Core Viewpoint - OrganiGram reported a quarterly loss of $0.05 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.03, marking a significant earnings surprise of -66.67% [1][2] Financial Performance - OrganiGram's revenues for the quarter ended March 2025 were $45.69 million, exceeding the Zacks Consensus Estimate by 8.09% and showing a year-over-year increase from $27.91 million [2] - Over the last four quarters, the company has surpassed consensus revenue estimates three times [2] Stock Performance and Outlook - OrganiGram shares have declined approximately 26.7% since the beginning of the year, contrasting with the S&P 500's decline of -3.8% [3] - The company's earnings outlook is currently unfavorable, leading to a Zacks Rank 4 (Sell), indicating expected underperformance in the near future [6] Future Earnings Estimates - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $45.73 million, and for the current fiscal year, it is -$0.16 on revenues of $166.74 million [7] Industry Context - The Medical - Products industry, to which OrganiGram belongs, is currently ranked in the bottom 33% of over 250 Zacks industries, suggesting potential challenges for stock performance [8]

Company Performance - OrganiGram reported a quarterly loss of $0.13 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.03, representing an earnings surprise of -333.33% [1] - The company posted revenues of $29.76 million for the quarter ended March 2025, missing the Zacks Consensus Estimate by 29.59%, compared to revenues of $27.91 million a year ago [2] - Over the last four quarters, OrganiGram has surpassed consensus EPS estimates only once and has topped consensus revenue estimates two times [2] Stock Outlook - OrganiGram shares have declined approximately 26.7% since the beginning of the year, while the S&P 500 has decreased by -3.8% [3] - The current consensus EPS estimate for the upcoming quarter is -$0.02 on revenues of $45.73 million, and for the current fiscal year, it is -$0.16 on revenues of $166.74 million [7] - The estimate revisions trend for OrganiGram is currently unfavorable, resulting in a Zacks Rank 4 (Sell) for the stock, indicating expected underperformance in the near future [6] Industry Context - The Medical - Products industry, to which OrganiGram belongs, is currently in the bottom 33% of over 250 Zacks industries, suggesting a challenging environment [8] - Empirical research indicates a strong correlation between near-term stock movements and trends in earnings estimate revisions, which could impact OrganiGram's stock performance [5]

INTRODUCTION This Management's Discussion and Analysis dated May 12, 2025 (this "MD&A"), should be read in conjunction with the unaudited condensed consolidated interim financial statements (the "Interim Financial Statements") of Organigram Global Inc. (formerly Organigram Holdings Inc.) (together with its subsidiaries, the "Company", "Organigram", "we", "us", or "our") for the three and six months ended March 31, 2025 ("Q2 Fiscal 2025"), and the audited annual consolidated financial statements for the year ...

Group 1 - Alan Brochstein is a pioneer in the cannabis investment sector, having focused exclusively on this industry since 2007 [1] - He founded AB Analytical Services to provide independent consulting to registered investment advisors and has been managing partner of New Cannabis Ventures since 2015, which offers financial information in the cannabis industry [1] - Alan has been leading the investing group 420 Investor since 2013, which focuses on publicly-traded cannabis stocks and moved to Seeking Alpha in 2023 [2] Group 2 - The 420 Investor group covers 23 cannabis stocks, providing investment news, earnings report previews, and post-report analyses [2] - Features of the group include 2 model portfolios, 10 weekly videos with chart analysis, 3 weekly summary pieces, a monthly newsletter, and a chat service for questions [2] - A sub-service called The Big Picture is offered to help investors stay updated on the cannabis sector [2]

Financial Data and Key Metrics Changes - The company reported a net revenue increase of 17% to $42.7 million compared to Q1 of the previous year, driven by growth in flagship brands SHRED and BOXHOT [32][34] - Adjusted gross margin increased to $14.3 million or 33%, up from 31% in the prior year, attributed to increased international sales and operational efficiencies [34] - The net loss for the quarter was $23 million compared to a net loss of $15.8 million in Q1 fiscal 2024, with adjustments indicating a net loss of $4.1 million when excluding fair value losses [40][41] Business Line Data and Key Metrics Changes - The recreational business grew by 15%, with significant contributions from both core and newly acquired product lines [32][33] - The company expanded its national market share by 500 basis points year-over-year, with notable growth in vapes and pre-rolls, where it achieved the number one position [11][12] - Supporting brands like Big Bag O' Buds and Debunk saw impressive growth, doubling their market share compared to Q1 last year [10][11] Market Data and Key Metrics Changes - The Canadian cannabis industry grew by 7.7% year-over-year in Q1, driven by strong demand in pre-rolls and vapes [11] - International sales reached $3.3 million, reflecting a 2.3 times year-over-year increase [34] - The company anticipates continued growth in international sales throughout fiscal 2025, supported by strategic investments and partnerships [30] Company Strategy and Development Direction - The integration of the Motif acquisition is a key focus, with expected operational synergies of $10 million over 24 months [22][38] - The company is investing in seed-based cultivation to enhance efficiency and reduce costs, with plans to increase flower output significantly [20][25] - International expansion remains a priority, particularly in the German market, with a $21 million investment in Sanity Group to capitalize on growth opportunities [28][29] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in achieving operational efficiencies and market position improvements, anticipating a stabilization of adjusted gross margin around 35% in fiscal 2025 [35][44] - The company is optimistic about the international market growth, particularly in Germany, and plans to leverage its EU GMP certification to enhance margins [29][72] - Management highlighted the potential for favorable changes in government policy regarding cannabis regulation and taxation, which could benefit the industry [76][81] Other Important Information - The company plans to invest $8 million to $10 million in sustaining capital expenditures during fiscal 2025, alongside an additional $16 million for capacity enhancement projects [42] - Cash position as of December 31 was $71.2 million, with negligible debt, indicating a strong balance sheet [41][43] Q&A Session Summary Question: Insights on international market growth and investment opportunities - Management highlighted the growth of the German medical market and the potential for increased demand through strategic partnerships, particularly with Sanity Group [51][72] Question: Pro-forma financials and profitability trends - Management indicated that consolidated EBITDA is expected to exceed last year's figures, with significant synergies anticipated in the back half of the year [61][62] Question: Strength of international markets and EU GMP certification timing - Management noted that the EU GMP certification will enhance margins and demand, despite increased competition in the international market [70][72] Question: Potential impacts of government changes on the cannabis industry - Management discussed the potential for favorable regulatory changes under a new government, which could support industry growth and reduce excise taxes [76][81]

Financial Performance - OrganiGram reported a quarterly loss of $0.05 per share, which was worse than the Zacks Consensus Estimate of a loss of $0.03, representing an earnings surprise of -66.67% [1] - The company posted revenues of $30.54 million for the quarter ended December 2024, missing the Zacks Consensus Estimate by 10.57%, compared to year-ago revenues of $26.78 million [2] - Over the last four quarters, OrganiGram has surpassed consensus EPS estimates only once and topped consensus revenue estimates two times [2] Stock Performance and Outlook - OrganiGram shares have increased approximately 7.5% since the beginning of the year, outperforming the S&P 500's gain of 3.1% [3] - The company's earnings outlook is crucial for investors, as it includes current consensus earnings expectations for upcoming quarters and any recent changes to these expectations [4] - The current consensus EPS estimate for the coming quarter is -$0.03 on revenues of $46.67 million, and -$0.09 on revenues of $177.82 million for the current fiscal year [7] Industry Context - The Medical - Products industry, to which OrganiGram belongs, is currently in the top 30% of over 250 Zacks industries, indicating a favorable industry outlook [8] - The performance of OrganiGram's stock may be influenced by the overall industry outlook, as research shows that the top 50% of Zacks-ranked industries outperform the bottom 50% by more than 2 to 1 [8]

Financial Performance - For Q1 Fiscal 2025, Organigram reported an adjusted gross margin of 45% compared to 40% in Q1 Fiscal 2024, indicating a 5 percentage point improvement year-over-year[8]. - The company achieved an adjusted EBITDA of $10 million for the quarter, reflecting a significant increase from $5 million in the same period last year, representing a 100% growth[8]. - Gross revenue for Q1-2025 was $66,806 million, an increase of 19% from $56,270 million in Q1-2024[72]. - Net revenue for Q1-2025 reached $42,730 million, up 17% from $36,455 million in Q1-2024, driven by increased international and recreational revenue[75]. - Adjusted EBITDA for Q1-2025 was $1,410 million, a significant increase of 937% compared to $136 million in Q1-2024[72]. - The gross margin for Q1-2025 was $13,814 million, representing a 106% increase from $6,700 million in Q1-2024[72]. - The net loss for the three months ended December 31, 2024, was $22,957 or $0.202 per Common Share, compared to a net loss of $15,750 or $0.194 per Common Share for the same period in 2023[97]. - The company reported a net loss of $22,957 million in Q1-2025, a 46% increase from a net loss of $15,750 million in Q1-2024[72]. Production and Capacity - Organigram's production capacity is expected to increase with the licensing of new facilities, including the Moncton Campus and Winnipeg Facility, which are projected to enhance overall output by 30%[10]. - The company harvested 21,087 kg of dried flower in Q1 Fiscal 2025, an increase from 19,946 kg in Q1 Fiscal 2024, reflecting improved operational efficiency[40]. - The Lac-Supérieur Facility was expanded to 33,000 square feet, increasing its capacity to produce 2,400 kilograms of flower and over 2 million packaged units of hash annually[42]. - The Winnipeg Facility is capable of producing over 4 million gummies monthly, showcasing the company's capacity for high-volume production[41]. - The Aylmer Facility produces approximately 1,350 kg of distillate, 400,000 kg of hydrocarbon extract, 750,000 pre-rolls, and has the capacity to fill one million vapes monthly[44]. - The Company anticipates increasing its flower output by approximately 12,000 kg annually through expansion initiatives in Fiscal 2025 and 2026[58]. Strategic Initiatives and Collaborations - Organigram is focusing on the commercialization of its FAST nanoemulsion technology, which is expected to provide a competitive edge in the gummy product category[10]. - The company is in the process of integrating Motif Labs Ltd., with expected synergies projected to enhance operational efficiency and reduce costs by approximately 15%[10]. - Organigram's collaboration with British American Tobacco is expected to yield strategic benefits, including access to new markets and enhanced product development capabilities[10]. - The company has established a "Centre of Excellence" in collaboration with BAT to focus on developing next-generation cannabis products[26]. - The Company expects to yield 27,129 kg of cannabis from its biological assets as of December 31, 2024, down from 28,889 kg as of September 30, 2024[162]. Market Position and Growth - The company anticipates a revenue growth of 20% for Fiscal 2025, driven by increased demand for both medical and recreational cannabis products[13]. - Organigram's market share in the Canadian cannabis sector is projected to grow by 5% due to increased distribution and product offerings[10]. - SHRED brand achieved $230 million in annual retail sales as of the end of Q1 Fiscal 2025, maintaining a strong market position[36]. - Organigram holds the 3 market share position in the flower category and the 1 market position in all pre-rolls as of December 31, 2024[59]. - The cannabis market in Canada is projected to reach $5.3 billion by 2028, with exports increasing from $8 million in 2020 to approximately $218 million in 2024[51]. Financial Position and Investments - Total assets increased by 60% to $479,207 million in Q1-2025 from $299,014 million in Q1-2024[72]. - Working capital increased by 32% to $162,532 million in Q1-2025 from $122,823 million in Q1-2024[72]. - The Company expects to generate over $10 million in annual run-rate synergies from the Motif acquisition within 24 months[33]. - The Company completed its EU-GMP audit in November 2024, which is expected to drive growth in international revenue[66]. - The Follow-on BAT Investment includes $83 million earmarked for the Jupiter Pool investment fund to support international expansion initiatives[67]. Challenges and Risks - The company is actively monitoring the impact of geopolitical events, such as the ongoing conflict in Israel, on its supply chain and market demand[13]. - The company has identified material weaknesses in internal control over financial reporting, which have not been fully remediated as of December 31, 2024[193]. - Management is committed to remediating the identified weaknesses by the end of Fiscal 2025[200]. - The company engaged PKF O'Connor Davies for an integrated audit, which resulted in an adverse report on the effectiveness of internal control over financial reporting[186].

Financial Data and Key Metrics Changes - In Q4, net revenue grew by 10% sequentially and 22% year-over-year to $44.7 million, driven by increased international sales and growth in the domestic recreational business [50][51] - Adjusted EBITDA for Q4 was $5.9 million, a 69% increase from $3.5 million in Q3, with full-year adjusted EBITDA increasing 55% to $8.4 million from $5.4 million in fiscal 2023 [55][56] - Adjusted gross margin rate improved to 37% in Q4 compared to 36% in Q3 and 20% in Q4 of the previous year, marking a 17 percentage point year-over-year improvement [52] Business Line Data and Key Metrics Changes - The flower business returned to growth, gaining 0.4 percentage points in market share to reach 9.5% overall flower share, driven by the Big Bag O' Buds brand which grew 25% year-over-year [34][38] - The pre-roll business expanded significantly, moving from the number six position in fiscal 2023 to number three in fiscal 2024, gaining 2.4 percentage points in market share [39] - The company maintained dominant positions in gummies and hash with market shares of 20.9% and 22.6% respectively in fiscal 2024 [40] Market Data and Key Metrics Changes - Organigram finished the fiscal year with a 7.6% market share in the Canadian cannabis market, achieving year-over-year growth in recreational shipments of 17.6%, significantly outpacing market growth [17][34] - In Quebec, the company reached its highest market share ever of 9.9% in September, while in Saskatchewan, market share more than doubled from 3.2% to 7.9% [43] - In British Columbia, market share increased from number 11 to number five, with a 1.4 percentage point overall increase [44] Company Strategy and Development Direction - The company aims to focus on the continued growth of its domestic business, expansion of international sales, increased production efficiency, and margin expansion [24] - The acquisition of Motif is expected to enhance net revenue and earnings potential, with anticipated cost synergies of $10 million identified [19][59] - The company plans to leverage its strong balance sheet and relationships to capture market share from struggling competitors [79] Management's Comments on Operating Environment and Future Outlook - Management anticipates slower growth in the Canadian cannabis market, forecasting a 4% growth rate for the industry in the next year [76] - The company expects to stabilize gross margins above 35% and generate positive adjusted EBITDA in most future reporting periods, with fiscal 2025 adjusted EBITDA expected to exceed that of fiscal 2024 [60][61] - The company sees significant opportunities in the international market, particularly in Germany, despite increased competition [84][88] Other Important Information - The company harvested over 23,000 kilograms of flower in Q4, representing a 10% year-over-year increase [27] - The company achieved a record-breaking yield of 187 grams per plant in Q4, contributing to better unit economics and cultivation efficiency [51] - The company is actively investing in international cannabis growth opportunities through its $83 million Jupiter fund [12][14] Q&A Session Summary Question: Can you elaborate on the potential synergies from the Motif acquisition? - Management highlighted leveraging Motif's credibility in the vape category and centralized warehousing for faster fulfillment as key synergies [66][70] Question: What is the outlook for the overall Canadian market growth? - Management expects the Canadian market to grow about 4% in the next year, with opportunities to capture market share from smaller players [76][79] Question: How does the company view competition in international markets? - Management acknowledged increased competition but emphasized the opportunity presented by EU GMP certification to command higher prices [84][88] Question: What feedback has been received regarding the FAST technology? - Early feedback has been positive, with consumers responding well to the technology, and the company is exploring opportunities to leverage it in the U.S. market [91][93] Question: Why is the company focusing on hemp-derived products in the U.S.? - Management indicated that hemp-derived products present a compliant entry into the U.S. market, while keeping an eye on THC opportunities as regulations evolve [100][102]

Group 1 - Alan Brochstein is a pioneer in the cannabis investment sector, starting his career in the securities industry in 1986 and founding AB Analytical Services in 2007 to provide consulting for investment advisors [1] - He has been managing the investing group 420 Investor since 2013, focusing on publicly-traded cannabis stocks and moving the group to Seeking Alpha in 2023 [2] - The 420 Investor group covers 23 stocks, providing investment news, earnings report previews, and post-report analyses, along with model portfolios, weekly videos, summaries, and a monthly newsletter [2] Group 2 - The Big Picture is a sub-service of 420 Investor that helps investors stay informed about the cannabis sector [2]

Core Viewpoint - Organigram (NASDAQ:OGI) has shown significant stock performance, increasing 22% since the last analysis, while the broader cannabis market has declined, indicating strong relative performance [1][2] Financial Performance - For fiscal Q3, Organigram reported revenue of C$41.1 million, a 25% increase year-over-year, surpassing expectations of C$38 million [6] - Adjusted EBITDA for Q3 was C$3.5 million, compared to a loss of C$2.9 million a year earlier, indicating a positive turnaround [6] - The company has improved its cash position significantly, reporting C$80.1 million in cash and short-term investments, up 136% from the previous year-end [6] Market Position - Organigram has outperformed many of its peers, with a 42% increase in 2024, while the Global Cannabis Stock Index rose only 5.1% and the Canadian Cannabis LP Index fell 17.5% [2][3] - The company is heavily focused on the adult-use market in Canada, which accounted for 89% of its net revenue, growing 42% year-over-year [6] Analyst Expectations - Analysts have revised their FY25 revenue projections for Organigram from C$165 million to C$176 million, with adjusted EBITDA expectations increasing from C$5 million to C$9 million [7] - The consensus for FY26 adjusted EBITDA has also improved, with estimates rising from C$18 million to C$19 million [7] Valuation Insights - Organigram is currently trading at a small discount to tangible book value at 0.9X, which is considered attractive for a cash-rich and debt-free company [8] - The target price for the end of the year has been adjusted to C$2.45 (US$1.80), reflecting a potential gain of 21% [8] Future Opportunities - Potential favorable changes in Canadian cannabis taxation could benefit the entire sector, including Organigram [9] - There is speculation about a possible acquisition by British American Tobacco, which has shown interest in increasing its stake in Organigram [10]