Organigram stock is leading the cannabis sector after Organigram Holdings (TSX:OGI) (NASDAQ:OGI) trimmed its revenue guidance for the fourth quarter.
The new revenue projection for the fourth quarter from Organigram Holdings has caused a lot of consternation among investors. Late Monday, the company provided its projections for the quarter, and it proved to be a massive disappointment.
Organigram believes that its revenue for Q4 2019 is going to be $16.3 CAD million, which is significantly lower than the $24.8 CAD million in revenue that it generated in the third quarter this year. In addition to that, it falls well short of the analysts’ estimates of $27.9 CAD million in revenue for the fourth quarter.
The news naturally proved to be a massive blow for investors, and Organigram stock tanked by as much as 18% at one point on Tuesday.
That being said, the company asserted that the state of retail stores in Canada is the reason behind the worse-than-expected performance. It revealed that it had managed cannabis worth $20 million CAD during the period. Cannabis producers have repeatedly spoken about the slow rollout of retail stores in Canada and how it has affected their sales figures.
The Chief Executive Officer of Organigram Holdings, Greg Engel, acknowledged that the company has not been able to meet expectations, but he reiterated that the firm remains one of the leaders of the nascent industry.
He said, “While Q4 2019 did not meet our overall expectations, we have not only emerged as one of the national leaders in the industry with significant growth expected in net revenue and strong market share.” Engel went on to add that OrgangGram is going to report a positive EBITDA for the full year.
The company will publish its financial results for the full year on November 25.
Organigram stock has fallen over 30% so far in 2019.
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