Leading cannabis producer Organigram Holdings Inc. has acquired all of the issued and outstanding shares of Laurentian Organic Inc. with an eye on growth in the Canadian market.
The deal is based on $36 million, with funds taken from both cash and shares. It offers earn-out consideration if Laurentian surpasses certain earnings thresholds in calendar 2022 and 2023, according to a news release.
The acquisition is expected to expand Organigram’s position in the Canadian market as it ventures into premium products that include hash and craft cannabis.
“The Laurentian acquisition marks yet another important milestone for Organigram as we continue to deepen the focus of our core business on delighting consumers with innovative products and brands that deliver unique and memorable experiences,” Organigram Chief Executive Officer Beena Goldenberg said. “Not only does Laurentian add two great new brands to our portfolio, it also brings us new premium product offerings with its Afghan hash and artisanal craft flower, as well as a footprint in the important market of Quebec. We look forward to building on the momentum that Laurentian has established to bring these products to even more Canadian provinces and territories.”
As part of the transaction Organigram intends to invest at least $7 million in growth capital expenditures at Laurentian to drive cultivation growth, expand processing and storage space and invest in automation, all of which should increase sales growth and improve margins. Construction on the expansion efforts is expected to be realized during the summer of 2022.
Laurentian, co-founded by Eric Brosseau, Mathieu Lahaie and Eric Verdier, is on the record with plans to steer its strong internal field sales force and worldwide distribution capabilities to build upon its momentum.
“We founded Laurentian with the goal of bringing the highest quality hash and cannabis to consumers across Canada. We are thrilled to be joining Organigram where we will have the opportunity to leverage their expertise and distribution capabilities to make this expansion goal a reality,” Brosseau said. “The Organigram team has an unrivaled customer service experience through its rigor and professional standards and dedicated national sales force, and we are thrilled to be able to work with their team through the next phase of growth.”