OrganiGram: History, Production, and Sales of Certified Organic Medical Cannabis

OrganiGram was founded in 2013 in Moncton, New Brunswick. In 2014, there were only approximately 17 staff members. The company employed 70 people as of December 2016, and it was looking forward to expanding its workforce up to about 170 staff in the next year or two to staff its new and expanding facilities. The  organizational  structure  consisted  of  three  levels:  the  C-suite  (i.e.,  chief  executive  officer,  chief  operating officer, chief financial officer, and chief commercial officer), directors, and employees in various functions  (e.g.,  garden  workers  and  client  support).  Its  facilities  consisted  of  a  main  facility,  a  newly acquired building next to the main facility, and the adjoining 10-acre (4.1-hectare) property with a 136,000-square-foot (12,635-square-metre) industrial building.  
 

In  addition  to  being  the  first  medical  cannabis  company  in  the  Maritimes  to  be  licensed  to  grow  and  sell  medical cannabis, it was a certified organic medical cannabis producer. This organic certification meant that it needed to follow more rules than most of its competitors. Canada had only three organic LPs.14 Organigram was the only Maritime cannabis company with licences to cultivate, produce, and sell cannabis products. 
 

In a Canadian Broadcasting Corporation report, it was announced that at the end of March 2016, the New Brunswick government awarded payroll rebates of up to $990,000 over three years to OrganiGram to help create up to 113 new jobs in the province.15 Chief executive officer Denis Arsenault stated, “We are from New Brunswick and we’re excited to invest at home, where the advantages of a well-educated work force, low power rates and a competitive cost of living make New Brunswick and Moncton a logical place for our future.”16 
 

In the summer of 2016, OrganiGram purchased a new building in Moncton. In an interview published on October 25, 2016, chief commercial officer Ray Gracewood stated that much of the space in the new facility in  Moncton  would  be  for  the  manufacturing  of  edibles  and  extracts.17  To  finance  its  expansion  plans,  OrganiGram  announced  the  closing  of  a  $40  million  bought  deal  on  December  7,  2016,  to  finance  an  expansion of its existing facility for an additional 32,000 square feet (2,973 square metres) of grow-room area  and  continue  with  its  planned  cannabis  oil  extracts  and  derivatives  facility.18  In  this  bought  deal,  a  group of investment firms (led by Dundee Securities Ltd.) offered $40,253,450 for 11,339,000 shares at a price of $3.55 per share to OrganiGram.19 
 
The process of growing and processing cannabis started with purchasing and receiving materials such as soil and fertilizers. Cuttings taken from  mother plants were started in the nursery to grow clones, which were  put  into  pots  of  soil  for  the  pre-vegetative  (pre-veg)  process.  The  process  of  growing  plants  from  clones  had  two  benefits:  (1)  it  took  less  time  than  growing  from  seeds  and  (2)  it  ensured  that  the  plants  would have the same characteristics as the mother plant. The pre-veg process took several weeks, as did the vegetative process, which began when the plants were set into larger pots. Next, the plants were placed in grow rooms for the flowering stage, which took 56–72 days.

Facilities and Staff

After harvesting, the cannabis was trimmed, dried, cured, and packaged for mailing to patients. OrganiGram had produced and posted a YouTube video that described the growing process.20 According to Rogers, it could take over six months from starting the clones to packaging the final product. Under the ACMPR, LPs  were permitted to sell cannabis products only to patients directly through mail order or to other LPs on a wholesale basis. For use only in the course Management Decision Making at George Brown College taught by Robert Ruggieri from August 31, 2020 to June 18, 2021. Use outside these parameters is a copyright violation.
 
OrganiGram differentiated itself by highlighting that some of its products were premium, 100 per cent organic, which meant that they were subject to audits, were grown in regulated soil, received organic fertilizers, and were free of certain disallowed pesticides. These standards were in addition to the Health Canada regulations. OrganiGram received its organic certification from ECOCERT on October 10, 2014.21 
 
Many  of  OrganiGram’s  strains  had  Maritime-themed  names,  such  as  Highlands,  Rising  Tides,  and  Lighthouse.  The  price  of  the  dried  cannabis  ranged  from  $9.25  to  $10.50  per  gram.  Daily  dosages  for  patients  ranged  from  75  milligrams  per  day  to  3.2  grams  per  day.22  According  to  the  ACMPR,  the  possession limit was 30 times the daily dosage, or 150 grams, whichever was less. However, OrganiGram offered a 25 per cent discount to patients who were on social assistance or disability programs. Competitors also had compassionate-pricing programs.  

OrganiGram oils were all priced at $99 per 50 millilitres. The oils had different names from their dried plant strain names and were labelled with the amounts of THC and CBD in milligrams or millilitres. Depending on each patient’s needs, the choice would be made according to the amount of THC and/or CBD in the product. In addition to its cannabis products, OrganiGram sold vaporizers that ranged in price from $97.50 to $195.  
 
In 2016, Canada’s largest publicly traded LPs were Canopy Growth, Mettrum, OrganiGram, Aphria, and Aurora Cannabis. The first four companies had licences to cultivate the dried plant, produce oils, and sell both  products.  Aurora  had  licences  only  to  cultivate  the  dried  plant  and  sell  it.  However,  Aurora  was  enrolling new patients very quickly in a short period of time.23 In terms of licensed capacity and resources, Canopy  Growth  was  the  largest  player  and  was  the  result  of  a  merger  of  the  companies  Tweed  and  Bedrocan.  Tweed  had  a  branding  partnership  with  Snoop  Dogg.24  Canopy  Growth  was  working  on  international expansion activities in Brazil, Australia, and Germany.25 Mettrum was very much a medically focused  company  that  concentrated  on  building  a  physician’s  network  to  increase  its  patient  base.  On  December  1,  2016,  it  was  announced  that  Mettrum  would  be  acquired  by  Canopy  Growth,  pending  shareholder approval.26 Many LPs were in the process of increasing the number of registered patients while expanding their operations. 
 
The prices for most dried cannabis strains tended to be between $6 and $12 per gram.27 Several companies, including OrganiGram, offered “compassionate pricing” (i.e., a discounted price) for those patients in need. Strains with higher percentages of THC often were able to garner higher prices.
 
Colorado  and  several  other  American  states  had  already  legalized  recreational  cannabis.  Data  from  the  cannabis data firm Headset Inc. Cannabis Intelligence provided sales data on the most popular recreational cannabis products in the United States.28 The dried flower was the most popular product (48 per cent of all transactions) but had the lowest profit margin (53.5 per cent on average). The second most popular product was edibles (13.1 per cent of all transactions), and some types had the highest profit margins (ranging from 53  per  cent  for  soup  to  65.5  per  cent  for  brittle).  Concentrates,  beverages,  and  vapour  products  were  also  becoming more popular.  For use only in the course Management Decision Making at George Brown College taught by Robert Ruggieri from August 31, 2020 to June 18, 2021. Use outside these parameters is a copyright violation.

 According  to  a  2016  report  by  the  Rocky  Mountain  High  Intensity  Drug  Trafficking  Area  on  marijuana  in  Colorado, the established demand in 2014 was 121.4 metric tons for residents (aged 21 years and older) and the estimated demand was 8.9 metric tons for out-of-state visitors (aged 21 years and older). The same report noted 485,000 regular users of cannabis in Colorado. 

Based on data collected on approximately 40,000 legal (recreational) cannabis purchases, cannabis users spent  an  average  of  US$647  annually  in  Washington  State.30  Thousands  of  jobs  and  millions  of  dollars  collected in taxes were reported in Colorado.31 According to Rogers, Colorado “is like the gold standard for recreational marijuana in the world. It’s the only place of size that has had a recreational marketplace for more than a short period of time at least they have some quantifiable data that you can try and use to project forward.” However, regulations were very different in the United States and varied from state to state. For example, the state law in Colorado permitted licensed retailers to sell only up to 30 per cent of their total “finished Retail Marijuana inventory” to other licensed establishments.32 Because marijuana was still illegal at the federal level, it was difficult for American cannabis businesses to open bank accounts and many used only cash transactions.

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