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- 📈 OGI Invests In Germany 📈
📈 OGI Invests In Germany 📈
Anthony Varrell
June 26, 2024
GM Everyone,
History seems to of repeated itself yesterday for the millionth time when a double digit green day (Monday) was followed up by a slow grind back down to where we started. Seeing a patten yet? This is one of the big frustrations of most of the participants that are still here in cannabis land. Its a constant one step forward four steps back. But hey it has to improve sometime. Right?
Happy Hump Day.
Today’s letter can be read in 7 minutes and 52 seconds.
What's Driving the Market Today?
Stock futures climb after S&P 500 ends 3-day decline:
Aussie dollar jumps 0.5% as Australian inflation hits 6-month high.
U.S. markets await Fed's PCE inflation update on Friday.
Treasury yields nudge higher amid heavy debt sales.
Nvidia rebounds 7%, FedEx rallies 15% overnight.
Big U.S. banks set for cautious shareholder payouts after stress tests.
💸 High Impact
Organigram Invests in Germany
The What - Organigram Holdings Inc. (NASDAQ: OGI, TSX: OGI) has made a significant investment in Sanity Group, a leading German cannabis company. This €14 million (~C$21 million) investment consists of an €11.5 million unsecured convertible note and a €2.5 million equity stake, setting the stage for both immediate and long-term growth in the European cannabis market.
This partnership is significant, as it not only includes a financial stake but also a new supply agreement. Sanity Group is set to purchase higher volumes of dried flower from Organigram, contingent upon the EU-GMP certification of Organigram’s Moncton facility. This agreement aims to commercialize Organigram’s brands and intellectual property in Germany, leveraging Sanity Group’s distribution network.
With total sales projected to reach around USD$3.7 billion by 2027, the market potential is immense. The legal reforms in Germany are expected to shift consumers from the illicit market to the legal market, increasing medical cannabis prescriptions by 30-50% since April 1, 2024. This trend underscores the importance of Organigram’s timely entry into the market.
The Why - The strategic partnership with Sanity Group provides a pathway for Organigram to introduce its brands and products into the European market, particularly as Sanity Group holds a 10% market share in the German medical cannabis market and is expanding into the recreational sector. The collaboration supports Organigram’s ambition to become a global cannabis leader, utilizing Sanity Group’s expertise and distribution network.
Organigram’s CEO, Beena Goldenberg, remarked on the significance of this partnership: “Our investment in Sanity Group establishes a significant European footprint for us. Organigram benefits from Sanity’s expertise and insights in the German and other European cannabis markets. This has the potential to provide a pathway for us to launch our own brands and industry-leading IP through Sanity’s distribution network. This relationship also bolsters our European revenue generation through a significantly expanded commercial agreement.”
Sanity Group’s participation in the Swiss recreational cannabis pilot program and plans for retail expansion in Switzerland highlight further growth potential. Organigram’s option for an additional €3 million investment under certain conditions could enhance its ownership and influence in the European cannabis industry, paving the way for increased market penetration.
My .02 - Organigram is one of those Canadian LPs that have withstood the test of time and are really making something out of themselves later in life. This is a big investment for them across the pond into Sanity Group, which is a "leading German cannabis company"—their words, not mine. The company has a network of over 2,000 pharmacies and 5,000 physicians with an approximate 10% share of the German cannabis market. Well, hello there, Sanity Group. This sounds like a stellar investment for OGI, albeit to the tune of C$21 million in the form of an unsecured convertible and minority equity stake.
📈 Dog Walkers
Brazil Beat Us
Yes, you read that right. Brazil beat us. The Supreme Court of Brazil decriminalized possession of cannabis for personal use. The vote was cast on Tuesday and won by a majority on the 11-person court. One of the major points made for enacting this change was to reduce the massive prison population that is weighing down the country.
🗽Brazil ranks behind the U.S. and China in countries with the highest prison populations, according to the World Prison Brief, a database tracking such figures.
RIV Capital Strengthens Leadership Team
RIV Capital (CSE: RIV) (OTC: CNPOF) has announced the appointment of David Vautrin as Chief Retail Officer (“CRO”) of RIV Capital to strengthen its senior leadership team in preparation for an anticipated transformational merger. The company aims to enhance its strategic capabilities and drive future growth in the competitive cannabis market.
Billboard Ban In 8 Mile
Cannabis companies have put up so many billboards around Detroit that the city council now wants to have a hearing on getting rid of them. This is why we can’t have nice things, guys. If they are so saturated that people are taking that much notice, and the one guy they chose to interview has so many around Detroit he’s “lost count”. Houston, we have a problem. Like the saying goes. Everything in moderation.
🔢 Number O.T.D.
$431,300,000
That is the top of the range estimate for how much tax revenue the adult use cannabis market in Florida could bring in per year. That seems like a pretty healthy number that could be put to good use.
🗞️ The News
📭 Research
Initiating Coverage: Green Thumb Industries - Download Here
Reconfirming Buy Rating: MariMed - Download Here
Initiating Coverage Of Verano Holdings Corp. - Download Here
Initiating Coverage: Trulieve Cannabis - Download Here
📺 YouTube
TDR Tours a High Tide Canna Cabana
What we covered:
✅ Join us as TDR Co-Hosts Shadd Dales and Anthony Varrell tour a High Tide Inc. (NASDAQ: HITI, TSXV: HITI) Canna Cabana in Toronto, Canada. High Tide has been significantly growing its revenue and earnings. What is behind this success? Shadd and Anthony will share insider observations from their tour.