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Organigram also has publicly traded warrants under the symbol OGI.wt.a. These warrants have a $4 strike price, expire on June 18, 2019, and have no forced conversion feature. With the common shares currently trading in the mid $4 range, these warrants are now in the money. The leverage and gearing offered by warrants is high. Holding warrants offers a much more volatile, and less capital intensive alternative to owning the underlying stock. It’s important to understand the risks and benefits of holding warrants. In bearish markets, they can lose significant value in short periods of time, and even expire worthless if they are below the strike price at the expiration date. The general consensus among analysts is a 12- month price target for Organigram in the $7-8 range. If these targets are hit, the common stock owners will see appreciation of approximately 65%, while warrant holders could see gains of 120% or greater.
In conclusion, Organigram has laid a strong foundation under CEO Greg Engel to be a prominent player in the global cannabis industry. Significant operational improvements have lead to reduced costs, increased yields, and superior product quality. A strong portfolio of brands, combined with industry leading production output in 2018 could see the company’s revenues increase dramatically. A growing global footprint allows for increased sales channels and a much broader market opportunity for the future. Organigram Holdings has a great offering and should be on the radar of every serious cannabis investor.
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