OrganiGram (NasdaqGS:OGI) Q4 2025 Earnings Call December 16, 2025 08:00 AM ET Company ParticipantsGreg Guyatt - CFOMax Schwartz - Director of Investor RelationsAaron Grey - Managing Director and Head of Consumer ResearchBrenna Cunnington - Equity Research AssociatePeter Amirault - Executive ChairTim Emberg - President of Organigram CanadaOperatorGood morning. My name is Tiffany, and I'll be your conference operator today. At this time, I'd like to welcome everyone to the Organigram Global Fourth Quarter Fis ...

Sales of vapes, cigarettes and other tobacco products slumped more than any other grocery category in the UK, a survey showed, a sign that tighter regulations and health concerns are curbing smoking habits https://t.co/xgfED1x6c8 ...

Industry Overview - The U.S. cannabis industry is projected to approach $45 billion by 2025, driven by increasing demand for both medical and recreational use as more states expand access [1] - Marijuana penny stocks are gaining popularity due to their potential for sharp gains and quick movements, especially with recent optimism surrounding possible federal rescheduling [1][2] AYR Wellness Inc. (AYRWF) - AYR Wellness is a multi-state operator with a strong presence in Florida, operating over 70 dispensaries across the U.S. and focusing on both medical and recreational markets [3][5] - The company is recognized for its commitment to customer experience, product consistency, and strong branding, positioning itself as a developing leader among penny-level operators [3][6] - Recent financial performance shows stable revenue, with a focus on cost reduction and operational improvements to support sustainable profitability [5][6] Cansortium Inc. (CNTMF) - Cansortium operates under the Fluent brand, primarily in Florida, with over 30 dispensaries and a focus on high-quality medical products [7][10] - The company emphasizes operational efficiency and has streamlined its operations to improve gross margins and cash flow [10] - Despite facing regulatory costs and market saturation, Cansortium's controlled growth strategy and expanding patient network provide significant upside potential [10] Verano Holdings Corp. (VRNO) - Verano is a major multi-state operator with over 130 dispensaries, known for its premium brands and vertically integrated infrastructure [11][12] - The company has invested heavily in cultivation and manufacturing, ensuring reliable product quality and a diverse product lineup [12][13] - Recent financial performance indicates revenue growth driven by rising consumer adoption, although regulatory costs continue to pressure net profits [15]

Group 1: Honeywell - Honeywell declared a 5% increase in its quarterly dividend, raising it to $1.19 per share [4] - The company is undergoing a significant transition, splitting into three separate entities: Solstice Advanced Materials, Honeywell Automation, and Honeywell Aerospace, with the first split expected by the end of this year [5] - In its last reported quarter as a single entity, Honeywell achieved an 8% year-over-year revenue growth, reaching $10.4 billion, while GAAP net income increased marginally to almost $1.6 billion [6] - The company raised its revenue and profitability guidance for full-year 2025, driven by high demand for aerospace components and maintenance offerings [7] - The new dividend will be paid on December 5 to investors of record as of November 14, yielding just under 2.3% at the most recent closing share price [8] Group 2: Philip Morris International - Philip Morris International announced a 9% increase in its quarterly dividend, raising it to $1.47 per share, continuing its streak of annual dividend raises since 2009 [10] - The company reported a 15% year-over-year increase in sales of its "smoke-free" products, totaling $4.2 billion, while traditional cigarette sales rose by 2% to $6 billion, leading to total revenue of over $10 billion, a 7% gain [12] - Net income saw a significant boost of 25%, exceeding $3.1 billion, prompting management to raise bottom-line guidance for 2025 [13] - Despite the positive results, there is concern as cigarette shipments declined by 1.5%, indicating potential challenges in maintaining growth from traditional products [14] - The enhanced dividend is set to be paid on October 20 to stockholders of record as of October 3, yielding a theoretical 3.6% at the current share price [15]

High Tide Conference Call Summary Company Overview - **Company Name**: High Tide (NasdaqCM: HITI) - **Ticker**: HITI on NASDAQ since 2021 and TSX Venture Exchange since 2018 - **Main Operating Company**: Canna Cabana, the largest retail cannabis brand in Canada with over 207 stores [2][3] Financial Performance - **Trailing Revenue**: Approximately CAD 683 million, including recent acquisitions [2] - **Adjusted EBITDA**: CAD 58 million, with a pro forma trailing adjusted EBITDA multiple of 8.8 times [3] - **Same-Store Sales Growth**: Up 137% since October 2021, compared to a 2% decline for peers [4][14] - **Market Share**: 12% in the five provinces of operation, with a target to reach 15% [4][15] - **Revenue per Square Foot**: CAD 1,735, outperforming many blue-chip retailers [5][16] - **Free Cash Flow**: Generated CAD 4 million in July 2023, five months ahead of schedule [25][26] Recent Developments - **Acquisition**: Acquired 51% of Ramexian Pharma, a leading medical cannabis importer in Germany, for €26.4 million [19] - **Market Expansion**: Entering the German market, which has seen a significant increase in patient counts from 250,000 to 900,000 [20][21] - **Growth in German Cannabis Imports**: Annualized imports increased from CAD 30-40 million to CAD 300 million post-reclassification of medical cannabis [23] Strategic Insights - **Retail Strategy**: Focus on smaller, efficient store sizes (1,200 to 1,500 square feet) rather than larger stores [9][18] - **Loyalty Program**: 2.15 million loyalty members, with 115,000 ELITE members paying CAD 35 annually for additional discounts [4][12] - **Consumer Preferences**: Pre-rolls and dried flower account for about two-thirds of sales, with vapes at 22% [7][8] Market Context - **Canadian Cannabis Market**: Legalized in October 2018, now a CAD 5.5 billion market, with Canna Cabana's operations in a CAD 4.5 billion retail market [6] - **Competitive Landscape**: Canna Cabana's average store revenue significantly exceeds that of peers, with Alberta stores averaging CAD 2.3 million and Ontario stores over CAD 3.1 million [14][15] Future Outlook - **Store Growth**: Targeting to exceed 300 stores, with plans to open 20-30 new stores annually [27] - **Vertical Integration**: Exploring opportunities in cannabis accessories and white-label products, though full vertical integration is limited by regulations [34][36] - **International Expansion**: Monitoring other European markets (UK, Poland, Czech Republic, Switzerland) for potential entry [32] Key Takeaways - High Tide is positioned as a leading innovative retailer in the cannabis space, with strong financial metrics and growth potential in both Canada and Germany [41] - The company is leveraging its retail relationships to capitalize on the growing medical cannabis market in Germany, aiming for significant market share [42]

Industry Overview - The U.S. cannabis industry is rapidly expanding, with legal sales reaching nearly $30 billion in 2024 and projected to surpass $45 billion by 2028, driven by increased state legalization and changing consumer demand [1][3] - Federal rescheduling discussions are ongoing, with lawmakers considering moving cannabis to Schedule III, which could enhance banking access and reduce tax burdens [1][3] Key Companies - Green Thumb Industries Inc. (GTBIF), Curaleaf Holdings Inc. (CURLF), and Verano Holdings Corp. (VRNOF) are highlighted as top stocks to watch, each operating numerous dispensaries and possessing significant cultivation capacity [4][6][27] Green Thumb Industries Inc. (GTBIF) - Green Thumb operates over 90 dispensaries, primarily in Illinois, Pennsylvania, and Ohio, and is recognized as a vertically integrated operator with control over cultivation, processing, and retail [5][7] - The company reported quarterly revenue exceeding $275 million, maintaining profitability and showing resilience despite challenges in competitive markets [9][11] - Green Thumb's financials indicate improved margins due to higher retail sales and efficient operations, with stable debt levels enhancing financial flexibility [10][11] Curaleaf Holdings Inc. (CURLF) - Curaleaf operates over 140 dispensaries across more than 15 states, with a strong presence in Florida, New York, New Jersey, and Arizona [12][15] - The company posted quarterly revenue above $330 million, confirming its status as the largest revenue generator among U.S. cannabis companies, while also reducing operating losses [16][18] - Curaleaf's aggressive acquisition strategy and focus on high-demand markets position it as a competitive player in the industry [15][19] Verano Holdings Corp. (VRNOF) - Verano operates more than 140 dispensaries, primarily in Florida, New Jersey, and Illinois, and emphasizes customer experience and premium store design [19][21] - The company reported quarterly revenue of around $235 million, with positive adjusted EBITDA and improved operating income due to reduced expenses [24][25] - Verano's ongoing expansion and financial discipline, along with manageable debt levels, make it a significant competitor in the U.S. cannabis market [26][27]

Financial Performance - Record gross revenue of $110.2 million, a 73% increase year-over-year and a 7.2% sequential increase[86] - Record net revenue of $70.8 million, a 72% increase year-over-year and a 7.9% sequential increase[86] - Adjusted EBITDA of $5.7 million, a 64% increase year-over-year and a 16% sequential increase[86] - International revenue reached $7.4 million, a 208% increase year-over-year and a 21% sequential increase[86] - Free cash flow was $5.0 million, compared to ($4.8) million in the prior year period[86] Strategic Initiatives - Completed the acquisition of Motif Labs Ltd, expecting approximately $15 million in run-rate cost synergies[44] - Completed the acquisition of Collective Project Limited, fast-tracking entry into the cannabinoid beverages category and the U S market[47] - Strategic investments from BAT totaled over $345 million to fund research & development and international M&A[48] - Invested $21 million into German cannabis leader Sanity Group to establish a foothold in the rapidly growing German market and expand export volume to Europe[61] - 27% of flower harvest at Moncton facility was seed-based in Q3 Fiscal 2025[65] Market Position - Organigram is the 1 LP in market share in Canada[17] - 1 in vapes, 1 in pre-rolls, 1 in milled flower, 1 in hash, 3 in edibles, 3 in dried flower in Canada[86]

Industry Overview - Canadian cannabis stocks are gaining momentum as the U.S. cannabis market is projected to reach nearly $45 billion by 2025, with legal sales expanding in over 20 states [1] - Renewed interest in federal reform is evident, with lawmakers pushing for rescheduling and broader legalization, despite local regulatory challenges [1] - Canadian firms with U.S. exposure are expected to benefit from these developments, leading to increased investor optimism [1] Company Highlights - **Sundial Growers Inc. (SNDL)** has transformed into a diversified cannabis and liquor operator, expanding its retail presence in the Southeastern U.S. and managing dozens of dispensaries [5][8] - For Q1 2025, Sundial reported net revenue exceeding $200 million, with significant gross profit growth and improved operational efficiency, despite still reporting an operating loss [8] - **Cronos Group Inc. (CRON)** has adopted a partnership strategy to gain U.S. exposure, allowing it to distribute branded products without direct ownership of retail stores [9] - In Q1 2025, Cronos saw a meaningful revenue increase, with gross profit more than doubling year-over-year and adjusted earnings turning positive for the first time in several quarters [11] - **High Tide Inc. (HITI)** operates the largest non-franchised cannabis retail chain in Canada and has a strong e-commerce presence in the U.S. [12] - The company reported over 10% revenue growth in Q2 2025, maintaining positive adjusted EBITDA for 21 consecutive quarters and expanding its store count to over 200 [14] Investment Outlook - August 2025 brings renewed interest in the cannabis sector, with Sundial, Cronos, and High Tide showing distinct strengths and operational momentum [15] - Each company demonstrates resilience and strategic growth, making them worthy of consideration for investors looking to tap into North America's cannabis potential [16]

Core Viewpoint - British American Tobacco p.l.c. (NYSE: BTI) is recognized as the "second-best" tobacco company globally, with strong brand recognition and significant market shares, although it does not hold the top position like Marlboro [1]. Company Overview - British American Tobacco has a diverse portfolio that includes next-generation products such as heat-not-burn and vapes, indicating a strategic shift towards modern tobacco alternatives [1]. Market Position - The company maintains a competitive stance in the tobacco industry, leveraging its well-known brands to capture substantial market shares, although it is positioned behind Marlboro in terms of overall market leadership [1].

Core Insights - Altria has transitioned into a primarily tobacco-focused company, while Philip Morris International has a more diversified and stronger business model [1][4] Market Share and Brand Performance - Altria's flagship brand, Marlboro, holds a 41% market share in North America, contributing to an overall market share of approximately 45% when including smaller brands [3] - Marlboro has recently lost market share, indicating a decline in Altria's competitive position [5] Business Operations and Challenges - Altria's cigarette volume fell by 13.7% in Q1 2025, continuing a long-term downward trend, which is impacting its business significantly [5][6] - The company has faced substantial financial missteps, resulting in billions of dollars in write-downs, highlighting its struggles in adapting to market changes [6] Comparison with Philip Morris - Philip Morris has shown resilience, with cigarette volumes increasing in foreign markets during the same period, leading to a 0.4-percentage-point market share gain [7] - Philip Morris's non-cigarette operations are thriving, generating 42% of its revenue and 44% of its profits in Q1 2025, with strong performance in vapes and pouches [8] Investment Considerations - Investors in Altria are betting on the company's ability to pivot towards non-cigarette businesses, while Philip Morris is currently seen as the stronger investment option due to its successful execution and market performance [9]