OR­GANIGRAM OFF TO A STRONG HEAD START WITH EARLY MAR­KET EN­TRY

The London Free Press - - FP LONDON - DENISE DE­VEAU Post­media Con­tent Works

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.

SUP­PLIED

SUP­PLIED

Or­ganigram is lay­ing the ground­work to even­tu­ally sup­port in­dus­trial-scale pro­duc­tion.

SUP­PLIED

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.

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