By Chris Wack

 

Organigram Holdings Inc. said Thursday it received a C$221 million ($175.1 million) strategic investment from a wholly owned subsidiary of British American Tobacco Plc.

The BAT subsidiary has subscribed for 58.3 million common shares of Organigram, which represents a 19.9% equity interest worth C$221 million at a price per share of C$3.792.

Organigram Inc. and BAT also have entered into a product development collaboration agreement which will focus on developing the next generation of cannabis products with an initial focus on CBD. The Center of Excellence will be located at Organigram's indoor facility in Moncton, New Brunswick, which holds the Health Canada licenses required to conduct research and development activities with cannabis products. Both companies will contribute scientists, researchers and product developers, and will be governed and supervised by a steering committee consisting of an equal number of senior members from both companies.

Under the terms of the agreement, both Organigram and BAT have access to certain of each other's intellectual property and have the right to independently, globally commercialize the products, technologies and IP created by the Center of Excellence.

Organigram shares were up 22% to $3.54 in premarket trading.

 

Write to Chris Wack at chris.wack@wsj.com

 

(END) Dow Jones Newswires

March 11, 2021 06:36 ET (11:36 GMT)

Copyright (c) 2021 Dow Jones & Company, Inc.
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