Licensed cannabis producer Organigram Holdings (NASDAQ:OGI) rallied strongly in pre-market trading today after announcing a C$124.6 million “follow-on strategic equity investment” from BT DE Investments, a subsidiary of British American Tobacco or BAT (NYSE:BTI).
As a part of this investment, BAT will subscribe to 38.7 million shares at a price of C$3.22 per share across three tranches. The gross proceeds from this share issuance are expected to be C$124.6 million. Organigram will use a majority of this investment to create a strategic investment pool called Jupiter.
With this strategic investment pool, Organigram said it will “target investments in emerging cannabis opportunities that will enable [the company] to apply its industry-leading capabilities to new markets.”
As a part of this investment, BAT will increase its ownership of voting common shares to 30% and its overall equity stake in OGI to 45% (including non-voting Class A Preferred Shares).
Beena Goldenberg, CEO of Organigram, commented, “This [investment] deepens the strategic partnership between Organigram and BAT, and we look forward to continuing to leverage BAT’s global capabilities and scientific expertise.”
Price Movement of OGI Stock
OGI stock has not performed well year-to-date and has tanked by more than 60%.
