According to a press release on November 6th from the official website of British American Tobacco (BAT), the company will deepen its strategic partnership with Canadian marijuana producer Organigram. BAT will invest approximately £74 million (CAD 124.6 million) between January 2024 and January 2025, increasing its stake from around 19% to 45%.
This investment aims to deepen the strategic relationship between Organigram and BAT. Since BAT’s initial investment and the establishment of a Product Development Collaboration (PDC) in March 2021, the relationship between the two companies has been further strengthened. The PDC was formed with the objective of combining the knowledge of both companies and developing the next generation of non-combustible cannabis products.
British American Tobacco, in a statement, expressed its satisfaction with Organigram’s performance and continued to be impressed by the company’s prudent financial governance. “British American Tobacco still supports the category management abilities demonstrated by the Organigram management team, particularly in addressing challenging market conditions,” the company stated. “These factors lead us to believe that new investments can allow Organigram to fully capitalize on market opportunities and bring incremental value to both companies.
The majority of investments will be allocated to Organigram, in order to establish a strategic investment fund. This fund aims to expedite Organigram’s growth and support regional, technological, and product expansion in the cannabis industry.
According to the British American Tobacco company, this investment still needs to meet customary conditions, including obtaining necessary approval from Organigram shareholders.