Tobacco Company’s CA$124 Million Investment in Cannabis Company Organigram Gets Approval

The stakeholders of Organigram Holdings Inc. have officially sanctioned a substantial investment from the prominent tobacco industry leader, British American Tobacco, into the Canadian cannabis production firm, Organigram. This formal approval was granted following the conclusion of Organigram’s annual general and special meeting, as duly communicated by the company.

This investment arrangement, initially disclosed in November of the preceding year, encompasses a commitment from British American Tobacco’s subsidiary, BT DE Investments Inc., to infuse an amount of 124.6 million Canadian dollars, which is equivalent to 92.5 million United States dollars, into Organigram. This strategic investment is poised to further strengthen the already-established collaborative partnership between the cannabis enterprise and British American Tobacco.

It is worth highlighting that British American Tobacco had initially established a financial foothold in Organigram back in 2021. This subsequent injection of capital will augment British American Tobacco’s ownership stake in Organigram, endowing it with a 30% interest in voting common shares and an overall equity interest of approximately 45%.

A substantial portion of this capital infusion will be directed by Organigram towards the establishment and funding of a strategic investment pool, aptly named “Jupiter.” This investment pool is strategically designed to identify and invest in emerging markets within the ever-evolving cannabis industry.

The initial phase of this equity investment has been successfully executed this week. During this stage, British American Tobacco, acting through its subsidiary, procured a total of 12,893,175 shares in Organigram at an approximate price of CA$3.20 per share.

Paolo De Luca, the Chief Strategy Officer of Organigram, expressed his enthusiasm following the formal ratification of this pivotal agreement by the shareholders and the successful conclusion of the initial tranche of funding. De Luca underscored the company’s eager anticipation of accomplishing its strategic objectives, which encompass geographical expansion, technological advancements, and diversification of their product portfolio.

The total gross proceeds accruing to Organigram from this transaction amounted to CA$ 41.5 million.

Organigram has also announced the scheduling of two additional tranches of this investment. These subsequent phases are slated for execution around the dates of August 30, 2024, and February 28, 2025, as delineated in the statements provided by the Canadian entity.

Organigram Announces Strategic Expansion and Board Additions, Bolstered by BAT Investment

In a recent official press release, the leadership team of Organigram Holdings Inc. has communicated a pivotal strategic decision, emphasizing the paramount importance of geographic expansion as a core objective for the company. This strategic choice aligns seamlessly with the current trajectory of the global legal recreational cannabis market, which has been experiencing remarkable growth. Organigram has articulated that the investment opportunity extended by British American Tobacco (BAT) represents a crucial financial injection that will empower the company to establish a robust global presence. This capital infusion is poised to enable Organigram to seize the burgeoning opportunities within the expanding market and elevate its international footprint.

Additionally, during Organigram’s recent annual meeting, Ms. Karina Gehring was formally welcomed into the company’s esteemed board of directors. Gehring’s appointment marks a significant and noteworthy addition to the leadership of the company, introducing fresh perspectives and expertise to the board’s collective wisdom.

Ms. Gehring, alongside Mr. Simon Ashton, constitutes one of the two distinguished directors nominated by the BAT subsidiary, BT DE Investments Inc., to serve on Organigram’s board. This nomination serves as a tangible manifestation of the ongoing partnership and investment strategy that underscores the deepening ties and mutual strategic interests shared between Organigram and the BAT subsidiary.

Furthermore, Organigram’s shareholders have ratified the introduction of a novel category of preferred shares, designated as Class A shares. These specialized shares are poised to be exclusively issued to the BAT subsidiary as an integral component of the overarching investment agreement. The creation of this innovative class of preferred shares signifies a strategic maneuver, symbolizing the strengthening rapport between Organigram and BAT. It also serves as a testament to the confidence that Organigram’s shareholders place in this partnership and the boundless potential it holds for the company’s future growth and expansion within the dynamic and evolving international cannabis market.

This sequence of events and strategic decisions serves as a resounding affirmation of Organigram’s unwavering commitment to strategic growth and expansion. The partnership with BAT, reinforced by this investment, stands as a cornerstone of Organigram’s strategy to solidify its position and prominence within the rapidly evolving global cannabis market.