Organigram On Pace To Beat Tilray And Hexo In QoQ Sales Growth As Canadian Rec. Sales Reach $275.6M

As COVID-related restrictions begin to ease across the globe, some industries are feeling the benefits more than others. When it comes to Canadian recreational cannabis sales, new Hifyre scanner data reveals a 10% improvement sequentially, noted Cantor Fitzgerald’s Pablo Zuanic in his latest industry report.

The analyst was projecting more of an accelerated growth rate compared to the second-quarter growth pace, but that didn’t happen despite cannabis shops now receiving in-store traffic.

Hifyre estimated August sales reached CA$347 million ($275.6 million), representing

2% month-over-month growth, after hitting CA$339 million in July (which was up 7% from June). The average monthly sales for both months amount to CA$343 million, which is 10% higher than the second quarter monthly average, explained Zuanic.

“If we assumed September is flat month-over-month, this would still imply about 11% sequential quarter-over-quarter growth,” the analyst detailed, adding that this is neither good nor bad, just not “accelerated” as he was expecting.

The report also revealed that pre-rolls have driven growth accounting for 24% of sales, improving 27% over the second quarter monthly average. Flower sales were up only 2%, accounting for almost half of the sales, while vapes (13% of sales) and edibles (5% of sales) jumped 9% and 20%, respectively. Concentrates sales improved 24% and accounted for 4% of industry sales.

Performance By Company

Industry giants had various performances, with Organigram OGI and Auxly 

CBWTF standing out and outperforming with 30% and 22%, respectively, Zuanic highlighted.

• Cronos Group CRON – Up 50%
• Organigram – Up 30%;
• Auxly – Up 22%;
• Tilray TLRY – Up 6%;
• HEXO HEXO – Up 7%;
• Village Farms Intl VFF – Up 7%;
• Canopy Growth CGC – Down 12% ;
• Aurora Cannabis ACB – Down 16%;
• Sundial Growers ( NASDAQ: SNDL) – Down 4%.

“In terms of companies reporting July or August quarters, we calculate Organigram is on pace for a significant beat with August quarter sales up 44% sequentially, while HEXO (July quarter) and Tilray (August) point to low single-digit pro forma growth,” noted Zuanic.

Market Share By Company 

• Tilray – 15.3% share (consisting of Aphria’s 11.1% and Tilray’s 4.2%);
• HEXO (including Hexo and recently acquired Redecan, Zenabis and 48North) - 12.7% share;
• Canopy Growth (counting Supreme) – 10.2% share;
• Organigram – 7.1% share;
• Village Farms Intl – 7.0% share;
• Auxly – 5.3% share;
• Cronos Group – 4.2% share;
• Aurora Cannabis – 3.9% share;
• Sundial Growers – 1.9% share. 

Price Action 

Organigram’s shares were trading 0.75% lower at $2.63 per share during Tuesday's pre-market session. 

Photo: Courtesy of Visual Stories || Micheile on Unsplash