Organigram Holdings Inc. said after its annual shareholder meeting and special meeting that it approved tobacco giant British American Tobacco Plc's "transformational" investment in the Canadian cannabis producer.
The deal, first announced in November, calls for British American Tobacco subsidiary BT DE Investments SA to invest C$124.6 million ($92.5 million) in Organigram, deepening an existing partnership between the cannabis company and BAT.
British American Tobacco first invested in Organigram in 2021.
The additional investment will ultimately give BAT 30% ownership of voting common shares and 45% overall equity ownership.
The majority of the funds will be used by Organigram to fund a strategic investment pool called Jupiter, which will target investments in the emerging cannabis market.
The first of three tranches of equity investments closed this week, with a subsidiary of British American Tobacco acquiring 12,893,175 shares of Organigram for about C$3.20 per share.
"With this transformational transaction now formally approved by shareholders and with first tranche of funding secured, we look forward to achieving our goals of geographic and technological growth and product expansion," said Paolo De Luca, chief strategy officer at Organigram.
Organigram's total revenue was C$41.5 million.
The Canadian company said it will conduct two further financings around August 30, 2024 and February 28, 2025.
"Management has identified geographic expansion as a strategic priority and this opportunity provides the company with the capital to build a global foundation as the legal recreational cannabis market continues to grow significantly," the company said in a release.
Karina Gehring was appointed to Organigram’s Board of Directors at the annual meeting.
Gehring is one of two named directors of the British American Tobacco subsidiary, including Simon Ashton, who has been nominated to the Organigram board.
Shareholders also approved the creation of a new class of preference shares (Class A) to be issued to British American Tobacco subsidiaries as part of the investment.
Organigram's shares trade on the Nasdaq and Toronto Stock Exchange under the symbol OGI.
