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Organigram Holdings Inc. (NASDAQ:OGI) (TSX:OGI) has reached agreement with Phylos Bioscience Inc., to initiate a wide-ranging technical and commercial relationship in Canada. This innovation relationship is expected to further support Organigram’s cultivation efforts in Canada with patent-pending foundational technologies and genetics. In the future, subject to receipt of any required approvals and permits, Organigram intends to export THCV products to select legal international markets.
THCV (Delta 9-Tetrahydrocannabivarin)
THCV is a minor cannabinoid that has been shown to provide a distinctive user experience with an energizing and focused effect, low to no cognitive impairment or intoxication compared to THC and has been shown to have potential as an appetite suppressant. Phylos has developed, and is continuing to develop, proprietary high-THCV genetics in various THCV:THC ratios.
Production-Ready Seeds
F1 Hybrid Phylos Production-Ready Seed enables direct sowing of cannabis seeds compared to today's clone-based production. Seed-based production offers the economic advantages of reduced labor while recapturing existing facility footprint currently used by Organigram for raising clones for production.
Strategic Rationale and Opportunities
According to the company it would become the first Canadian licensed producer to release high potency whole plant derived THCV in Canada based on Phylos’ genetics platform;
Enabling Organigram to modernize cannabis production and employ seed-based production at scale;
Enabling Organigram to develop seed-based F1 hybrid genetics for key Organigram brands such as SHRED, providing future opportunities to offer ‘turn-key’ U.S. and international licensing of seed-based genetics and an established cannabis brand when and where legal.
Convertible Loan Details
Under the terms of the loan agreement, Organigram will advance up to $8 million to Phylos in three tranches. Organigram advanced Phylos an initial $3.25 million on May 25th, with a commitment to fund up to an additional $4.75 million over two tranches within 12 and 24 months from the initial closing date, upon the completion of certain milestones.
The convertible loan will accrue paid-in-kind interest at a rate of U.S. Prime + 3.5% (with an overall cap of 11%) subject to certain conditions. The maturity date of the convertible loan will be on the fifth anniversary of the initial closing date subject to one-year extensions and subject to certain conditions. The convertible loan is convertible into common share equity of Phylos under certain circumstances .
Photo: Benzinga edit with photo by Kindel Media on Pexels
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