Organigram Holdings Seeks C$500 Million Financing Approval

A potential M&A spree is brewing, though investors could see their shares diluted.

Organigram Holdings Inc. (Nasdaq: OGI) (TSX: OGI) is paving the way to distribute up to C$500 million in securities.

Organigram filed a preliminary short form base shelf prospectus with Canadian securities commissions, the company announced Monday.

Upon approval, Organigram would be authorized to offer a mixture of financial tools, such as common shares and debt securities, over a 25-month period.

The Nasdaq- and TSX-listed cannabis producer also filed a corresponding registration statement with the U.S. Securities and Exchange Commission, which is currently pending approval.

The company noted in the filing that “any additional sale or issuance of Common Shares or other Securities that are convertible or exchangeable into Common Shares” will dilute the voting power and economic interest held by current investors in the company. Additionally, if option holders buy and then sell their stocks, the increased availability could potentially lower the stock’s price.

Expansion updates

Organigram also said in its last earnings release that research and development efforts are seeing gains both from a scientific development standpoint and in terms of revenue-driving commercial capability, creating intellectual property assets that could bring value to an M&A strategy plan.

In May, the company signed an agreement in May to supply medical cannabis to the German market and reported shipments totaling $1.7 million to Australia in the third quarter.

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