Shares of Organigram Holdings (NASDAQ:OGI) were sliding 4.9% lower as of 11:18 a.m. EDT on Monday after falling as much as 13% earlier in the day. The decline appeared to be the result of an announcement OrganiGram made on Friday (when U.S. stock markets were closed). The Canadian cannabis producer stated that it had cut around 25% of its total workforce and expects revenue in the third quarter will be lower than in Q2.
OrganiGram's Q2 results were pretty bad. Investors are now bracing for an even worse Q3 update later this month. Why is OrganiGram expecting lower net revenue yet again? The company said on Friday that its Q3 results were "impacted by insignificant wholesale revenue being recorded in the quarter."
There could be some good news in OrganiGram's Q3 results, though. The company expects selling, general, and administrative expenses will be lower in Q3 than in Q2. It remains to be seen, however, if those lower expenses will be enough to offset lower revenue.
OrganiGram's changes reflect a new reality for all Canadian marijuana stocks. Current market conditions aren't what companies expected when they significantly ramped up production capacity over the last couple of years.
Just how ugly OrganiGram's Q3 results are will be revealed soon. The company's Q3 update is scheduled for July 21, 2020. This is nearly one week later than originally planned.