The past months have been proven to be a tough period for most cannabis companies, and in this regard, Organigram stock has not been an exception. Organigram Holdings (TSX:OGI) (NASDAQ:OGI) has lost as much as 55% from its highest level this year.
However, Organigram stock got a boost recently after an analyst at Jeffries upgraded the stock and set a target price that is more than 100% of its current level. So, is Organigram stock worth a closer look?
Key Advantage
First and foremost, it has now become abundantly clear that the Canadian cannabis market is not big enough to sustain the number of companies that have cropped up in recent times. However, that gives Organigram Holdings an advantage, since it is the only larger company in the sector that has reported an adjusted operating profit each time since legalization.
>> EMH Stock Gains Despite $7 Million CAD Village Farms Dispute
The company is looking to expand its production capabilities significantly as well, and next year, it is on track to produce as much as 113,000 kgs annually. Moreover, the establishment of OrganiGrow, which is going to track every step of the production process, is another huge development for the company. It will track the production in 144 separate production rooms and allow the company to produce a consistent product. It could give Organigram Holdings a major competitive advantage over its peers.
At the time of writing, Organigram stock is down 3.30% at $4.69 on TSX.
The company currently produces 100 grams of product per plant on average, and that is significantly higher than other companies. Although it might not be a particularly high figure, it needs to be pointed out that no other company in Canada has managed to get anywhere close. Hence, there are a lot of indicators that suggest that the company is on track to grow in the long run.
However, experts suggest that one should wait for another earnings report before considering Organigram stock.
Featured image: Canva
