OrganiGram stock is one of the notable outperformers in the cannabis sector amid growing optimism.
OrganiGram Holdings (TSXV:OGI) (NASDAQ:OGI) has been one of the more interesting companies in the cannabis space for quite some time, and in a new development, the Canadian company became one of the chosen ones to partner with vaporizer company Pax Era.
The announcement was made last week, and it is a significant one for OrganiGram. Only four companies were chosen to supply cannabis products that would be suitable for the Pax ERA oil vaporizer.
Key Drivers
OrganiGram Holdings may have been slow to get off the blocks as far as a listing on a US stock exchange was concerned, and having only listed in May, it is perhaps a big boost for the company to have announced such a deal in June. Although the deal with Pax Era should not be the sole reason for keeping an eye on OrganiGram stock; there are other compelling reasons too.
One of the most important attributes that will be of interest to many investors is the fact that the company’s costs of production are among the lowest in the industry. That, in turn, allows OrganiGram to have a far bigger margin than many of its competitors.
OrganiGram stock is trading lower by 4% at 6.53 on the Nasdaq.
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Production Capabilities
In addition to that, the company’s production capabilities are going to increase in the near future as well. Currently, its output is pegged at 47,000 kilos a year, but the company has projected that the annualized production by the end of 2019 is going to hit 113,000 kilos. In the cannabis industry, production capacity is a major factor for continued growth, and in that regard, OrganiGram Holdings is not doing too badly.
OrganiGram has also signed supply agreements with as many as 10 provinces in Canada, and that is a significant achievement considering the fact that only three other cannabis companies have been able to achieve that.
It is also beefing up its capabilities in cannabis edibles and derivatives products, which are set to be quite popular in the near future. Last, but not least, the company has also forayed into the international market with two important deals.
OrganiGram has joined hands with Alpha Cannabis to gain a foothold in the thriving German medical cannabis industry, while an offtake understanding with Serbian hemp producer Eviana also looks promising. The deal with Eviana could open up the whole of Europe for OrganiGram Holdings when it wishes to supply hemp-based CBD products.
OrganiGram stock has rocketed 55% so far in 2019.
Featured image: Canva
