ORGANIGRAM OFF TO A STRONG HEAD START WITH EARLY MARKET ENTRY
Organigram has the distinction of being one of the originals when it comes to building a presence in the cannabis space. With that early start, it has been able to stay ahead of its competitors, perfecting its unique growing system, developing a premium product portfolio, securing its supply channel, and acquiring soughtafter licences and strong international partnerships to reach a global market base.
Formed in 2013, the Moncton-based company became part of the first group of licensed producers (LPs) in 2014. Getting that early licensing provided a significant boost to the company, says Greg Engel, CEO. “It’s a huge advantage to be one of the early movers in terms of gaining experience,” he says.
Organigram started with a small facility, which Engel says provided ample opportunities to develop key learnings. It also allowed the company to lay the groundwork to eventually support industrial-scale growth of consistent, highquality products based on well-established production practices.
An important claim to fame is the company’s oneof-a-kind three-tiered growing system, which allows it to triple its capacity over other LPs within a similar footprint, while lowering production costs. It also provides the ideal environment to perfect growing methodologies and develop premium product offerings.
Organigram has already become a significant player in the medical cannabis space, and serves more than 15,000 patients. Now, with its sights set on the adult recreational market, the company’s overall strategic plan is to focus on a diverse portfolio of premium products. “The medical market is a fraction of recreational market consumers, which is estimated to be a $6-billion to $8-billion market in Canada, according to Echelon Wealth Partners and Russell Stanley,” Engel says.
This foray into the recreational market is being fuelled in part by The Edison Project, an initiative that builds on years of innovation and research. The end result is an ultra-premium, hand-manicured, craft cured product using only the highly coveted top flowers of the cannabis. According to Ray Gracewood, chief commercial officer, no other LP in Canada has accomplished that. “This project represents our very best work to date. In our years of dedicated R&D work, we have discovered a great deal about the true potential in our plants and learned how to deliver those benefits to our patients.”
Organigram’s i nventory of strains is expansive. So far, it has cultivated 50 strains, but has narrowed its focus on those that consistently perform well, aligning with the cannabinoid and terpene profiles consumers have come to expect from a high-end product. “It’s important to have a core group as you go recreational to ensure you will always have consistent product availability,” Engel explains.
Organigram is already capturing interest for its product i nnovation and quality on a number of fronts. In November 2017, it won both the Top Sativa Flower and Top Blend categories at the Canadian Cannabis Awards. The company has also signed a memorandum of understanding with New Brunswick to supply a minimum of five million grams of adult-use recreational cannabis to the province’s market, as well as a similar agreement with Prince Edward Island for one million grams per year.
Moving forward, the management team is taking a three-pronged approach to ensure sustainable growth.
“First is serving the medical market in Canada, which will always be a priority for us,” Engel says.
The second is the adult recreational market, expected to open up later this year. “We are expanding dramatically to increase our productions levels,” he explains. “Plans are to expand capacity to 113,000 kg over the next two years which we can execute on due to the previous purchase of adjacent properties.”
Organigram’s recreational focus will be based on a recently announced “house of brands” approach, Gracewood says.
“A big part of our development is being able to speak to different consumer groups through our brands. Each plays a different role in our portfolio, ranging from our premium Edison brand to ANKR Organics, which stays true to organic cultivation and has been part of our business since Day 1, and to Trailer Park Buds, which will speak to consumers who appreciate value but don’t take themselves too seriously.”
In addition, the company has entered into an IP arrangement with The Green Solution in Colorado, which produces over 225 leading cannabis-infused products such as edibles, beverages and topicals, as well as vaporizable products.
“We will be using their methodologies, technology and packaging design to produce and develop similar products here,” Engel says. “That will place us in a unique position when the market expands in 2019.”
More recently, Organigram made an additional step towards securing its industry leadership by signing a letter of intent to make a strategic investment in Montreal-based Hyasynth Biologicals Inc., which will enable Organigram to purchase yeast-derived cannabinoids for formulation. “Hyasynth’s technology is a disruptive game-changer that will allow for scalable production at a fraction of the cost of traditional plantbased cannabinoid production,” Engel explains.
Over time, as production and demand for products increase, Organigram plans to use data to possibly develop other products, including offerings in derivatives such as topicals, extracts, concentrates and infused beverages, Gracewood says. “I don’t think there is any other LP coming forward with as comprehensive a brand strategy.”
The third prong of the strategy is international expansion. Organigram is one of a small group of industry players actively engaged in expanding into global markets, and it has established a dedicated team under the direction of Guillermo Delmonte, president of the international division.
Canada is in a strong position in the global arena, Engel explains.
“Canadian companies are on the leading edge of an entire industry. The U.S. is facing federal issues around legalization and classification, and because a majority of U.S. companies are at the state level, it prevents them from accessing global markets.”
Organigram is moving quickly on the international front, having entered into a term sheet with the German company Alpha-Cannabis whereby Organigram would make a 25% investment in the German company and enter into a strategic business arrangement with Alpha-Cannabis, which will serve as a gateway to the EU market.
The company is also one of only a handful of Canadian LPs to have received a dealer’s licence from Health Canada, allowing it to produce, develop, test and export more diverse products for medical markets. Shortly after acquiring the licence, Organigram entered into an export agreement with Australian medical cannabis enterprise Cannatrek Medical PTY Ltd.
Delmonte says global markets represent huge opportunities for the company.
“To date, there have been a limited number of Canadian medical cannabis companies to enter the EU market. Moving forward, our export permit to Australia will provide access to the Southeast Asia/Pacific markets,” Delmonte explains. “Ultimately, we want to start production overseas.”
“We are a 21st-century cannabis company,” Gracewood adds. “What we are doing today will allow us to position ourselves as a global leader in the future.”
Organigram’s three-tiered growing systems allows the company to triple its production capacity while lowering costs.
Organigram is laying the groundwork to eventually support industrial-scale production.
The company’s inventory of 50 strains is expansive, but it is focusing on top performers.
THIS STORY WAS CREATED BY CONTENT WORKS, POSTMEDIA’S COMMERCIAL CONTENT DIVISION, ON BEHALF OF ORGANIGRAM.