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by Stockwatch Business Reporter
The S&P/TSX Cannabis Index lost 1.38 points to 123.48 Tuesday, while the Canadian Securities Exchange Composite Index dropped 0.4 point to 274. In company news, Organigram Holdings Inc. (OGI) fell three cents to $2.39 on 1.44 million shares after temporarily laying off about 400 employees, or 45 per cent of its work force. The company claims the decision was "primarily to help boost COVID-19 containment efforts." Indeed, Organigram says it offered voluntary layoffs to some employees; those who accepted make up the majority of the layoffs. In other cases, COVID-19 made some administrative and support jobs "non-essential."
As a result of the layoffs, Organigram expects to see a reduction in its cultivation, production and packaging capacities. It plans to meet demand through its inventory. As of the end of fiscal Q1 (Nov. 30, 2019), the company had $101-million worth of marijuana sitting in inventory. (Inventory includes all marijuana grown. It can be grown but not packaged, so the $101-million is not all ready for sale. Nonetheless, Organigram still has employees to package and process marijuana, just at slower rates.) Based on $28-million of sales in Q1, there should be no short-term concern that Organigram will run out of product to sell.
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