OrganiGram Holdings Inc (OTCMKTS: OGRMF) excellent start to the year has received a significant boost on the company reporting record net revenues for Q2. The company’s sentiments have also inched higher having emerged it is one of the leaders in the Canadian adult-use recreational market.
OrganiGram Price Analysis
According to the Chief Executive Officer Greg Engel, second quarter financial results reflect operational excellence. The company has also advanced several initiatives awaiting derivatives and edibles legalization later in the year as it seeks to diversify its operations in the multi-billion industry.A solid financial report is not the only thing fuelling Organigram upward momentum. The launch of a cross-platform mobile application for medical patients is another development that continues to strengthen investor’s sentiments in the stock.After a solid start to the year, Organigram has resorted to trading in a steep uptrend as bulls continue to push the stock up the charts on pullbacks. With the stock flirting with record highs, bulls could as well be eyeing further highs.The stock has once again started edging higher after a minor correction from record highs of $7.53. The $6.40 mark has since emerged a support level from where Organigram is likely to register another leg higher. OGRMF Daily ChartFurther pullbacks would have to contend with support at the $6 mark, above which the stock remains bullish. A breach of the $6 support level could elicit further selling pressure that could result in the stock edging lower.
About Organigram
Organigram is engaged in the production and distribution of dried cannabis and cannabis oil. The company also ships cannabis plant cuttings as well as dried flowers, blends and cannabis oils to retailers and wholesalers.
Stellar Q2 Financial Results
A 100% plus spike in share price as well as market activity affirms renewed investor interest on Organigram, thanks to improved market sentiments and outlook. The company delivering net revenues of $26.9 million underscores robust growth helped by adult use recreational sales. Gross margin in the quarter came in at $16 million or 60%.In addition to revenue growth and gross margin expansion, the company also achieved significant milestones in the quarter. Top on the list was the expansion of the Moncton facility now set to add 92 incremental grow rooms. More grow rooms should go a long way in tripling the company’s production capacity to 113,000kg per year.Organigram did make a submission to Health Canada for Phase 4a, and Phase 4b grow rooms as it seeks to commence cloning operations at the initial 13 rooms. The company has also set the groundwork ahead of the launch of derivatives in the fall of 2019. Capacity expansion should go a long way in helping the company meet the expected demand for edibles.Organigram has also set sights on vaporizable pen technologies to supplement the edible products it plans to launch.
“Our team has already progressed several key initiatives in preparation for the derivative and edibles launch in the fall of 2019. We are excited about the significant growth ahead expected from these new products, our expanding capacity, our strategic partnerships, and our relentless focus on continuous improvement to consistently deliver a high-quality product to our customers," explained Mr. Engel.
Mobile Application Launch
The release of a cross-platform mobile application for medical patients underscores innovation as Organigram seeks to strengthen its competitive edge in the sector. The mobile application seeks to offer patients greater convenience when it comes to optimization of cannabis medication.Registered patients will be able to order medical cannabis products as well as accessories through the app as well as manage their profiles. Patients will also be able to chew past orders and order limits as well as communicate with client care representatives.
“We want our patients to know that in this post-adult recreational world, Organigram is committed to supporting them. It is our hope that this tool makes medical cannabis even more accessible to our patients who prefer a mobile tool," Engel says.
What Next For Organigram
A spike in share price and market activity affirms strengthening investor confidence about OrganiGram growth metrics and long-term prospects. The company reporting record revenues and putting in place a framework for further growth should allow the company to deliver record-breaking revenue growth.Organigram is likely to continue climbing the cannabis ladder given the improved market sentiments and bullish outlook.We will be updating our subscribers as soon as we know more. For the latest updates on OGRMF, sign up below!Disclosure: We have no position in OGRMF and have not been compensated for this article.
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