Ms. Beena Goldenberg reports

ORGANIGRAM ANNOUNCES C$124.6 MILLION INVESTMENT FROM BAT AND CREATION OF "JUPITER" STRATEGIC INVESTMENT POOL

Organigram Holdings Inc. has arranged a $124.6-million follow-on strategic equity investment from BT DE Investments Inc., a wholly owned subsidiary of BAT, a leading, multicategory consumer goods business with a purpose to build a better tomorrow.

"We are excited to bring this transformative transaction to Organigram's shareholders, reinforcing our commitment to delivering shareholder value. This investment bolsters an already-strong balance sheet and solidifies our position as a leading cannabis company. In addition, this deepens the strategic partnership between Organigram and BAT, and we look forward to continuing to leverage BAT's global capabilities and scientific expertise," said Beena Goldenberg, chief executive officer of Organigram. "Jupiter, the strategic investment pool, is expected to accelerate Organigram's ambitious growth plans, enabling further geographic, technological and product expansion."

Strengthening Organigram's position to deliver results

This investment will not only allow Organigram to deliver on its stated ambition to extend its footprint beyond Canada but also strengthen its financial position for long-term, sustainable growth. This further enables Organigram to invest in growing the topline of its core business while optimizing operations to deliver on cost-saving efficiencies, thus accelerating earnings growth. The flexibility afforded to the company by this investment will provide incremental capital to Organigram to pursue new opportunities and expand on existing initiatives aimed at fuelling net revenue growth and achieving EBITDA (earnings before interest, taxes, depreciation and amortization) objectives.

Through this investment, Organigram aims to capitalize on its state-of-the-art facilities, support further workstreams in R&D (research and development) and product development and deliver impactful product launches. As a result of this, Organigram is poised to deliver further market share gains in this rapidly consolidating market, where the company was able to achieve a No. 2 market position in Canada over the last two months.

Building on the foundations of the Product Development Collaboration (PDC)

Since March, 2021, Organigram's partnership with BAT has gone from strength to strength, most significantly the progress achieved as part of the PDC agreement. Organigram's commercial business is already seeing significant benefits both from a scientific development standpoint and in terms of revenue-driving product capability.

This transaction furthers BAT's support of Organigram as a trusted partner and accelerates the focus on innovative cannabis science and R&D outside of combustibles. The PDC is now in late-stage development of a suite of emulsions, novel vapour formulations, flavour innovations and packaging solutions that are planned to be applied to certain products within Organigram's portfolio in calendar 2024. We expect these innovations to deliver market share and revenue growth for Organigram, appealing to a broad range of adult consumers seeking new, progressive cannabis formats with efficacious results.

Jupiter strategic investment pool will accelerate Organigram's growth ambitions

The majority of the $124.6-million investment will be used by Organigram to create a strategic investment pool named Jupiter. Jupiter will target investments in emerging cannabis opportunities that will enable Organigram to apply its industry-leading capabilities to new markets. 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. Organigram maintains the highest level of regulatory and product stewardship and will continue to monitor the cannabis regulatory environment carefully. As a result, all potential investments will undertake rigorous legal compliance and due diligence processes.

"The opportunity set within the cannabis space has grown significantly since our initial collaboration with BAT in March, 2021, and the category continues to expand globally as more adult consumers incorporate cannabis into their lives. The competitive nature of the industry also means that the opportunity for investments is ample for companies with strong balance sheets, industry experience, and a proven track record of M&A [merger and acquisition] success," said Paolo De Luca, chief strategy officer of Organigram. "Organigram's expertise and continued success in the cannabis industry means that we are well placed to bring best-in-class capabilities to the investment sourcing and due diligence process as well as postdeal integration. All investments will be considered with Organigram's long-term strategic vision in mind and with the goal of delivering incremental value to both the company and our shareholders."

Organigram has 10 years of experience within the Canadian cannabis market and has already made several successful cannabis investments. The acquisition and integration of Edibles and Infusions Corp. and Laurentian Organics Inc. and, more recently, its investment in Phylos Bioscience Inc. have propelled Organigram to a market leadership position in gummies and hash as well as enabling the company to be first to launch THCV (delta-9 tetrahydrocannabivarin) products in Canada. This proven record, combined with Organigram's industry knowledge, can now be applied at a larger scale through Jupiter.

Current market conditions are optimal for such an investment approach for several reasons:

• Emerging cannabis legalization trends are happening at a global level as well as an expanding adult consumer base, setting the stage for continued category growth.
• A large proportion of cannabis companies continue to be undervalued compared with their market potential, creating conditions for a buyer market.
• Many cannabis companies are looking for strategic investors to help scale their businesses, resulting in a high volume of inbound deal opportunities.
• Products arising from the PDC agreement are nearing commercialization. Initial testing has been very positive, and the investment pool enables Organigram to bring these innovations to markets beyond Canada, reaching new adult consumers globally.
• To capitalize on this opportunity, Organigram will be setting up an internal team that will be focused on sourcing future investment targets and concluding transactions. This will ensure that an entrepreneurial approach and best-in-class industry knowledge, including that of the regulatory environment, are applied throughout the sourcing process.

Proposed private placement of common shares and convertible preferred shares

Subject to the receipt of certain regulatory approvals, approval from Organigram's shareholders and other conditions, BAT will subscribe for 38,679,525 shares at a price of $3.2203 per share for gross proceeds of $124.6-million across three tranches.

BAT will subscribe for 12,893,175 million shares on the closing of the first tranche (currently expected to be on or around Jan. 16, 2024) for gross proceeds of $41.5-million with the remaining 25,786,350 shares to be subscribed for in two further equal tranches on or around Aug. 30, 2024, and Feb. 28, 2025.

To the extent BAT exceeds a 30.0-per-cent holding of outstanding common shares, it will be issued non-voting Class A convertible preferred shares. Accordingly, in aggregate, based on Organigram's current 81,161,630 common shares outstanding, 12,999,231 common shares will be issued and the remaining 25,680,294 shares will be initially issued as preferred shares. The preferred shares will be eligible for conversion into voting common shares at BAT's option, provided that such conversion would not result in BAT's voting interest in the company exceeding 30 per cent.

In connection with the closing of the first tranche of the investment and subject to approval by Organigram's shareholders, the company will file articles of amendment to create the new class of preferred shares to be issued to BAT in the investment.

Class A preferred shares

Each preferred share shall be economically equivalent to a common share and will be convertible into common shares at the option of BAT without payment of any additional consideration. The conversion ratio shall initially be one for one and, after issuance, shall increase at a rate of 7.5 per cent per annum, compounded annually, until such time as the preferred shares are converted into common shares or the aggregate equity interest of BAT in Organigram (inclusive of both the common shares and preferred shares as if converted into common shares) reaches 49 per cent. BAT shall be periodically required to convert preferred shares to the extent that it holds less than 30 per cent of the common shares outstanding.

Board representation

In connection with the closing of the first tranche, Organigram and BAT will enter into an amended and restated IRA (investor rights agreement), pursuant to which BAT will be eligible to appoint up to 30 per cent of the board.

Investment approvals

The investment constitutes a related party transaction under Multilateral Instrument 61-101, Protection of Minority Security Holders in Special Transactions, and will require majority of the minority approval under MI 61-101. The investment will also require disinterested shareholder approval under Section 604(a)(ii) of the Toronto Stock Exchange company manual. Completion of the investment is also subject to the approval of the TSX and approval under the Competition Act (Canada).

The company intends to obtain the requisite shareholder approval at its annual and special shareholder meeting to be held on or around Jan. 15, 2024. The closing of the first tranche is expected to occur thereafter, subject to the satisfaction of the closing conditions under the subscription agreement entered into between Organigram and BAT, a copy of which will be available on Organigram's SEDAR+ profile.

Additional information regarding the investment will be included in a material change report to be filed by Organigram on SEDAR+. This press release is only a summary of certain principal terms of the investment and is qualified in its entirety by reference to the more detailed information contained in the material change report.

About Organigram Holdings Inc.

Organigram Holdings is a company (listed on the Nasdaq Global Select Market and the TSX) whose wholly owned subsidiaries include Organigram Inc. a licensed producer of cannabis, cannabis-derived products and cannabis-infused edibles in Canada.

Organigram is focused on producing high-quality cannabis for patients and adult recreational consumers as well as developing international business partnerships to extend its global footprint. Organigram has also developed and acquired a portfolio of legal adult-use recreational cannabis brands, including Edison, Holy Mountain, Big Bag O' Buds, Shred, Shred'ems, Monjour, Laurentian, Tremblant Cannabis and Trailblazer. Organigram operates facilities in Moncton, N.B., and Lac-Superieur, Que., with a dedicated edibles manufacturing facility in Winnipeg, Man. The company is regulated by the Cannabis Act and the Cannabis Regulations (Canada).

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