Value Investors: 1 Cheap Cannabis Stock to Own

Organigram Holdings Inc. (TSX:OGI)(NASDAQ:OGI) has huge potential due to the company’s broad offering of medical cannabis products.

| More on:
Cannabis stocks have fallen.

Organigram Holdings (TSX:OGI)(NASDAQ:OGI) is a leading Canadian licensed producer of high-quality cannabis and cannabis-derived products in Canada. The company is focused on producing high-quality, indoor-grown cannabis primarily for adult recreational consumers in Canada and the medical market as well as developing international business partnerships to extend the company’s global footprint.

High-quality products and brands

The company has been working on establishing strong brands for use in the adult-use recreational market place and is seeking to create a portfolio of diverse brands and products. The company’s adult-use recreational brands strategy reflects Organigram’s views about current and potential consumers, the industry, future product development, and opportunities for growth.

Huge recreational cannabis opportunity

The company developed an initial portfolio of adult-use recreational brands to specifically meet the evolving needs of Canada’s recreational use market. The suite of brands created by the Company for Canada’s adult-use market include Edison Cannabis, Trail Blazer, and SHRED. Each brand is unique to a specific customer demographic with a product offering designed to meet the needs of the target audience, including as to strength and price point.

Medical cannabis

The company received a medical cannabis certification and now offers organically grown medical cannabis under the certification body. The company offers a broad offering of medical cannabis products, including cannabis flowers, cannabis oils, and vaporizers to suit a variety of preferences.

New product development

The company plans to bring a variety of cannabis-based products to market. Such products are at various stages of development, including edible products, vape pens, chocolate, and dissolvable powdered beverages. These products require 60-day advance new product notifications to be submitted to Health Canada before they can be sold.

Efficient operations

The company has assembled a capable management team with significant experience in the management and growth of successful enterprises. Coupled with operational experience, the company is a cost-competitive producer of cannabis, owing to various operational cost-saving attributes such as competitive power costs and competitive labour costs.

Further, the company has a facility that maximizes real property square footage through the use of tiered grow rooms.

Other cost-saving attributes include competitive real property costs, the adoption of various efficiencies and access to various government assistance programs. Substantially all of the company’s revenue is derived from the sale of cannabis, cannabis product, and cannabis plant material produced, which is cultivated and processed by the company.

Capital markets risk

An economic downturn of global capital markets would make the raising of capital by equity or debt financing is difficult. The company is dependent upon the capital markets to raise additional financing in the future, while it establishes a user base.

As such, the company is subject to liquidity risks in meeting development and future operating cost requirements in instances where cash positions are unable to be maintained or appropriate financing is unavailable. These factors could impact the company’s ability to raise equity or obtain loans and other credit facilities in the future and on favourable terms.

Despite risks, Organigram has huge potential due to the company’s broad offering of medical cannabis products.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium service or advisor. We’re Motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer, so we sometimes publish articles that may not be in line with recommendations, rankings or other content.

Fool contributor Nikhil Kumar has no position in any of the stocks mentioned. The Motley Fool owns shares of and recommends OrganiGram Holdings. The Motley Fool recommends OrganiGram Holdings.

More on Cannabis Stocks

A cannabis plant grows.
Cannabis Stocks

Canopy Growth Stock Is Rising But I’m Worried About This One Thing

Canopy Growth stock is soaring as the legalization effort makes real progress in both Germany and the United States.

Read more »

Cannabis grows at a commercial farm.
Cannabis Stocks

Why Canopy Growth Stock Could Double in 2024

Canopy Growth (TSX:WEED) stock saw its share more than double in the last two weeks. So, can it do it…

Read more »

Coworkers standing near a wall
Cannabis Stocks

Why Is Everyone Talking About Canopy Growth Stock?

Canopy Growth stock (TSX:WEED) saw shares surge in the last two weeks for a variety of reasons investors can dig…

Read more »

Pot stocks are a riskier investment
Stocks for Beginners

Why Shares of Cannabis Stocks Are Rising This Week

Cannabis stocks received a boost this week as the White House urged the drug enforcement administration to reschedule the drug.

Read more »

A person holds a small glass jar of marijuana.
Stocks for Beginners

Why Canopy Growth Stock Jumped 16% on Wednesday

Canopy Growth stock (TSX:WEED) is up 16% on Wednesday, adding to a surge of 60% growth in the last week…

Read more »

Pot stocks are a riskier investment
Cannabis Stocks

Is the Worst Over for Canopy Growth Stock?

Down 99% from all-time highs Canopy Growth stock has burnt investor wealth and remains a high-risk investment.

Read more »

Pot stocks are a riskier investment
Cannabis Stocks

Steer Clear: This Stock Spells Trouble

A newly listed cannabis stock is outperforming in 2024 but investors should stay clear to avoid trouble and losses.

Read more »

Cannabis stocks have fallen.
Cannabis Stocks

2 Best Marijuana Stocks to Buy This Month

Marijuana stocks in the U.S. such as Green Thumb and Curaleaf can help you deliver outsized gains to investors in…

Read more »