Shareholders of Organigram Holdings Inc. approved tobacco giant British American Tobacco’s “transformational” investment in the Canadian cannabis producer, the company said following its annual general and special meeting.
The deal, first announced last November, calls for BAT subsidiary BT DE Investments Inc. to invest 124.6 million Canadian dollars ($92.5 million U.S.) in Organigram, deepening the existing partnership between the cannabis company and BAT.
BAT first invested in Organigram in 2021.
This additional investment will ultimately give BAT a voting common share ownership position of 30% and overall equity interest of 45%.
Most of the money will be used by Organigram to fund a strategic investment pool named Jupiter, which will target investments in emerging cannabis markets.
The first of three tranches of the equity investment closed this week, in which BAT’s subsidiary acquired 12,893,175 of Organigram’s shares for approximately CA$3.20 per share.
“With this transformational deal now formally approved by shareholders and with the first tranche funded, we look forward to delivering on our objectives of geographic and technological growth as well as product expansion,” said Paolo De Luca, chief strategy officer of Organigram.
Gross proceeds for Organigram were CA$41.5 million.
Two further tranches will occur around Aug. 30, 2024 and Feb. 28, 2025, the Canadian company said.
“Management has identified that geographic expansion is a strategic priority and this opportunity presents the company with the capital to lay global foundations as the legal recreational cannabis market continues to see significant growth,” the company said in a news release.
Karina Gehring was appointed to Organigram’s board of directors at the annual meeting.
Gehring is one of two directors, including Simon Ashton, designated by the BAT subsidiary as nominees to Organigram’s board.
Shareholders also approved the creation of a new class of preferred shares (Class A) to be issued to the BAT subsidiary as part of the investment.