Benzinga Interview: Organigram CEO Beena Goldenberg Discusses Company Performance And Canadian Cannabis Market

OrganiGram Holdings Inc OGI OGI CEO Beena Goldenberg recently spoke with Benzinga to discuss the company's ongoing growth and Q2 success. Crediting the team for persevering during the pandemic, the CEO said Organigram is focusing on utilizing its recent success to further establish itself across Canada's markets and various buyers.

Continuing Strong Performances In Early 2022

Goldenberg told Benzinga that Organigram has substantial momentum in early 2022, noting a market share increase that grew from 4.4% in Q1 2021 to 7.5% the same period this year.

Among the factors making the previous quarter a success were the company's two value brands: the milled flower Shred and the 28-gram offering Bag o' Buds. Goldenberg credits product consistency and price points helping drive consumer interest, leading Shred to be the top searched brand in Ontario 13 of the past 14 months.

"It's about finding the right value equation with consumers," she said, noting that a successful balance can help convert unlicensed market consumers to buying from licensed LPs.

The CEO highlighted January figures from HiFyre that saw market shares increase to 8.4% in the adult-use market as Organigram vaulted into the third-largest LP in Canada.

Market growth can be partially attributed to the company's attempt to appeal to every consumer segment.

"We're building out our portfolio brand so that we have different brands that meet different consumers in the price spectrum, from the value all the way to premium craft flower," Goldenberg said.

She credited the company's in-house R&D team for fueling product development. Internal efforts are joined by a $175 million investment from British American Tobacco PLC BTI that was announced in March 2021.

Calling the investment a game-changer, Goldenberg said the company is using BAT's investment to "build out our infrastructure and invest in not only today's R&D but the future."

Capital Needed To Contend In Canada

As prospects look bright for the company, Canada's overall market outlook continues to look less than positive in the eyes of various sector analysts.

The projection comes despite select forecasts expecting sales to reach roughly CA$4.8 billion in 2022, according to MJBizDaily.

Still, profits and stability remain pressing a challenge for LPs in 2022. Goldenberg noted price compression and impending consolidation as two critical areas impacting the market.

She predicts that price compressions should stabilize when the licensed market pricing comes closer to unlicensed goods. At the same time, the company and other leading LPs will continue to use their liquidity to heavily invest in automation and increasing operations.

Those unable to contend are likely to be part of the ongoing market consolidation that Goldenberg said is sure to happen.

"We've certainly had the ability to make it through because we have the means to invest in efficiencies and automation." 

At the same time, she said lawmakers must improve regulations that help LPs grow the market while bringing in new customers.

"We have to alleviate some of the commercial pinch points," Goldenberg said, highlighting an excise tax on value products as a prime example.

Additional Growth Slated For 2022

Organigram's multi-pronged 2022 effort is underway, with plans to expand across Canadian distribution and sales channels.

New cultivars are part of the new rollout, with Goldenberg saying consumers can expect various new additions to the line over the next 12 months. The production of improved potency strains and products is expected to be joined by more accessible product information.

"You're going to see more terpenes on the label because we think that's where consumers are going." 

Investments in facilities are on tap as the company strives to meet its increased demand. Goldenberg said Organigram currently has a "good problem" where demand can constrict supply.

She highlighted the April 2021 acquisition of Edibles & Infusions Corporation and Laurentian Organic Inc. as keys to further establishing brand presence in Western Canada and Quebec. Efforts are also underway to increase the company footprint in British Columbia.

"We see the opportunity to continue to build that distribution across the country," Goldenberg concluded.