Fully completed Phase 1, 2 and 3
cultivation facilities at Moncton campus bring target dried flower
equivalent production to 36,000 kg/annum
MONCTON, NB,
July 23, 2018
/CNW/ - Organigram Holdings Inc. (TSX VENTURE: OGI)
(OTCQB: OGRMF), the parent company of Organigram Inc. (the
"Company" or "Organigram"), a leading licensed producer of medical
marijuana based in Moncton, New
Brunswick, is in the final stages of planting the remaining
three of the sixteen three-tier Phase 3 cultivation rooms which
have been licensed by Health Canada. In total, the Company's Phase
3 expansion has increased Organigram's target dried flower
equivalent production capacity from an estimated 22,000 kg/annum
(Phases 1 and 2) to 36,000 kg/annum (Phases 1, 2 and 3).
Staggered harvests from Phase 3 are expected to begin in
late August. The licensing of Phase 3 does not require a new sales
license as this expansion is part of the existing Moncton
facility. The additional capacity will help ensure product is
available for sale when the adult recreational market
launches.
In addition, Organigram has received licensing on a second
harvest room which allows the Company to automate its harvesting
process. The Company has also received licensing on new automated
potting and waste shredding rooms.
"We are pleased to successfully complete our latest
expansion project on time and on budget to meet the needs of the
existing domestic and international medical market as well as the
launch of the recreational adult-use market in Canada on October 17,
2018," said Greg Engel, CEO, Organigram. "As a
high-quality, indoor producer we are well positioned to deliver a
consistent product across multiple SKUs and in meaningful volumes
to wholesalers and retailers across Canada."
Phase 4 Expansion and Operations Update
The Company also recently broke ground on its Phase 4
expansion project which will be completed over three different, but
concurrently constructed, stages in 2018 and 2019. Phase 4a (31
grow rooms) will come online in April of 2019, increasing the
Company's target production capacity to 62,000 kg/yr. Phase
4b (32 grow rooms) is expected to be
ready by August of 2019, increasing the target production capacity
to 89,000 kg/yr.
Construction for Phase 4c (28 grow rooms), which will
bring target production capacity up to 113,000 kg/yr., is scheduled
to begin in January 2019. The rooms
will be available to Organigram by October of 2019.
The estimated cost of constructing Phases 4a and
4b (including all supporting
mechanical rooms) is approximately $70
million. The estimated cost of Phase 4c is $40 million. Included in the cost of the Phase 4a
and 4b budget is a $4 million dedicated substation with peak power
capacity of 40 megawatts.
Organigram has sufficient cash on hand to fund all three
stages of Phase 4 expansion and expects to be cash flow positive
from operations at the outset of the launch of the adult
recreational market launch.
The Company is also in the process of commissioning
automated dried flower and oil packing and labelling lines.
Organigram anticipates delivery of a bespoke automated pre-roll
machine as well as a fully-integrated packaging and labeling line
for pre-rolls in August, well in advance of providing initial
shipments for the adult recreational market launch.
Future Expansion of Moncton Campus
In addition to the expansion of the Organigram facility,
the Company's Moncton campus continues to grow. On July 13, 2018, the Company completed the purchase
of approximately 9.1 acres located across the road from its current
production facility for $640,000.
The Company also will have at its disposal approximately
58,000 sq ft of interior space that it already owns and is
currently leasing to a third-party from Q1-2019 onwards once the
tenant relocates.
The aforementioned real estate can be used in the future
for purposes which may include an edibles facility or further
production expansion depending on the Company's strategic review of
market conditions.
About Organigram Holdings
Inc.
Organigram Holdings Inc. is a TSX Venture Exchange listed
company whose wholly owned subsidiary, Organigram Inc., is a
licensed producer of cannabis and cannabis-derived products in
Canada.
Organigram is focused on producing the highest-quality,
indoor-grown cannabis for patients and adult recreational consumers
in Canada, as well as developing
international business partnerships to extend the company's global
footprint. In anticipation of the legal adult use recreational
cannabis in Canada, Organigram has
developed a portfolio of brands including The Edison Cannabis
Company, Ankr Organics and Trailer Park Buds. Organigram's primary
facility is located in Moncton, New
Brunswick and the Company is regulated by the Access to
Cannabis for Medical Purposes Regulations
("ACMPR").
Neither TSX Venture Exchange nor its Regulation
Services Provider (as that term is defined in policies of the TSX
Venture Exchange) accepts responsibility for the adequacy or
accuracy of this release.
This news release contains forward-looking information
which involves known and unknown risks, uncertainties and other
factors that may cause actual events to differ materially from
current expectations. Important factors - including the
availability of funds, consummation of definitive documentation,
the results of financing efforts, crop yields - that could cause
actual results to differ materially from the Company's expectations
are disclosed in the Company's documents filed from time to time on
SEDAR (see www.sedar.com). Readers are cautioned not to place undue
reliance on these forward-looking statements, which speak only as
of the date of this press release. The Company disclaims any
intention or obligation, except to the extent required by law, to
update or revise any forward-looking statements, whether as a
result of new information, future events or otherwise.
SOURCE OrganiGram