What happened

Shares of the craft cannabis company Organigram Holdings (OGI 1.07%) were up by 5.98% on heavy volume as of 2:49 p.m. ET Monday afternoon. The Canadian pot company's shares appear to be responding positively to two material events:

  1. Organigram and fellow Canadian pot titan Tilray Brands (TLRY 0.58%) are both set to report their latest fiscal results this week. While Tilray will report its fiscal 2023 Q3 earnings after market close today, Organigram is scheduled to reveal its fiscal 2023 Q2 earnings after the closing bell on Tuesday. Investors, for their part, seem to be optimistic that Organigram and Tilray will both beat expectations. Keeping with this theme, Tilray's stock was also up by a healthy 5.4% at the time of this writing. 
  2. The Congressional Progressive Caucus is pressuring the Biden administration to expedite the ongoing review of marijuana as a Schedule I controlled substance, per a report from Marijuana Moment. This renewed call to fast-track the scheduling review on cannabis may not accomplish much from a regulatory standpoint, but it underscores the political clout cannabis legalization has gained in the United States. 

So what

Despite being one of the most efficient cannabis cultivators in Canada, Organigram's stock hasn't been able to escape the multiyear downward trend in the space. Since its IPO, Organigram's shares have lost a staggering 69% of their value. 

As a direct result of this bearish market for cannabis stocks, Organigram's shares have fallen well below the $1 minimum bid requirement to remain listed on the Nasdaq stock exchange. The company, in turn, might have to execute a reverse split later this year in order to keep its U.S. listing. Today's bullish overtones are thus welcome news for investors in the space in the broad sense, and for shareholders of Organigram stock in particular. 

Now what

Is Organigram's stock a buy ahead of earnings? While the company will probably be fine long term, the industry is in a tough spot at the moment. The Canadian market still needs widespread consolidation to boost profit margins, and additional international markets need to open up to increase sales volumes across the board. Until these two events take place, it's probably best to watch this beaten-down pot stock from the sidelines.