Just days after announcing a comprehensive rebrand as it shifts its focus to international markets, Organigram Global has acquired Hamilton-based Collective Project Limited (CPL) in a deal worth up to C$24m.
This acquisition, Organigram says, will fast-track its entrance into both the US and the thriving THC-beverages market, already seeing $1bn in retail sales with expectations this will grow to $4m by 2028.
Collective Project beverages are already stocked in major US retailers, including Total Wine and Top Ten Liquors, with availability in ten states expected by year-end.
In Canada, Organigram sees cannabis beverages as a high-growth category, especially if regulatory changes allow for on-premise consumption or expanded distribution.
Collective Project currently holds 5.6% of the Canadian cannabis beverage market, and the company plans to expand distribution beyond its current provincial footprint.
“This acquisition represents our first commercial entry into the U.S. hemp-derived THC beverage market and fast-tracks our entry into the beverage category in Canada,” said Beena Goldenberg, CEO of Organigram. “We believe cannabis beverages are on the verge of significant growth.”
Organigram also plans to leverage its proprietary FAST nanoemulsion technology to enhance Collective Project’s product offerings and will use its existing Canadian sales infrastructure to drive distribution.
Under the agreed acquisition, Organigram will acquire 100% of the issued and outstanding shares of CPL for an initial cash consideration of approximately C$6.2m, of which C$6m was attributed to the beverage business and C$200,000 to other cannabis categories, such as vapes and edibles.
The agreement also includes performance-based milestone payments, with C$2m in cash payable if CPL achieves US beverage wholesale sales of US$500,000 by June 30, 2025, and US$1 million by September 30, 2025.
Additionally, two potential earnout payments, calculated at 2.5 times trailing twelve-month net revenue through September 2025 and 2026 respectively, could bring the total transaction value to a maximum of C$24m.
These earnouts, if triggered, would be paid 50% in cash and 50% in Organigram shares, with share pricing based on the five-day VWAP on the TSX prior to settlement.
