OrganiGram (NASDAQ: OGI ) is a Canadian company and leader in the organic cannabis space. The company is growing at an impressive pace.
Raymond James analysts predict that 2019 total revenue will be $97 million. That’s a huge jump from $12 million in revenue in 2018 and $5.7 million in 2017.
OrganiGram also expects to increase production capacity from 24,000 kilograms per year to 113,000 kilograms per year by the end of 2019.
OrganiGram is one of the few profitable publicly traded cannabis companies. And analysts are generally on OrganiGram. For example, CIBC analyst John Zamparo says, “The company offers one of the few opportunities to gain exposure to the cannabis space at a reasonable price. We believe OrganiGram has a demonstrated track record of profitability, a rarity in the cannabis sector.”
Organic cannabis is an area that’s especially interesting to me. Pesticides are a big problem in cannabis today. Anything you inhale into your lungs should be organic. I believe that when people buy cannabis for health reasons, they will increasingly choose organic.
Organic cannabis prices should hold up much better than non-organic. There are very few organic producers, and far less supply. As a result, organic cannabis prices shouldn’t be affected by oversupply issues the way non-organic cannabis prices are.
OrganiGram has healthy gross margins of around 50%, and some of the best yields in the industry. It produces roughly 230 grams per square foot, versus an industry average of 75-125 grams per square foot.
The company has a huge opportunity coming up with sales of cannabis edibles, beverages and vaporizers beginning in December in Canada.
OrganiGram’s primary organic competitor, Green Organic Dutchman, is struggling and has slashed production estimates.
I strongly recommend reading this Bloomberg article to better understand OrganiGram’s potential:
As you can see, OrganiGram trades at a discount to its competitors. Its business model is sustainable, and I believe this company offers an excellent risk-reward equation.
Stay ahead of the masses,
Founder, Crypto Wealth Coach LLC
Owner, Modern Wealth Management, LP