OrganiGram Stock Rises Even as Cannabis Sales Fall

Sales fell 8% in the May quarter at OrganiGram Holdings , the midsize Canadian cannabis producer. The shortfall could reinforce worries about recreational marijuana demand in the year after Canada legalized such sales in October 2018.

The Moncton, New Brunswick–based company (ticker: OGI) this morning reported net revenue of 25 million Canadian dollars (US$19 million). That fell short of the C$27 million level of the February quarter, as well as the C$30 million expected by analysts. While Canada’s overall sales of pot have risen modestly, other leading producers have also had trouble scaling sales volumes, notably Canopy Growth (CGC).

But in early Nasdaq trading, Organigram’s stock rose more than 3%, to US$6.05, after a conference call in which the company emphasized its positive cash flows and expressed optimism about new product opportunities.

OrganiGram CEO Greg Engel attributed the sales slowdown to lower cultivation yields and disappointing orders from Quebec and Ontario. He said that OrganiGram’s harvests had improved and urged investors to look ahead to “Cannabis 2.0” at year-end, when Canada allows the sale of vape pens and edible products, like chocolate and powdered beverage mixes.
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