Cannabis company OrganiGram Holdings ( OGI -6.67% ) took a tumble on the market. In the wake of the Canadian company's release of its latest quarterly results, it closed Tuesday nearly 11% lower.
Marijuana stock investors are starving for encouraging signs of growth and current/potential profitability in their companies. With OrganiGram's first quarter of fiscal 2021 figures, unfortunately, they didn't get any.
For the quarter, the company's net revenue totaled just under 19.3 million Canadian dollars ($15.1 million), which was 23% down on a year-over-year basis and 5% below that of the previous quarter. Net loss, meanwhile, was CA$34.3 million ($26.9 million) against the year-ago shortfall of CA$863,000 ($676,000) and narrower than Q4 2020's deficit of CA$38.6 million ($30.2 million).
According to Zack's Investment Research, that top line missed the average analyst estimate. Prognosticators following the stock were also expecting a considerably narrower loss.
OrganiGram attributed the revenue slide to "significantly" lower take in the wholesale segment from licensed producers and a lower average selling price overall for marijuana during the quarter.
OrganiGram just doesn't seem to be able to counter the price erosion in the Canadian market. What it calls "Rec 2.0" products -- the derivatives such as cannabis-infused candies and drinks that were legalized in 2019 -- helped fuel the company's recreational marijuana revenue sales, which rose 30% year over year. That is only a short-term sugar rush, however, as in the year-ago quarter those goods hadn't yet come to market.