Organigram (OGI.V) announced it too would be raising a shit-ton of money, joining the ranks of Canopy Growth Corp (CGC.T) and Supreme (SL.C) who have recently raised $60 million and $50 million respectively to add to their war chests.
Organigram will seek to raise $40m in a bought deal at a premium of $3.55 per share.
According to a company news release Thursday:
The Company intends to apply approximately 60% of the net proceeds from the Offering towards the build out and construction of an extension to its existing facility located at 35 English Drive in Moncton (the “35 English Drive Expansion”). The Company anticipates that the 35 English Drive Expansion will add 32,000 square feet of additional grow room area and significantly increase the Company’s cannabis production capacity by between 12,000 to 14,000 kilograms of flower per year. This portion of the net proceeds of the Offering will also enable the Company to continue with its current expansion and to supplement its planned 15,000 square foot cannabis extracts and derivatives facility which is being designed to maximize utilization of plant production and cannabis oil extraction in anticipation of the expected growth in demand for cannabis oil extracts and related products.
The marijuana industry in Canada has been subject to extreme valuations of late, with Canopy at one point hitting a valuation of nigh $2 billion a few weeks ago. Licensed producers have made judicious use of those valuations to raise money for growth and acquisitions.
— Chris Parry