If you take a look a couple of stories to your right in this column you’ll see the company’s big man, Gregory Engel, selling up Organigram’s preparedness for Covid amongst an already tumbling cannabis sector in March.
But .. does the emperor actually have any clothes?
Whilst CEO Gregory Engel tells Marketwatch this……….
Organigram eventually became one of the first cannabis companies to start discussing and disclosing the coronavirus’ expected impact on its operations. publicly making changes to its operations in response to COVID-19 in February.
and so on and so forth.
Grizzle write
Organigram Holdings (TSE:OGI, NASDAQ:OGI) posted disappointing financial results for Q2 2020.
More important than earnings is the company’s rapidly deteriorating financial position which is a surprise for what was once the most profitable Canadian licensed producer.
The company burned $46 million of cash for the second quarter in a row and now only has $41 million remaining in its bank account.
Most importantly, the company violated a covenant on its debt this quarter.
Organigram previously had C$50 million left to borrow on this facility from BMO, but now that the company is in violation of its covenants, we think it’s unlikely the bank will let them draw down that money.
If OGI can’t borrow another C$50 million they are on track to run out of money by the end of May 2020.
THE CASH SITUATION IS PRETTY BAD
Yes the company laid off 45% of the workforce on April 7th, but they paid out two weeks of pay as an act of goodwill and will be on the hook for at least another two weeks of severance pay if those employees aren’t rehired.
Read more at https://grizzle.com/organigram-q2-2020-earnings/
