Organigram Global Q1 Earnings Call Highlights

Organigram Global (NASDAQ:OGI) opened its fiscal 2026 first-quarter earnings call with new CEO James Yamanaka making his first appearance in the role, emphasizing operational execution, consumer-focused innovation, and disciplined international expansion as near- and longer-term priorities. Yamanaka said he has spent his first month visiting facilities and meeting teams to identify where processes can be fine-tuned, while maintaining continuity in the company’s strategic direction.

Canadian market share, strike disruption, and category trends

Yamanaka said Organigram maintained the number one position in Canada with 11.3% total market share in Q1 and 11.7% over the past 12 months. However, he noted market share fell by about 500 basis points versus the prior quarter, attributing much of the decline to an eight-week BC General Employees’ Union strike that ended October 26. He said the company’s recovery in British Columbia is now complete after a brief restock period, and Organigram has regained historical distribution levels.

Competition, particularly in vapes and infused pre-rolls (IPRs), also contributed to market share fluctuation during the quarter, partially offset by growth in flower and concentrates, according to management. Yamanaka said three Organigram brands—SHRED, BOXHOT, Holy Mountain, and Big Bag of Buds—remained in the top 10 nationally in Q1, generating over CAD 67 million in retail sales.

Regionally, the company said it held the number one position in Ontario, British Columbia, and Alberta. In Quebec, Organigram moved up to the number three position with 9.9% market share for the quarter and exited December at 10.1%, which management attributed to the success of vape launches. Organigram also cited strong share in several smaller provinces, including 33.1% in New Brunswick and 21.9% in Newfoundland.

Category performance discussed on the call included:

• Vapes: maintained the #1 position with 20.4% market share.
• Pre-rolls: moved to #2 at 7.7%, which management said primarily reflected increased competition in IPRs.
• Beverages: share increased 80 basis points year-over-year to 5.9%.
• Concentrates: management said BOXHOT Whipped Diamonds and Organigram innovation became the #1 dabbable concentrate in Canada, contributing to 15.5% category share.
• Edibles: share increased 2.4 points year-over-year to 17.9%, with SHRED becoming the #2 gummy brand in December.
• Whole flower: share increased 90 basis points year-over-year to 7.3%, driven by Big Bag brands.

Innovation pipeline and new product launches

Management said its innovation pipeline is beginning to reach distribution in the second quarter, including new coated IPRs as well as SHRED Soda and SHRED Shots. Yamanaka said SHRED Shots will feature an on-package claim of a 15-minute onset, enabled by a fast-acting soluble technology developed in the company’s Product Development Centre. He said the company believes the claim could help reduce barriers to trial and support retailer shelf-space decisions, positioning shots as a discreet alternative competing with other ingestible formats, including gummies.

Operational updates: cultivation, extraction, and manufacturing

On cultivation and plant science, Yamanaka said Organigram harvested over 28,000 kilograms of flower in Q1, up 43% year-over-year, citing improved yields from an LED lighting conversion project and refinements to nutrient programs. He also said average flower THC reached a quarterly high of over 29%, with 38% of lots testing above 30% THC.

The company also announced a proprietary development related to powdery mildew resistance. Yamanaka said its plant science team identified a genetic marker that can be screened in early seedlings, reducing confirmation time from about 90 days to 10 days and enabling early removal of out-of-spec populations to reduce crop loss and waste. He said the screening tool is proprietary and applicable across a wide range of genetics, and he linked it to expectations for improved yield stability and cost efficiency over time.

In manufacturing, Yamanaka said Organigram has shifted to 100% hydrocarbon-based extraction, with extraction capacity up 87% year-over-year and lower associated cost of goods sold. The company also completed commissioning of its beverage line in Winnipeg and is beginning in-house production for a portion of its beverage portfolio. CFO Greg Guyatt said benefits from operational improvements and distribution efficiencies tied to ERP optimization should become more visible as lower-cost inventory flows through the P&L.

International sales, EU GMP progress, and U.S. positioning

International sales were a key focus of the Q&A. Yamanaka said the company generated CAD 5 million in international sales in Q1, up year-over-year, but experienced an unanticipated sequential decline in international volumes driven by a higher-than-expected proportion of flower that did not meet international specifications. Guyatt quantified the revenue impact at approximately CAD 3.5 million for the quarter. Management said it has identified drivers of the issue and believes it is temporary. Guyatt added the out-of-spec flower has been repurposed for the Canadian market and the company is not expecting inventory write-offs related to it.

On EU GMP certification, management said it received feedback from regulators in January 2026 and is preparing follow-up responses. Yamanaka did not provide a firm timeline, citing the unpredictability of regulatory processes, but said the company is working to address the questions as quickly as possible.

In branded international markets, Organigram said it shipped input materials for vape production and distribution in Australia in December, completed the first production run in January, and is in the process of launching. In the U.S., the company said it launched Collective Project and Fetch in Illinois and Wisconsin through new distribution partners, expanding its retail footprint to 11 states, and continues to pursue expansion for Happi gummies. Management said U.S. penetration has been slower than anticipated due to competition and regulatory developments, and emphasized that the U.S. is currently less than 1% of revenue and not central to the company’s growth plan. Yamanaka and Guyatt also said they are monitoring legislative efforts related to intoxicating hemp products and are being prudent about capital deployment given uncertainty and Nasdaq constraints.

Financial results: revenue growth, margin stability, and guidance reiterated

Guyatt reported Q1 net revenue of CAD 65.3 million, up 49% from CAD 42.7 million a year earlier, driven by Canadian growth, the integration of Motif, and higher international sales. Sequentially, net revenue declined 21%, which management attributed primarily to seasonality, as well as the BC strike, competitive pressures in vapes and pre-rolls, and lower sequential international sales.

Adjusted gross profit rose to CAD 23.9 million from CAD 14.3 million year-over-year, while adjusted gross margin was 38%, flat sequentially and up 500 basis points from Q1 fiscal 2025. Guyatt cited higher yields, lower cultivation costs, and Motif synergies, and said the company anticipates margin expansion as international volumes scale through the year.

Operating expense details included:

• G&A: CAD 15 million vs. CAD 11.2 million year-over-year, reflecting Motif consolidation, ERP and professional fees, and higher depreciation and amortization; management expects ERP-related costs to roll off after Q2.
• Sales and marketing: CAD 9 million vs. CAD 5.8 million, tied to supporting Motif and Collective Project portfolios.
• Total operating expenses: CAD 26.7 million, or 42% of net revenue, down 600 basis points year-over-year.

Adjusted EBITDA was CAD 5.3 million, up from CAD 1.4 million a year ago, while net income was CAD 20 million versus a CAD 23 million net loss in the prior year period. Guyatt said the year-over-year improvement in net income was primarily due to changes in the fair value of derivative liabilities and top-up rights associated with the company’s follow-on BAT investment.

On cash flow, cash provided by operating activities before working capital changes was CAD 0.3 million compared to cash used of CAD 6.3 million a year earlier. After working capital changes, cash used in operations was CAD 16 million, which management attributed to working capital investments related to higher inventory during ERP migration and the timing of excise duties and Health Canada licensing payments.

Organigram ended the quarter with CAD 63 million in total cash and short-term investments, including CAD 7.6 million of unrestricted cash. Guyatt said the company is assessing non-dilutive sources of capital to support liquidity and reiterated confidence in its ability to generate positive free cash flow for the full year. Management reaffirmed full-year guidance for revenue exceeding CAD 300 million.

About Organigram Global (NASDAQ:OGI)

Organigram Global Inc (NASDAQ: OGI) is a licensed producer of cannabis and hemp products headquartered in Moncton, New Brunswick, Canada. Founded in 2013, the company operates a state-of-the-art cultivation and manufacturing facility spanning more than one million square feet. Organigram holds licenses from Health Canada to produce and sell both medical and adult-use cannabis, and it pursues Good Manufacturing Practice (GMP) certification to support international exports.

The company’s product portfolio encompasses dried flower, pre-rolled joints, cannabis oils, capsules and soft gels, as well as vapourizer cartridges and extracts.