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3 Glaring Problems in OrganiGram Holdings’ Q2 Results: The Canadian cannabis producer’s update included plenty of bad news.

Canadian cannabis producers have been shell-shocked by problem after problem. OrganiGram Holdings(NASDAQ:OGI), though, ranks as one of the strongest in the industry and has had fewer issues than most of its rivals. The company hit a home run with its fiscal 2020 first-quarter results announced in January. It’s also avoided the turnover at the top that several of its peers have experienced.

But OrganiGram isn’t bulletproof. The company reported disappointing fiscal 2020 Q2 results before the market opened on Tuesday. Here are three glaring problems in OrganiGram’s update.

1. Falling revenue

Just three months ago, OrganiGram posted 55% quarter-over-quarter revenue growth. The company’s situation has changed dramatically since then. It reported Q2 net revenue of 23.2 million Canadian dollars ($16.6 million), down 8% from the previous quarter and falling 14% year over year.

There were several culprits for the revenue decline. For one thing, competition has increased and caused average selling prices to fall. Customers have changed their preferences as well, leading to OrganiGram writing down revenue in Q2 for returns and price adjustments — primarily for cannabis oil products. In addition, year-over-year comparisons were skewed because of significant order volume in Alberta and Ontario in the prior-year period to address supply shortages during the early days of the adult-use recreational market in Canada. [Read More @ The Motley Fool]

 

 

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