Organigram Holdings Inc. said on Monday that marijuana cultivation had cost almost 50% more money and had impacted earnings in the last quarter because the cannabis company was trying to develop a more efficient growing technique – and failed ,
Growing costs increased to $ 0.95, or $ 1.29 per gram of dried blooms of $ 0.65 and $ 0.95 per gram in the previous quarter, respectively. The costs came from attempts to develop an alternative technique for planting fresh cannabis that worked with a few cannabis strains, but not on a large scale organigram
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CEO Greg Engel told MarketWatch in a telephone interview to grow plants and plant this organic material instead of a seed for a new plan which is called "cloning". The ingredients are usually taken from so-called mother plants to ensure the genetic consistency, but Moncton, New Brunswick, tried to use organic material from early-stage plants instead.
"We have done an experiment in which we take an early flower, in which you cut off the lower leaves anyway and use them for cloning," Engel said. "In the early experiment we had really positive results, then we went to a broader group that was variable depending on the load and had inconsistent results. This had a significant impact on the yield.
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Engel says that the employees of Organigram have found out that the new method of cutting crops did not work as planned within a few weeks, but the return to the previous method took several weeks. Finally, there was a period of four to six weeks that affected a significant number of the company's growing areas.
Many cannabis breeders have previously conducted the same experiment as Organigram with similarly mixed results in California's well-known pot growing area, the Emerald Triangle. According to these potted growers, this is possible with certain pot types, but not with others, and this is much more challenging than with other planting techniques.
While this experiment was conducted on a larger scale and involved more of the company's products than other tests, Engel Organigram is constantly working on innovations and improvements to its growers. For example, the company found that reducing the number of plants per room could actually increase the area yield.
"This was of interest to us for two reasons," Engel said. "It would allow us not to have to grow these vegetative plants for a little longer to free up space. This would make cutting off the flowering plants more effective as you will be using this material. It was a kind of double efficiency.
Engel says that due to the way the company processes and manufactures cannabis, it is not efficient to apply the experimental technique to just a few plants.
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and Canopy Growth Corp.
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The company reported a net loss of $ 10.2 million ($ 7.8 million) USD) or 7 cents per share for the same period last year, a gain of C $ 2.8 million, or 3 cents per share. Gross revenues increased almost ninefold to $ 30.4 million, while net revenue excluding excise taxes increased from $ 3.4 million to $ 24.75 million ($ 19.0 million).
The FactSet consensus showed a profit of 3 cents and revenue of $ 29.7 million. The third fiscal quarter of Organigram ended on May 31.
See also: Cannabis companies say that they are growing enough pot, they simply can not deliver it. Www.germnews.de/archive/gn/1996/03/27.html According to Engel He bought a large amount of cannabis to make sure it had enough weed to sell to the first 25 retailers. One source familiar with retail sales said stores that did not buy the originally available 100 kilograms would have had problems to ensure that there were enough products available and some closed several days a week.
"There was this big pipeline filling and after that you have introduced this cap so shops can buy 25kg per week from the first order of 100kg," Engel said. "It's a way to showcase things, but there are also a few other products, such as our Trailblazer brand."
Organigram Holdings US-listed stocks closed 4.6% on Monday. The stock has lost 8.3% in the last three months to Friday, while the ETFMG Alternative Harvest ETF
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fell by 13.1%, and the S & P 500
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Additional coverage by Tomi Kilgore.