OrganiGram Holdings Inc (NASDAQ: OGI) was a huge gainer in yesterday’s session and closed the day with gains of 45.37%. This came after the company announced strong quarterly results, even as uncertainties linger about the cannabis sector.
In Q1 of 2020, the company announced that, net revenues stood at $25.2 million. This represents an increase of $102% compared to what it reported in Q1 of 2019. On top of that, the company announced that gross margins before fair value changes on inventory in the quarter stood at $9.3 million or 37% of net revenues. In Q1 of 2019, the company had net revenues of $8.8 million representing 71% of its net revenues.
The company stated that, the increase in absolute gross margins was due to higher net revenues. It further announced that, its lower gross margins when taken as a percentage of gross margins was due to increased cost of sales. It attributed this to higher labor costs for cultivation, and post-harvest capacity, while at the same time having to deal with reduced economies of scale. It attributed this to inadequate infrastructure in the retail side of things.
Comparing its Q1 2020 revenues to those in Q4 of 2019, the company recorded growth. In Q1 of 2020, the company had net revenues of $25.2 million. Of these revenues, $16.7 million came from the adult-use recreational and medical markets. The rest of it came from the international market and other markets. In Q4 of 2019, the company had net revenues of $16.3 million. On top of that, the company announced that it received Health Canada licensing approval for 16 growing rooms, as it pushes towards a capacity of 13,000 Kgs every year for sweet leaf and dry flower.
From its price action, the stock opened the day at $2.76 and traded between a low of $2.62 and a high of $3.25 before closing the day at $3.14. Volumes in the day stood at 23.33 million.
About OrganiGram Holdings Inc
OrganiGram Holdings Inc is a cannabis company. It is based in Moncton, Canada.