Paradigm starts Organigram at buy

Paradigm Capital launched coverage of Organigram Holdings (TSXV:OGI) with a “buy” rating. The stock closed at $9.40 on April 15.

Organigram is a Canadian licensed producer of cannabis. Founded in 2013, the company produces indoor-grown cannabis for Canada’s medical and adult-use markets.

“Organigram’s investment in cultivation-optimizing technologies, synergistic international operations, and future-facing technologies, like cannabinoid biosynthesis, all demonstrate the company’s commitment to innovative, highly standardized processes to serve present and future cannabis markets,” writes analyst Rahul Sarugaser.

“This focus on technology and operation data has driven the company’s industry-leading production costs and has given rise to very healthy gross margins: a rarity among Canadian cannabis producers,” he added.

Mr. Sarugaser said the company has built a suite of high-quality, consistent cannabis products and brands to address a diversity of anticipated medical and adult-use market segments.

“Organigram’s established and escalating medical and adult-use consumer base; its multiplicity of forward-thinking strategic partnerships and collaborations; its innovative and meticulous cultivation methodologies; and its industry-leading product quality, cost of goods, and pricing, in our view, set this company in bold relief against its peers in the cannabis arena,” he said.

Mr. Sarugaser said that in these ways, “we believe Organigram is positioned to create significant value for its investors.”

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