- The company’s recreational cannabis plants and growing processes received organic certification from Pro-Cert Organic Systems Ltd.
- The certification is an important part of the company’s expansion strategy, as the market demand for organic cannabis products is on the upswing
- Organigram recently announced that it has secured a C$140 million credit facility with Bank of Montreal as the lead arranger and agent, which will largely be used to fund the company’s expansion plans and to refinance existing long-term debt
The end of May 2019 marked several exciting developments for Organigram Holdings Inc. (TSX.V: OGI) (NASDAQ: OGI), a leading Canadian licensed producer of medicinal and recreational cannabis products.
On May 31, Organigram announced that it has received organic certification for its recreational cannabis plants and growing processes. Pro-Cert, a North American certification body that is accredited to provide certificates under Canadian Organic Standards, worked closely with Organigram during the process.
Consumer demand for organic cannabis is significant, Organigram CEO Greg Engel said in a news release (http://ibn.fm/kYntT). Previously, the company offered select organic strains among its Organigram medical cannabis products. The extended recreational organic offerings are expected to please recreational consumers who are interested in organically certified products, Engel concluded.
The certification strengthens Organigram’s product offerings. Additionally, it complements the EcoCert certification that currently applies to Organigram’s medical products. Receiving the Pro-Cert certification also facilitates the company’s planned launch of ANKR Organics – a line of organic flower and edible extract oils. ANKR’s launch is anticipated later in 2019 within select Canadian markets.
Organigram has always prioritized the production of high quality, indoor-grown cannabis products for patients and adult recreational users in Canada. A focus on extending Organigram’s global footprint is also guiding the company’s strategic efforts.
As part of its expansion strategy, Organigram also announced the closing of a C$140 million credit facility with Bank of Montreal (http://ibn.fm/mckuw). The facility consists of a C$115 million term loan and a C$25 million revolving credit facility. Both of these mature in May 2022.
“The closing of this credit facility reflects BMO’s and the syndicate lenders’ vote of confidence in our management team, ability to deliver financial results, and investment in our world-class Moncton campus,” Engel said in a news release.
Organigram is always looking to optimize its capital structure and reduce the cost of capital, Organigram CFO Paolo De Luca added. The decision not to access public capital markets is aimed at avoiding shareholder dilution, he noted.
Both facilities are secured by Organigram assets, primarily consisting of the Moncton campus production facility. The final constructed and licensed facility is projected to be able to produce the dried flower equivalent cannabis of 113,000 kilograms (249,000 lbs.) per year. Construction is expected to be completed by the end of 2019. The Moncton facility will also house innovative manufacturing equipment, including the previously announced C$15 million infrastructure investment to produce world class infused chocolate products.
The proceeds from the term loan will be used to fund phases four and five of the Moncton campus expansion. In addition, funds will be used to refinance Organigram’s existing long-term debt with Farm Credit Canada.
For more information, visit the company’s website at www.Organigram.ca
NOTE TO INVESTORS: The latest news and updates relating to OGI are available in the company’s newsroom at http://ibn.fm/OGRMF