Haywood analyst Neal Gilmer maintained a Buy rating on OrganiGram Holdings (OGI – Research Report) yesterday and set a price target of $2.50.
Neal Gilmer has given his Buy rating due to a combination of factors surrounding OrganiGram Holdings’ strategic acquisition of Collective Project Limited. This acquisition marks OrganiGram’s entry into the U.S. market, specifically targeting the hemp-derived THC market, which is regulated under the 2018 Farm Bill. By entering this market, OrganiGram is positioned to consolidate revenues from the U.S., enhancing its growth potential.
Additionally, the acquisition allows OrganiGram to expand into the cannabis beverage category in Canada, filling a significant gap in its product offerings. The deal’s structure, involving an upfront payment with contingent considerations based on milestone achievements, presents a low-risk opportunity with potential for significant revenue growth. This strategic move not only provides immediate market presence but also offers opportunities for expansion and distribution gains, justifying the Buy rating.
OGI’s price has also changed dramatically for the past six months – from $1.760 to $1.040, which is a -40.91% drop .