Organigram Holdings Inc. stock soared 30% during extended trading Tuesday, as the Canadian weed company reported fiscal first-quarter revenue that jumped two-fold, beating Wall Street estimates.
Net revenue rose to C$25.2 million ($19.3 million) from C$12.4 million a year ago, which beat the consensus estimate of C$21 million, according to analysts polled by FactSet. The previous year’s quarter, which also ended the last day of November, included just over a month of recreational cannabis sales, which began in Canada on Oct. 17, 2018.
Organigram OGI, -3.14% OGI, -0.44% reported a net loss from continuing operations of C$900,000, which amounts to $0.006 a share, versus net income from continuing operations of C$29.5 million, or C$0.195 a share.
FactSet did not poll enough analysts to form a reliable per-share consensus. For the fiscal second quarter, analysts model sales of C$24.5 million.
Organigram said that roughly C$16.7 million of sales were to the adult-use and medical cannabis markets in Canada and C$9.5 million to the wholesale and international markets. The company said the cash cost per gram was C$0.66 and the “all-in” cultivation costs were C$0.87 for its dried flower.
“Our team was also successful in shipping the first of our Rec 2.0 products as planned and on schedule in December of 2019,” Organigram Chief Executive Greg Engel said in a statement, referring to the launch of edibles, vapes and other products that were illegal in Canada until late last year. “We also look forward to the launch of the remainder of our vape pen portfolio followed soon after by our premium cannabis-infused chocolate products.”
Under the new regulatory environment in Canada, Organigram said it plans to pursue vape pens and edible products, which it says are the two most popular derivative-products forms in the U.S., based on state sales data.
Organigram said that it expects “additional retail store openings” in Ontario and Quebec, the most populous two provinces of Canada, and that it was adjusting distribution of vapes in several provinces, such as Alberta, because of bans on such cannabis products.
The company reported that it had C$34.1 million in cash and short-term investments at the end of the fiscal first quarter.
Organigram stock has lost just over half of its value in the past year, with the S&P 500 index SPX, -0.15% rising 15.5%. The ETFMG Alternative Harvest ETF MJ, +2.60% dropped 44% in the past year. Organigram shares closed down 3.1% to $2.16 on Tuesday during the regular session.