Organigram stock could be set for some big gains in the new year after receiving expanded licensing approval ahead of the launch of the cannabis 2.0 market.
Organigram Reaches Target Production Capacity
Organigram Holdings (TSX:OGI) (NASDAQ:OGI) announced in a statement on December 13 that it had been given the green light from Health Canada for 16 additional cultivation rooms at its flagship Moncton, New Brunswick facility, which will represent approximately 13,000 kilograms per annum in increased production capacity, bringing the site's total capacity to a target volume of 89,000 kilograms per annum. Cannabis plants will be moved into the new rooms in the coming weeks, with the first harvest expected in April 2020. Organigram stock is up 7% on Tuesday.
Organigram Stock Well Place Ahead of 2.0 Market
Additionally, Organigram Holdings is gearing up for the launch of the cannabis 2.0 market, which officially came into effect on December 17, with the purchase of a high speed, high capacity chocolate production line, which includes a state-of-the-art chocolate molding line and a fully integrated packaging line that includes advanced engineering, robotics, high-speed labeling, and automated carton packing. The company expects first sales from this line to be made in Q1 2020, positioning Organigram stock to take early advantage of the 2.0 market.
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“This is a dynamic time for Organigram and the industry as a whole. Cannabis 2.0, the legalization of adult use recreational cannabis edibles, vape products, extracts and topicals, is a new era for cannabis here at home and around the world,” said Greg Engel, CEO of Organigram Holdings. “Our physical expansion reflects our ambitious response to this new opportunity as well as our ongoing commitment to anticipating and meeting the demands of Canadian cannabis consumers for new and innovative cannabis experiences.” Organigram stock is currently trading for $3.13.
Trouble At Moncton Facility
However, it hasn't been all good news for New Brunswick firm of late. On December 10, it was reported that fire crews were called to the Moncton facility after the outbreak of a small fire. Moncton Fire Platoon Chief Tim Rossiter said the fire was contained to a single grow room in the facility with no injuries being reported. It's not the first issue Organigram has had with the facility after reports of elevated bacteria in a cooling tower in October led to the possible outbreak of legionnaires' disease. Organigram stock has dropped almost 35% since that report.
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