Organigram stock continues to new lows on broader market weakness and severe correction in the cannabis sector. Let's analyze whether or not Organigram Holdings (TSX:OGI) (NASDAQ:OGI) is positioned to rebound.
The global economic climate is a bit wobbly right now, so it's important to determine which, if any, cannabis companies could continue to make money if a recession does materialize in North America. Experts believe that Organigram Holdings could be one of those companies.
The company has developed an extremely streamlined operation and operates only one licensed facility located in Moncton. The existence of only one facility makes it easier for Organigram to have greater control over its operations while regulating its expenses according to market demand—something that could have a stabilizing effect on Organigram stock.
Competitive Advantage
However, that is not the only competitive advantage that Organigram possesses over many of its peers. The company is all set to be one of the most efficient growers in the industry. Once it completes the 4C build on its facility in Moncton, the company is going to be able to produce as much as 113,000 kilos a year.
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Organigram stock is now down by 11% to C$2.35.
Once the expansion is complete, the growing space is going to be 500,000 square feet and would bring the yield per square foot to an impressive 230 grams. That will be a higher yield than what some of the biggest companies in the industry have previously recorded.
On top of that, once the construction costs end and Organigram Holdings begins potentially pulling in money from cannabis 2.0 products, the company could be on its way to making a profit soon.
Experts believe that the aggressive rollout of retail stores in many parts of Canada is going to boost demand for cannabis in 2020, which could be another major trigger for Organigram’s further growth this year.
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