STOCK TITAN

Organigram Announces Launch of Overnight Marketed Public Offering

Rhea-AI Impact
(High)
Rhea-AI Sentiment
(Neutral)
Tags
Rhea-AI Summary
Organigram Holdings Inc. announces a public offering of units for gross proceeds of approximately C$25 million. The offering will be completed through underwriting agreements with ATB Securities Inc. and is expected to close on April 2, 2024. The company plans to use the net proceeds for growth initiatives, acquisitions, and investments in the cannabis and hemp markets.
Positive
  • None.
Negative
  • None.

The announcement by Organigram Holdings Inc. regarding a public offering of units for approximately C$25 million represents a strategic move to raise capital. The offering's structure, consisting of common shares and warrants, is a common practice that allows investors to potentially benefit from future price increases of the company's stock. The use of proceeds for growth initiatives and general corporate purposes is indicative of Organigram's expansion strategy. However, the dilutive effect of such offerings on existing shareholders cannot be ignored. The market's reaction to the pricing and terms, once finalized, will be critical in assessing the immediate impact on the company's stock value.

Furthermore, the inclusion of an over-allotment option, or 'greenshoe', is standard in public offerings, providing underwriters with a mechanism to manage price stability post-offering. The anticipated use of funds for accretive acquisitions and investments signals a proactive approach to scaling operations, which may be received positively if the market perceives the targeted opportunities as value-adding. Nonetheless, the final assessment of this offering's success will depend on the execution of the growth initiatives funded through this capital raise.

Organigram's decision to pursue a public offering is reflective of the broader cannabis industry's need for capital to fund expansion and sustain competitive advantage. The reference to 'accretive acquisitions' suggests that Organigram is seeking to consolidate its market position or enter new markets, a trend observed across the sector. The success of such a strategy hinges on selecting the right targets and integrating them effectively. Investors will likely scrutinize the company's past acquisition performance and the potential of new markets, such as international federally legal cannabis and hemp markets, to gauge the long-term value proposition.

It is also notable that the offering is being made in both Canada and the United States, indicating Organigram's intention to appeal to a broader investor base and capitalize on the growing cross-border interest in cannabis companies. The timing of the offering, set to close on April 2, 2024, suggests a calculated move to align with market conditions, although it carries inherent risks related to market volatility and regulatory dynamics within the industry.

From a legal standpoint, the offering's reliance on a prospectus supplement and registration statement under the United States/Canada Multi-Jurisdictional Disclosure System (MJDS) highlights the regulatory complexities of cross-border offerings. Organigram must navigate both Canadian and U.S. securities laws, ensuring compliance with the Toronto Stock Exchange and NASDAQ notification rules. The requirement for approval by these exchanges and the filing with securities regulatory authorities underscores the importance of transparency and adherence to regulatory standards in capital-raising activities.

The legal framework for cannabis-related businesses remains fragmented, especially in international markets. Organigram's reference to targeting federally legal cannabis and hemp markets is a prudent reminder of the varying legal landscapes and the company's commitment to operating within these confines. Investors will need to consider the legal risks associated with the industry, including potential changes in regulations that could impact Organigram's growth initiatives and international market strategies.

TORONTO--(BUSINESS WIRE)-- Organigram Holdings Inc. (“Organigram” or the “Company”) (TSX: OGI; NASDAQ: OGI), announces today an overnight marketed public offering of units of the Company (the “Units”) for total gross proceeds of approximately C$25 million (the “Offering”). The Offering is expected to be completed pursuant to an underwriting agreement to be entered into between the Company and ATB Securities Inc., as lead underwriter, on behalf of itself and a syndicate of underwriters including A.G.P. Canada Investments ULC. The Offering will be made in the United States through the lead underwriter's U.S. affiliate, ATB Capital Markets USA Inc.

The Units are expected to be comprised of common shares of the Company and common share purchase warrants of the Company (“Warrants”). The final composition of the Units and the terms of the Warrants will be determined in the context of the market.

The Offering is expected to be priced in the context of the market with the price, total size and other final terms of the Offering to be determined at the time of entering into a definitive underwriting agreement between the Company and the underwriters. In addition, the Company will grant the underwriters an over-allotment option exercisable for a period of 30 days from the closing date of the Offering to purchase up to an additional 15% of the Offering, which will be comprised of additional Units at the Offering price.

The Offering is expected to close on April 2, 2024 and will be subject to market and other customary conditions, including the approval of the Toronto Stock Exchange and compliance with the notification rules of NASDAQ. There can be no assurance as to whether or when the Offering may be completed, or as to the actual size or terms of the Offering.

The Company expects to use the net proceeds from the Offering to fund growth initiatives and for general corporate purposes. The Company sees compelling opportunities for accretive acquisitions and investments in both the Canadian market and international federally legal cannabis and hemp markets to deliver long-term value for shareholders.

The Units will be offered pursuant to a prospectus supplement (the “Prospectus Supplement”) to the Company’s short form base shelf prospectus dated October 6, 2023 (the “Base Shelf Prospectus”) to be filed with the securities commissions or similar securities regulatory authorities in each of the provinces and territories of Canada. In addition, the Prospectus Supplement will be filed with the United States Securities and Exchange Commission (the “SEC”) as a supplement to the Company’s registration statement on Form F-10 (SEC File No. 333-274686) (the “Registration Statement”) under the United States/Canada Multi-Jurisdictional Disclosure System which includes the Base Shelf Prospectus. The Prospectus Supplement, the Base Shelf Prospectus and the Registration Statement contain important detailed information about the Company and the Offering. Prospective investors should read the Prospectus Supplement, the Base Shelf Prospectus and the Registration Statement and the other documents the Company has filed on SEDAR+ and EDGAR before making an investment decision.

Copies of the Prospectus Supplement, following filing thereof, and the Base Shelf Prospectus will be available on SEDAR+ at www.sedarplus.ca and copies of the Prospectus Supplement and the Registration Statement will be available on EDGAR on the SEC’s website at www.sec.gov. Copies of the Prospectus Supplement, following filing thereof, the Base Shelf Prospectus and the Registration Statement may also be obtained from ATB Securities Inc., 66 Wellington Street West, Suite 3530, Toronto, Ontario M5K 1A1, Attn: Jay Lewis, by telephone at (647) 688-7077, or by email at ogi-prospectus@atb.com.

No securities regulatory authority has either approved or disapproved of the contents of this news release. This news release is for information purposes only and shall not constitute an offer to sell or the solicitation of an offer to buy, nor shall there be any sale of these securities in any state or jurisdiction in which such offer, solicitation or sale would be unlawful prior to registration or qualification under the securities laws of any such state or jurisdiction.

About Organigram

Organigram is a NASDAQ Global Select Market and TSX listed company whose wholly owned subsidiaries include Organigram Inc. a licensed producer of cannabis, cannabis-derived products and cannabis infused edibles in Canada.

Organigram is focused on producing high-quality, cannabis for patients and adult recreational consumers, as well as developing international business partnerships to extend the Company’s global footprint. Organigram has also developed and acquired a portfolio of legal adult-use recreational cannabis brands, including Edison, Holy Mountain, Big Bag O’ Buds, SHRED, SHRED’ems, Monjour, Laurentian, Tremblant Cannabis and Trailblazer. Organigram operates facilities in Moncton, New Brunswick and Lac-Supérieur, Quebec, with a dedicated edibles manufacturing facility in Winnipeg, Manitoba. The Company is regulated by the Cannabis Act and the Cannabis Regulations (Canada).

Forward-Looking Information

This news release contains forward-looking information. Often, but not always, forward-looking information can be identified by the use of words such as “plans”, “expects”, “estimates”, “intends”, “anticipates”, “believes” or variations of such words and phrases or state that certain actions, events, or results “may”, “could”, “would”, “might” or “will” be taken, occur or be achieved. Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual results, events, performance or achievements of Organigram to differ materially from current expectations or future results, performance or achievements expressed or implied by the forward-looking information contained in this news release. Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such forward-looking information include changes to market conditions, consumer preferences and regulatory climate and factors and risks as disclosed in the Company’s most recent annual information form, management’s discussion and analysis and other Company documents filed from time to time on SEDAR+ (see www.sedarplus.ca) and filed or furnished to the SEC on EDGAR (see www.sec.gov) including that the Offering may not be completed on the terms indicated or at all, the Company may be unsuccessful in satisfying the conditions to closing of the Offering and the Company’s use of the net proceeds of the Offering may differ from those indicated. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release. Although the Company believes that the assumptions and factors used in preparing the forward-looking information in this news release are reasonable, undue reliance should not be placed on such information and no assurance can be given that such events will occur in the disclosed time frames or at all. The forward-looking information included in this news release are made as of the date of this news release and the Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking information, whether as a result of new information, future events or otherwise.

For Media enquiries:

Megan McCrae

Senior Vice President, Global Brands and Corporate Affairs

megan.mccrae@organigram.ca

Organigram

Source: Organigram Holdings Inc.

Organigram Holdings Inc. is announcing a public offering of units for total gross proceeds of approximately C$25 million.

The underwriting agreement for the offering involves ATB Securities Inc. as the lead underwriter, along with a syndicate of underwriters including A.G.P. Canada Investments ULC.

The offering is expected to close on April 2, 2024.

Organigram Holdings Inc. plans to use the net proceeds from the offering for growth initiatives, acquisitions, and investments in the cannabis and hemp markets.

The units will be offered in the United States through the lead underwriter's U.S. affiliate, ATB Capital Markets USA Inc.
OrganiGram Holdings Inc.

NASDAQ:OGI

OGI Rankings

OGI Latest News

OGI Stock Data

Medicinal and Botanical Manufacturing
Manufacturing
Link
Pharmaceuticals: Other, Health Technology, Process Industries, Agricultural Commodities/Milling, Manufacturing, Medicinal and Botanical Manufacturing

About OGI

as part of canada’s marihuana for medical purposes regulations (mmpr), organigram (tsx-v:ogi) is atlantic canada's original licensed producer of medical marijuana. we are dedicated to consistently providing our clients with the highest quality, organically grown medicine and service. if you have questions or want to learn more, visit www.organigram.ca or give our client services team a call at 1-855-961-9420.