What happened

Shares of OrganiGram Holdings (NASDAQ: OGI) has increased by over 40% in pre-market today,  A few hours ago, OrganiGram announced that they received a $175.81 million strategic investment from a wholly-owned subsidiary of BAT, what's going on?


Source: Slideshow

What look for

OrganiGram said on Thursday that they received a $175.81 million strategic investment from a wholly-owned subsidiary of British American Tobacco (BAT). Greg Engel, Chief Executive Officer of Organigram said in the announcement:

"This is a tremendous milestone in the evolution of Organigram. It is instrumental in advancing our commitment to offering consumers innovative cannabis products and to furthering our long-term international strategy. We have been extremely selective about aligning with a strategic partner and, in BAT, we’ve found a leading consumer goods business with sophisticated management, innovative product platforms, an impressive dedication to research and development, deep consumer insights, regulatory expertise and a commitment to responsible stewardship and consumer safety among many other enviable attributes. This collaboration is the culmination of extensive discussions and workshops and in-depth due diligence.”

The announcement also pointed out that a "Center of Excellence" will be established to focus on developing the next generation of cannabis products. The Center of Excellence will be located at Organigram’s indoor facility in Moncton, New Brunswick, which holds the Health Canada licenses required to conduct research and development activities with cannabis products. 

What that means

In the cannabis industry recently, frequent moves are being staged, including acquisitions, mergers and acquisitions, issuance of new shares, and expanding market. But investors are still most concerned is that whether the cannabis industry can get support at Federal level, after all, the legalization of cannabis will bring huge profits to the industry. Obviously, it's unclear, so, investors are buying cannabis stocks with cautious attitude.

Disclaimer: The opinions expressed in this article are solely those of the featured analysts. The content is intended to be used for informational purposes only. It is very important to do your own analysis before making any investment.