- \n
- Combination results in #1 market share position in the Canadian recreational cannabis market1<\/sup><\/i><\/li>\n
- Catapults Organigram into the #1 position in the vape category and accelerates the Company\u2019s market share in the fast-growing infused pre-roll segment1<\/sup><\/i><\/li>\n
- Strong brand portfolio now anchored by Organigram\u2019s \u201cSHRED\u201d and Motif\u2019s \u201cBOXHOT\u201d – two of Canada\u2019s beloved cannabis brands<\/i><\/li>\n
- Highly complementary product portfolios with expanded geographic reach<\/i><\/li>\n
- Organigram gains strategically located distribution hub in Southwestern Ontario enabling numerous logistics optimization opportunities<\/i><\/li>\n
- Significant cost synergy potential estimated to be in excess of $10 million to be realized over ~24 months<\/i><\/li>\n
- Financially accretive acquisition with Motif generating approximately $86 million of LTM net revenue and adjusted EBITDA of $4.7 million2,3<\/sup><\/i><\/li>\n<\/ul>\n
TORONTO–(BUSINESS WIRE<\/a>)–
\nOrganigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI), (the “Company” or “Organigram”), a leading licensed producer of cannabis, is pleased to announce the acquisition of 100% of the issued and outstanding shares of Motif Labs Ltd. (\u201cMotif\u201d), for upfront consideration of $90 million, consisting of $50 million in cash and $40 million of Organigram common shares priced based on the 30 day trading VWAP of $2.3210 on the Toronto Stock Exchange (\u201cTSX\u201d). In addition, Motif shareholders will be entitled to receive additional contingent consideration of $10 million payable in Organigram common shares (\u201cContingent Consideration\u201d), conditional on Organigram achieving a price per share exceeding $3.2203 per share, based on the rolling 30-trading day VWAP on the TSX, within 12 months of the date of the transaction. The Contingent Consideration shall be priced at of $3.22031 per share.<\/p>\nThis press release features multimedia. View the full release here: https:\/\/www.businesswire.com\/news\/home\/20241206796726\/en\/<\/a><\/p>\n
![\"Organigram](\"https:\/\/mms.businesswire.com\/media\/20241206796726\/en\/2324853\/4\/Organigram_Motif.jpg\")
<\/p>\nOrganigram Acquires Motif (Graphic: Business Wire)<\/p>\n<\/div>\n
\n\u201cThe highly complementary acquisition of Motif establishes Organigram as Canada\u2019s largest cannabis company by market share and accelerates our vision to be a leading cannabis company across all major categories, driven by a relentless focus on the consumer of today and tomorrow,\u201d said Beena Goldenberg, CEO of Organigram. \u201cWinning in Canada, the world\u2019s largest federally legal recreational market, supported by leading brands and best-in-class operations, innovation and product development, provides the platform to unlock global opportunities as evolving attitudes towards cannabis drive regulatory changes in new and exciting markets,\u201d she added.<\/p>\n
\nMotif is a Canadian leader in the vape and infused pre-roll (\u201cIPR\u201d) categories backed by a portfolio of strong, owned brands, including the popular BOXHOT<\/i> brand. Motif’s business also includes a wholesale division and end-to-end services for external brands. Motif has repeatedly proven to be able to design, develop and launch, innovative and high-quality products at speed and scale, resulting in market growth with SKUs and brands that resonate with consumers. Motif is headquartered in Aylmer, Ontario, strategically located in the heart of Southwestern Ontario soon-to-be supported by a large distribution warehouse in nearby London, Ontario.<\/p>\n
\n\u201cMotif was founded in 2017 with a vision to leverage manufacturing expertise to succeed in the production of cannabis extracts. We are proud to say that today, not only is Motif one of Canada\u2019s largest and most efficient extractors but we have also commercialized a portfolio of leading, widely distributed brands that have unlocked leading market share positions of #1 in vapes and #3 in infused pre-rolls,\u201d said Mario Naric, CEO and Founder of Motif. \u201cThis is a landmark transaction in our industry and the Motif team is thrilled to be joining forces with Organigram to create Canada\u2019s undisputed leader with deep capabilities in all major cannabis categories.\u201d<\/p>\n
Motif Highlights<\/b><\/p>\n
- \n
- \nGrew from $35 million in net revenue in 2022 to $79 million in 2023 and has generated approximately $86 million in LTM4<\/sup><\/li>\n
- \nDelivered 15 consecutive quarters of positive adjusted EBITDA5<\/sup><\/li>\n
- \nMaintained a #1 vape position for over two years, with a current market share of 21.2%6<\/sup> supported by the strength of the BOXHOT<\/i> and DEBUNK<\/i> brands, backstopped by vape manufacturing capabilities of over 1 million units a month<\/p>\n<\/li>\n
- \nCurrently the #3 position and growing in IPRs6<\/sup> and growing market share supported by monthly IPR manufacturing capabilities of over 750k units per month<\/p>\n<\/li>\n
- \nDeep expertise and proven efficiency at various extraction methodologies such as hydrocarbon, ethanol, and CO2<\/sub><\/li>\n
- \nCapable of producing 1,350 kg of distillate per month and 400 kg of hydrocarbon derived extracts<\/p>\n<\/li>\n
- \nExtraction breadth of expertise and efficiencies support various ready-to-consume categories that require traditional inputs such as THC and CBD but also more innovative and novel products that use minor cannabinoids such as CBN, CBG and CBC<\/p>\n<\/li>\n
- \nProduction of THCA, a highly sought input to the production of the fast-growing IPR market, is also a key core capability of Motif<\/p>\n<\/li>\n<\/ul>\n
Strategic Rationale<\/strong><\/b><\/p>\n
\n\u201cOrganigram has a proven track record of executing on Canadian M&A, successfully capturing and growing market share with highly complementary acquisitions that add to our existing strengths. This acquisition of Motif is no exception,\u201d said Paolo De Luca, Chief Strategy Officer at Organigram. \u201cThis deal is about a leading public cannabis company joining forces with Canada\u2019s top private licensed producer. We are extremely excited about leveraging our combined competitive advantages and respective market positions to continue to grow in Canada and beyond.\u201d<\/p>\n
Highlights of the Combined Entity:<\/b><\/p>\n
- \n
- Propels Organigram to the #1 Canadian cannabis company by market share with a combined market share of 12.4% and unmatched category leadership across multiple categories.<\/b> Organigram captures leadership position in the vape and pre-roll categories with the opportunity to expand Motif\u2019s distribution to new markets including Quebec and Atlantic Canada. Motif holds 21.2% and 9.4% share of Canadian vape and infused pre-roll markets, respectively.7
\n
<\/sup><\/li>\n- Highly synergistic and financially accretive acquisition further driving economies of scale and a strong financial position with improving operating cash flows.<\/b> Sizable opportunity for margin expansion due to economies of scale and vertical integration opportunities such as ingredient production and use as well as logistics optimization. Significant cost synergy potential estimated to be in excess of $10 million to be realized over ~24 months.
\n<\/li>\n- Adds two strategic facilities to Organigram\u2019s existing roster of dedicated manufacturing and cultivation footprints across Canada. <\/b>Aylmer, Ontario facility provides advanced CO2 and hydrocarbon extraction capabilities in addition to increased infused pre-roll production. The facility adds monthly production of 1,350 kgs of distillate, 400 kgs of high value hydrocarbon extracts, 750k infused pre-rolls capacity, and 1 million units of vape filling capacity. The London, Ontario facility provides Organigram with a strategic location in Southwestern Ontario that will be used as a distribution hub to optimize fulfillment and shipping costs.
\n<\/li>\n- Brings together the best-in-class capabilities of two passionate teams with deep cannabis expertise who are highly focused on consumer-driven innovation<\/b>. The combination of both teams, with the support of the Product Development Collaboration, is expected to accelerate the pipeline of products to deliver a stronger, faster pace of innovation, maintaining the company\u2019s reputation for delivering on award-winning innovation in the cannabis sector.\n<\/li>\n<\/ol>\n
Canadian Recreational Market Share and Ranking by Category8<\/sup><\/b><\/p>\n
- Highly synergistic and financially accretive acquisition further driving economies of scale and a strong financial position with improving operating cash flows.<\/b> Sizable opportunity for margin expansion due to economies of scale and vertical integration opportunities such as ingredient production and use as well as logistics optimization. Significant cost synergy potential estimated to be in excess of $10 million to be realized over ~24 months.
- \nDelivered 15 consecutive quarters of positive adjusted EBITDA5<\/sup><\/li>\n
- Catapults Organigram into the #1 position in the vape category and accelerates the Company\u2019s market share in the fast-growing infused pre-roll segment1<\/sup><\/i><\/li>\n
![\"Logo\"](\"https:\/\/mms.businesswire.com\/media\/20241206796726\/en\/2324849\/3\/Organigram_Logo_New.jpg\"){kind=logo}
<\/td>\n<\/tr>\n![\"Photo\"](\"https:\/\/mms.businesswire.com\/media\/20241206796726\/en\/2324853\/3\/Organigram_Motif.jpg\")
<\/td>\n<\/tr>\n