Site icon TheCannalysts

COVID Cover: Organigram Lays-off 45% of Workforce PART 2

Originally published July 3, 2020

What we surmised on April 7, 2020 has become a reality.

“Yesterday Molly and I had discussions of how covid is providing “cover” for many companies in the cannabis industry.  The “cover” ranges from distracted media not covering anything except covid stories to a convenient excuse for actions.  From Cronos and their inflating of sales getting little media attention, to iAnthus not paying interest payments because of covid, and now Organigram laying off staff “primarily” for covid. “

And

My biggest question was would Organigram’s 2.0 sales revenue over the Feb 29/20 Q and the May 31/20 Q be enough to displace what could be disappearing from wholesale revenue? With last night’s announcement my guess is now “no.””

And

“If sales stayed the same inventory could well have grown to 8x quarterly sales.  Two years’ worth of product.

The temporary layoffs were inevitable, as Organigram had to throttle their grow.  This was not “primarliy” covid related IMO.”

BNN Bloomberg is reporting today:

“Organigram Holdings Inc. announced Friday that it is slashing its workforce by 25 per cent, leaving 220 employees out of work.

The New Brunswick-based cannabis producer said only a “small number” of cuts will hit employees who weren’t already on temporary layoff.”

And

“The company also warned it’s expecting to report a sequential drop in fiscal third-quarter revenue as well as writedowns on inventory and its Moncton facility.”

Looks like our crystal ball was working.

 

The preceding is the opinion of the author and is in no way intended to be a recommendation to buy or sell any security or derivative. The author does not have a position in Organigram and will not start one in the next five days.