Insights & Opportunities - TSX Venture (OGI) OTCQB Venture Marketplace (OGRMF)
←
→
Page content transcription
If your browser does not render page correctly, please read the page content below
Insights & Opportunities TSX Venture (OGI) OTCQB Venture Marketplace (OGRMF)
Disclaimer & Cautionary Statements
This document is current as of January 18, 2018. The information contained estimates of management at the date the statements are made, and are
in this presentation is provided by Organigram (“OGI”) for informational subject to a variety of risks and uncertainties and other factors that could
purposes only and does not constitute an offer to issue or arrange to issue, cause actual events or results to differ materially from those anticipated in
or the solicitation of an offer to issue, securities of OGI or other financial the forward-looking statements, including, among others, OGI’s crop yields,
products. The information contained herein is not investment or financial product liability, government regulation, OGI’s expansion plans, as well as
product advice and is not intended to be used as the basis for making an those risk factors identified in OGI’s Q3 MD&A and other disclosure
investment decision. documents available at www.sedar.com under OGI’s name. OGI undertakes
no obligation to update forward-looking information if circumstances or
The views, opinions and advice provided in this presentation reflect those management’s estimates or opinions should change except as required by
of the individual presenters, and are provided for information purposes law. The reader is cautioned not to place undue reliance on forward-looking
only. The presentation has been prepared without taking into account the statements.
investment objectives, financial situation or particular needs of any particular
person. No representation or warranty, express or implied, is made as to the This presentation does not constitute an offer of shares for sale in the United
fairness, accuracy, completeness or correctness of the information, opinions States or to any person that is, or is acting for the account or benefit of, any
and conclusions contained in this presentation. To the maximum extent U.S. person [as defined in Regulation S under the United States Securities
permitted by law, none of OGI nor its directors, officers, employees or Act of 1933, as amended (the “Securities Act”) (“U.S. Person”)], or in any
agents, nor any other person accepts any liability, including, without other jurisdiction in which such an offer would be illegal. OGI’s shares have
limitation, any liability arising out of fault or negligence, for any loss not been and will not be registered under the Securities Act. We seek safe
arising from the use of the information contained in this presentation. harbour.
Except for statements of historical fact, this presentation contains certain This document may not be reproduced, further distributed or published in
“forward-looking information” within the meaning of applicable securities whole or in part by any other person. This document may only be
laws. Forward-looking information is frequently characterized by words such disseminated or transmitted into any jurisdiction in compliance with, and
as “plan”, “expect”, “project”, “intend”, “believe”, “anticipate”, “estimate” and subject to, applicable securities laws. Readers are required to ensure their
other similar words, or statements that certain events or conditions “may” or compliance with applicable securities laws.
“will” occur. Forward-looking statements are based on the opinions and
2
Strong Roots.
In our plants, our people
& our company.
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
New Brunswick
– by July 2018
expansion
Differentiated Cannabis, large
– leading the Ready for the adult products & brands CPG brands,
In our plants, our people recreational market
Canada – global cannabis charge in beverage alcohol,
& our
leader company.
in cannabis Canada launch pharma, finance,
horticulture
4
Organigram: Financial Snapshot
Stock Data (TSXV: OGI) Financial Highlights
Stock Price $4.86 Revenue $7.7M
52 Week Low/High $1.81 - $5.68 EPS ($0.11)
Avg. Daily Vol. (3 mo.) 2,270,000 Cash (excludes $54M net proceeds from
$33.9M
financing)
Basic Shares Out. 124M
Debt $3.5M
Fully Diluted Shares Out. 139M
Total Assets $92.8M
Public Float, est. 116M
Total Liabilities $9.8M
Insider Holdings ~6.3%
Fiscal Year End Aug 31
Valuation Measures Share Price Performance LTM
Market Cap $605M
Enterprise Value $696M
EV/Revenue 90x
Price/Tangible Book 4.5x
Note: Stock Data figures as of January 18th. Financial highlights as of OGI’s fiscal year-
end: Aug-31-2017. Valuation measures calculated using Jan 18th share price and Aug-31st
financial statement data with pro-forma net cash proceeds from Dec-18th bought deal
5 financing.
Strong Roots
Plant People Company
§ Premium product, winner § World-class experience § Early entrant
of two of six product § Invest in strong leadership § High medicinal standards
category awards at 2017 § Knowledge transfer § Well-positioned for adult
Canadian Cannabis § Focus on culture & brands recreational market
Awards
§ Focus on Quality with
Industry-leading Quality
Assurance program
§ Current Lift Cannabis
Rating 4.5 / 5
6
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.
Compassionate Pricing
7
Cannabis Consumption: Forecasted Exponential Growth
2017 2018 2021
Medical Market Adult Recreational Market
Launch: by July 2018
Total Revenue:
$8.6B Medical Revenue:
Medical Revenue: • Medical & Adult $1.2B
$435M recreational Patients:
markets
Patients: 236,000 • This is 40% of the 450,000
Canadian alcohol
market
• As of September 30, 2017
Source: Russell Stanley, Echelon Wealth Partners
8
Canadian Legislative The Opportunity for
Landscape Organigram
The Canadian Federal Government
§ Premium high quality product
announced marijuana will be legalized § Existing established customer base
in July 2018. § Increase production capacity in advance of
adult recreational market launch
§ Federal legislation was tabled April 13, 2017
§ Leadership among the competition
§ Organigram part of select group of LPs that – setting standards for product quality
will have product for the adult recreational § Corporate social responsibility
marketplace launch – educating consumers on responsible
§ Provinces will determine retail sales usage
distribution channel, which in most cases will § Create and develop branded and
mirror liquor distribution by province. differentiated products
Licensed Producers will also be able to sell
via direct mail
9
Making Good Choices.
The Strategy.
We’re well-positioned for the adult
recreational market.
10New 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
11Organigram 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
12Exponential Production Growth
§ Fully funded (ongoing) facility expansion through
Phase 4 up to 428,725 sq. ft.
§ Current Facility Includes:
‣ Ongoing annual rental income of $770,000 (blue-chip
tenant)
Expansion Specifications § Production capacity
Completion Area
Phase Status Date (sq. ft.) • Present: 5,200 kg/yr
Phase 1 Complete Complete 31,600 • January 2018: 16,000 kg/yr
Phase 2 Under Construction Jan 2018 102,125 • May 2018: 25,000 kg/yr
Phase 3 Under Construction May 2018 40,000 • April 2019: 39,500 kg/yr
Phase 4 Future Expansion A April 2019 130,000 • July 2019: 47,500 kg/yr
Phase 4 Future Expansion B July 2019 40,000 • April 2020: 65,000 kg/yr
Phase 4 Future Expansion C April 2020 85,000
Phase 5 Leased Space N/A 58,503 ‣ Expected pro-forma production capacity
Approx. Project Total Sq. Ft / 487,228
13Three Level Growing Technology
§ Maximize footprint
§ 100% larger rooms in new expansion
14It’s a Brand & Product Play
The Green Solution
§ Exclusive Canadian brand licensing, product development and distribution
Our Brand Strategy agreement
§ Proven market leader base in Denver, Colorado
• $100M + in cumulative product sales
§ Readiness to guarantee first-to- • 13 retail locations
market • 225+ unique cannabis products in portfolio
§ Brands & segmentation • Recognized and award-winning premium brands and product lines
§ Develop products faster • Consulting Organigram for development of:
§ North American & Global appeal ‣ Commercial scale extraction and processing
§ Flawless execution ‣ Formulated product development
Trailer Park Boys
§ Exclusive Canadian licensing agreement:
• Cannabis producer
• Business partner and brand developer
§ Organigram will develop branding, packaging and competitive product
portfolio for recreational market
§ Distributed exclusively by Organigram
15Key Performance Indicators
$2.11 $7.89 26%
Q3 2017 Fiscal 2017 Sales Growth $33,957,370
Cost of goods sold Avg. selling price Gross sales Cash Balance
Low-cost indoor per gram of dried increased year Aug. 31, 2017
producer cannabis to medical over year (Excludes $54M Dec. 2017
(excludes f.v. adjustment patients (2017 vs 2016) bought deal financing)
to bio-assets and inventory)
16Key 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 • Average cost of goods sold of $2.11 per gram
• Average selling price of $7.89 per gram
§ Increasing Production and Processing
Capabilities
§ Winner of two of six product category awards at 2017
• Expected increase in production to Canadian Cannabis Awards
25,000 kg per year in 2018
• Fully funded to complete expansion
§ Positioned well for Regulatory Changes
• Adult use program launch expected
in July 2018
17 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: 1-855-961-9420 Ext. 401
18Appendix A: Management
Greg Engel – Chief Executive Officer and Director Paolo De Luca – Chief Financial Officer
Mr. Engel is a senior executive with 30 years of National and International experience in Mr. De Luca joined Organigram on December 19, 2017 bringing over 20 years of
the pharmaceutical, biotechnology, cannabis and consumer packaged goods industries. diversified financial business experience. Mr. De Luca has held senior financial, investor
Mr. Engel has led the creation, development and growth of several companies over the relations, and accounting leadership roles at companies including West Face Capital, one
span of his career. An articulate and trusted voice in the burgeoning Canadian cannabis of Canada's leading alternative asset management firms; Meridian LNG; Potash Ridge;
space, Mr. Engel most recently worked with a competitive licensed producer to become C.A. Bancorp; and TD Securities.
the first Canadian exporter of medical cannabis, as well as the establishment of several
trailblazing industry standards. As leader at Organigram Inc, Mr. Engel is focused on Raymond Gracewood – Chief Commercial Officer
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 As the previous Senior Director of Sales and Marketing for Moosehead Breweries Ltd., Mr.
the Medical and Adult Recreational Cannabis industries. Mr. Engel graduated from the Gracewood is a leading brand and marketing professional in Atlantic Canada. With more
University of Guelph with an Honours Bachelor of Science in Microbiology. than 15 years of experience in the marketing space, he is a strong speaker on brand,
packaging and positioning, both locally and throughout North America. He has extensive
experience in building and developing brands, positioning and segmentation. Mr.
Jeff Purcell – Vice President of Operations Gracewood holds a Bachelor of Business Administration degree from the University of
New Brunswick.
Mr. Purcell assumed the position of Vice President of Operations of Organigram Inc. on
June 12, 2017. He is filling a key role on the company’s Senior Leadership Team, as a Tim Emberg – Vice President of Sales and Commercial
seasoned professional in the areas of large scale production and facility expansion. Mr.
Purcell has the responsibility and oversight for the entire production facility including Operations
production, engineering and maintenance, construction, quality assurance, safety,
security and the company’s vision for oils and extract products. Mr. Purcell brings over 25 Mr. Emberg is a senior sales and marketing executive with over 20 years experience in the
years of experience to the role, most recently as Vice President of Operations at Ganong pharmaceutical, OTC and consumer packaged goods industry. As the previous Head of
Bros. Limited with responsibilities including implementation of quality systems, safety, Marketing & Executive Director of Sales for Roche Diabetes Care Canada, Mr. Emberg
and continuous improvement initiatives. While in the role, he was also responsible for a built and led several sales and marketing teams to success over the years. Mr. Emberg
significant facility expansion, essentially creating an entirely new production environment. has also held many progressively growing commercial roles in other top-tier
Prior to Ganong, Mr. Purcell spent over 15 years in progressively senior roles leading organizations such as Jamieson Laboratories and Frito-Lay Canada. Mr. Emberg holds
operations at McCain Foods. Mr. Purcell holds a Bachelor of Commerce degree, from St. a Bachelor’s degree from the University of Ottawa.
Mary’s University.
19Appendix B: Board of Directors
Denis Arsenault – Chairman Peter Amirault – Lead Director
Mr. Arsenault has spent the past 30 years as a successful entrepreneur; building, Mr. Amirault is currently the President of BML Group Limited. Prior to joining BML
running, and selling several profitable businesses. As the former Chief Executive Group, Peter held varying executive roles including: President of Swiss Chalet North
Officer of the Company, Mr. Arsenault focused on growing the Company into a America for the Cara Group of Companies, CEO of Creemore Springs Brewery Ltd,
sustainable and successful employer in Moncton. His extensive knowledge and Senior Vice President of Molson Coors Canada, Managing Director of Sleeman
experience in building successful enterprises has helped to establish a strong Brewing Ltd, along with senior roles at Nestle Canada and The Premium Beer
management team and a modern production facility prior to his transition to the role of Company of Toronto. Peter holds a BBA from Acadia University and an MBA from The
Executive Chairman. Mr. Arsenault holds a Bachelor of Administration Degree from the Schulich School of Business. Peter brings a wealth of knowledge with his previous
Université de Moncton. board experience and roles at senior management levels.
Derrick West – Audit Committee Chair Dr. Kenneth Mitton – Director
M. West est actuellement directeur financier et secrétaire général de Partners Real Dr. Mitton is a highly respected physician, practicing in Moncton, New Brunswick. Dr.
Estate Investment Trust, un émetteur inscrit à la TSX, et a préalablement été directeur Mitton has practiced medicine for over 30 years as a family doctor. He also advises a
financier d'une entreprise de services miniers inscrit à la TSXV comme vice-président number of large corporations in New Brunswick, with respect to occupational health
de la comptabilité et de l'administration d'une FPI inscrite à la TSX. M. West a matters. Dr. Mitton has previously served as the Chief of Staff of the South-East
commencé sa carrière chez Grant Thornton LLP, où il a obtenu sa désignation de Regional Health Authority (now the Horizon Health Network) and is currently the
comptable agréé, et est comptable agréé professionnel actif. medical director of The Moncton Hospital. Dr. Mitton holds a Bachelor of Science and a
Doctor of Medicine Degree from Dalhousie University.
Michel Bourque – Director
Mr. Bourque brings more than 25 years of sales and marketing leadership experience
in the pharmaceutical industry, having worked in the branded Rx, generic Rx and
branded/private label OTC sectors. Over this time, he has successfully led teams in the
specialty medicine, hospital, and retail key account areas driving profitable growth
through strategic planning and the implementation of innovative value-added
programs. Mr. Bourque holds a Bachelor of Business Administration degree from
l’Université de Moncton.
20You can also read
