Headquartered in Moncton, Canada, OrganiGram Holdings Inc. (OGI) is a licensed cannabis manufacturer and cannabis extract-based products developer. With a $556.10 million market cap, OGI is Canada’s fourth-largest licensed cannabis producer.

The company has been focusing on expanding its business through acquisitions and improving its product quality.

Shares of OGI have gained 28.2% in price over the past year and 36.8% year-to-date.

Click here to check out our Cannabis Industry Report for 2021

Here is what shaped OGI’s performance over the past year:

Increasing Market Share

According to HyFire, OGI increased its market share in Canada to 7.7% in September 2021 from 3.9% in January 2021, making it the fourth-largest Canadian cannabis producer. Regarding this, OGI CEO Beena Goldenberg said, “Our industry-leading market share growth really highlights the continued momentum that Organigram is experiencing in the market…The strong demand for our products speaks to the fact that consumers are responding favorably to the great brands, products, and innovations that we continue to deliver on a regular basis.”

Acquisition and Product Development

OGI acquired soft chew cannabis manufacturer The Edibles and Infusions Corporation (EIC) on April 6, 2021, for $22 million (plus additional performance-based compensation). The acquisition should expand OGI’s operational footprint in Western Canada and expand the company’s cannabis-based product pipeline. Furthermore, EIC’s leading position in the cannabis derivatives and confectionary market, its commitment to research and development, and continuous innovation should facilitate OGI’s domestic and international growth strategies.

Within three months of this acquisition, OGI produced and sold three new high-quality SKUs under the SHRED’ems brand. The company also delivered four additional SKUs last month. OGI also launched the Edison Jolts lozenges in August 2021. The unique first-to-market product reached the #1 position in the ingestible cannabis extracts category within a month.

Probable Decriminalization of Marijuana in the United States

Marijuana has been legal in Canada since October 17, 2018. Medical use of marijuana is legal in 36 states in the U.S., while recreational use is legal in 18 states. However, the drug has yet to be legalized on a national level. Nine states in the U.S. legalized marijuana this year, while three states decriminalized it.

President Biden has been a long-standing advocate of the decriminalization and eventual legalization of marijuana. Roughly 60% of U.S. adults believe that marijuana should be legalized for medical and recreational purposes. Republicans have also joined this bandwagon, with Representative Nancy Mace proposing the States Reform Act.

Solid Growth Attributes

OGI’s revenues have increased at a 66.8% CAGR over the past five years and an 85.4% CAGR over the past three years. The company’s tangible book value has improved at a rate of 59.9% per annum over the past five years and at a rate of 35.9% per annum over the past three years. Its trailing-12-month total assets rose 55.4% year-over-year.

Analysts expect OGI’s revenues to increase 111.9% in the current quarter (ending February 2022), 70.1% in the current year, and 38.4% next year. The consensus EPS estimates indicate an 88.6% year-over-year improvement in the current quarter, a 79.5% rise in the current year, and a 27.6% improvement next year.

Bottom Line

OGI’s impressive growth trajectory and increasing market share made it one of the best performing cannabis stocks so far this year. Its 36.8% price gains year-to-date compares with Amplify Seymour Cannabis ETF’s (CNBS) 20.5% decline over this period.

Click here to check out our Cannabis Industry Report for 2021

OGI shares were trading at $1.80 per share on Thursday afternoon, down $0.02 (-1.10%). Year-to-date, OGI has gained 35.34%, versus a 25.80% rise in the benchmark S&P 500 index during the same period.

About the Author: Aditi Ganguly

Aditi is an experienced content developer and financial writer who is passionate about helping investors understand the do’s and don'ts of investing. She has a keen interest in the stock market and has a fundamental approach when analyzing equities. More...

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