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Organigram Holdings Inc
Symbol OGI
Shares Issued 124,613,210
Close 2018-05-07 C$ 4.40
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Organigram to acquire 25% of German medical pot player

2018-05-08 06:40 ET - News Release

Mr. Greg Engel reports

ORGANIGRAM ANNOUNCES FIRST INTERNATIONAL EXPANSION INVESTMENT

Organigram Holdings Inc. has entered a non-binding term sheet to acquire up to 25 per cent of alpha-cannabis Pharma GmbH (Alpha-Cannabis Germany or ACG) located in Stadthagen, Germany.

"We are proud to have developed a world-class indoor facility producing Canada's premier medical cannabis which is now ready to help support the global cannabis market," said Greg Engel, chief executive officer, Organigram. "As we expand into international market development and technology acquisition, we are pleased to announce our proposed investment in Alpha-Cannabis Germany, the first of what we anticipate will be several international business development announcements. We have taken the time to curate several opportunities which, like ACG, we believe offer excellent strategic fit and add value to our core operations."

According to the non-binding term sheet, Organigram will invest up to 1,625,000 euros in cash and 875,000 euros worth of Organigram common shares (based on the achievement of milestones) for 25 per cent of the aggregate issued and outstanding shares of Alpha-Cannabis Germany on a fully diluted basis. Once the agreement is final, Organigram will provide ACG with dried cannabis flower as well as sweet leaf for conversion into extracts for the burgeoning German medical cannabis market. Further, the parties also anticipate entering into an agreement whereby Organigram will have an option to purchase pure synthetic CBD isolate from Alpha-Cannabis Germany. The parties anticipate jointly submitting for future licences available to supply medical cannabis in the German market.

"We have been looking for a strategic partnership with an experienced group that is committed to world-class product quality and safety," said Alexander Klomsdorff, Alpha-Cannabis Germany CEO. "Product excellence is a prerequisite for serving the German market with medical cannabis and cannabis-based drugs. Organigram's total quality management and monitoring system gives us confidence in them as one of Canada's most reliable producers performing far beyond regulatory requirements."

The closing is subject to customary conditions for an investment of this nature, including satisfactory due diligence, TSX Venture Exchange regulatory approval, and all other required regulatory approvals and consents.

About alpha-cannabis Pharma GmbH (Alpha-Cannabis Germany)

Established in 2016, Alpha-Cannabis Germany is strategically positioned to serve the German medical cannabis market which is quickly becoming one of the largest markets for medical cannabis in the world. Additionally, the German market is positioned as a potential gateway to supplying other European markets.

With team of highly experienced and reputable specialists from the pharmaceutical industry with scientific and business backgrounds, ACG is focused on the development, production and marketing of cannabis-based APIs (active pharmaceutical ingredients) and pharmaceuticals. ACG's activities cover the spectrum of cannabinoids. The company enjoys a strong network of professional partners throughout Germany and its recently announced launch of a CBD kit will be available in over 20,000 pharmacies throughout Germany, Austria and Switzerland.

About Organigram Holdings Inc.

Organigram's wholly owned subsidiary, Organigram Inc., is a licensed producer of medical marijuana in Canada. Organigram is focused on producing the highest-quality, condition-specific medical marijuana for patients in Canada. Organigram's facility is located in Moncton, N.B., and the company is regulated by the Access to Cannabis for Medical Purposes Regulations (ACMPR).

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