Organigram acquires Collective Project for C$6.2M

Organigram (OGI) announced the acquisition of 100% of the issued and outstanding shares of Collective Project for upfront consideration of approximately C$6.2M, potential milestone payments and potential earnout payments totaling in the aggregate up to C$24M for the twelve-month periods ending September 30 and September 30, 2026. Organigram has acquired all the issued and outstanding shares of CPL, on a debt free basis, for C$6.2M cash of which C$6M is attributable to the beverage business and C$0.2M attributable to all other cannabis categories that CPL is engaged in. Milestone and earnout payments thereafter, if applicable, are subject to performance in the beverage category only. Milestone payments of C$2M each in cash are payable if CPL achieves “cumulative depleted wholesale sales” of at least $500,000 from inception to June 30 and “cumulative depleted wholesale sales” of at least $1M from inception to September 30 in each case from its U.S. hemp-derived beverage business. The first eligible earnout payment, if applicable, shall be paid by calendar 2025 year-end, based on 2.5 times trailing twelve months net revenue to September 30, less any consideration paid to date including the original consideration, Milestone 1 and Milestone 2. The first earnout, if applicable, is expected to be paid 50% in cash and 50% in Organigram share consideration priced at the five-day TSX VWAP the day prior to settlement. The second eligible earnout payment, if applicable, shall be paid by calendar 2026 year-end, based on 2.5 times trailing twelve months net revenue to September 30, 2026, less any consideration paid to date including the Original Consideration, Milestone 1, Milestone 2 and the First Earnout. The second earnout, if applicable, is expected to be paid 50% in cash and 50% in Organigram share consideration priced at the five-day TSX VWAP the day prior to settlement. Contingent consideration for the beverage business in all cases shall be capped at C$24M. While the original consideration of C$6.2M will not be taken from the Jupiter strategic investment pool as CPL is currently substantially a Canadian business, some of the future milestone or earn-out payments, if any, may be eligible for drawdowns from the Jupiter strategic investment pool.