(Image: Evie Fjord on Unsplash)
Moncton-based medical and recreational cannabis producer Organigram is looking to strengthen its position in the growing edibles market with its new acquisition.
Organigram Holdings Inc., the parent company of Organigram Inc. has announced it has acquired all of the issued and outstanding shares of The Edibles & Infusions Corporation (EIC) for consideration of $22-million, plus up to an additional $13-million in shares payable upon the EIC business achieving certain earnout milestones.
The EIC acquisition will broaden Organigram’s edible product offerings and provides an operational footprint in Western Canada.
EIC was co-founded by AgraFlora Organics International Inc. and James Fletcher, who is the CEO of Cavalier Candies, one of Canada’s oldest confectionery companies. EIC constructed a purpose-built, highly-automated, 51,000-square-foot manufacturing facility located in Winnipeg, Manitoba.
The facility employs state-of-the-art equipment is designed to produce highly customizable, precise, and scalable cannabis-infused products, including edibles.
EIC currently holds a Research License and a Standard Processing License issued under the Cannabis Act and regulations and is in the process of completing its application to add the activity of the sale of Cannabis 2.0 products to its Standard Processing License. Until EIC receives its Sales License, it is capable of manufacturing products in bulk for further processing, review and sale by Organigram or third-party licensed producers, for which it may provide white-label services.
“EIC is an important acquisition to ensure Organigram is consistently at the forefront of cannabis product development. The integration of EIC will continue to provide our consumers access to innovative cannabis products while leveraging Organigram’s national sales and distribution network,” said Greg Engel, CEO of Organigram, in a release.
“EIC’s commitment to research and development, continuous innovation, and its confectionery market leadership strategically aligns with Organigram’s domestic and international strategy.”
The edibles category currently represents approximately 4.4 percent of the Canadian recreational cannabis market of which soft chews are collectively are around 75 percent of that. It’s considered a rapidly growing segment of the overall Canadian market and Organigram expects the Canadian market to gradually grow towards the 12-15 percent and 85 percent edible and soft chew (and related formats) category share seen in the U.S. as new product offerings are introduced, and as regulatory changes unfold.
EIC’s confectionary focus complements Organigram’s industry-leading cannabis-infused chocolate production capabilities and allows Organigram to manufacture future confectionary product lines and undertake additional R&D at a facility dedicated for this purpose. EIC has the capability to produce a wide range of cannabis-infused products in various formats and dosages including pectin, gelatin, and sugar-free soft chews (gummies), toffee and caramel with novel capabilities such as infusions, striping and the possibility of using fruit purees.
“Combining our complementary management expertise and business strengths will result in an integrated entity that is poised for further growth in Canada as well as globally in an expanding market for cannabinoid-infused products,” said James Fletcher, president of EIC in a statement.
“Our facility at EIC was designed to handle both smaller-batch artisanal manufacturing but, more importantly, large-scale nutraceutical-grade high-efficiency manufacturing with a view to gaining EU GMP certification as well. Indeed, the facility design and all of the equipment specifications were completed with that in mind.”
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