Insights & Opportunities - TSX Venture (OGI) OTCQB Venture Marketplace (OGRMF) - OrganiGram
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Insights & Opportunities TSX Venture (OGI) OTCQB Venture Marketplace (OGRMF)
Disclaimer & Cautionary Statements
This document is current as of June 21st, 2018. The information contained in the forward-looking statements, including, among others, OGI’s crop yields,
this presentation is provided by Organigram (“OGI”) for informational product liability, government regulation, OGI’s expansion plans, as well as
purposes only and does not constitute an offer to issue or arrange to issue, those risk factors identified in OGI’s Q2-2018 MD&A and other disclosure
or the solicitation of an offer to issue, securities of OGI or other financial documents available at www.sedar.com under OGI’s name. OGI undertakes
products. The information contained herein is not investment or financial no obligation to update forward-looking information if circumstances or
product advice and is not intended to be used as the basis for making an management’s estimates or opinions should change except as required by
investment decision. law. The reader is cautioned not to place undue reliance on forward-looking
statements.
No representation or warranty, express or implied, is made as to the fairness,
accuracy, completeness or correctness of the information, opinions and This presentation does not constitute an offer of shares for sale in the United
conclusions contained in this presentation. To the maximum extent States or to any person that is, or is acting for the account or benefit of, any
permitted by law, none of OGI nor its directors, officers, employees or U.S. person [as defined in Regulation S under the United States Securities
agents, nor any other person accepts any liability, including, without Act of 1933, as amended (the “Securities Act”) (“U.S. Person”)], or in any
limitation, any liability arising out of fault or negligence, for any loss other jurisdiction in which such an offer would be illegal. OGI’s shares have
arising from the use of the information contained in this presentation. not been and will not be registered under the Securities Act. We seek safe
harbour.
Except for statements of historical fact, this presentation contains certain
“forward-looking information” within the meaning of applicable securities This document may not be reproduced, further distributed or published in
laws. Forward-looking information is frequently characterized by words such whole or in part by any other person. This document may only be
as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and disseminated or transmitted into any jurisdiction in compliance with, and
other similar words, or statements that certain events or conditions “may” or subject to, applicable securities laws. Readers are required to ensure their
“will” occur. Forward-looking statements are based on the opinions and compliance with applicable securities laws.
estimates of management at the date the statements are made, and are
subject to a variety of risks and uncertainties and other factors that could
cause actual events or results to differ materially from those anticipated in
2
Meet the Executive Team 3
Investor Highlights
Consumer base to Strategic location Increased Brand positioning Team with
grow exponentially to operate our production with & strategic extensive
with adult business fully-funded partnerships experience
Strong Roots.
recreational market
in October 2018
New Brunswick
– leading the
expansion
Ready for the adult
Differentiated
products & brands
Cannabis, large
CPG brands,
Canada – global cannabis charge in recreational market focused on quality beverage alcohol,
In our plants, our people launch for the medical and
leader in cannabis Canada pharma, finance,
& our company. adult recreational horticulture
markets
4
Organigram: Financial Snapshot
Stock Data (TSXV: OGI) Financial Highlights
Stock Price $5.76 Revenue (Q2-2018) $3.2M
52 Week Low/High $2.04 - $5.93 EPS $0.009
Avg. Daily Vol. (3 mo.) 780,000 Cash & Cash Equivalents $177.9M
Basic Shares Out. 125M Debt $95.8M
Fully Diluted Shares (Excl. 5.42 debentures) 140M Total Assets $268.7M
Fully Diluted Shares (w/ $5.42 debentures) 117M Total Liabilities $107.9M
End of Q2-2018 Feb 28
Valuation Measures Share Price Performance LTM
Market Cap $717M
Enterprise Value $645M
EV/Revenue 60x
Price/Tangible Book 4.5x
Note: Stock Data figures as of June 21st, 2018.. Financial highlights as of OGI’s Q2-2018: Feb28-2018. Valuation measures calculated
using June 21st, 2018 share price and Feb-28th financial statement data.
5
Recent Wabanaki Awards In November 2017, Organigram was recognized for product quality and exceptional service at the Canadian Blueberry Cheesecake Cannabis Awards. The annual, voter-driven event recognizes best-in-class among licensed producers from coast-to-coast. Current Lift Rating Compassionate Pricing 4.3/5 Stars 6
Cannabis Consumption: Forecasted Exponential Growth
2017 2018 2021
Medical Market Adult Recreational Market
Launch: October 17, 2018
Total Revenue:
$8.6B Medical Revenue:
Medical Revenue: • Medical & Adult $1.2B
$435M recreational Patients:
markets
Patients: 269,502 • This is 40% of the 450,000
Canadian alcohol
market
• As of December 31, 2017
Source: Russell Stanley, Echelon Wealth Partners
7
Total Monthly Active Patients
May 2017 to May 2018
8
Canadian Legislative The Opportunity for
Landscape Organigram
The Canadian Federal Government recently § Premium high quality product
announced that the adult recreational § Existing established customer base
program marijuana will launch on § Increase production capacity in advance of
October 17, 2018. adult recreational market launch
§ Leadership among the competition
§ Bill C-45 became law on June 21, 2018
– setting standards for product quality
§ Organigram part of select group of LPs that will § Corporate social responsibility
have significant product volume available for – educating consumers on responsible
the adult recreational marketplace launch
usage
§ Distribution will be via provincially operated
§ Create and develop branded and
stores in Ontario, Quebec, New Brunswick,
Nova Scotia and PEI and via private retail stores
differentiated products
in BC, Alberta, Saskatchewan, Manitoba and
Newfoundland
§ All online sales will be run by the province
except for Saskatchewan
9
New Brunswick
We Call it Home. And it Makes Business Sense.
§ One of the lowest cost locations in Canada § Low and predictable base power rate of
• Operating cost 5.2/kWh
• Real estate § Significantly cheaper (up to 50% cheaper) than
• Utilities Ontario
• Wages § Skilled & motivated workforce
§ Bilingual branding and services
§ Lowest general corporate income tax in
Atlantic Canada
10Organigram Signs Landmark Deals
In September of 2017, Organigram In January of 2018, Organigram signs
becomes one of the first licensed an MOU with Prince Edward Island, the
producers to sign an MOU with provincial second province in the Maritime region
authority responsible for the distribution of to secure a supply agreement for the
cannabis to the adult recreational market adult recreational market
Deal secures a minimum of five million Deal secures a minimum of one million
grams per year grams per year
Retail value of between $40 million to $60 Retail value of between $8 million to
million per year $12 million per year
Agreement reinforces progressive Agreement secures inventory for the
leadership of New Brunswick within adult recreational market in Prince
Canadian market, emphasizes province’s Edward Island
commitment to New Brunswick-based
businesses
11International Target Markets 12
International Target Markets (cont.)
Germany - Partnership with German Alpha-Cannabis which provides Organigram:
1) An immediate vehicle for larger scale export into the EU market.
2) The possibility to purchase synthetic CBD.
3) Strong partner for submitting an application to the soon to be released
RFP for in-country cultivation (equivalent to ACMPR) from the German
Health Regulatory Body (BfArM)
Australia - Commence international export to Australian medical cannabis
partner Cannatrek Medical through their partnership with leading global
cannabis and hemp brokerage firm Cannada Management.
Dealer’s License - Received Dealer’s License in May 2018 which allows the Company
to conduct activities not permitted under ACMPR. The company can now develop, test
and export an extensive range of products including its current offering of cannabis
oils as well as an extensive range of derivative based products.
13Three Level Growing Technology
§ Maximize footprint
§ 100% larger rooms in new expansion
14Exponential Production Growth
§ Fully funded (ongoing) facility expansion through
Phase 4 up to 502,228 sq. ft.
§ Production capacity
• Present: 36,000 kg/yr
• April 2019: 65,500 kg/yr
• July 2019: 81,000 kg/yr
Expansion Specifications • April 2020: 113,000 kg/yr
Target Construction Area
Phase Status Date (sq. ft.)
Phase 1 Complete N/A 31,600
‣ Expected pro-forma production capacity
Phase 2 Complete N/A 102,125
Phase 3 Complete N/A 40,000
Phase 4 Final Design Complete April 2019 90,000
Phase 4 In Planning July 2019 90,000
Phase 4 In Planning April 2020 90,000
Phase 5 TBD N/A 58,503
Approx. Project Total Sq. Ft / 502,228
15Industry Leading Yields Driving Down Costs 16
Key Performance Indicators
Medical Patients > $7.00 20% $177.9 Million
>15,000 Medical Avg. selling price Q/Q Sales Growth Cash and Cash
Patients with an Active per gram of dried Gross sales Equivalents at Q2-
Prescription cannabis to medical increased from 2018
patients Q1-2018 to Q2-2018
17Adult Recreational Portfolio – 2018 18
Product Portfolio for the Future
The Green Solution
§ Exclusive Canadian intellectual property, product development and distribution agreement
§ Proven market leader based in Denver, Colorado
• $100M + in cumulative product sales
• 16 retail locations
• 225+ unique cannabis products in portfolio
• Recognized and award-winning product lines
• Consulting to Organigram for development of:
‣ Commercial scale extraction and product processing
‣ Derivative product development
ü Vaporizer cartridges and pens
ü Proven leading edibles and beverage product mix
ü Child-resistant packaging for all edibles and beverages
19Key Take Aways
§ Organigram is well positioned to become a • Will open up the recreational market
leading producer to both the medical and adult • Early win with Government of New Brunswick MOU
recreational markets
• Medical continues to proliferate and gain
acceptance § Organigram is an efficient producer of
premium quality product
• Adult recreational entering its infancy, a new market
for distribution • All-in costs of production less than $1.50/gram
• Average selling price over $7.00/gram
§ Increasing Production and Processing
Capabilities
§ Winner of two out of six product category awards at
• Current production capacity of 2017 Canadian Cannabis Awards
36,000 kg per year
• Fully funded to complete expansion
§ Positioned well for Regulatory Changes
• Adult use program launch
in October 2018
20 Organigram was recognized as a TSX Venture 50TM company in 2017. TSX Venture 50 is a trademark of TSX Inc. and is used under license.Thank You!
Contact Information:
Organigram Holdings Inc.
35A English Dr.
Moncton, NB, E1E 3X3
investorrelations@organigram.ca
Direct Line: 416-639-2144
Toll Free: 1-844-644-4726 Ext. 401
21Appendix A: Management
Greg Engel – Chief Executive Officer and Director Raymond Gracewood – Chief Commercial Officer
Mr. Engel is a senior executive with 30 years of National and International experience in As the previous Senior Director of Sales and Marketing for Moosehead Breweries Ltd., Mr.
the pharmaceutical, biotechnology, cannabis and consumer packaged goods industries. Gracewood is a leading brand and marketing professional in Atlantic Canada. With more
Mr. Engel has led the creation, development and growth of several companies over the than 15 years of experience in the marketing space, he is a strong speaker on brand,
span of his career. An articulate and trusted voice in the burgeoning Canadian cannabis packaging and positioning, both locally and throughout North America. He has extensive
space, Mr. Engel most recently worked with a competitive licensed producer to become experience in building and developing brands, positioning and segmentation. Mr.
the first Canadian exporter of medical cannabis, as well as the establishment of several Gracewood holds a Bachelor of Business Administration degree from the University of
trailblazing industry standards. As leader at Organigram Inc, Mr. Engel is focused on New Brunswick.
reputational excellence through product quality and safety, expansion of the company’s
Moncton, N.B. facility, and production efficiencies to position the company as a leader in Tim Emberg – Vice President of Sales and Commercial
the Medical and Adult Recreational Cannabis industries. Mr. Engel graduated from the
University of Guelph with an Honours Bachelor of Science in Microbiology. Operations
Mr. Emberg is a senior sales and marketing executive with over 20 years experience in the
Jeff Purcell – Vice President of Operations pharmaceutical, OTC and consumer packaged goods industry. As the previous Head of
Marketing & Executive Director of Sales for Roche Diabetes Care Canada, Mr. Emberg
Mr. Purcell assumed the position of Vice President of Operations of Organigram Inc. on built and led several sales and marketing teams to success over the years. Mr. Emberg
June 12, 2017. He is filling a key role on the company’s Senior Leadership Team, as a has also held many progressively growing commercial roles in other top-tier
seasoned professional in the areas of large scale production and facility expansion. Mr. organizations such as Jamieson Laboratories and Frito-Lay Canada. Mr. Emberg holds
Purcell has the responsibility and oversight for the entire production facility including a Bachelor’s degree from the University of Ottawa.
production, engineering and maintenance, construction, quality assurance, safety,
security and the company’s vision for oils and extract products. Mr. Purcell brings over 25
years of experience to the role, most recently as Vice President of Operations at Ganong
Guillermo Delmonte – President of International Operations
Bros. Limited with responsibilities including implementation of quality systems, safety,
A proven leader in the international cannabis and CBD marketplace, Mr. Delmonte joins
and continuous improvement initiatives. While in the role, he was also responsible for a
the Organigram team following two and a half years as Chief Executive Officer at ICC
significant facility expansion, essentially creating an entirely new production environment.
Labs Inc., a leading international hemp and cannabis producer. In this role, he successfully
Prior to Ganong, Mr. Purcell spent over 15 years in progressively senior roles leading
oversaw the ICC's initial public offering (IPO) as the first South American cannabis
operations at McCain Foods. Mr. Purcell holds a Bachelor of Commerce degree, from St.
company to go public with a first day valuation of more than $120 million CAD.
Mary’s University.
Paolo De Luca – Chief Financial Officer Michael Tripp – Chief Legal Officer
Mr. Tripp worked for private practices at respected business law firms in Moncton and
Mr. De Luca joined Organigram on December 19, 2017 bringing over 20 years of
Toronto where he acted on over $3 billion in transactions.
diversified financial business experience. Mr. De Luca has held senior financial, investor
relations, and accounting leadership roles at companies including West Face Capital, one
of Canada's leading alternative asset management firms; Meridian LNG; Potash Ridge;
C.A. Bancorp; and TD Securities.
22Appendix B: Board of Directors
Peter Amirault – Chairman Michel Bourque – Director
Mr. Amirault is currently the President of BML Group Limited. Prior to joining BML Mr. Bourque brings more than 25 years of sales and marketing leadership experience
Group, Peter held varying executive roles including: President of Swiss Chalet North in the pharmaceutical industry, having worked in the branded Rx, generic Rx and
America for the Cara Group of Companies, CEO of Creemore Springs Brewery Ltd, branded/private label OTC sectors. Over this time, he has successfully led teams in the
Senior Vice President of Molson Coors Canada, Managing Director of Sleeman specialty medicine, hospital, and retail key account areas driving profitable growth
Brewing Ltd, along with senior roles at Nestle Canada and The Premium Beer through strategic planning and the implementation of innovative value-added
Company of Toronto. Peter holds a BBA from Acadia University and an MBA from The programs. Mr. Bourque holds a Bachelor of Business Administration degree from
Schulich School of Business. Peter brings a wealth of knowledge with his previous l’Université de Moncton.
board experience and roles at senior management levels.
Dr. Kenneth Mitton – Director
Derrick West – Audit Committee Chair
Dr. Mitton is a highly respected physician, practicing in Moncton, New Brunswick. Dr.
Mr. West currently serves as the Chief Financial Officer and Corporate Secretary of Mitton has practiced medicine for over 30 years as a family doctor. He also advises a
Partners Real Estate Investment Trust, a TSX listed issuer, and has previously served as number of large corporations in New Brunswick, with respect to occupational health
the CFO of a TSXV listed international mining service enterprise and as the Vice- matters. Dr. Mitton has previously served as the Chief of Staff of the South-East
President of Accounting and Administration for a TSX listed REIT. Mr. West Regional Health Authority (now the Horizon Health Network) and is currently the
commenced his career with Grant Thornton LLP where he obtained his Chartered medical director of The Moncton Hospital. Dr. Mitton holds a Bachelor of Science and a
Accountancy designation and is an active Chartered Professional Accountant. Doctor of Medicine Degree from Dalhousie University.
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