Marijuana - Companies & Stocks

[Hunchbackgeek]

TSXV:OGI The case for OrganiGram......

One of OrganiGram's strongest features is its extremely low cost of production, stemming from the use of a three-tiered growing system. This year, for instance, the company has already lowered its production cost from 2.65 Canadian dollars to CA$0.80 per dried flower. Equally as impressive, OrganiGram's selling price per gram of dried flower has been among the bottom of the pack at a little over CA$7.00 so far this year.

Larger competitors like Canopy Growth Corporation (TSX:WEED) (NYSE:CGC) have consistently been selling their dried-flower products at far higher prices of more than CA$8.30 per gram this year -- giving OrganiGram a distinct pricing advantage over some of its chief rivals.

Interestingly enough, though, OrganiGram's lower prices haven't meant a drop-off in quality. OrganiGram's products took home several accolades at the Canadian Cannabis Awards in 2017, and the company has been nominated for another nine awards this year. In short, OrganiGram has a proven track record of producing premium cannabis products in a cost-efficient manner.

Another feather in OrganiGram's cap is the company's expanding international footprint. OrganiGram kicked off its invasion of Australia not long ago through its medical cannabis partner Cannatrek Medical, resulting in shipments of both dried flower and cannabis oil earlier this year. The company has also signed an agreement with Alpha-cannabis to begin exporting medical-grade marijuana to the all-important German market. That's a major step forward, as Germany is widely expected to become the most valuable market outside of North America.

On the valuation front, OrganiGram does have some short-term issues. At present levels, the company's stock is trading at a monstrous price-to-sales ratio of 60 right now. The good news, though, is that OrganiGram's forward-looking price-to-sales ratio (2019) is expected to improve markedly to 6.3, thanks to a projected upswing in sales emanating from the legalization of recreational marijuana in Canada. While that's still not a cheap valuation in classic terms, OrganiGram's stock is among the lowest priced within its high-flying peer group.

https://www.fool.com/investing/2018/10/29/better-buy-organigram-holdings-inc-vs-aurora-canna.aspx