OrganiGram Holdings Inc (OTCMKTS:OGRMF) is a cannabis play that keeps on giving on pullbacks, as it continues to outperform the overall sector. The stock is already up by more than 80% for the year, at a time when the overall industry is still trying to recover from one of the worst sell-offs.
OrganiGram Share Price Analysis
The tiny pot stock continues to climb higher on investors taking note of the fact that it is slowly transitioning to become one of the top five marijuana producers. Its annual harvest is set to grow from 36,000 Kg to 113, 000kg, over the next one year. Its award-winning dried flower product line has also continued to strengthen its sentiments among investors.
All indication is that the stock will continue to climb higher, given that pullbacks so far have acted as buy opportunities from where buyers have come in and pushed the stock higher. On the investment point of view, it may be wise to wait for a pullback, given that the stock is currently trading at 52-week highs.
The stock faces immediate support at the $5 a share level from where buyers could join push the stock higher. A breach of the support level on the downside, on the other hand, could see short sellers streaming in and pushing the stock to the $4.40 level, seen as the next substantial support level.
However, given that the company is firing on all cylinders when it comes to execution of its business strategy, the stock looks set to finish the year on a high on stabilizing above the $6 a share level.
OrganiGram is a licensed producer and distributor of cannabis and cannabis-derived products in Canada. The company strives to provide the highest quality indoor-grown cannabis for both recreational and medical marijuana markets. In addition to selling its products in North America, the company is also in the process of signing strategic partnerships as it looks to diversify its footprint on the international scene.
Recreational Marijuana Sale Opportunity
Shares of OrganiGram continue to fly high in the market on investors taking note of the company’s ever-growing prospects and Business Empire in the multi-billion sector. The company is already experiencing strong growth in medical marijuana sales, in Canada. Sales should inch a notch higher with the opening of the recreational market soon.
The company has also inked recreational marijuana supply agreements with five provinces. In addition, it joins an exclusive list of 26 licensed producers set to supply Ontario with recreational cannabis for sale in the Ontario Cannabis Store, a major online outlet.
OrganiGram has also signed a supply agreement with Nova Scotia Liquor Corporation ahead of the opening up of the recreational cannabis market next month.
“With supply arrangements in place in six provinces, we take great pride in our place as a national leader working towards a responsible, sustainable and successful adult-use recreational cannabis market,” said Greg Engel, Organogram’s Chief Executive Officer.
In addition to North American opportunities, OrganiGram is in the process of pursuing growth opportunities overseas, after signing a partnership with Alpha Cannabis Germany. The partnership provides the company a leeway to expand its footprint and operations in one of the fastest growing medical marijuana markets in Europe
Germany is to act as the company’s launch pad for wider European operation. A partnership with Cannatrek Medical also opens the door for the company to expand its operations into Australia.
The company is in the process of positioning itself as it eyes a bigger share of the recreational market having embarked on an aggressive plan to crank up its production capacity. The company’s annual production of 36,000Kg is set to more than triple over the next one year to highs of 113,000Kg.
There is no doubt that OrganiGram is in the best shape, ever since it became a public company, as it continues to strengthen its edge against rivals. Increasing harvest yields should allow the company to pursue sales opportunities in both recreational and medical marijuana market in North America and abroad.
That said, the company remains well positioned to experience tremendous revenue growth in the coming years as it continues to target multiple markets at a go. It thus does not come as a surprise that investors have continued to push the stock higher given that the company remains well positioned to generate significant shareholder value going forward. After the recent rally, any pullback should act as a buying opportunity.
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Disclosure: We have no position in OGRMF and have not been compensated for this article.