OrganiGram Holdings Inc Q2 2021 Earnings Call Transcript

The following is excerpted from the question-and-answer section of the transcript.

Question: Andrew Partheniou - Stifel Nicolaus Canada Inc., Research Division - Analyst : Maybe just to start off with -- you have a strong balance sheet. You guys recently announced the acquisition of EIC and strengthening your edibles offering. Do you see any more white space in Canada? And if not, could you also provide a little bit of color on your international expansion strategy? Just trying to get a sense of what are your focus and priorities on deploying this cash?

Question: Andrew Partheniou - Stifel Nicolaus Canada Inc., Research Division - Analyst : Maybe just switching gears and talking about your outlook. You guys already mentioned next quarter, revenue should be up versus this quarter. Absent any kind of COVID risk further shutdowns of your facility and things like that. Is it possible to give any kind of indication as of magnitude of what you could expect maybe tying into the recent SKU launches and more SKU launches that you guys are planning to do in the quarter? Should we be thinking about Q3 returning to Q1 levels or potentially Q4 levels? Any kind of further color would be very useful.

Question: Tamy Chen - BMO Capital Markets Equity Research - Analyst : First is, I wanted to go back to on the production side. So Greg, you've talked about this a number of quarters ago where the company has been doing a pivot to change what you've been growing. So it's more in line with consumer demand. So I'm just wondering first, where the company is at with respect to climbing up the learning curve of these new strains. Because we're sort of continuing to see inventory provisions, I think there was last quarter, and now there's additional this quarter. So I'm just trying to understand, like is that a result of you're still going up the learning curve of these new strains and will these write-downs continue?

Question: Tamy Chen - BMO Capital Markets Equity Research - Analyst : Okay. And my follow-up is, I'm wondering if you could talk a bit about the -- your different brands in flower, primarily between Edison and SHRED. Are you seeing over the last little bit? And now are you seeing more velocity, more demand on the value side? So your SHRED products? Or are you seeing some more relative velocity and more traction on some of the more mass premium products like your Edison brand?

Question: Douglas Miehm - RBC Capital Markets, Research Division - Analyst : Yes. Greg, just a quick question with respect to the strategy going more upmarket, better strains and those sorts of things. We're hearing the same thing from almost every single company out there. Can you tell us how you're going to be able to differentiate yourself? And if you think there's going to be any pricing pressure as people all start to move in that direction. And it's not so much that this market is going to change overnight, but it seems that within the next quarter or 2, people are going to have multiple streams available in this marketplace.

Question: Douglas Miehm - RBC Capital Markets, Research Division - Analyst : Okay. That's fine. And then with respect to that $7 million, and maybe you answered this already, but what was the breakdown? Was it primarily SHRED or what did you miss out specifically on?

Question: Matt Bottomley - Canaccord Genuity Corp., Research Division - Analyst : I just wanted to go back to that $7 million that Doug was just talking about. With respect to, I guess, relationships with the provinces and the ability to carve out additional market share in these various SKUs, are there any near-term implications for not being able to fill certain orders? As I know there's a very strict fulfillment policy that many of the provinces, particularly Ontario have. So just any color on how that may or may not impact relationships with these buyers?

Question: Matt Bottomley - Canaccord Genuity Corp., Research Division - Analyst : Great. That's helpful. And then just one more question for me on sort of market share. And just tying back to some of your comments, you mentioned that the, I guess, pool of brands to be purchased like a supreme or like some of those that we've seen, isn't as deep where there'd be sort of mass M&A expected in the near-term just for brands. So if you kind of look at where your market share is today and how much growth is left, in the sector, which is still quite a bit. But we are, like you said, I think, $3 billion-plus on a run rate. What's the best way to, in your view, to gain that incremental share, if not through M&A, obviously, you guys are focused a lot on the edibles and chews, and maybe that's an undersized proportion of the market today versus where it is at maturity. But just any color that ex M&A, how market share can be gained in your view in the coming months and quarters?