Organigram acquires hashish meals firm for CA $ 22 million

Canadian cannabis producer Organigram Holdings acquired cannabis food manufacturer The Edibles & Infusions Corp. (EIC) from AgraFlora Organics International and other shareholders.

Organigram paid $ 22 million Canadian ($ 17.5 million) shares in the acquisition. Up to CA $ 13 million worth of additional share payments when EIC hits milestones, including:

  • Organigram branded products will be listed for sale in Ontario or Alberta before the end of 2021.
  • A net sales and Adjusted EBITDA target for 2022.

Organigram, based in Moncton, New Brunswick, which already owns a manufacturing facility for cannabis-infused chocolate, said the acquisition would allow the company to “manufacture future confectionery products and conduct additional research and development in a dedicated facility.”

“EIC is able to manufacture a wide range of cannabis-infused products in a variety of formats and dosages, including pectin, gelatin and sugar-free soft chews (gums), toffee and caramel with novel features such as infusions, streaking and uses of fruit purees,” noted Organization chart in a press release on Tuesday morning.

Cannabis-infused food sales grew briskly in Canada last year, up 150% between the first and third quarters, according to the latest data from Statistics Canada.

Organigram assumes that the sale of EIC soft chews will begin in the fourth quarter of fiscal year 2021, which ends on August 31, “subject to the date of receipt and commissioning of certain additional devices, the completion of the quality assurance documentation and the discontinuation of the necessary equipment staff. “

EIC was co-founded by AgraFlora and James Fletcher, CEO of Canadian confectionery manufacturer Cavalier Candies, according to a press release.

The Winnipeg EIC facility measures 51,000 square feet and “uses state-of-the-art equipment to create highly customizable, precise and scalable cannabis infused products, including food.”

AgraFlora owned 43% of the business, according to a press release from the Vancouver, British Columbia-based company.

In the press release, Elise Coppens, CEO of AgraFlora said, “AgraFlora is now better positioned, with its net share of transaction proceeds, to explore new opportunities, possibly in the US.”

Organigram recently signed a CA $ 220 million contract with a subsidiary of British American Tobacco.

Organigramm’s shares are traded as OGI on the Toronto Stock Exchange and Nasdaq.

AgraFlora shares are traded as AGRA on the Canadian stock exchange.

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