Canadian CANNAINVESTOR Magazine June / July 2018 | Page 201

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OGI: Obviously, I am very limited in what I can say on any potential merger or acquisition. I will say, I think the reason you’re seeing Organigram mentioned as a potential target is because we are trading under industry averages on forward EV/EBITDA metrics and how that would be seen as “accretive” to shareholders. I can add that we are very actively looking at acquisition targets in Canada but have not yet found a company that would be the right fit for us. We continually monitor the industry’s landscape for potential synergistic opportunities.

CCIM: Fair enough and thank you. Before we bring this to a close, I am a bit of a sci-fi nut. It comes out in my writing as evidenced by being among the first to describe the industry as a vibrant ecosystem subject to suggest transformative events that are changing the landscape before our eyes (I call this “ecoforming” after the sci-fi concept of terraforming). I am completely fascinated by the science at Hyasynth Bio in Montreal. I discuss this company in my article this month. Briefly, Hyasynth has a Dealer’s License and they are working on creating yeast that have been specifically designed to produce cannabinoids. Organigram has entered into a non-binding letter of intent for a $10-million investment. My imagination fires on all cylinders with the potential of this technology. Cannabinoids in days (not weeks or months); farm land preservation; less carbon foot print; precision accuracy for cannabinoid potency; operational efficiencies. Am I at least in the ballpark here?

OGI: Correct – I think you are in the right ball park and we are excited about closing this transaction in the near future. Hyasynth’s ability to create specific yeast strains that produce olivetol and them convert the olivetol to various cannabinoids such as CBG and THC using their proprietary enzymes is exciting from both a medical and recreational perspective. The ability for them to scale up production by adding additional fermentation vessels as well as produce a purified cannabinoid as an end product allows for a potentially incredible advantage. We look forward to going in more detail on Hyasynth once the deal closes.

CCIM: A subject that has always been near and dear to my heart in this space has been beverages. My first article and case study a couple of years back explored the potential for beverages – new users do not want to start smoking and I speculated would gravitate towards the familiarity of a drink over vaping or baking! Not only is the act of drinking as basic human need and source of comfort and sustenance, it is also socially acceptable to consume alcohol. Preferable delivery method and in a manner we already accept. Does Organigram have any plans in this space? Your most recent investor deck does hint at it strongly.