Organigram Holdings Inc. (OGI.V) reported a third-quarter loss as revenue slipped amid lower recreational pot reorders from Ontario and British Columbia, but the cannabis company anticipated growth ahead as edibles and new retail stores come online.
The Moncton, N.B.-based licensed producer reported a $10.2-million loss for the three-month period ended May 31, compared with a profit of $2.8 million a year earlier.
Organigram's net revenue during its financial third quarter totalled $24.8 million, down from $26.9 million in its second quarter, but up from $3.4 million a year earlier -- before legal recreational cannabis sales began.
The decrease came as sales growth in Alberta and Atlantic Canada was offset by lower reorders from Ontario, after the province made a large number of orders in the previous quarter in advance of opening retail stores.
"Not having that replenishment in Q3 had an impact," Organigram's chief executive Greg Engel said on a conference call. "And so, while Alberta and Atlantic Canada grew, Manitoba grew for us as well... The B.C. market has been more challenging."
He noted that B.C. is only now adding some additional retail stores but also the province's dried flower market has been difficult to penetrate due to its "unique nature," but did not elaborate further.
The quarter excluded shipments to Quebec, as well, which occurred after the quarter ended, the company added.
The cannabis producer said the quarterly loss amounted to nearly seven cents per share, compared with a profit of three cents per share in the same quarter a year ago.
It sold approximately 3,926 kilograms of dried cannabis flower and approximately 5,090 litres of cannabis oil in its most recent quarter.
Douglas Miehm, an analyst with RBC Capital Markets, said Organigram's latest revenues came in below its estimate of $28.2 million. He added that its quarterly results reaffirmed their view that Organigram could face difficulties delivering revenue growth and margin growth over the next one or two quarters.
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