Organigram stock has bounced back almost 20% from its 52-week low over the past few weeks. Let's analyze whether Organigram Holdings (TSX:OGI) (NASDAQ:OGI) has reached the bottom or not.
There is absolutely no doubt that the marijuana industry has gone through a pretty tough period over the course of the past months, and many of the stocks have collapsed from their peaks this year. However, certain companies continue to do well despite a slowdown in the industry.
Regulatory and Supply Issues
If one is looking into marijuana stocks in November, then Organigram Holdings will likely jump out at them. The company is certainly at the pinnacle when compared against other marijuana companies of similar sizes. So let's take a closer look at Organigram stock.
Like the majority of stocks in the marijuana industry, Organigram stock experienced steep declines, and since its listing on the NASDAQ earlier this year, it has lost as much as half of its value. Regulatory and supply issues were the main factors behind the decline. However, it is important to consider the factors that make Organigram Holdings a top stock pick for the month.
The legalization of derivatives in Canada is a significant event, and the company is spending heavily in order to enter the market strongly. The spending may have affected Orgianigram's stock price, but if the company can corner some portion of the market in Canada, then it could prove to be money well spent in the long run.
It's also necessary to keep in mind that Organigram enjoys some key competitive advantages that could see the company growing rapidly in the long run. Organigram Holdings is based out of New Brunswick and remains the only marijuana company of its size that operates in the area. Its presence in that area makes it possible for the company to create a major stronghold in the eastern region. In addition to that, it has also acquired supply agreements in all 10 Canadian provinces.
Last but not least, one must also remember that the company’s production is based out of only one facility in Moncton. Other marijuana companies have been spending copious amounts of money in order to raise their production level in the meantime.
Analysts believe that Organigram could well turn out to be the first marijuana company from Canada to make a profit, and hence, Organigram stock is an attractive one to some.
What do you think?
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