TORONTO — Organigram Holdings Inc., a leading licensed producer of cannabis, closed the third and last of three tranches of a C$124,559,674 follow-on strategic equity investment by BT DE Investments Inc., a wholly owned subsidiary of British American Tobacco plc (BAT). The investor acquired 7,562,447 common shares and 5,330,728 Class A preferred shares of the Organigram at a price of C$3.2203 per share for gross proceeds of C$41,519,891 (about USD$28,955,918.44).
“With all three tranches of the Jupiter private placement now funded, Organigram has approximately C$57.8 million to further invest from its Jupiter strategic investment pool after completing investments of C$21 million in Sanity Group and C$2.7 million in Open Book Extracts,” said Paolo De Luca, chief strategy officer at Organigram. “Opportunities in the space have only improved with cannabis valuations at historically weaker levels and many cannabis and hemp companies unable to access cost-efficient growth capital despite fundamentally strong businesses. We look forward to continuing to roll out our international and differentiated product strategy supported by the Jupiter platform.”
Most of the Investment is being used by Organigram to fund a strategic investment pool named Jupiter. The Jupiter Pool was designed to accelerate Organigram’s international growth ambitions and targets investments both overseas and in the United States. All potential investments will undertake rigorous legal compliance and due diligence processes.
Early warning disclosure
Immediately following the closing of the Third Tranche, the Investor beneficially owned 40,134,389 common shares and 13,794,163 preferred shares, representing 30% of the issued and outstanding common shares and 100% of the preferred shares, in each case on a non-diluted basis.
The Investment was undertaken in three tranches, each subject to the satisfaction of certain conditions. Under the first tranche, which closed on January 23, 2024, 12,893,175 common shares were issued to the investor. Under the second tranche, which closed on August 30, 2024, 4,429,740 common shares and 8,463,435 preferred shares were issued to the investor.
Approval by the company’s shareholders, clearance under the Competition Act (Canada), applicable stock exchange approval and certain other conditions to closing of each of the first, second, and third tranches were satisfied in connection with the closing of the virst tranche. The aggregate subscription price of the shares acquired by the investor as part of the tranches was C$124,559,674.36.
The preferred shares are non-voting convertible preferred shares of the company convertible at the option of the investor without payment of any additional consideration (subject to the 30% threshold). The preferred shares are convertible initially on a one-for-one basis into common shares, provided however that the conversion rate will increase at a rate of 7.5% per annum commencing from the initial date on which preferred shares are issued, until such time as the holders of preferred shares would beneficially own, or exercise control or direction over, directly or indirectly, with their respective affiliates, associates, related parties and any joint actors, after giving effect to the conversion of the preferred shares, 49.0% of the aggregate number of common shares issued and outstanding.
About Organigram Holdings Inc.
Organigram Holdings Inc. is a NASDAQ Global Select Market and TSX listed company whose wholly owned subsidiaries include Organigram Inc., a licensed cultivator of cannabis and manufacturer of cannabis-derived goods in Canada, and Motif Labs Ltd., a licensed cannabis processor. 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, Tremblant Cannabis, Trailblazer, BOXHOT and DEBUNK.
