Organigram Reports Postive Cash Flow and Update on Recent Events - Seite 2

In connection to the product recalls in December 2016 and January 2017, Organigram has communicated extensively with its customers, regulators, and licensed labs regarding the issue and origin of the ingredients. The Company has taken immediate and comprehensive corrective measures within its operating and quality assurance procedures to ensure such an event does not re-occur.

"Organigram, like many of the first movers in this emerging industry, has experienced incredible growth in our business, operating infrastructure, and within our team. We have also faced challenges and setbacks as the regulations that govern our industry and the market in which we operate continues to evolve. Thanks to the prompt action of our team, the understanding and loyalty of our patients and investors, the support of our licensed testing counterparties, and the collaboration and oversight of our industry's regulators, the Company has been able to address these challenges and setbacks immediately and definitively," says Denis Arsenault, Chief Executive Officer of Organigram.

Organigram is working closely with Health Canada to determine the origin of the non-permitted ingredients. Since the voluntary product recall, Organigram has successfully harvested and tested new batches of organic as well as non-organic medical cannabis and has maintained inventory in its online store to ensure Organigram patients do not go without medication.

As a result of the recall, the unrealized fair value adjustment of inventory includes a loss of $499,857 for the three-month period ended November 30, 2016 and there may be further adjustments to the unrealized fair value of biological assets and inventory.

"This process, the required action and disclosure, combined with the necessity for each producer to track every product in the regulated cannabis market highlights that the Canadian cannabis regulatory system works, that Canadian consumers are being protected, and that the regulations governing the cannabis market in Canada provide a gold standard for the world to follow", says Arsenault.

The Company has seen great progress with its onsite expansion initiatives, and is pleased to share additional details relating to the phase 3 expansion, which is now expected to be completed and operational by December. The expansion infrastructure, which will be built and operated in accordance with the Company's recently supplemented quality assurance and operating procedures, is expected to increase the Company's run-rate production capacity to 17,000 kg per year by the early 2018.