The following is excerpted from the question-and-answer section of the transcript.
(Questions from industry analysts are provided in full, but answers are omitted - download the transcript to see the full question-and-answer session)
Question: Tamy Chen - BMO Capital Markets Equity Research - Analyst
: Sorry to hound on the gross margin again, but I just want to make sure I understand. The going from the negative 4% gross margin last quarter to
12%, so quite a significant recovery. So was that more due to changes in your product mix? Or was that largely because you're producing more
and so you have those economies of scale? I guess, was it more due to the latter?
Question: Tamy Chen - BMO Capital Markets Equity Research - Analyst
: So it was improvement to the cost structure. So this was even prior to getting to more production economies of scale?
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NOVEMBER 23, 2021 / 1:00PM, OGI.TO - Q4 2021 OrganiGram Holdings Inc Earnings Call
Question: Tamy Chen - BMO Capital Markets Equity Research - Analyst
: Interesting. Okay. So it sounds like the -- now that you're producing more, and as you continue to produce more through fiscal 2022, there's --
that's where that upside to more margin improvement will come from. Okay. And my next question is, can you give us a sense, like your Big Bag
O' Buds and your SHRED, I know you just took that price increase on SHRED. Like those 2 product lines, like are they in the positive margin -- gross
margin territory at this point now? Or is like SHRED, after the price increase, still kind of like just at breakeven? Like can you just give us a sense of
the margin you get off of those 2 products.
Question: Douglas Miehm - RBC Capital Markets, Research Division - Analyst
: I guess as part of this gross margin question, I am curious if you could comment on, if you're getting close to capacity today at 40,000, and as you
move to the 70,000, can you tell us what's going to be required to get there in terms of, are there any new approvals required as you bring on
capacity? Is there a chance that margins could decline over the next few quarters before we get to Q4?
Question: Douglas Miehm - RBC Capital Markets, Research Division - Analyst
: Okay. Perfect. And then maybe you could comment on one of the things that you've obviously been very good at is your ability to identify changes
within the consumer, how they're thinking. And Beena, maybe you could describe some of the new consumer research that you're seeing right
now and how that's changed over the last, let's say, 6 or 12 months, and how you intend to take advantage of that?
Question: Andrew Partheniou - Stifel Nicolaus Canada Inc., Research Division - Analyst
: Congrats on the profitability improvement in this quarter. Maybe just talking about your rec performance. You mentioned that you took price
increases on SHRED. Wondering what that did to the average net selling price in the quarter. And if you continue to take price increases on SHRED,
where that can go in tandem with your premium offerings?
Question: Andrew Partheniou - Stifel Nicolaus Canada Inc., Research Division - Analyst
: And maybe just continuing on that. You talk about the continuing revitalization of the Edison brand. Maybe just providing a little bit more color
on the mechanics behind that. Do you need to win any SKU listings for that? I'm not sure that you required to do that in the past, you may have
just switched them out with your existing legacy strains. Just some color on the path forward given the provincial markets or the provincial buyers
are being a little bit more stringent with SKU listings here.
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