OrganiGram Holdings Inc (NASDAQ:OGI), a Canadian cannabis operator producer, has increased its investment in Phylos Bioscience Inc., a U.S.-based cannabis genetics company.
Following the achievement of a crucial milestone under their May 2023 loan agreement, Organigram has closed the second tranche, advancing $2.75 million to Phylos. This brings the total senior secured convertible loans to $6 million.Â
“We have always strived to be at the forefront of innovation through our commitment to scientific excellence and rigorous research. Our investment in Phylos was driven by that commitment, and we are thrilled with the progress we have made and the benefits we are reaping from this strategic investment,” says Borna Zlamalik, senior vice president of R&D and innovation at Organigram.
“To further expand and capitalize on this investment in Phylos, we are preparing the development of additional breeding programs which aim to deliver a suite of high potency minor cannabinoid flower to complement the THCV flower, with a focus on key rare cannabinoids such as CBG, CBC, CBDV and THCP,” he added.
Phylos creates cost-effective cannabis varietals. This includes a range of THCV cultivars with targeted potencies and specific aroma profiles.
In August, Organigram introduced its first THCV product lineup under its SHRED and Trailblazer brands, utilizing Phylos’ technology. The convertible loans from Organigram to Phylos will accrue interest and are convertible into common share equity of Phylos under specific conditions, including U.S. federal cannabis legalization.
Loan Agreement Details
The loan agreement stipulates additional funding of up to $2 million by May 2025, depending on milestone completion. The convertible loans, accruing interest at U.S. Prime + 3.5%, can be converted into Phylos equity under certain conditions​​.
OGI Price Action
OGI’s shares were trading 1.69% higher at $1.27 per share at the time of this writing around 1:30 p.m. EST Tuesday.
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