Organigram Global Inc. (OGI) shares climbed Thursday morning after the cannabis company locked down a 65.2 million Canadian dollar private placement from British American Tobacco's (BTI) subsidiary, effectively greenlighting its European expansion plans.
The funding breakthrough answers the question investors have been asking: how exactly will Organigram pay for its ambitious Sanity Group acquisition? Now we know.
How the Deal Breaks Down
British American Tobacco's subsidiary is subscribing to 14,027,074 shares at 3.00 Canadian dollars each, putting 42.08 million Canadian dollars on the table. Add in the exercise of top-up rights for another 9,897,356 shares at 2.335854 Canadian dollars per share (worth 23.12 million Canadian dollars), and you get 65.2 million Canadian dollars in total gross proceeds.
This isn't just abstract numbers. The money directly addresses the funding gap for Organigram's proposed acquisition of Sanity Group GmbH. The proceeds will cover the cash portion of the 113.4 million euro upfront consideration, plus transaction expenses and general working capital needs.
Wednesday's hint that advanced negotiations were underway has now become Thursday's reality. That quick progression from "we're talking" to "it's done" suggests both parties were eager to get this across the finish line.
Why This Matters Beyond the Dollars
The confirmed investment does two things simultaneously. First, it strengthens Organigram's balance sheet in a concrete way. Second, and perhaps more importantly, it signals continued backing from British American Tobacco, which already holds stakes in both Organigram and Sanity.
That alignment isn't coincidental. BAT's willingness to deepen its involvement reinforces confidence in the strategic logic of building a global pure-play cannabis platform with meaningful exposure to key European markets. When your major shareholder puts more money in rather than sitting on the sidelines, that's usually a good sign.
