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Organigram Stock Falls After Cannabis Company Lowers Q4 Guidance

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Organigram Stock Falls After Cannabis Company Lowers Q4 Guidance

Organigram Holdings Inc. (NASDAQ: OGI) (TSX: OGI) issued guidance Monday for its fiscal fourth quarter and full-year 2019.

The company is scheduled to report the results Nov. 25.

For the fiscal full-year 2019, the company projected net revenue of CA$80.4 million ($60.7 million) and positive adjusted EBITDA.

For the fourth quarter, it expects to post net revenue of around CA$16.3 million versus $24.8 million in the previous quarter.

The projected fourth-quarter revenue is based on CA$20 million in quarterly shipments and around CA$3.7 million in provisions for product returns and pricing adjustments, the company said.

Around CA$1.6 million of packaging and inventory adjustments and lower fourth-quarter net revenue may result in a negative adjusted EBITDA for the quarter, according to Organigram. 

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“While Q4 2019 did not meet our overall expectations, we have not only emerged as one of the national leaders in the industry with significant growth expected in net revenue and strong market share, we expect to report positive adjusted EBITDA for the year,” CEO Greg Engel said in a statement.

“And we remain relentlessly focused on running a profitable business which earns attractive returns on investment for our shareholders over the near and long term. We are encouraged by Ontario’s recent announcement to expand the retail network and believe this should be an important catalyst to drive further growth for us and the industry as a whole.”

Organigram shares were down 11.95% at $2.98 at the time of publication. 

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