical cannabis grows in the U.K. the market for certain cannabinoids like cannabigerol (CBG) is expected to expand rapidly there in the coming years. Maryland’s market research firm Fact.MR says that sales of CBG in the U.K. are expected to ascend at a substantial compound annual growth rate of 29 per cent over the next decade.

Organigram shares dropped by 1.11 per cent Tuesday to $1.78 on the Toronto Stock Exchange and have been on a steady decline since the beginning of this year, dropping by 58.4 per cent.

The company reported having $75 million in cash on July 13 and generated $92.5 million in net revenue from recreational cannabis for the nine-month period ending May 31, a 9.5 per cent and $8 million increase year-over-year from the same period in 2022.

 

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