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British American Tobacco enters cannabis through Organigram



Photo: DR | organization chart

Another tobacco company enters the race for investment in the cannabis sector, in this case British American Tobacco (BAT), which owns the brands Pall Mall, Rothmans, Lucky Strike and Camel. THE Organigram Holdings Inc., a Canadian cannabis company, made public the entry of BAT as its shareholder, which will hold close to 20% of the company's shares, in a transaction worth more than 220 million dollars.

According to anúncio carried out by Organigram, a strategic investment by a subsidiary of BAT was unveiled, where the subscription of approximately 58,3 million ordinary shares of Organigram was reported (represents a stake in the share capital of 19,9% ​​on a post-trade basis) to 3,79 Canadian dollars consummating a capital inflow of 221 million Canadian dollars of total revenue.

As part of the transaction, the companies entered into a product development collaboration agreement (PDC) and a research and development center focused on developing the next generation of cannabis products, starting with CBD (cannabidiol). The center will be located at Organigram's in-house facility in New Brunswick, which holds the necessary licenses from Health Canada to conduct research and development (R&D) activities on cannabis products.

Organigram expects the BAT investment and PDC Agreement to strengthen the company's balance sheet, accelerate its R&D program and product development activities, and strengthen its ability to enter the US and other international markets. “In our opinion, the cannabis industry is still in the early stages of product development. We believe that R&D-backed product innovation is necessary to establish a long-term competitive advantage in the cannabis industry,” said Paolo De Luca, the company's strategic director. “This strategic collaboration strengthens our ability to provide innovative and differentiated products that appeal to adult consumers, and we hope it will be transformative for Organigram and its shareholders.”

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