OrganiGram stock is moving up in early trade on Friday after OrganiGram Holdings Inc (TSXV:OGI) (NASDAQ:OGI) announced that it has entered into an advance payment and purchase agreement with 703454 N.B. Inc.
Major Development for OrganiGram Stock
Cannabis stocks might not be gaining as much as they were some months ago, but the companies involved in the industry are still working on deals to ensure that they continue to grow. In that regard, OrganiGram Holdings deserves special mention since the company has been making important moves for some time now, and today, it made another important announcement.
The company is making a big move into the CBD space, and today it struck a deal with 703454 N.B. Inc, otherwise known as 1812 Hemp, by way of which OrganiGram will get access to 60,000 kilos of dried hemp a year. The hemp, in turn, is going to be put through an extraction process in order to produce CBD. In addition to that, OrganiGram will also have the right of first refusal on the product.
Over the years, OrganiGram Holdings has come a long way as a company in the cannabis space. The company initially started off as a wholly medical cannabis company back in 2013, but over the years, it has evolved as one of the more important players in the cannabis industry.
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OrganiGram stock is trading lower by 1.50% at $5.92 on the Nasdaq.
At this point in time, it is among the 10 largest producers of cannabis in the whole industry, and at the end of the day, a company’s success ultimately depends on its production capabilities. One of the secrets to the company’s growth has been its indoor cultivation process in the promising New Brunswick region, and in addition to that, it has also managed to keep costs down compared to its peers.
OrganiGram has projected that it is going to produce 113,000 kilos of cannabis a year by the end of 2019. However, the biggest argument in favor of OrganiGram stock is the fact that it is one of the few companies in the industry currently profitable. In the previous quarter, it earned $12.5 million net against revenues of $64.1 million. The company is now trying to move into international markets and is also making a big splash with its entry into the hemp market.
OrganiGram stock is one of the biggest cannabis stock gainers this year, with a jump of 40%.
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