According to a press release today, cannabis cultivator OrganiGram Holdings (TSXV:OGI) (NASDAQ:OGI) has begun shipments of its pure cannabidiol (CBD) oil. In reaction to the news, OrganiGram stock is up 3.41% and selling for $10.60 CAD.
Let’s check this out.
OrganiGram Stock Climbing on CBD News
According to the release, the company has shipped more than 130,000 units of its pure cannabidiol (CBD) oil, which is destined for markets across Canada.
Demand for the substance has been high since Canada legalized recreational cannabis in October 2018. CBD is a naturally occurring compound in cannabis that has no psychoactive effect. It is said to have therapeutic benefits such as anti-inflammatory and relaxing properties.
Greg Engel, CEO of OrganiGram Holdings, spoke at the release and said the following:
“Since legalization, Canadian consumers have proven themselves to be not only receptive to, but surprisingly well educated about, the benefits of CBD […] Consumers have embraced the idea of cannabis as it relates to overall wellness.”
Now that the company is delivering on its targets, OrganiGram stock is climbing. The company has several strategic relationships from provincial partners that allow it to achieve its goals.
One of these partnerships is a long-term agreement with New Brunswick’s industrial hemp researcher, 1812 Hemp. The first leg of the deal saw 1812 Hemp give 6,000 kg of dried hemp flower to OrganiGram earlier in 2019. Subsequently, OrganiGram sent this batch for extraction to be turned into CBD oil.
1812 Hemp is expected to increase its delivery of hemp to OrganiGram moving forward. And to ensure its supply, OrganiGram Holdings has a right-of-first-refusal on future procurements of hemp from the company.
Valens GroWorks Corp
OrganiGram also has a multi-year extraction contract with Valens GroWorks Corp (CSE:VGW) (OTCQB:VGWCF). Valens will continue to trim and extract cannabis flowers from OrganiGram’s Moncton facility in order to produce extract concentrate. OrganiGram is using this concentrate in its cannabis oil product lines and following legalization of derivative-based products, it is expected that the concentrates will be used in the production of edibles.
OrganiGram stock has increased 9% over the last week. It has been one of this year’s best-performing stocks with year-to-date gains of over 85%.
Are you an OrganiGram fan?
Featured Image: Canva