Organigram Announces C$124.6 Million Investment from BAT and Creation of “Jupiter” Strategic Investment Pool - Seite 3

Organigram has 10 years of experience within the Canadian cannabis market and has already made several successful cannabis investments. The acquisition and integration of the Edibles and Infusions Corporation, Laurentian Organics Inc., and more recently, its investment in Phylos Bioscience Inc. has propelled Organigram to a market leadership position in gummies and hash, as well as enabling the Company to be first to launch THCV products in Canada. This proven track 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 to their market potential, creating conditions for a “buyer’s 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, is 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 C$3.2203 per share, for gross proceeds of C$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 January 16, 2024) for gross proceeds of C$41.5 million with the remaining 25,786,350 shares to be subscribed for in two further equal tranches on or around August 30, 2024 and February 28, 2025.

To the extent BAT exceeds 30.0% holding of outstanding Common Shares, it will be issued non-voting Class A convertible preferred shares (“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%.