Organigram posts net loss of $248.6 million in 2023

| Sarah Clark

Organigram reported that net revenue increased 11% to $161.6 million in 2023, but the cannabis producer still had a net loss of $248.6 million, according to its new fiscal report. 

The New Brunswick-based company had $233.6 million in gross revenue in the past year, paying $72 million in federal excise taxes. The cost of sales was $136.4 million.

The company leveraged its spending to help secure its position in several product categories in Canada, holding the top position in the milled flower, gummies, and hash categories, the number three position in Ontario and Quebec, and the number one position in Atlantic Canada (according to Organigram’s market scans). It also says it holds the number three position in dried flower.

Organigam introduced 16 SKUs in the last quarter of 2023 for a total of 143 in the market. It sells an array of cannabis products in Canada under brands like Edison Cannabis Co., SHRED, Big Bag O’ Buds, Holy Mountain, and others. 

It also completed its first harvest at its “craft” cultivation and hash production facility in Lac-Supérieur, Quebec, which it acquired in 2021 from Laurentian Organic. Organigram has made significant inroads in the market with its SHRED X Rip-Strip hash brand

Another highly popular product from the Maritime producer, Edison Jolts, has faced pushback from Health Canada, but the company recently relaunched the product in several provincial markets. In a previous quarterly report, Organigram complained of lower net revenue and margins due to the declining price of cannabis flower, as well as a higher cost of sales, THC inflation, and Health Canada no longer allowing the sale of “ingestible extracts” like the Edison Jolts.

Organigram also signed its first UK supply agreement with 4C Labs Ltd. to distribute medical cannabis to UK-based patients, along with its first German supply agreement with Sanity Group GmbH to distribute medical cannabis to Germany-based patients.

Organigram completed international shipments totalling $18.9 million in 2023, an increase of 25% over Fiscal 2022.

In November, British American Tobacco (BAT) announced that it would invest nearly $125 million into Organigram, more than doubling its equity position in the cannabis company from about 20% to 45%. The deal is still subject to shareholder approval. 

As part of that partnership, Organigram and BAT are developing what they say are new technologies in the cannabis edible, vape, and beverage categories in addition to “new disruptive inhalation formats.” The launch of these new products will include gummies, which will feature “a new nano-emulsion technology.”

Organigram also invested in new vape technology in 2023 through a product purchase agreement with vaporization technology company Greentank, and reached an agreement with Phylos, a U.S. cannabis genetics company and provider of production-ready seeds, based in Portland, Oregon.

As part of the partnership, Phylos has been developing production-ready first-generation (“F1”) hybrid cannabis seeds for Organigram. The milestones achieved so far consist of delivery of a 1:1 THCV cultivar at 10%+ THCV potency; a 3:1 THCV cultivar at target 18% THCV (16% minimum); and four THC aroma specific cultivars (in either Berry, Citrus, or Gas).

The Moncton-based producer says it’s up-to-date on all its excise tax remittances, but notes that many other producers are not, something it says acts as a “source of alternative financing.” It also notes that THC inflation remains a significant challenge in the industry, saying it has seen the stated amount of THC on some products inflated by more than 50%. Organigram says it’s confident that efforts by Health Canada and provincial boards like the OCS will help address this issue.