- Organigram (TSX:OGI) has acquired Aylmer, Ontario’s Motif Labs for up to $100 million, making it the largest Canadian cannabis company by market share at 12.4 per cent
- Motif has been adjusted EBITDA positive for the past 15 quarters
- Organigram’s cannabis brand portfolio includes Edison, Holy Mountain, Big Bag O’ Buds, SHRED, SHRED’ems, Monjour, Laurentian, Tremblant Cannabis and Trailblazer
- Organigram stock has added 20.11 per cent year-over-year but remains down by 83.99 per cent since 2019
Organigram (TSX:OGI) has acquired Aylmer, Ontario’s Motif Labs for up to $100 million, making it the largest Canadian cannabis company by market share at 12.4 per cent.
Motif’s leading brands include BOXHOT (Canada’s #1 cannabis vape brand), DEBUNK (Canada’s #1 liquid diamonds vape brand), as well as Rizzlers and Floe State. It holds 21.2 per cent and 9.4 per cent of the Canadian vape and infused pre-roll markets, respectively, according to Friday’s news release. The company also operates a wholesale division and end-to-end services for external brands.
Through a financial lens, Motif grew from $35 million in net revenue in 2022 to $79 million in 2023 and has generated approximately $86 million year-over-year. Operations have been adjusted EBITDA positive going back 15 quarters.
Organigram seems significant potential for margin expansion thanks to economies of scale, cost synergies ($10 million over 24 months) and improved operating cash flow.
Prior to the acquisition, Motif was the largest privately owned cannabis business in Canada.
Canadian recreational cannabis market share by category
Canadian recreational cannabis market share
Leadership insights
“The highly complementary acquisition of Motif establishes Organigram as Canada’s largest cannabis company by market share and accelerates our vision to be a leading cannabis company across all major categories, driven by a relentless focus on the consumer of today and tomorrow,” Beena Goldenberg, Organigram’s chief executive officer (CEO), said in a statement. “Winning in Canada, the world’s largest federally legal recreational market, supported by leading brands and best-in-class operations, innovation and product development, provides the platform to unlock global opportunities as evolving attitudes towards cannabis drive regulatory changes in new and exciting markets.”
“Organigram has a proven track record of executing on Canadian M&A, successfully capturing and growing market share with highly complementary acquisitions that add to our existing strengths. This acquisition of Motif is no exception,” commented Paolo De Luca, Organigram’s chief strategy officer. “This deal is about a leading public cannabis company joining forces with Canada’s top private licensed producer. We are extremely excited about leveraging our combined competitive advantages and respective market positions to continue to grow in Canada and beyond.”
“Motif was founded in 2017 with a vision to leverage manufacturing expertise to succeed in the production of cannabis extracts. We are proud to say that today, not only is Motif one of Canada’s largest and most efficient extractors but we have also commercialized a portfolio of leading, widely distributed brands that have unlocked leading market share positions of #1 in vapes and #3 in infused pre-rolls,” added Mario Naric, Motif’s founder and CEO. “This is a landmark transaction in our industry and the Motif team is thrilled to be joining forces with Organigram to create Canada’s undisputed leader with deep capabilities in all major cannabis categories.”
About Organigram
Organigram is a licensed Canadian producer of cannabis, cannabis-derived products and cannabis infused edibles. Its brand portfolio includes Edison, Holy Mountain, Big Bag O’ Buds, SHRED, SHRED’ems, Monjour, Laurentian, Tremblant Cannabis and Trailblazer.
Organigram stock (TSX:OGI) is up by 8.87 per cent trading at C$2.21 per share as of 11:28 am ET. The stock has added 20.11 per cent year-over-year but remains down by 83.99 per cent since 2019.
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(Top photo of an Organigram cannabis operation: Organigram Holdings)
