Organigram Holdings Inc. has, as of February 28, closed on the third and final tranche of funding from BT DE Investments Inc., a wholly owned subsidiary of British American Tobacco.

​​In 2023, Organigram said most of a $124.6 million investment from British American Tobacco (BAT) would be used to create a strategic investment pool named Jupiter, focusing on emerging cannabis opportunities, including geographic expansion.

In 2021, the deal was first announced as a C$221 million strategic investment, and has continued to evolve over the years. The third and final round of funding was expected in early 2025. 

The first round of funding closed on January 23, 2024. The second round of funding was closed in August 2024.

“With all three tranches of the Jupiter private placement now funded, Organigram has approximately $57.8 million to further invest from its Jupiter strategic investment pool after completing investments of $21 million in Sanity Group and $2.7 million in Open Book Extracts,” said Paolo De Luca, CSO of Organigram (all figures in Canadian dollars unless otherwise noted).

“Opportunities in the space have only improved with cannabis valuations at historically weaker levels and many cannabis and hemp companies unable to access cost-efficient growth capital despite fundamentally strong businesses. We look forward to continuing to roll out our international and differentiated product strategy supported by the Jupiter platform.”  

In June 2024 Organigram announced a $21 million investment from its Jupiter strategic investment pool, giving it a minority stake in German cannabis company Sanity Group GmbH and, therefore, a foothold in the German market. 

In March, Organigram announced a USD$2 million minority investment in Steady State LLC (dba Open Book Extracts or OBX) from the Jupiter fund. Based in North Carolina, OBX specializes in cannabinoid ingredient production and serves as a one-stop formulation and finished goods manufacturer. 

The final round of funding from BAT comes with 7,562,447 common shares in Organigram and 5,330,728 Class A preferred shares at a price of $3.2203 per Share for gross proceeds of $41,519,891.

The aggregate subscription price of the shares acquired as part of the first, second, and third tranche was $124,559,674.36.  

Organigram operates its flagship campus in Moncton, New Brunswick, its edibles facility in Winnipeg, its flower cultivation and hash production facility in Lac-Supérieur, Québec, and its London and Aylmer facilities in Ontario which it acquired in a recent deal with cannabis producer Motif.

The Aylmer facility houses CO2 and hydrocarbon extraction capabilities and is optimized for formulation refinement and post-processing of minor cannabinoids, as well as pre-roll production. Organigram plans to upgrade the London facility for labelling, packaging, and national fulfilment.

Cannabis, tobacco, and Canada

This is not the first entry of a tobacco company into the Canadian cannabis market. In 2016, Philip Morris invested US$20 million in the Israeli company Syqe Medical. Syqe created an inhaler for use with cannabis for medical purposes.

In 2019, Altria Group, the parent company of Philip Morris USA, paid $2.4 billion for a 45% ownership interest in Cronos Group, the Canadian cannabis company behind brands like Spinach and Peace Natural. Altria later declined options to purchase additional shares.

 In 2019, Imperial Brands, a British multinational tobacco company, invested C$123 million in Canada’s Auxly Cannabis Group. That deal also included a research and development partnership similar to other deals. 

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