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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM 40-F
☐ REGISTRATION STATEMENT PURSUANT TO SECTION 12 OF THE SECURITIES EXCHANGE ACT OF 1934
OR
☒ ANNUAL REPORT PURSUANT TO SECTION 13(a) OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934
| | | | | |
For the fiscal year ended September 30, 2025 | Commission File Number 001-38885 |
ORGANIGRAM GLOBAL INC.
(Exact name of Registrant as specified in its charter)
| | | | | | | | |
| Canada | 2833 | N/A |
| (Province or Other Jurisdiction of Incorporation or Organization) | (Primary Standard Industrial Classification Code) | (I.R.S. Employer Identification No.) |
1400-145 King Street West
Toronto, Ontario
Canada M5H 1J8
Tel: 1-844-644-4726
(Address and telephone number of Registrant's principal executive offices)
CORPORATION SERVICE COMPANY
251 Little Falls Drive
County of New Castle
Wilmington, Delaware 19808
Tel: 1-800-927-9800
(Name, address (including zip code) and telephone number (including area code)
of agent for service in the United States)
Securities registered or to be registered pursuant to Section 12(b) of the Securities Exchange Act of 1934 (the "Exchange Act"):
| | | | | | | | |
| Title of each class | Trading Symbol | Name of each exchange on which registered |
| Common Shares | OGI | NASDAQ Global Select Market |
Securities registered or to be registered pursuant to Section 12(g) of the Exchange Act: None
Securities for which there is a reporting obligation pursuant to Section 15(d) of the Exchange Act: None
For annual reports, indicate by check mark the information filed with this Form:
☑ Annual Information Form ☑ Audited Annual Financial Statements
Indicate the number of outstanding shares of the Registrant’s classes of capital or common stock as of the close of the period covered by the annual report: 134,461,029
Indicate by check mark whether the Registrant (1) has filed all reports required to be filed by Section 13 or 15(d) of the Exchange Act during the preceding 12 months (or for such shorter period that the Registrant was required to file such reports) and (2) has been subject to such filing requirements for the past 90 days.
☑ Yes ☐ No
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted and posted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the Registrant was required to submit and post such files).
☑ Yes ☐ No
Indicate by check mark whether the registrant is an emerging growth company as defined in Rule 12b-2 of the Exchange Act.
Emerging growth company ☐
If an emerging growth company that prepares its financial statements in accordance with U.S. GAAP, indicate by check mark if the registrant has elected not to use the extended transition period for
complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. ☐
Indicate by check mark whether the registrant has filed a report on and attestation to its management's assessment of the effectiveness of its internal control over financial reporting under Section 404(b) of the Sarbanes-Oxley Act (15 U.S.C. 7262(b)) by the registered public accounting firm that prepared or issued its audit report. ☑
If securities are registered pursuant to Section 12(b) of the Act, indicate by check mark whether the financial statements of the registrant included in the filing reflect the correction of an error to previously issued financial statements. ☐
Indicate by check mark whether any of those error corrections are restatements that required a recovery analysis of incentive-based compensation received by any of the registrant's executive officers during the relevant recovery period pursuant to §240.10D-1(b). ☐
INTRODUCTORY INFORMATION
Organigram Global Inc. (the "Company" or "Organigram") is a "foreign private issuer" as defined in Rule 3b-4 under the Exchange Act, and is a Canadian issuer eligible to file its annual report ("Annual Report") pursuant to Section 13 of the Exchange Act on Form 40-F pursuant to the multi-jurisdictional disclosure system (the "MJDS") adopted by the United States Securities and Exchange Commission (the "SEC"). The Company's common shares are listed on the Toronto Stock Exchange (the "TSX") and the Nasdaq Global Select Market ("NASDAQ") under the trading symbol "OGI".
In this annual report, references to "we", "our", "us", the "Company" or "Organigram", mean Organigram Global Inc. and our wholly-owned subsidiaries, unless the context suggests otherwise.
Unless otherwise indicated, all amounts in this annual report are in Canadian dollars and all references to "$" or "Cdn.$" mean Canadian dollar and references to "U.S. dollars" or "US$" are to United States dollars.
PRINCIPAL DOCUMENTS
The following principal documents are filed as exhibits to, and incorporated by reference into this Annual Report:
| | | | | |
| Document | Exhibit No. |
| Audited consolidated financial statements of the Company and notes thereto as at and for the year ended September 30, 2025, together with the reports thereon of the independent registered public accounting firm | |
Management's Discussion and Analysis of the Company for the year ended September 30, 2025 (the "MD&A") | |
Annual Information Form of the Company for the year ended September 30, 2025 (the "AIF") | |
FORWARD-LOOKING STATEMENTS
This Annual Report (including the documents incorporated by reference herein) includes or incorporates by reference certain statements that constitute "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. These statements appear in a number of places in this Annual Report and include statements regarding our intent, belief or current
expectation and that of our officers and directors. Such statements can be identified by the use of forward-looking terminology such as "outlook", "objective", "may", "will," "could", "would", "might", "expect", "intend", "estimate", "anticipate", "believe", "plan", "continue", "budget", "schedule" or "forecast" or similar expressions suggesting future outcomes or events. They include, but are not limited to, statements with respect to expectations, forecasts or other characterizations of future events or circumstances, and the Company's objectives, goals, strategies, beliefs, intentions, plans, estimates, projections and outlook, including statements relating to the Company's plans and objectives, or estimates or predictions of actions of customers, suppliers, partners, distributors, competitors or regulatory authorities; and, statements regarding the Company's future economic performance. These statements are not historical facts but instead represent management beliefs regarding future events, many of which by their nature are inherently uncertain and beyond management control. Forward-looking information has been based on the Company's current expectations about future events.
Forward-looking statements in this Annual Report include, but are not limited to, statements with respect to:
•Expectations regarding production capacity, facility size, THC (as defined in the AIF) content, costs and yields;
•Expectations regarding the prospects of the Company's collaboration and ongoing investment from BT DE Investments Inc., a wholly-owned subsidiary of British American Tobacco p.l.c. (referred to in the AIF and MD&A as "BAT");
•Expectations regarding the prospects for the Company's principal operating subsidiary Organigram Inc. (formerly, Organigram, EIC and LAU (as defined in the AIF));
•Expectations around demand for cannabis and related products, future opportunities and sales including the relative mix of medical versus adult-use recreational products, the relative mix of products within the adult-use recreational category including wholesale, the Company's financial position, future liquidity and other financial results;
•Changes in legislation related to permitted cannabis types, forms and potency and legislation of additional cannabis types and forms for adult-use recreational cannabis in Canada, including regulation relating thereto, the timing and the implementation thereof, and our future product forms;
•Expectations around branded products and derivative-based products with respect to timing, launch, product attributes, composition and consumer demand;
•Expectation to create sustainable competitive advantage through relevant and differentiated consumer products and medical trade engagement materials;
•Expectation to renew the Company's licenses prior to their expiry dates;
•Expectations around the Company's ability to develop current and future vapour hardware, and the Company's ability to expand its share of the vapour market;
•Strategic investments and capital expenditures, and expected related benefits;
•The expectation that the technical arrangement between Organigram and Phylos Bioscience Inc. will permit Organigram to continue to transition a portion of its garden to seed-based cultivation over time, and the anticipated benefits of seed-based production;
•The expectations regarding the Company's investments in Green Tank Technologies Corp., Steady State LLC doing business as Open Book Extracts, and Sanity Group GmbH;
•The expectations regarding the Company's acquisition and integration of Motif Labs Ltd. and Collective Project Limited;
•Expectations regarding the resolution of litigation and other legal proceedings;
•The general continuance of current, or where applicable, assumed industry conditions;
•Changes in laws, regulations and guidelines, including those relating to the recreational market, the medical cannabis markets domestically and internationally, and in particular, with respect to changes in hemp and marijuana in the U.S.;
•Changes in laws, regulations, guidelines and policies, including those related to minor cannabinoids;
•The impact of the Company's cash flow and financial performance on third parties, including its supply partners;
•Fluctuations in the price of the Common Shares and the market for the Common Shares;
•The treatment of the Company's business under international regulatory regimes and impacts on changes thereto to the Company's international sales;
•The Company's growth strategy, targets for future growth and forecasts of the results of such growth;
•Expectations concerning access to capital and liquidity, and the Company's ability to access the public markets to fund operational activities and growth;
•The Company's ability to remain listed on the TSX and NASDAQ, and the impact of any actions it may be required to take to remain listed;
•The ability of the Company to generate cash flow from operations and from financing activities;
•The competitive conditions of the industry, including the Company's ability to maintain or grow its market share; and
•Expectations concerning Fiscal 2026 performance.
Certain of the forward-looking statements and other information contained herein are based on estimates prepared by the Company using data from publicly available governmental sources as well as from market research and industry analysis, and on assumptions based on data and knowledge of the
medical cannabis industry, industrial hemp industry and the adult-use recreational cannabis industry which the Company believes to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. While the Company is not aware of any misstatement regarding any industry or government data presented herein, the medical cannabis industry, industrial hemp industry, and the adult-use recreational cannabis industry involve risks and uncertainties that are subject to change based on various factors.
Although the Company believes that the expectations reflected in such forward-looking statements are reasonable, it can give no assurance that such expectations will prove to be correct. The Company’s forward-looking statements are expressly qualified in their entirety by this cautionary statement. A number of factors could cause actual events, performance or results to differ materially from what is projected in the forward-looking statements. These factors include, but are not limited to, risks related to competition, changes in the Canadian cannabis industry and market, governmental regulation, changes in laws, regulations and guidelines, reliance primarily on a single cultivation facility, reliance on key inputs and volatility in the wholesale and retail prices of cannabis, the Company’s success in developing new products and finding a market for the sale of new products, licence renewal risks, risk inherent in the agricultural business, rising energy costs, negative cash flows from operations, dividends, competition from illicit markets, acquisition and integration risk, volatility in the market for the Company’s securities, history of losses, product liability, sufficiency of insurance, management of growth, financing risks, risks relating to developing and maintaining effective internal controls for reliable financial reporting and for fraud prevention, reliance on key personnel, risks relating to the resurgence of pandemic and catastrophic events, product recalls, risks relating to litigation and securities class actions, difficulties with forecasts, uninsured and uninsurable events risks, risks relating to inflation, unknown health impacts of the use of cannabis and cannabis-derivatives, reliance on third-party transportation, ability to meet target production capacity, scale of operations, supply chain and distribution disruptions, facility and technological risks, packaging and shipping logistics, changes to government laws, regulations or policy, including the amendment of the definition of hemp in the 2018 Farm Bill (U.S.) to effectively eliminate hemp-derived THC products, potential time frame for the implementation of legislation to legalize cannabis internationally, risks relating to the ability of the Company to obtain and/or maintain their status as a licensed producer, the potential size of the regulated adult-use recreational cannabis market, demand for and changes to products, the development of the vapour market, political conditions, market opportunities, timing of final implementation of the Company’s enterprise resource planning system, contracts or other arrangements with provincial governments are not guaranteed, TSX and NASDAQ listing requirements and the ability to continue to meet listing standards for the TSX and the NASDAQ, risks relating to the Company’s designation as a “large accelerated filer”, differing shareholder protections across jurisdictions, increased volatility for dual-listed shares, market liquidity risks, investment risk, risks
relating to the Company’s status as a foreign private issuer in the U.S., risks relating to expansion into new markets, foreign investment risk, risk of corruption and fraud in emerging markets and relating to ownership of real property; risks relating to the Company’s IP, credit risk, liquidity risk, concentration risk, risks associated with significant shareholders, dividends, publicity or consumer perception, cyber security and privacy, product security, environmental and employee health and safety regulations, regulatory proceedings, investigations and audits, fraudulent or illegal activity by employees, restrictions on foreign investors, regulatory and operational risks associated with expansion into foreign jurisdictions, reliance on international advisers and consultants, anti-money laundering laws and regulation risks, anti-corruption and anti-bribery laws, global economic risks, future acquisitions, general business risks and liabilities, dilution, constraints on marketing products, provincial legislative controls, suppliers and skilled labour, conflicts of interest, risks associated with the Company’s status as a holding company and the other risks described in AIF. Material factors and assumptions used in establishing forward-looking information include that construction and production activities will proceed as planned and regulatory conditions will advance in the manner expected by management. The purpose of forward-looking statements is only to provide the reader with a description of management’s expectations relating to future periods, and, as such, forward-looking statements are not appropriate for any other purpose. You should not place undue reliance on forward-looking statements contained in this Annual Report.
All forward-looking information is provided as of the date of this Annual Report. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as and to the extent required by applicable law, including applicable United States federal securities laws.
See also "Risk Factors" in the MD&A and the AIF.
NOTE TO UNITED STATES READERS REGARDING DIFFERENCES
BETWEEN UNITED STATES AND CANADIAN REPORTING PRACTICES
The Company is permitted to prepare this Annual Report in accordance with Canadian disclosure requirements, which are different from those of the United States. The Company prepares its consolidated financial statements in accordance with International Financial Reporting Standards ("IFRS"), as issued by the International Accounting Standards Board (the "IASB"), which differ in certain respects from United States generally accepted accounting principles ("US GAAP") and from certain practices prescribed by the SEC. Therefore, the Company's financial statements incorporated by reference in this Annual Report may not be comparable to financial statements prepared in accordance with US GAAP.
CURRENCY
Unless otherwise indicated, all dollar amounts in this Annual Report are in Canadian dollars. The exchange rate of Canadian dollars into United States dollars, on October 1, 2025, based upon the daily exchange rate as quoted by the Bank of Canada was U.S.$1.00 = Cdn. $1.394.
TAX MATTERS
Purchasing, holding, or disposing of the Company's securities may have tax consequences under the laws of the United States and Canada that are not described in this Annual Report.
DISCLOSURE CONTROLS AND PROCEDURES
Disclosure controls and procedures are defined in Rule 13a-15(e) and 15d-15(e) under the Exchange Act to mean controls and other procedures of an issuer that are designed to ensure that information required to be disclosed by the issuer in the reports that it files or submits under the Exchange Act is recorded, processed, summarized and reported, within the time periods specified in the SEC's rules and forms and includes, without limitation, controls and procedures designed to ensure that such information is accumulated and communicated to the issuer's management, including its principal executive and principal financial officers, or persons performing similar functions, as appropriate, to allow timely decisions regarding required disclosure.
As of the end of the period covered by this report, our management carried out an evaluation, with the participation of Beena Goldenberg, our Chief Executive Officer until November 30, 2025, and Peter Amirault, our Executive Chair acting in the capacity of interim Chief Executive Officer effective December 1, 2025 ("CEO"), and our Chief Financial Officer ("CFO"), of the effectiveness of our disclosure controls and procedures. Based upon that evaluation, our CEO and CFO concluded that, as of the end of the period covered by this report, our disclosure controls and procedures, as defined in Rule 13a-15(e), were not effective because of the material weaknesses in our internal control over financial reporting noted below and described in the MD&A.
INTERNAL CONTROL OVER FINANCIAL REPORTING
Internal Control over Financial Reporting
Internal control over financial reporting, as defined by Rule 13a-15(f) and 15d-15(f) of the Exchange Act ("ICFR"), is a process designed by, or under the supervision of, the Company's principal executive and principal financial officers or persons performing similar functions and effected by the Board of Directors, management and other personnel, to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with IFRS as issued by the IASB. ICFR includes policies and procedures that:
•pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the Company;
•provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with IFRS, and that receipts and expenditures of the Company are being made only in accordance with authorizations of management and directors of the Company; and
•provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use or disposition of the Company's assets that could have a material effect on the financial statements.
In connection with the Company's reporting obligations in Canada and its obligations under Rule 13a-15(c) under the Exchange Act, management, under the supervision and with the participation of its CEO and CFO, conducted an evaluation of the effectiveness of the Company's ICFR as of September 30, 2025, using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) Internal Control - Integrated Framework (2013). Based on this evaluation management concluded that a material weakness existed as of September 30, 2025, as described at page 21 of the MD&A under the heading "Management's Evaluation of Internal Control over Financial Reporting", filed as Exhibit 99.5 to this Annual Report.
Attestation Report of the Independent Registered Public Accounting Firm
PKF O’Connor Davies, LLP, an Independent Registered Public Accounting Firm, has audited the Company's consolidated annual financial statements for the year ended September 30, 2025, and has
issued an adverse report on the effectiveness of ICFR which is addressed to the Board of Directors of the Company and is included in the Company's audited consolidated annual financial statements filed as Exhibit 99.4 to this Annual Report.
Changes in Internal Control over Financial Reporting
There has been a change to the Company’s ICFR during the three months ended September 30, 2025 ("Q4 Fiscal 2025") that has materially affected, or is likely to materially affect, the Company’s ICFR.
During Q4 Fiscal 2025, staff turnover among personnel responsible for preparing and reviewing complex spreadsheets related to biological assets and inventory impacted management's ability to maintain effective operation of applicable controls.
Security and Administration and Monitoring of Service Organizations
With respect to the material weakness related to the information process during Fiscal 2025, the following remedial activities were completed and the material weakness assessed was remediated in Q4 Fiscal 2025:
•Engaged internal control specialists that assisted management in evaluating internal controls and in designing remediation plans;
•Hired a VP, Information Technology, to oversee and enhance the IT department and support the remediation of deficiencies in general IT controls;
•Hired and trained a dedicated resource to review the third-party service organization control reports and assess their impact in relation to the Company's control environment; and
•Remediated certain IT general controls.
CORPORATE GOVERNANCE
The Board of Directors is responsible for the Company’s corporate governance and has the following separately designated standing committees: the Governance, Nominating and Sustainability Committee, the Compensation Committee, the Investment Committee, and the Audit Committee. The respective charters of the Governance, Nominating and Sustainability Committee, the Compensation Committee, the Investment Committee, and the Audit Committee can be viewed on the Company’s corporate website at www.organigram.ca. In addition, the Company’s Audit Committee Charter is attached as Appendix “A” to the AIF, which is filed as Exhibit 99.6 to this Annual Report.
Governance, Nominating and Sustainability Committee and Compensation Committee
The Governance, Nominating and Sustainability Committee is responsible for reviewing, overseeing and evaluating the governance, nominating and sustainability policies of the Company, and the Compensation Committee is responsible for reviewing, overseeing and evaluating the compensation policies of the Company.
The mandate of the Governance, Nominating and Sustainability Committee includes: (a) assessing the effectiveness of the Board of Directors, each of its committees and individual directors; (b) overseeing the recruitment and selection of candidates to be nominated for election as directors; (c) organizing an orientation and education program for new directors; (d) considering and approving proposals by the directors to engage outside advisors on behalf of the Board of Directors as a whole or on behalf of the independent directors; (e) reviewing and making recommendations to the Board of Directors concerning the size, composition and structure of the Board of Directors and its committees; and (f) overseeing management succession.
The Compensation Committee is responsible for: (a) administering any securities-based compensation plans of the Company; (b) assessing the performance of the Company's management; (c) reviewing and approving the compensation paid by the Company, if any, to the Company's officers; and (d) reviewing and making recommendations to the Board of Directors concerning the level and nature of the compensation payable to Company's directors and officers. The Compensation Committee is also responsible for administering the Company's Policy for the Recovery of Erroneously Awarded Incentive-Based Compensation (the "Recovery Policy"), which has been adopted by the Board of Directors pursuant to Rule 5608 of the NASDAQ Marketplace Rules. A copy of the Recovery Policy is filed as Exhibit 97.1 to this Annual Report, and is also available on the Company's corporate website at www.organigram.ca.
The Compensation Committee also reviews and makes recommendations to the Board of Directors at least annually with respect to the compensation of the Chief Executive Officer and other senior executive officers of the Company, including incentive compensation plans, equity-based plans, the terms of any employment agreements, severance arrangements, and change of control arrangements or provisions, and any special or supplemental benefits. In considering compensation matters, the Compensation Committee is required under its Charter to be guided by the following principles: (a) offering competitive compensation to attract, retain and motivate the very best qualified individuals in order for the Company to meet its goals; and (b) acting in the interests of the Company by being fiscally responsible.
The Company's Governance, Nominating and Sustainability Committee and the Company's Compensation Committee are required under their respective Charters to meet at least semi-annually and more frequently as circumstances require.
The Governance, Nominating and Sustainability Committee is comprised of Geoffrey Machum (Chair), Sherry Porter, Dexter John and Craig Harris. The Compensation Committee is comprised of Sherry Porter (Chair), Geoffrey Machum and Karina Gehring. The Board of Directors has determined that all members of each of the Governance, Nominating and Sustainability Committee and the Compensation Committee are independent, based on the criteria for independence prescribed by Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
Investment Committee
The Investment Committee's mandate is to assist the Board of Directors in discharging the Board of Directors' oversight responsibilities relating to proposed acquisitions, dispositions, major capital investments and financing arrangements. The Investment Committee is responsible for: (a) reviewing at least quarterly with management the Company's strategic business objectives, including potential acquisitions, dispositions, transaction opportunities and financing arrangements; (b) convening with management as needed to discuss and assess such opportunities, and reviewing and evaluating such opportunities with management on a regular basis; (c) monitoring the performance of the Company's completed transactions and investments by conducting periodic reviews for the purposes of evaluating the degree of success achieved, assessing the accuracy of projections and other assumptions relied upon in approving transactions, identifying the factors that differentiate more successful transactions from less successful ones, and evaluating the strategic contributions resulting from transactions; (d) considering, in conjunction with the Audit Committee as appropriate, the accounting treatment and impact of proposed investments; (e) when appropriate, making recommendations to the Board of Directors in respect of a proposed acquisition, disposition, financing or other arrangement (provided, however, that management may approve, without the requirement for further Committee or Board of Directors action, corporate development, business development, acquisitions and divestiture transactions in the normal course of business involving consideration up to $5,000,000); and (f) considering conformance with applicable law and compliance elements of proposed investments.
The Investment Committee is comprised of Dexter John (Chair), Stephen Smith, Marni Wieshofer, Simon Ashton and Craig Harris. The Board of Directors has determined that all five members of the Investment Committee are independent, based on the criteria for independence prescribed by Rule 5605(a)(2) of the NASDAQ Marketplace Rules.
AUDIT COMMITTEE
Our Board of Directors has established the Audit Committee in accordance with section 3(a)(58)(A) of the Exchange Act and Rule 5605(c) of the NASDAQ Marketplace Rules for the purpose of overseeing our accounting and financial reporting processes and the audits of our annual financial statements and effectiveness of internal control over financial reporting.
The Audit Committee is comprised of Stephen Smith (Chair), Marni Wieshofer, Dexter John and Simon Ashton. Our Board of Directors has determined that the Audit Committee meets the composition requirements set forth by Section 5605(c)(2) of the NASDAQ Marketplace Rules, and that each of the members of the Audit Committee is independent as determined under Rule 10A-3 of the Exchange Act and Rule 5605(a)(2) of the NASDAQ Marketplace Rules. All four members of the Audit Committee are financially literate, meaning they are able to read and understand the Company's financial statements and to understand the breadth and level of complexity of the issues that can reasonably be expected to be raised by the Company's financial statements.
Our Board of Directors has determined that Stephen Smith:
•qualifies as an "audit committee financial expert" (as defined in paragraph (8)(b) of General Instruction B to Form 40-F),
•has past employment experience in finance or accounting, requisite professional certification in accounting, or any other comparable experience or background which results in his financial sophistication (pursuant to Rule 5605(c)(2)(A) of the NASDAQ Marketplace Rules), and
•is independent (as determined under Exchange Act Rule 10A-3 and Rule 5605(a)(2) of the NASDAQ Marketplace Rules).
PRE-APPROVAL OF AUDIT AND NON-AUDIT SERVICES PROVIDED BY
INDEPENDENT AUDITOR
The Audit Committee Charter sets out responsibilities regarding the provision of non-audit services by the Company's external auditors and requires the Audit Committee to pre-approve all permitted non-audit services to be provided by the Company's external auditors, in accordance with applicable law.
PRINCIPAL ACCOUNTING FEES AND SERVICES
As of June 28, 2024, our independent registered public accounting firm is PKF O’Connor Davies, LLP, New York, NY, Auditor Firm ID: 127. Prior to June 28, 2024, our independent registered public accounting firm was KPMG LLP, Vaughan, ON, Canada, Auditor Firm ID: 85. Tabular disclosure of the amounts billed to us by our independent auditors for each of our last fiscal years ended September 30, 2024 ("Fiscal 2024") and September 30, 2025 ("Fiscal 2025") as Audit Fees, Audit-Related Fees, Tax Fees and All Other Fees, is made on page 78 of the AIF, filed as Exhibit 99.6 to this Annual Report.
Audit Fees
Audit Fees include fees necessary to perform the annual audit including the audit of internal controls over financial reporting and quarterly reviews of the Company’s financial statements. Audit Fees include fees for review of tax provisions and for accounting consultations on matters reflected in the financial statements. Audit Fees also include audit or other attest services required by legislation or regulation, such as comfort letters, consents, reviews of securities filings and statutory audits. For Fiscal 2024 audit fees were comprised of quarterly reviews and the annual audit (including the audit of internal controls over financial reporting) . For Fiscal 2025 audit fees were comprised of quarterly reviews and the annual audit (including the audit of internal controls over financial reporting).
Audit-related Fees
Audit-related Fees include fees related to Public Company Accounting Oversight Board and Canadian Public Accountability in Fiscal 2025.
Tax Fees
Tax Fees include fees for all tax services other than those included in "Audit Fees" and "Audit-Related Fees". This category includes fees for tax compliance and advisory in Fiscal 2024. Tax advice includes advice related to mergers and acquisitions and a captive insurance structure.
Audit Committee Pre-Approval Policies
From time to time, management of the Company recommends to and requests approval from the Audit Committee for audit and non-audit services to be provided by the Company's external auditor.
The Audit Committee may delegate to one or more of its members the authority to pre-approve non-audit services to be provided to the Company or its subsidiaries by the Company's external auditor. The pre-approval of non-audit services must be presented to the Audit Committee at its first scheduled meeting following such pre-approval.
The Audit Committee may satisfy its duty to pre-approve non-audit services by adopting specific policies and procedures for the engagement of the non-audit services, provided the policies and procedures are detailed as to the particular service, the Audit Committee is informed of each non-audit service and the procedures do not include delegation of the Audit Committee's responsibilities to management.
OFF-BALANCE SHEET ARRANGEMENTS
There were no off-balance sheet arrangements during Q4 Fiscal 2025 and Fiscal 2025.
CONTRACTUAL OBLIGATIONS
Disclosure of contractual obligations can be found under "Risk Factors - (ii) Liquidity Risk" beginning on page 23 of our MD&A, filed as Exhibit 99.5 to this Annual Report, which section is incorporated by reference.
CODE OF ETHICS
We have adopted a Code of Business Conduct and Ethics (the "Code") that applies to our officers (including without limitation, the CEO and CFO), employees and directors of the Company and its subsidiaries and promotes, among other things, honest and ethical conduct. The Code meets the requirements for a "code of ethics" within the meaning of that term in Form 40-F.
The Code was reviewed and approved by the Board of Directors on September 26, 2025. The Code is available on the Company's corporate website at www.organigram.ca and under the Company's SEDAR+ profile on www.sedarplus.ca and is filed as Exhibit 99.7 to this Annual Report.
During Fiscal 2025, no material amendment was made to the Code which would be required to be disclosed pursuant to Paragraph 9 of General Instruction B, and no waivers of the Code were granted to any principal officer of the Company or any person performing similar functions.
NOTICES PURSUANT TO REGULATION BTR
There were no notices required by Rule 104 of Regulation BTR that the Company sent during Fiscal 2025, concerning any equity security subject to a blackout period under Rule 101 of Regulation BTR.
NASDAQ CORPORATE GOVERNANCE
The Company complies with corporate governance requirements of the TSX. As a foreign private issuer, the Company is required to comply with some, but not all, of the corporate governance requirements of NASDAQ. Notwithstanding certain accommodations available to foreign private issuers under NASDAQ's corporate governance standards, the Company adopts best practices consistent with domestic NASDAQ listed companies when appropriate to its circumstances.
The Company has reviewed the NASDAQ corporate governance requirements and confirms that the Company is in compliance with the NASDAQ corporate governance standards that apply to the Company (taking into account the accommodations available for foreign private issuers) in all significant respects:
Executive Sessions: Under Rule 5605(b)(2) of the NASDAQ Marketplace Rules, a listed company must have regularly scheduled meetings at which only independent directors are present ("executive sessions"). The rule contemplates that executive sessions will occur at least twice a year, and perhaps more frequently, in conjunction with regularly scheduled board meetings. Under applicable Canadian rules, customs and practice, the Company's independent directors are not required to hold executive sessions. However, the Company is subject to certain disclosure requirements prescribed in Canadian Form 58-101F1 - Corporate Governance Disclosure ("Form 58-101F1"). In particular, the Company must disclose whether the independent directors hold executive sessions and, if such executive sessions are held, how many of these meetings have been held since the beginning of the Company's most recently completed financial year. If the Company does not hold executive sessions, the Company must describe what the Board of Directors does to facilitate open and candid discussion among its independent directors.
Contents of Audit Committee Charter: Under Rule 5605(c)(1) of the NASDAQ Marketplace Rules, a listed company must adopt a formal written charter that specifies the scope of its responsibilities and the means by which it carries out those responsibilities; the external auditor's accountability to the audit committee; and the audit committee's responsibility to ensure the independence of the outside auditor. In accordance with section 2.3(1) of Canadian National Instrument 52-110 - Audit Committees, the Company has adopted an Audit Committee Charter that sets out its mandate and responsibilities, and
substantially complies with Rule 5605(c)(1) of the NASDAQ Marketplace Rules. However, the Audit Committee Charter does not strictly comply with the requirement under Rule 5605(c)(1)(B) that an audit committee charter must specify the committee's responsibility for ensuring its receipt from the outside auditors of a formal written statement delineating all relationships between the auditor and the company, with the view to confirming the objectivity and independence of the external auditor. Instead, consistent with the laws, customs and practices in Canada, the Company's Audit Committee Charter provides that: (a) the Committee shall satisfy itself, on behalf of the Board of Directors, that the external auditor is independent of management; and (b) in assessing such independence, the Committee shall discuss with the external auditor, and may require a letter from the external auditor outlining, any relationships between the external auditor and the Company or its affiliates.
Composition of Compensation Committee: Under Rule 5605(d)(1) of the NASDAQ Marketplace Rules, a listed company must adopt a formal written compensation committee charter that specifies the scope of its responsibilities and the means by which it carries out those responsibilities, including structure, processes and membership requirements. Rule 5605(d)(2)(A) requires that, subject to a limited exception, the compensation committee must be composed of at least two members, each of whom must be an independent director as defined in Rule 5605(a)(2). Under applicable Canadian rules, the Company's compensation committee is not required to include a prescribed number of independent directors. However, pursuant to Form 58-101F1, the Company must disclose what steps its board of directors takes to ensure an objective process for determining the compensation of the directors and officers of the Company, if its compensation committee is not comprised entirely of independent directors.
Independent Director Oversight of Director Nominations: Rule 5605(e)(1) of the NASDAQ Marketplace Rules prescribes that, subject to a limited exception, director nominees must either be selected, or recommended for the Board of Directors' selection, either by: (a) independent directors (as defined in Rule 5605(a)(2)) constituting a majority of the Board of Directors' independent directors in a vote in which only independent directors participate, or (b) a nominations committee comprised solely of independent directors. Rule 5605(e)(2) requires a listed company to adopt a formal written charter or board resolution, as applicable, addressing the nominations process and such related matters as may be required under United States federal securities laws. Under applicable Canadian rules, the Company's nominating committee is not required to include a prescribed number of independent directors. However, pursuant to Form 58-101F1, the Company must disclose what steps its board of directors takes to ensure an objective process for encouraging an objective nomination process for new directors of the Company, if its nominating committee is not comprised entirely of independent directors.
The Company's Governance, Nominating and Sustainability Committee and Compensation Committee: The Company has adopted a Governance, Nominating and Sustainability Committee Charter and a Compensation Committee Charter (the "Charters") that substantially comply with Rules 5605(d)(1) and Rule 5605(e)(2) of the NASDAQ Marketplace Rules. However, in contrast to the requirements of Rules 5605(d)(2)(A) and 5605(e)(1), the Charters prescribe that only a majority of the Committee (which should be comprised of a minimum of three directors) must be independent as defined in Canadian National Instrument 58 101 - Disclosure of Corporate Governance Practices, and free from any relationship that, in the view of the Board of Directors, could be reasonably expected to interfere with the exercise of his or her independent judgment as a member of the Committee. This is consistent with the laws, customs and practices in Canada. As disclosed elsewhere in this Annual Report, the Company's Governance, Nominating and Sustainability Committee is currently comprised of Geoff Machum (Chair), Sherry Porter, Dexter John and Craig Harris, and the Compensation Committee is currently comprised of Sherry Porter (Chair), Geoff Machum and Karina Gehring, each of whom has been determined by the Board of Directors to be independent based on the criteria for independence prescribed by Rule 5605(a)(2) of the NASDAQ Marketplace Rules. In the event that the Governance, Nominating and Sustainability Committee or the Compensation Committee ceases to comprised of only independent directors, the Company will disclose the steps its Board of Directors takes to ensure an objective process for the nomination of new directors of the Company or the determination of the compensation of the Company's directors and officers, as the case may be.
Shareholder Meeting Quorum Requirement: Under Rule 5620(c) of the NASDAQ Marketplace Rules, a listed company that is not a limited partnership must provide in its by-laws for a quorum of not less than 33 1/3% of the outstanding shares of the company's common voting stock in respect of all meetings of the holders of its common stock. The Company's Bylaws provide that a quorum for a meeting of shareholders of the Company is present if two persons who are, or who represent by proxy, one or more shareholders who, in the aggregate, hold at least five percent of the issued shares. This quorum requirement is consistent with the laws, customs and practices in Canada.
Proxy Delivery Requirement: Under Rule 5620(b) of the NASDAQ Marketplace Rules, a listed company that is not a limited partnership must solicit proxies and provide proxy statements for all meetings of shareholders, and also provide copies of such proxy solicitation materials to NASDAQ. The Company is a "foreign private issuer" as defined in Rule 3b-4 under the Exchange Act, and the equity securities of the Company are accordingly exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act. The Company solicits proxies in accordance with applicable rules and regulations in Canada.
Distribution of Annual Reports: NASDAQ Marketplace Rule 5250(d) requires a NASDAQ-listed Company to make available to shareholders an annual report containing audited financial statements of the Company and its subsidiaries (which, for example, may be on 40-F under the Exchange Act) within a reasonable period of time following the filing of the annual report with the SEC. The Company may comply with this requirement either:
•by mailing the report to shareholders (as opposed to electronic or notice-and-access delivery);
•by satisfying the requirements for furnishing an annual report contained in Rule 14a-16 under the Exchange Act; or
•by posting the annual report to shareholders on or through the Company's website, along with a prominent undertaking in the English language to provide shareholders, upon request, a hard copy of the annual report free of charge. A Company that chooses to satisfy this requirement pursuant in this manner must, simultaneous with this posting, issue a press release stating that its annual report has been filed with the Commission. The press release must also state that: (a) the annual report is available on the Company's website and include the website address, and (b) shareholders may receive a hard copy free of charge upon request.
As indicated above, the Company is exempt from the proxy rules set forth in Sections 14(a), 14(b), 14(c) and 14(f) of the Exchange Act (as well as Rule 14a-16 promulgated under the Exchange Act), and solicits proxies in accordance with applicable rules and regulations in Canada.
Section 437 of the TSX Company Manual requires that: (a) every TSX-listed company must forward annually to each shareholder who has requested them its annual financial statements and its related management's discussion and analysis in accordance with Canadian National Instrument 51-102 - Continuous Disclosure Obligations ("NI 51-102"); and (b) if a listed company produces an annual report, it must be filed publicly through SEDAR+, available at www.sedarplus.ca.
Pursuant to NI 51-102, the Company is required to send annually a request form to the registered holders and beneficial owners of its securities, other than debt instruments, that registered holders and beneficial owners may use to request a copy of the Company's annual financial statements and related management's discussion and analysis, the interim financial statements and related management's discussion and analysis, or both. If a registered holder or beneficial owner of securities, other than debt instruments, of the Company requests the Company's annual or interim financial statements, the Company must send a copy of the requested financial statements to the person or company that made
the request, without charge, by the later of: (a) 10 days after the filing deadline for the financial statements, or (b) 10 calendar days after the Company receives the request. If the Company sends financial statements it must also send, at the same time, the annual or interim management's discussion and analysis relating to the financial statements.
Shareholder Approval Requirements: Section 5635 of the NASDAQ Marketplace Rules requires shareholder approval for issuances of common shares, or any securities convertible or exercisable into common shares:
(a)in connection with the acquisition of the stock or assets of another company
(i)where, due to the present or potential issuance of common shares (including shares issued pursuant to an earn-out or similar type of provision, or securities convertible into or exercisable for common shares) other than a public offering for cash:
(A)the common shares constitute or will upon issuance constitute at least 20% of the voting power outstanding before the issuance of the common shares (or, if applicable before the issuance of the securities convertible into or exercisable for common shares); or
(B)the common shares constitute or will upon issuance constitute at least 20% of the number of common shares outstanding before the issuance; or
(ii)if any director, officer or Substantial Shareholder (as defined by Rule 5635(e)(3) of the NASDAQ Marketplace Rules) of the listed company has a 5% or greater interest (or such persons collectively have a 10% or greater interest), directly or indirectly, in the target company or assets to be acquired, or in the consideration to be paid in the transaction or series of related transactions, and the present or potential issuance of common shares, or securities convertible into or exercisable for common shares, could result in an increase of 5% or more in the outstanding common shares or voting power of the listed company;
(b)where the common shares sold (or the number of common shares into which the securities sold are convertible or exercisable), either alone or together with sales by officers, directors or Substantial Shareholders of the listed company, constitute at least
(i)20% of the outstanding common shares before the issuance, or
(ii)20% of the voting power of the outstanding common shares before the issuance,
in either case except for (A) public offerings of common shares for cash, and (B) transactions involving the sale, issuance or potential issuance of common shares at a price, or securities convertible or exercisable into common shares with a conversion or exercise price, that is greater than or equal to the lesser of (1) the last closing price immediately preceding the signing of a binding agreement, and (2) the average closing price of the common shares on NASDAQ for the five trading days immediately preceding the signing of the binding agreement; and
(c)where the issuance would result in a change of control of the listed company.
The Company intends to follow TSX rules for shareholder approval of new issuances of its common shares. Following TSX rules, shareholder approval is required for certain issuances of shares that: (i) materially affect control of the listed issuer; or (ii) provide consideration to insiders in aggregate of 10% or greater of the market capitalization of the listed issuer, during any six-month period, and has not been negotiated at arm's length. Shareholder approval is also required, pursuant to TSX rules, in the case of private placements: (a) for an aggregate number of listed securities issuable greater than 25% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date of closing of the transaction if the price per security is less than the market price; or (b) that during any six month period are to insiders for listed securities or options, rights or other entitlements to listed securities greater than 10% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date of the closing of the first private placement to an insider during the six month period. The rules of the TSX also require shareholder approval in connection with an acquisition by a listed issuer where the number of securities issued or issuable in payment of the purchase price for the acquisition exceeds 25% of the number of securities of the listed issuer that are outstanding, on a non-diluted basis.
Equity Compensation Plans: Section 5635(c) of the NASDAQ Marketplace Rules also requires shareholder approval of all stock option or purchase plans or other arrangements that provide for equity securities as compensation to officers, directors, employees or consultants, and any material amendments to such plans or arrangements, except for certain plans and arrangements, including:
(a)stock purchase plans available on equal terms to all security holders of the listed company (such as a typical dividend reinvestment plan);
(b)tax qualified, non-discriminatory employee benefit plans (e.g., plans that meet the requirements of section 401(a) or 423 of the Internal Revenue Code) or parallel nonqualified plans, provided that such plans are approved by the listed company's independent compensation committee or a majority of the company's independent directors;
(c)those plans or arrangements allowing employees, directors or service providers to buy such securities on the open market or from the listed company for current fair market value;
(d)grants of options or other equity-based compensation as a material inducement to the grantee's entering into employment with the listed company, provided that such grants are approved by the listed company's independent compensation committee or a majority of the company's independent directors; and
(e)conversions, replacements or adjustments of outstanding options or other equity compensation awards to reflect a merger or acquisition.
The Company intends to follow TSX rules in respect of its security-based compensation arrangements. The TSX requires shareholder approval of all security-based compensation arrangements, and any material amendments to such arrangements, except for arrangements used as an inducement to persons or companies not previously employed by and not previously an insider of the listed issuer, provided that: (i) such persons or companies enter into a contract of full time employment as an officer of the listed issuer; and (ii) the number of securities made issuable to such persons or companies during any twelve month period does not exceed in aggregate 2% of the number of securities of the listed issuer which are outstanding, on a non-diluted basis, prior to the date the exemption is first used during such twelve month period. Such shareholder approval is required when the security-based arrangement is instituted and every three years thereafter if the arrangement does not have a fixed maximum aggregate of securities issuable. The TSX considers a security-based compensation arrangement to be any compensation or incentive mechanism involving the issuance from treasury or potential issuance from treasury of securities of a listed issuer.
Insiders of a listed issuer that are entitled to receive a benefit under a security-based compensation arrangement are not eligible to vote their securities in respect of the shareholder approval required by the TSX unless such security based compensation arrangement contains an "insider participation limit". An "insider participation limit" is a provision typically found in security-based compensation arrangements which limits the number of a listed issuer's securities: (i) issued to insiders of the listed issuer, within any one year period; and (ii) issuable to insiders of the listed issuer at any time, to 10% of the listed issuer's
total issued and outstanding securities. For the purposes of security-based compensation arrangements, the definition of "insider" would include the CEO, CFO, all directors of the listed issuer and its major subsidiaries, any person responsible for a principal business unit, division or function, and any shareholder that has beneficial ownership or control or direction over, more than 10% of the issued and outstanding common shares of the listed issuer. The Company obtains shareholder approval of its equity compensation plans in accordance with applicable rules and regulations of the TSX.
The foregoing are consistent with the laws, customs and practices in Canada.
MINE SAFETY DISCLOSURE
Not applicable.
DISCLOSURE REGARDING FOREIGN JURISDICTIONS THAT PREVENT INSPECTIONS
Not applicable.
RECOVERY OF ERRONEOUSLY AWARDED COMPENSATION
Not applicable.
UNDERTAKING AND CONSENT TO SERVICE OF PROCESS
Undertaking
The Company undertakes to make available, in person or by telephone, representatives to respond to inquiries made by the Commission staff, and to furnish promptly, when requested to do so by the Commission staff, information relating to: the securities registered pursuant to Form 40-F; the securities in relation to which the obligation to file an annual report on Form 40-F arises; or transactions in said securities.
Consent to Service of Process
The Company has previously filed with the SEC a written consent to service of process on Form F-X. Any change to the name or address of the Company's agent for service shall be communicated promptly to the SEC by amendment to the Form F-X referencing the file number of the Company.
SIGNATURES
Pursuant to the requirements of the Exchange Act, the Company certifies that it meets all of the requirements for filing on Form 40-F and has duly caused this annual report to be signed on its behalf by the undersigned, thereunto duly authorized.
Date: December 16, 2025 Organigram Global Inc.
By: /s/ Greg Guyatt
Greg Guyatt
Chief Financial Officer
Exhibit Index
| | | | | |
| Exhibit Number | Exhibit Description |
| Policy for the Recovery of Erroneously Awarded Incentive-Based Compensation |
| Certification of Principal Executive Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| Certification of Chief Financial Officer pursuant to Rule 13a-14(a) of the Exchange Act, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002 |
| Certification of Principal Executive Officer and Chief Financial Officer pursuant to Rule 13a-14(b) of the Exchange Act and 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 |
| Audited consolidated financial statements of the Company and notes thereto as of September 30, 2025 and 2024, and for the year ended September 30, 2025, and September 30, 2024, together with the reports of the Independent Registered Public Accounting Firms thereon |
| Management's Discussion and Analysis for the year ended September 30, 2025 |
| Annual Information Form of the Company for the year ended September 30, 2025 |
| The Company's Code of Business Conduct and Ethics as approved on September 26, 2025 |
| Consent of PKF O’Connor Davies LLP, Independent Registered Public Accounting Firm |
| News Release dated December 16, 2025 |
| Glossy Annual Report |
| 101.INS | XBRL Instance Document |
| 101.SCH | Inline XBRL Taxonomy Extension Schema |
| 101.CAL | Inline XBRL Taxonomy Extension Calculation Linkbase |
| 101.DEF | Inline XBRL Taxonomy Extension Definition Linkbase |
| 101.LAB | Inline XBRL Taxonomy Extension Label Linkbase |
| 101.PRE | Inline XBRL Taxonomy Extension Presentation Linkbase |
| 104 | Cover Page Interactive Data File (formatted in Inline XBRL and contained in Exhibit 101) |
INTRODUCTION
This Management’s Discussion and Analysis dated December 16, 2025 (this “MD&A”), should be read in conjunction with the audited annual consolidated financial statements (the “Financial Statements”) of Organigram Global Inc. (together with its subsidiaries, the “Company”, "Organigram", "we", "us", or "our") for the years ended September 30, 2025 ("Fiscal 2025") and September 30, 2024 ("Fiscal 2024"), including the accompanying notes thereto. References to "Q4 Fiscal 2025" are to the three-month period beginning July 1, 2025, and ending September 30, 2025. References to "Q4 Fiscal 2024" are to the three-month period beginning July 1, 2024, and ending September 30, 2024.
Financial data in this MD&A is based on the Financial Statements of the Company, and has been prepared in accordance with International Financial Reporting Standards ("IFRS") as issued by the International Accounting Standards Board (“IASB”), unless otherwise stated. All financial information in this MD&A is expressed in thousands of Canadian dollars (“$”), except for share and per share calculations, references to $ millions and $ billions, per gram (“g”) or kilogram (“kg”) of dried flower and per milliliter (“mL”) or liter (“L”) of cannabis extracts calculations.
Refer to the cautionary statements regarding forward-looking information and non-IFRS measures found at the end of this MD&A.
BUSINESS OVERVIEW
NATURE OF THE COMPANY’S BUSINESS
Organigram is a licensed cannabis cultivator and producer of consumer packaged goods containing cannabis. The Company manufactures and distributes cannabis products to wholesale and retail channels in Canada, exports to international jurisdictions, and distributes hemp-derived tetrahydrocannabinol ("THC") beverages and edibles in the U.S.
Organigram operates five facilities across Canada:
Moncton Campus (Indoor Cultivation and Manufacturing)
The Moncton Campus is home to our 500,000+ square foot state-of-the-art flagship facility, which features three-tiered, strain-specific grow rooms with the ability to control critical environmental factors specific to the needs of each strain. The facility's capabilities include extraction, cannabinoid testing, and automated production and packaging lines. We have invested in cost-effective seed-based production, which contributes to efficiency through faster room turns, lower plant care, and higher yields.
Winnipeg Facility (Ingestible Products Manufacturing)
The Winnipeg Facility is a purpose-built, highly automated 51,000 square-foot ingestibles manufacturing facility capable of producing up to 48 million gummies annually. The Company's newly commissioned beverage manufacturing line is capable of producing up to 2.6 million beverage cans annually, but is not yet operational. The facility also contains specialized manufacturing equipment for the Company's FASTTM (Fast Acting Soluble Technology) nanoemulsion technology ("FASTTM") used in some of its ingestible products.
Lac-Supérieur Facility (Hash/Concentrates and Premium Flower)
The Lac-Supérieur Facility is a greenhouse facility which provides a strategic footprint in Quebec, spans 33,000 square feet of space, and is equipped to produce 2,400 kg of premium flower and over 2 million packaged units of hash annually.
Aylmer Facility (Extraction and Manufacturing)
The Aylmer Facility houses advanced extraction and manufacturing capabilities, including hydrocarbon and CO2 extraction refinement, formulation, post-processing of minor cannabinoids, and infused and regular pre-roll production.
London Facility (Warehousing and Distribution)
The London Facility is a centralized warehouse distribution hub in Ontario, Canada's most populous province. The facility supports growing demand for Organigram's products, optimizes fulfillment, and reduces the cost and complexity of shipping products from the Moncton Campus to Central and Western Canada.
As of the end of Fiscal 2025, Organigram held the #1 market share position in the Canadian recreational cannabis market1.
STRATEGY
Our corporate strategy is to leverage our strengths in innovation, consumer focus, efficiency, and market expansion to profitably drive global growth and shareholder value.
1. Innovation
We are committed to maintaining a culture of innovation and have a track record of launching differentiated products that quickly capture market share.
1 Multiple Sources (Hifyre, Weedcrawler, provincial boards, internal modelling) as of September 30, 2025.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 1
Organigram maintains a Product Development Collaboration (“PDC”) with a wholly-owned subsidiary of British American Tobacco p.l.c. ("BAT"), its largest institutional shareholder and a leading multi-category consumer goods company, to develop next-generation cannabis products. Through the PDC we established a Centre of Excellence (“CoE”) at the Moncton Campus where we are licensed to conduct research on cannabis. Under Organigram's PDC agreement with BAT dated March 10, 2021 (the "PDC Agreement"), Organigram holds a worldwide, royalty-free, sub-licensable, perpetual license to all intellectual property developed through the PDC, exclusive in Canada and non-exclusive internationally. Both companies contribute scientists, researchers, and product developers to the CoE, which is jointly governed by a steering committee composed of equal representation from Organigram and BAT.
2. Consumer Focus
We maintain a diversified brand and product portfolio with competitive pricing that is aligned with evolving consumer preferences which we monitor through consumer and market research and social engagement.
3. Efficiency
We continue to reduce costs and improve scalability and margins through ongoing investments in facility automation, cultivation practices (including seed-based cultivation), and logistics efficiency, particularly at our London Facility.
4. Market Expansion
Organigram is committed to expanding its market presence through both organic growth and strategic diversification. Our key initiatives have included:
•Domestic expansion: acquisitions of cannabis cultivation and production facilities across Ontario, Québec, and Manitoba, enabling participation in all major Canadian product categories.
•International exports: shipments of bulk cannabis to Germany, Australia, and the United Kingdom (UK), strengthening Organigram’s position as a reliable global supplier.
•Strategic partnership with BAT: completion of a $124.6 million follow-on equity investment by BAT (the "Follow-on BAT Investment"), and creation of the Jupiter Pool to fund international growth opportunities, with initial investments in Steady State LLC (d/b/a Open Book Extracts ("OBX") (U.S.) and Sanity Group GmbH ("Sanity Group") (Germany).
•U.S. market entry: expansion into evolving hemp-derived THC beverages and edibles through the acquisition of Collective Project Limited ("CPL") and launch of "happly", a lifestyle edibles brand focused on consumer mood states and functional ingredients.2
OUTLOOK
Market Size & Industry Trends
The Company maintains a positive outlook on the cannabis industry, both in Canada and internationally. Recreational cannabis sales in Canada are expected to total $6.4 billion in calendar 20283.
The Canadian market is stabilizing after years of oversupply and pricing pressure. Stabilization has been driven by consolidation, reduced capacity, and the absorption of supply by increased international demand. To address continued increases in international demand, several licensed producers ("LPs") have announced capacity expansion projects. Consumer preferences continue to evolve with sustained demand for high-THC, value-format flower, and rapid growth in the infused pre-roll category.
Regulatory scrutiny has intensified, particularly around inflated THC potency labeling, prompting initiatives by the Ontario Cannabis Store, Health Canada, and the Cannabis Standards Alliance of Canada to establish consistent testing and enforcement.
In November 2025, the U.S. enacted the Continuing Appropriations and Extensions Act of 2026 (H.R. 5371), which includes a provision (section 781) to amend the definition of hemp in the 2018 Farm Bill to effectively eliminate hemp-derived THC products, although the change does not become effective for 365 days from the date of enactment. Organigram’s U.S. offerings would be directly impacted by this change in law; additionally, Organigram has investments in hemp seed and hemp ingredient manufacturers in the U.S. that may be impacted by this legislation. Efforts are underway to repeal, replace, or delay this amendment, but whether any change will occur is uncertain. If current federal legislation is not amended or reversed, Organigram may have to sell, wind-down or otherwise restructure its hemp THC product related activities in the U.S. by November 2026.
LPs are increasingly seeking growth in international markets to increase their revenues and margins, and to solidify Canada's strong reputation abroad for producing high quality cannabis products.
Certain international markets comprise the majority of demand for Canada's cannabis exports. Of the 37,223 kilograms of dried cannabis flower imported into Germany in the first three months of calendar 2025, about half, 16,057 kg, were from Canada and
2 See amendments to definition of hemp in the 2018 Farm Bill as described in greater detail in the "Outlook" section of this MD&A.
3 October, 2025 data from BDS Analytics, Inc. (BDSA).
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 2
from October 2018 to September 2024 (most recently available data), there were 295,933 kg of cannabis and 52,662 L of cannabis oil exported from Canada to markets like Australia, Israel, Germany, and the UK.4
Business Outlook
We expect to continue our revenue expansion through a combination of organic growth and M&A. Organic growth is anticipated to be supported by a strong innovation pipeline, improving cannabis quality, higher potency, and the commercialization of our FASTTM nanoemulsion technology in ingestible formats. M&A is expected to focus primarily on international opportunities that allow Organigram to build upon its growing international sales and support branded product sales in international markets. We also regularly evaluate opportunities in Canada that may strengthen our competitiveness.
In Fiscal 2025, Organigram achieved significantly higher international sales compared to Fiscal 2024, as well as efficiencies in production, manufacturing, and logistics, driving adjusted gross margin5 growth, and adjusted gross margin of 38% in Q4 Fiscal 2025. Assuming the Company continues to have a strong innovation pipeline, increasing international sales, high cannabis quality and higher potency, commercialization of FAST nanoemulsion technology in ingestible formats, and receipt of the EU-GMP certification, the Company anticipates net revenue to exceed $300 million in Fiscal 2026, and expects adjusted gross margin5 to outpace the rate achieved in Fiscal 2025. The Company also anticipates adjusted EBITDA5 to surpass Fiscal 2025 levels and to generate positive free cash flow in Fiscal 20265, with capital expenditures expected to be less than $10 million.
The Company previously estimated Free Cash Flow5 (as defined below) to be positive for Q4 Fiscal 2025. The Company had Free Cash Flow5 of $(688) in Q4 Fiscal 2025, which was slightly lower than projected primarily due to higher investment in working capital than previously planned. The Company previously estimated full-year Fiscal 2025 cash flow from operations to be positive, and at or near breakeven before working capital changes. In Q4 Fiscal 2025 cash flow from operations was $(1,452), and $3,113 before working capital changes. In Fiscal 2025 cash flow from operations was $(7,591), and $(5,468) before working capital changes, primarily driven by investments in working capital, expenditures associated with the Company's ERP project, and acquisition related expenses.
Consistent with industry trends, our fourth fiscal quarter is typically one of the strongest of the year, reflecting heightened consumer activity and retailer replenishment ahead of the holiday period. This is usually followed by a seasonal slowdown in the first quarter before the market resumes its normal growth trajectory.
Our business outlook is subject to a number of assumptions and risk factors as further outlined in the Cautionary Statement Regarding Forward-Looking Information section of this MD&A.
International Market
The Company's international sales have increased since the first quarter of Fiscal 2024. As a result of initiatives aimed toward diversifying its international customer base, initiating branded sales outside of Canada, and establishing a foothold in the growing German cannabis market through a $21 million investment in Sanity Group. Organigram anticipates continued expansion of its international revenue, supported in part by the expected European Union Good Manufacturing Practice ("EU-GMP") certification of its Moncton Facility. The Company completed its EU-GMP audit in November 2024, has provided additional information to the regulator in October 2025, and is awaiting confirmation of certification or any required next steps.
Organigram serves a diverse international medical cannabis customer base in Australia, Germany, and the UK. The Company has also completed strategic investments in two U.S.-based companies, OBX and Phylos Bioscience Inc. ("Phylos"). Further, through its acquisition of CPL and launch of happly, Organigram currently participates in the hemp-derived beverages and edibles segments in the U.S. and is continuing to monitor and prepare to respond to the regulatory developments in this space6.
We continue to monitor and evaluate opportunities in regulated recreational and medical markets outside of Canada, with a focus on the U.S., Europe, and Australia.
Future international shipments are subject to the timing and receipt of regulatory approval and an export permit from Health Canada, as well as timing and receipt of regulatory approval and an import permit from the purchasers' regulatory authority.
Jupiter Investment Pool
International expansion initiatives are expected to be supported by the $124.6 million Follow-on BAT Investment, with $83 million of the Follow-on BAT Investment earmarked for the Jupiter Pool. To date, approximately $23 million has been deployed from the Jupiter Pool to fund investments by Organigram in OBX and Sanity Group (see "Jupiter Strategic Investments" below). As of
4Source:https://stratcann.com/other/canadian-cannabis-continues-to-dominate-german-medical-market/#:~:text=Canada%20was%20again%20the%20largest,16%2C057%20kg%2C%20were%20from%20Canada.
5Adjusted gross margin, adjusted EBITDA and Free Cash Flow are Non-IFRS Measures. See "Cautionary Statement Regarding Certain Non-IFRS Measures", "Financial Results and Review of Operations", and "Balance Sheet, Liquidity and Capital Resources" in this MD&A.
6See amendments to definition of hemp in the 2018 Farm Bill as described in greater detail in the "Outlook" section of this MD&A
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 3
September 30, 2025, $59 million (being the remaining portion of the Jupiter Pool funds) is available to support continued expansion into the U.S. and other international markets in compliance with applicable laws.
As of September 30, 2025, the Company has access to $10 million of previously restricted funds pursuant to a temporary waiver granted by BAT. The waiver permits use of these funds for general purposes through November 8, 2026, after which the original restrictions are reinstated. The Company has classified these funds as unrestricted cash based on the terms and substance of the arrangement.
Jupiter Strategic Investments
On March 26, 2024, the Company completed its inaugural Jupiter Pool investment with a US $2 million investment into U.S.-based OBX.
On June 25, 2024, the Company completed its first European strategic investment, with an approximate $21 million investment into the German medical company, Sanity Group.
KEY QUARTERLY FINANCIAL AND OPERATING RESULTS
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| Q4-2025 | | Q4-2024 | | CHANGE | | % CHANGE |
| Financial Results | | | | | | | |
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| Net revenue | $ | 80,061 | | | $ | 44,698 | | | $ | 35,363 | | | 79 | % |
| Cost of sales | $ | 52,053 | | | $ | 30,907 | | | $ | 21,146 | | | 68 | % |
Gross margin before fair value adjustments | $ | 28,008 | | | $ | 13,791 | | | $ | 14,217 | | | 103 | % |
Gross margin % before fair value adjustments(1) | 35 | % | | 31 | % | | | | 4 | % |
Operating expenses | $ | 30,649 | | | $ | 16,859 | | | $ | 13,790 | | | 82 | % |
Other expense (income) | $ | 42,914 | | | $ | 5,760 | | | $ | 37,154 | | | 645 | % |
Adjusted EBITDA(2) | $ | 9,843 | | | $ | 5,860 | | | $ | 3,983 | | | 68 | % |
Net loss | $ | (37,964) | | | $ | (5,433) | | | $ | 32,531 | | | 599 | % |
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Net cash provided by operating activities before working capital changes | $ | 3,113 | | | $ | 1,191 | | | $ | 1,922 | | | 161 | % |
Net cash (used in) provided by operating activities | $ | (1,452) | | | $ | 8,893 | | | $ | (10,345) | | | nm |
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Adjusted Gross Margin on total net revenue(2) | $ | 30,578 | | | $ | 16,543 | | | $ | 14,035 | | | 85 | % |
Adjusted Gross Margin % on total net revenue(2) | 38 | % | | 37 | % | | | | 1 | % |
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Note (1): Equals gross margin before fair value adjustments (as reflected in the Financial Statements) divided by net revenue.
Note (2): Adjusted EBITDA, adjusted gross margin and adjusted gross margin % are non-IFRS measures. See "Cautionary Statement Regarding Certain Non-IFRS Measures" and "Financial Results and Review of Operations" in this MD&A.
REVENUE
Net revenue is defined as gross revenue, net of customer fees, discounts, rebates, and sales returns and recoveries, less excise taxes. Revenue consists primarily of dried flower and cannabis derivative products sold to the recreational cannabis, medical cannabis, wholesale, and international cannabis markets.
For Q4 Fiscal 2025, the Company reported $80,061 in net revenue. Of this amount $66,415 (83%) was attributable to sales to the recreational cannabis market, $9,520 (12%) to the international market, and $4,126 (5%) to other revenues. Q4 Fiscal 2025 net revenue increased 126%, or $44,705, from Q4 Fiscal 2024 net revenue of $44,698. The increase was primarily driven by higher recreational and international sales, as well as the contribution from the acquisition of Motif Labs Ltd. ("Motif").
COST OF SALES
Cost of sales for Q4 Fiscal 2025 increased to $52,053 compared to $30,907 in Q4 Fiscal 2024, primarily due to an increase in net revenue of 126% in Q4 Fiscal 2025 compared to Q4 Fiscal 2024. Included in Q4 Fiscal 2025 cost of sales are $2,570 of inventory provisions for unsalable inventories. In Q4 Fiscal 2024 the Company had inventory provision adjustments of $2,752.
GROSS MARGIN BEFORE FAIR VALUE ADJUSTMENTS AND ADJUSTED GROSS MARGIN
The Company realized gross margin before fair value adjustments for Q4 Fiscal 2025 of $28,008, or 35% as a percentage of net revenue, compared to $13,791 or 31% as a percentage of net revenue, in Q4 Fiscal 2024. The increase in gross margin before fair value adjustments, as a percentage of net revenue, is primarily driven by a higher proportion of international sales with stronger margins, lower cost of sales per unit achieved through greater scale and operating efficiencies (including but not limited to an improvement in yields), and reduced inventory provisions and net realizable value adjustments.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 4
Adjusted gross margin7 for Q4 Fiscal 2025 was $30,578, or 38% as a percentage of net revenue, compared to $16,543 or 37%, in Q4 Fiscal 2024, an increase of $14,813.
OPERATING EXPENSES
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| Q4-2025 | | Q4-2024 | | CHANGE | | % CHANGE |
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| General and administrative | $ | 17,619 | | | $ | 9,470 | | | $ | 8,149 | | | 86 | % |
| Sales and marketing | 8,946 | | | 4,756 | | | 4,190 | | | 88 | % |
| Research & development | 3,151 | | | 1,667 | | | 1,484 | | | 89 | % |
| Share-based compensation | 933 | | | 966 | | | (33) | | | (3) | % |
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| Total operating expenses | $ | 30,649 | | | $ | 16,859 | | | $ | 13,790 | | | 82 | % |
GENERAL AND ADMINISTRATIVE
General and administrative expenses of $17,619 increased from the Q4 Fiscal 2024 expenses of $9,470 primarily due to higher depreciation and amortization resulting from the acquisitions of Motif and CPL, as well as increased implementation expenses related to the Company's enterprise resource planning ("ERP") system. General and administrative expenses represented 22% of net revenue in Q4 Fiscal 2025 compared to 21% in Q4 Fiscal 2024.
SALES AND MARKETING
Sales and marketing expenses of $8,946 increased from Q4 Fiscal 2024 expenses of $4,756. The increase primarily reflects the addition of Motif and CPL-related expenses, which were not present in Q4 Fiscal 2024. Higher investments in advertising, promotions, and trade marketing also contributed to the year-over-year increase. Sales and marketing expenses as a percentage of net revenue remained flat at 11% in both Q4 Fiscal 2025 and Q4 Fiscal 2024.
RESEARCH AND DEVELOPMENT
Research and development costs of $3,151 increased from the Q4 Fiscal 2024 costs of $1,667 primarily due to lower scientific research and experimental development (SR&ED) credits and increased activity.
SHARE-BASED COMPENSATION
Share-based compensation expense of $933 remained flat compared to Q4 Fiscal 2024..
OTHER (INCOME) / EXPENSES
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| Q4-2025 | | Q4-2024 | | CHANGE | | % CHANGE |
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| Investment income, net of financing costs | (73) | | | (960) | | | 887 | | | 92 | % |
Acquisition and transaction costs | 448 | | | 74 | | | 374 | | | 505 | % |
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Share of loss (including impairment) from investments in associates | — | | | 4,895 | | | (4,895) | | | (100) | % |
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| Loss on disposal of property, plant and equipment | 9 | | | 24 | | | (15) | | | (63) | % |
| Change in fair value of contingent consideration | (6,453) | | | — | | | (6,453) | | | nm |
| Share issue costs allocated to derivative liabilities and preferred shares | — | | | 269 | | | (269) | | | 100 | % |
| Change in fair value of derivative liabilities, preferred shares and other financial assets | 49,370 | | | 1,642 | | | 47,728 | | | 2,907 | % |
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| Other non-operating income | (387) | | | (184) | | | (203) | | | 110 | % |
| Total other income | $ | 42,914 | | | $ | 5,760 | | | $ | 37,154 | | | 645 | % |
INVESTMENT INCOME, NET OF FINANCING COSTS
Investment income (net of financing costs) of $73 decreased from Q4 Fiscal 2024 of $960, primarily due to a lower cash balance in the current period.
ACQUISITION AND TRANSACTION COSTS
Acquisition and transaction costs of $448 increased from Q4 Fiscal 2024 of $74, primarily driven by higher costs associated with the Company's acquisitions and integration activities related to Motif and CPL.
7 Adjusted gross margin is a non-IFRS financial measure. See "Cautionary Statement Regarding Certain Non-IFRS Measures" and "Financial Results and Review of Operations" in this MD&A.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 5
SHARE OF LOSS FROM INVESTMENTS IN ASSOCIATES
In Q4 Fiscal 2024, the Company recognized an impairment loss of $4,773 related to its investment in Hyasynth Biologicals Inc. ("Hyasynth"), This was due to indicators of impairment identified at the time, and the recoverable amount of the investment was determined to be approximately nil. The impairment was recorded in the consolidated statement of operations and comprehensive loss.
CHANGE IN FAIR VALUE OF CONTINGENT CONSIDERATION
Change in fair value of contingent consideration was a gain of $6,453 during Q4 Fiscal 2025 compared to $nil in Q4 Fiscal 2024. The gain in Q4 Fiscal 2025 was due to the revaluation of the contingent liability payable to the former vendors of Motif and CPL.
SHARE ISSUE COSTS
In Q4 Fiscal 2024, the Company closed the second tranche of the Follow-on BAT Investment and issued 4,429,740 common shares (the "Common Shares") and 8,463,435 Class A preferred shares ("Preferred Shares"). The transaction costs of $269 incurred in relation to the issuance of Preferred Shares were recognized as an expense in the consolidated statement of operations and comprehensive loss.
CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES, PREFERRED SHARES AND OTHER FINANCIAL ASSETS
Change in fair value of derivative liabilities, preferred shares and other financial assets was a loss of $49,370 during Q4 Fiscal 2025 compared to a loss of $1,642 in Q4 Fiscal 2024. The following are the fair value changes that were recognized in Q4 Fiscal 2025 and Q4 Fiscal 2024:
| | | | | | | | | | | | | | | | | |
| | | | 0 | Q4 Fiscal 2025 | 0 | Q4 Fiscal 2024 |
| Investment in Phylos | | | | $ | — | | $ | 2,132 | | | $ | (3,661) | |
| Investment in OBX | | | | — | | (111) | | | (175) | |
| Investment in Sanity Group (convertible loan) | | | | — | | 719 | | | (2,253) | |
| Investment in Sanity Group (common shares) | | | | — | | 485 | | | (247) | |
| Top-up Rights | | | | — | | 19,190 | | | 3,070 | |
| Commitment to fund third tranche of Phylos convertible loan | | | | — | | (1) | | | 168 | |
| Commitment to issue Preferred Shares | | | | — | | — | | | 2,744 | |
| Warrants | | | | — | | 3,107 | | | 2,520 | |
Preferred Shares | | | | — | | 23,849 | | | (524) | |
| | | | $ | — | | $ | 49,370 | | | $ | 1,642 | |
ADJUSTED EBITDA
Adjusted EBITDA8 was $9,843 in Q4 Fiscal 2025 compared to adjusted EBITDA of $5,860 in Q4 Fiscal 2024. The $3,983 increase in adjusted EBITDA from the comparative period is primarily attributable to higher recreational and international net revenue and the increase in adjusted gross margin9. Please refer to the “Financial Results and Review of Operations” section of this MD&A for a reconciliation of adjusted EBITDA to net loss.
NET LOSS
The net loss was $37,964 in Q4 Fiscal 2025 compared to a net loss of $5,433 in Q4 Fiscal 2024. The increase in net loss of $32,531 year-over-year was primarily due to a higher loss on the change in fair value of derivative liabilities, preferred shares and other financial assets, which increased by $47,728 compared to the comparative period. This increase in loss was partially offset by improved gross margins in Q4 Fiscal 2025, reflecting operational efficiencies, product mix optimization, and ongoing cost-management initiatives.
KEY DEVELOPMENTS DURING THE QUARTER AND SUBSEQUENT TO SEPTEMBER 30, 2025
In July 2025, in response to consumer demand for accessible, high-quality THC beverages, the Company’s launched its e-commerce platform expanding U.S. consumer access to Collective Project beverages across 25 states. The launch represented a milestone in Organigram’s multi-phase U.S. expansion strategy.
In September 2025 the Company released "High Impact, Green Growth: The Economic Footprint of Canada's Cannabis Industry," a national report done in partnership with the Business Data Lab at the Canadian Chamber of Commerce. The report
8 Adjusted EBITDA is a non-IFRS Measure. See "Cautionary Statement Regarding Certain Non-IFRS Measures" and "Financial Results and Review of Operations" in this MD&A.
9 Adjusted gross margin is a non-IFRS Measure. See "Cautionary Statement Regarding Certain Non-IFRS Measures" in this MD&A.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 6
shows that in 2024 Canada’s legal cannabis industry contributed more than $16 billion to national GDP, generating nearly $29 billion in total economic output. To put its economic weight in perspective, cannabis's direct GDP contribution of $8.4 billion in 2024 exceeds that of forestry and logging ($3.4 billion), breweries ($2.6 billion), and wineries and distilleries ($975 million). The sector also supported over 227,000 jobs across the country, including 168,000 direct jobs in cultivation and retail, alongside 59,000 in supply, logistics and professional services. These contributions extend coast-to-coast, demonstrating cannabis’s place as one of Canada’s most significant homegrown industries.
In October 2025 the Company announced the launch of happly, its third U.S. hemp-derived delta-9 brand, created specifically for the growing segment of consumers seeking ‘mindful recreation’ with THC products. The launch of happly follows the Company’s entry into the U.S. hemp-derived THC market with its lineup of Collective Project sparkling juices and Fetch sodas earlier this year.10
In October 2025 the Company announced that Ms. Beena Goldenberg extended her tenure as Chief Executive Officer until November 30, 2025 to support the completion of the Company’s CEO search process.
In November 2025 the Company announced that James Yamanaka, formerly Global Head of Strategy for BAT, has been appointed as the Company's new Chief Executive Officer. Mr. Yamanaka is expected to assume the role effective on or about January 15, 2026. Peter Amirault, Chairman of the board of directors of the Company (the "Board"), was appointed by the Board to serve as Executive Chair on an interim basis effective December 1, 2025, to oversee day-to-day management of the Company until Mr. Yamanaka assumes the CEO role. During this period, Geoff Machum, chair of the Board's Governance, Nominating and Sustainability Committee, will serve as the independent lead director.
10See amendments to definition of hemp in the 2018 Farm Bill as described in greater detail in the "Outlook" section of this MD&A.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 7
FINANCIAL RESULTS AND REVIEW OF OPERATIONS
FINANCIAL HIGHLIGHTS
Below is the period-over-period analysis of the changes that occurred between Fiscal 2025 and Fiscal 2024. Commentary is provided on the pages that follow.
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| 2025 | | 2024 | | $ CHANGE | | % CHANGE | | | | |
| Financial Results | | | | | | | | | | | |
| Gross revenue | $ | 403,024 | | | $ | 247,177 | | | $ | 155,847 | | | 63 | % | | | | |
| Net revenue | $ | 259,183 | | | $ | 159,841 | | | $ | 99,342 | | | 62 | % | | | | |
| Cost of sales | $ | 174,850 | | | $ | 111,390 | | | $ | 63,460 | | | 57 | % | | | | |
| Gross margin before fair value adjustments | $ | 84,333 | | | $ | 48,451 | | | $ | 35,882 | | | 74 | % | | | | |
| Gross margin % before fair value adjustments | 33 | % | | 30 | % | | | | 3 | % | | | | |
| Realized fair value on inventories sold and other inventory charges | $ | (67,125) | | | $ | (52,078) | | | $ | (15,047) | | | (29) | % | | | | |
| Unrealized gain on changes in fair value of biological assets | $ | 73,008 | | | $ | 51,151 | | | $ | 21,857 | | | 43 | % | | | | |
| Gross margin | $ | 90,216 | | | $ | 47,524 | | | $ | 42,692 | | | 90 | % | | | | |
| Operating expenses | $ | 105,516 | | | $ | 82,280 | | | $ | 23,236 | | | 28 | % | | | | |
Loss from operations | $ | (15,300) | | | $ | (34,756) | | | $ | 19,456 | | | 57 | % | | | | |
Other expenses | $ | 23,229 | | | $ | 10,684 | | | $ | 12,545 | | | 117 | % | | | | |
Net loss | $ | (24,759) | | | $ | (45,440) | | | $ | 20,681 | | | (46) | % | | | | |
Net loss per common share, basic | $ | (0.194) | | | $ | (0.477) | | | $ | 0.283 | | | 59 | % | | | | |
Net loss per common share, diluted | $ | (0.194) | | | $ | (0.477) | | | $ | 0.283 | | | 59 | % | | | | |
| | | | | | | | | | | |
Net cash used in by operating activities before working capital changes | $ | (5,468) | | | $ | (11,085) | | | $ | 5,617 | | | 51 | % | | | | |
| Net cash provided by (used in) operating activities | $ | (7,591) | | | $ | 3,872 | | | $ | (11,463) | | | nm | | | | |
| | | | | | | | | | | |
Adjusted gross margin(1) | $ | 91,004 | | | $ | 53,934 | | | $ | 37,070 | | | 69 | % | | | | |
Adjusted gross margin %(1) | 35 | % | | 34 | % | | | | 1 | % | | | | |
Adjusted EBITDA(1) | $ | 21,855 | | | $ | 8,416 | | | $ | 13,439 | | | 160 | % | | | | |
| | | | | | | | | | | |
| Financial Position | | | | | | | | | | | |
| Working capital | $ | 158,738 | | | $ | 208,897 | | | $ | (50,159) | | | (24) | % | | | | |
| Inventory and biological assets | $ | 123,954 | | | $ | 82,524 | | | $ | 41,430 | | | 50 | % | | | | |
| Total assets | $ | 562,211 | | | $ | 407,860 | | | $ | 154,351 | | | 38 | % | | | | |
Non-current financial liabilities(2) | $ | 76,401 | | | $ | 34,439 | | | $ | 41,962 | | | 122 | % | | | | |
Note (1): Non-IFRS measures that have been defined and reconciled within their respective subsections in this section of the MD&A.
Note (2): Non-current financial liabilities exclude non-monetary balances related to contingent consideration, derivative liabilities and deferred income taxes.
NET REVENUE
For Fiscal 2025, the Company recorded net revenue of $259,183 compared to net revenue of $159,841 for Fiscal 2024. Net revenue increased on a period-over-period basis primarily as a result of an increase in recreational revenue and international revenue, as well as the contributions from Motif's sales following the acquisition of Motif, for the period from December 6, 2024 to September 30, 2025.
REVENUE COMPOSITION
The Company’s net revenue composition by product category was as follows for Fiscal 2025 and Fiscal 2024:
| | | | | | | | | | | | | | | | | | | | | | | | | | | |
| 2025 | | 2024 | | $ CHANGE | | % CHANGE | | | | |
| Recreational, net of excise duty | 221,551 | | | 143,051 | | | 78,500 | | | 55 | % | | | | |
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International | 26,336 | | 9,651 | | 16,685 | | | 173 | % | | | | |
Wholesale, medical and other | 11,296 | | | 7,139 | | | 4,157 | | | 58 | % | | | | |
| Total Net Revenue | $259,183 | | $159,841 | | $99,342 | | 62 | % | | | | |
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MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 8
COST OF SALES AND GROSS MARGIN
The gross margin for Fiscal 2025 was $90,216 or 35% as a percentage of net revenue, compared to $47,524 or 30% as a percentage of net revenue, for Fiscal 2024. The changes and significant items impacting gross margin in Fiscal 2025 were: (i) higher recreational cannabis revenue; (ii) higher international sales; (iii) lower cultivation and post-harvest costs; and (iv) higher unrealized gains on changes in the fair value of biological assets.
Included in gross margin are the changes in the fair value of biological assets related to IFRS standard IAS 41 – Agriculture. Unrealized gain on changes in the fair value of biological assets for Fiscal 2025 was $73,008 as compared to $51,151 in Fiscal 2024.
Cost of sales primarily consists of the following:
•Costs of sales of cannabis (dried flower, pre-rolls, and wholesale/international bulk flower), cannabis extracts, vapes, chocolates, and other wholesale formats such as extract) include the direct costs of materials and packaging, labour, including any associated share-based compensation, and depreciation of manufacturing building and equipment. This includes cultivation costs (growing, harvesting, drying, and processing costs), extraction, vape filling, quality assurance and quality control, as well as packaging and labelling;
•Costs related to other products, such as vaporizers and other accessories;
•Shipping expenses to deliver product to the customer; and
•The production costs of late-stage biological assets that are disposed of, plants destroyed that do not meet the Company’s quality assurance standards, provisions for excess and unsalable inventories, provisions related to adjustments to net realizable value that reduce the carrying value of inventory below the original production or purchase cost, and other production overhead.
ADJUSTED GROSS MARGIN
•Adjusted gross margin is calculated by subtracting cost of sales, before the effects of: (i) unrealized gain on changes in fair value of biological assets; (ii) realized fair value on inventories sold and other inventory charges; (iii) realized fair value on inventories sold from acquisitions; (iv) provisions and impairment of inventories and biological assets; and (v) provisions to net realizable value. The Company believes that this measure provides useful information to assess the profitability of the Company's operations as it represents the normalized gross margin generated from operations and excludes the effects of non-cash fair value adjustments on inventories and biological assets, which are required by IFRS. See "Cautionary Statement Regarding Certain Non-IFRS Measures". The most directly comparable measure to adjusted gross margin calculated in accordance with IFRS is gross margin before fair value adjustments.
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| Q1-F24 | Q2-F24 | Q3-F24 | Q4-2024 | Q1-F25 | Q2-F25 | Q3-F25 | Q4-F25 | 2025 |
| Net revenue | $ | 36,455 | | $ | 37,628 | | $ | 41,060 | | $ | 44,698 | | $ | 42,730 | | $ | 65,600 | | $ | 70,792 | | 80,061 | | 259,183 | |
| Cost of sales before adjustments | 25,259 | | 26,019 | | 26,474 | | 28,155 | | 28,451 | | 43,679 | | 46,566 | | 49,483 | | 168,179 | |
Adjusted gross margin | 11,196 | | 11,609 | | 14,586 | | 16,543 | | 14,279 | | 21,921 | | 24,226 | | 30,578 | | 91,004 | |
Adjusted gross margin % | 31 | % | 31 | % | 36 | % | 37 | % | 33 | % | 33 | % | 34 | % | 38 | % | 35 | % |
| Less: | | | | | | | | | |
Provisions of inventories and biological assets | 1,672 | | 314 | | 628 | | 2,043 | | 13 | | 548 | | 921 | | 1,603 | | 3,085 | |
| Provisions to net realizable value | 13 | | 33 | | 71 | | 709 | | 151 | | — | | 15 | | 967 | | 1,133 | |
| Realized fair value on inventories sold from acquisitions | — | | — | | — | | — | | — | | 1,586 | | 867 | | — | | 2,453 | |
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| Gross margin before fair value adjustments | $ | 9,511 | | $ | 11,262 | | $ | 13,887 | | $ | 13,791 | | $ | 14,115 | | $ | 19,787 | | $ | 22,423 | | $ | 28,008 | | $ | 84,333 | |
| Gross margin % (before fair value adjustments) | 26 | % | 30 | % | 34 | % | 31 | % | 33 | % | 30 | % | 32 | % | 35 | % | 33 | % |
Add: Realized fair value on inventories sold and other inventory charges | $ | (11,923) | | $ | (11,062) | | $ | (13,728) | | $ | (15,365) | | $ | (13,066) | | $ | (14,192) | | $ | (14,461) | | $ | (25,406) | | $ | (67,125) | |
| Unrealized gain on changes in fair value of biological assets | $ | 9,112 | | $ | 9,400 | | $ | 13,849 | | $ | 18,790 | | $ | 12,765 | | $ | 12,823 | | $ | 18,184 | | $ | 29,236 | | $ | 73,008 | |
Gross margin(1) | $ | 6,700 | | $ | 9,600 | | $ | 14,008 | | $ | 17,216 | | $ | 13,814 | | $ | 18,418 | | $ | 26,146 | | $ | 31,838 | | $ | 90,216 | |
Gross margin %(1) | 18 | % | 26 | % | 34 | % | 39 | % | 32 | % | 28 | % | 37 | % | 40 | % | 35 | % |
Note (1): Gross margin reflects the IFRS measure per the Company’s Financial Statements.
Both adjusted gross margin and gross margin before fair value adjustments have generally improved throughout Fiscal 2024. This improvement is attributed to several factors, including lower cultivation and post-harvest costs, reduced inventory provisions, lower depreciation resulting from impairment charges recorded in fiscal year 2023 and higher recreational cannabis revenue. In Q1 Fiscal 2025, gross margin declined primarily due to lower unrealized gain on changes in fair value of biological assets and lower international sales. In Q2 Fiscal 2025, gross margin declined primarily due to the fair value adjustment on inventories acquired through the Motif acquisition and subsequently sold, as required under IFRS. In Q3 Fiscal 2025, gross margin has
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 9
increased primarily due to higher international sales and higher unrealized gain on changes in fair value of biological assets. In Q4 Fiscal 2025, the gross margin increase was driven by a higher proportion of international sales with stronger margins, lower cost of sales per unit achieved through greater scale and operating efficiencies (including but not limited to an improvement in yields), and higher unrealized gain on changes in fair value of biological assets, partially offset by lower margins on domestic white label and B2B sales.
OPERATING EXPENSES
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| 2025 | | 2024 | | CHANGE | | % CHANGE |
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| General and administrative | $ | 59,499 | | | $ | 44,955 | | | $ | 14,544 | | | 32 | % |
| Sales and marketing | 31,097 | | | 19,851 | | | 11,246 | | | 57 | % |
| Research and development | 10,945 | | | 11,200 | | | (255) | | | (2) | % |
| Share-based compensation | 3,975 | | | 6,274 | | | (2,299) | | | (37) | % |
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| Total operating expenses | $ | 105,516 | | | $ | 82,280 | | | $ | 23,236 | | | 28 | % |
GENERAL AND ADMINISTRATIVE
For Fiscal 2025, the Company incurred general and administrative expenses of $59,499 compared to $44,955 for Fiscal 2024. The increased expenses mainly relates to higher depreciation and amortization resulting from the acquisitions of Motif and CPL, as well as increased ERP implementation expenses. These expenses as a percentage of net revenue decreased to 23% from 28% in the comparative period.
SALES AND MARKETING
For Fiscal 2025, the Company incurred sales and marketing expenses of $31,097 or 12% of net revenues as compared to $19,851 or 12% of net revenues for Fiscal 2024. The increase in the current period is on account of higher trade investments consistent with the addition of Motif and CPL portfolios and a more competitive retail landscape. As a percentage of net revenue, sales and marketing expenses remained consistent with the prior year at 12%.
RESEARCH AND DEVELOPMENT
Research and development costs of $10,945 for Fiscal 2025 increased from $11,200 in Fiscal 2024. The decrease in expenses mainly relates to reduced activity under the PDC Agreement relative to Fiscal 2024.
SHARE-BASED COMPENSATION
For Fiscal 2025, the Company recognized $3,975, in share-based compensation expense in relation to selling, marketing, general and administrative, and research and development employees, compared to $6,274 for Fiscal 2024.
Total share-based compensation charges, including those related to production employees that are charged to biological assets and inventory, and amounts expensed, for Fiscal 2025, were $4,217 compared to $7,182 for Fiscal 2024. The decrease in expense is primarily due to immediately vesting equity awards granted in the comparative period to retain talent; no such awards were granted in the current period.
Share-based compensation represents a non-cash expense and was valued using the Black-Scholes valuation model for stock options and using the fair value of the shares on the date of the grant for restricted share units ("RSUs"). The fair value of performance share units ("PSUs") was based on the Company’s share price at the grant date, adjusted for an estimate of likelihood of achievement of the defined performance criteria.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 10
OTHER EXPENSES
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| Fiscal 2025 | | Fiscal 2024 | | CHANGE | | % CHANGE |
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| Investment income, net of financing costs | (1,150) | | | (3,311) | | | (2,161) | | | (65) | % |
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| Acquisition and transaction costs | 6,580 | | | 915 | | | 5,665 | | | 619 | % |
| Share of loss (including impairment) from investments in associates | — | | | 5,284 | | | (5,284) | | | (100) | % |
| Change in fair value of contingent consideration | (9,743) | | | (50) | | | 9,693 | | | 19,386 | % |
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Loss (Gain) on disposal of property, plant and equipment | 9 | | | (633) | | | 642 | | | nm |
| Share issue costs allocated to derivative liabilities | 170 | | | 937 | | | (767) | | | (82) | % |
| Change in fair value of derivative liabilities, preferred shares and other financial assets | 27,505 | | | 7,718 | | | 19,787 | | | 256 | % |
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Other non-operating expense (income) | (142) | | | (176) | | | (34) | | | (19) | % |
Total other expenses | $ | 23,229 | | | $ | 10,684 | | | $ | 12,545 | | | 117 | % |
INVESTMENT INCOME, NET OF FINANCING COSTS
Investment income (net of financing costs) for Fiscal 2025 of $1,150 decreased from the Fiscal 2024 of $3,311, primarily due to a lower cash balance in the current period.
ACQUISITION AND TRANSACTION COSTS
Acquisition and transaction costs for Fiscal 2025 of $6,580 increased from the Fiscal 2024 of $915, primarily driven by higher costs associated with the Company's acquisitions and integration activities related to Motif and CPL. Included in these costs are legal and professional advisory fees and employee restructuring costs.
SHARE OF LOSS FROM INVESTMENTS IN ASSOCIATES
During Fiscal 2024, the Company recognized an impairment loss of $4,773 related to its investment in Hyasynth. This was due to indicators of impairment identified at the time, and the recoverable amount of the investment was determined to be approximately nil. The impairment was recorded in the consolidated statement of operations and comprehensive loss.
LOSS (GAIN) ON DISPOSAL OF PROPERTY, PLANT AND EQUIPMENT
During Fiscal 2025, the Company recognized a loss on disposal of property, plant and equipment of $9 compared to gain of $633 in Fiscal 2024. The change in loss (gain) on disposal of property, plant and equipment was primarily as a result of an early termination of one lease agreement in Fiscal 2024, which resulted in a gain of $416.
CHANGE IN FAIR VALUE OF DERIVATIVE LIABILITIES, PREFERRED SHARES AND OTHER FINANCIAL ASSETS
Change in fair value of derivative liabilities, preferred shares and other financial assets was a loss of $27,505 for Fiscal 2025, compared to a loss of $7,718 for Fiscal 2024. The following are the fair value changes that were recognized in Fiscal 2025 and Fiscal 2024.
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| | | YEAR ENDED |
| | | | | SEPTEMBER 30, 2025 | | SEPTEMBER 30,
2024 |
| Investment in Phylos | | | | | $ | (3,174) | | | $ | (3,227) | |
| Investment in OBX | | | | | (374) | | | (164) | |
| Investment in Sanity Group (convertible loan) | | | | | (4,399) | | | (2,253) | |
| Investment in Sanity Group (common shares) | | | | | (1) | | | (247) | |
| Top-up Rights | | | | | 22,483 | | | 6,208 | |
| Commitment to fund third tranche of Phylos convertible loan | | | | | (357) | | | 762 | |
| Commitment to issue Preferred Shares | | | | | (6,937) | | | 7,189 | |
| Warrants | | | | | (2,266) | | | (26) | |
| Preferred shares | | | | | 22,530 | | | (524) | |
| | | | | $ | 27,505 | | | $ | 7,718 | |
NET LOSS
Net loss for Fiscal 2025 was $24,759 or $0.194 per Common Share (basic and diluted), compared to $45,440 or $0.477 per Common Share (basic and diluted) for Fiscal 2024. The decrease in net loss from Fiscal 2024 is primarily due to higher gross margins and a deferred tax recovery that was recorded in Fiscal 2025.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 11
SUMMARY OF QUARTERLY RESULTS
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| Q1-F24 | Q2-F24 | Q3-F24 | Q4-2024 | Q1-F25 | Q2-F25 | Q3-F25 | Q4-F25 |
| Financial Results | | | | | | | | |
Adult-use recreational cannabis revenue (net of excise) | $ | 34,425 | | $ | 33,118 | | $ | 36,467 | | $ | 38,839 | | $ | 38,558 | | $ | 56,658 | | $ | 59,918 | | $ | 66,415 | |
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Medical international, wholesale and other revenue | $ | 2,030 | | $ | 4,510 | | $ | 4,593 | | $ | 5,859 | | $ | 4,172 | | $ | 8,942 | | $ | 10,874 | | $ | 13,646 | |
| Net revenue | $ | 36,455 | | $ | 37,628 | | $ | 41,060 | | $ | 44,698 | | $ | 42,730 | | $ | 65,600 | | $ | 70,792 | | $ | 80,061 | |
Net income (loss) | $ | (15,750) | | $ | (27,075) | | $ | 2,818 | | $ | (5,433) | | $ | (22,957) | | $ | 42,456 | | $ | (6,294) | | $ | (37,964) | |
Net income (loss) per common share, basic | $ | (0.194) | | $ | (0.297) | | $ | 0.027 | | $ | (0.050) | | $ | (0.202) | | $ | 0.329 | | $ | (0.047) | | $ | (0.283) | |
Net income (loss) per common share, diluted | $ | (0.194) | | $ | (0.297) | | $ | 0.026 | | $ | (0.050) | | $ | (0.202) | | $ | 0.318 | | $ | (0.047) | | $ | (0.283) | |
| Operational Results | | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| | | | | | | | |
| Employee headcount (#) | 984 | | 987 | | 914 | | 875 | | 1,241 | | 1,150 | | 1,178 | | 1,139 | |
The Company saw a decrease in net revenues in the first quarter of Fiscal 2024. This was followed by a sequential increase in the remaining quarters of Fiscal 2024. In the first quarter of Fiscal 2025, net revenue marginally decreased primarily as a result of lower international sales. In the second quarter of Fiscal 2025, the Company's international sales increased. Additionally, recreational net revenue also increased during this period. In Q3 Fiscal 2025, the Company achieved record net revenue and sequentially higher international sales. In Q4 Fiscal 2025, net revenue was the highest that the Company has reported in the preceding eight quarters.
In the Q1 and Q2 Fiscal 2024, the Company recorded a higher net loss primarily due to lower gross margin, higher operating expenses and lower gain on the change in fair value of derivative liabilities. In Q3 Fiscal 2024, both net revenue and gross margin increased, resulting in net income. In Q4 Fiscal 2024, the Company recorded a net loss primarily due to an impairment loss of $4,773 for investments in associates and change in fair value of derivative liabilities and other financial assets (investments which are measured at fair value through profit and loss) of $1,642. In Q1 Fiscal 2025, the Company's net loss increased, primarily due to increases in fair value losses on derivative liabilities and higher acquisition and transaction costs related to the acquisition of Motif. In Q2 Fiscal 2025, the Company recorded net income of $42,456. This increase compared to the prior quarter is primarily due to higher gross margins and higher gains from changes in the fair value of derivative liabilities, preferred shares, contingent consideration, and other financial assets. In Q3 Fiscal 2025, the Company recorded net loss of $6,294 primarily due to an increase in fair value losses on derivative liabilities and preferred shares. In Q4 Fiscal 2025, the Company's net loss increased, primarily due to increases in fair value losses on derivative liabilities and preferred shares.
Adjusted EBITDA
Adjusted EBITDA is a non-IFRS Measure and the Company calculates adjusted EBITDA as net income (loss) excluding: financing costs, net of investment income; income tax expense (recovery); depreciation, amortization, impairment, normalization of depreciation add-back due to changes in depreciable assets resulting from impairment charges, (gain) loss on disposal of property, plant and equipment (per the consolidated statement of cash flows); share-based compensation (per the consolidated statement of cash flows); share of loss (gain) from investments in associates and impairment loss from loans receivable; change in fair value of contingent consideration; change in fair value of derivative liabilities, preferred shares and other financial assets; expenditures incurred in connection with research and development activities (net of depreciation); unrealized (gain) loss on changes in fair value of biological assets; realized fair value on inventories sold and other inventory charges; provisions and net realizable value adjustments related to inventory and biological assets; government subsidies, insurance recoveries and other non-operating expenses (income); legal provisions (recoveries); incremental fair value component of inventories sold from acquisitions; ERP implementation costs; transaction costs; share issuance costs; and provision for Canndoc expected credit losses. Management believes that adjusted EBITDA is intended to provide a proxy for the Company’s operating cash flow and derives expectations of future financial performance for the Company, and excludes adjustments that are not reflective of current operating results. See "Cautionary Statement Regarding Certain Non-IFRS Measures". The most directly comparable measure to adjusted EBITDA calculated in accordance with IFRS is net income (loss).
During the second quarter of Fiscal 2024, management changed the calculation of Adjusted EBITDA to include provisions for expected credit losses and has conformed prior quarters accordingly.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 12
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Adjusted EBITDA (Non-IFRS Measure) | | | | | | | | | |
| Adjusted EBITDA Reconciliation | Q1-F24 | Q2-F24 | Q3-F24 | Q4-2024 | Q1-F25 | Q2-F25 | Q3-F25 | Q4-F25 | Fiscal 2025 |
Net (loss) income as reported | $ | (15,750) | | $ | (27,075) | | $ | 2,818 | | $ | (5,433) | | $ | (22,957) | | $ | 42,456 | | $ | (6,294) | | $ | (37,964) | | $ | (24,759) | |
Add/(deduct): | | | | | | | | | |
| Investment income, net of financing costs | (522) | | (650) | | (1,179) | | (960) | | (825) | | (179) | | (73) | | (73) | | (1,150) | |
Income tax (recovery) expense | — | | (30) | | — | | 30 | | — | | (106) | | (9,903) | | (3,761) | | (13,770) | |
Depreciation, amortization, and (gain) loss on disposal of property, plant and equipment (per statement of cash flows) | 3,594 | | 3,130 | | 3,039 | | 3,073 | | 3,387 | | 4,839 | | 4,789 | | 4,960 | | 17,975 | |
| Normalization of depreciation add-back due to changes in depreciable assets resulting from impairment charges | 757 | | — | | — | | — | | — | | — | | — | | — | | — | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| | | | | | | | | |
| Share-based compensation (per statement of cash flows) | 2,007 | | 1,995 | | 2,087 | | 1,093 | | 1,325 | | 938 | | 1,007 | | 947 | | 4,217 | |
| | | | | | | | | |
| | | | | | | | | |
Other (income) expenses | 343 | | 12,778 | | (6,687) | | 6,646 | | 12,477 | | (50,728) | | 13,511 | | 42,539 | | 17,799 | |
| | | | | | | | | |
| Incremental fair value component on inventories sold from acquisitions | — | | — | | — | | — | | — | | 1,586 | | 897 | | — | | 2,483 | |
ERP implementation costs | 991 | | 173 | | 7 | | 465 | | 744 | | 628 | | 1,217 | | 951 | | 3,540 | |
| Acquisition and other transaction costs | 590 | | (170) | | 421 | | 74 | | 4,504 | | 974 | | 654 | | 448 | | 6,580 | |
Provisions and net realizable value adjustments related to inventory and biological assets | 4,496 | | 2,009 | | 578 | | (673) | | 465 | | 1,917 | | (2,787) | | (1,260) | | (1,665) | |
| Adjusted EBITDA as Previously Reported | | | | | | | | | |
| Research and development expenditures, net of depreciation | 4,387 | | 2,556 | | 2,381 | | 1,545 | | 2,290 | | 2,583 | | 2,676 | | 3,056 | | 10,605 | |
| Adjusted EBITDA as previously reported | $ | 893 | | $ | (5,284) | | $ | 3,465 | | $ | 5,860 | | $ | 1,410 | | $ | 4,908 | | $ | 5,694 | | 9,843 | | 21,855 | |
Add: Provision for expected credit losses | — | | 4,239 | | — | | — | | — | | — | | — | | — | | — | |
| Adjusted EBITDA (revised) | $ | 893 | | $ | (1,045) | | $ | 3,465 | | $ | 5,860 | | $ | 1,410 | | $ | 4,908 | | $ | 5,694 | | 9,843 | | 21,855 | |
| Divided by: net revenue | 36,455 | | 37,628 | | 41,060 | | 44,698 | | 42,730 | | 65,600 | | 70,792 | | 80,061 | | 259,183 | |
Adjusted EBITDA margin % (revised) (non-IFRS measure) | 2 | % | (3) | % | 8 | % | 13 | % | 3 | % | 7 | % | 8 | % | 12 | % | 8 | % |
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 13
In Q1 Fiscal 2024, the Company's adjusted EBITDA was $893. In Q2 Fiscal 2024, the Company's Adjusted EBITDA position was a loss of $1,045 and the decrease in adjusted EBITDA from Q1 Fiscal 2024 was primarily due to increased sales and marketing expenses. In Q3 Fiscal 2024, as a result of higher recreational cannabis revenue and a higher adjusted gross margin resulting from lower cultivation and post-harvest costs, adjusted EBITDA increased to $3,465. In Q4 Fiscal 2024, the Company achieved adjusted EBITDA of $5,860. During Q1 Fiscal 2025, the adjusted EBITDA decreased to $1,410 due to lower international sales. In Q2 Fiscal 2025, the Company's international sales increased and the adjusted EBITDA increased to $4,908. During Q3 Fiscal 2025, the Company's recreational and international sales increased, resulting in an increase in adjusted EBITDA to $5,694. In Q4 Fiscal 2025, continued growth in net revenues and lower costs of production (on a per unit basis), resulted in adjusted EBITDA of $9,843 which was the highest adjusted EBITDA the Company had ever reported in any quarter.
BALANCE SHEET, LIQUIDITY AND CAPITAL RESOURCES
The following represents selected balance sheet highlights of the Company at the end Fiscal 2025 and Fiscal 2024:
| | | | | | | | | | | | | | | | | |
| SEPTEMBER 30, 2025 | | SEPTEMBER 30,
2024 | | % CHANGE |
| Cash, restricted cash & short-term investments | $ | 84,420 | | | $ | 133,426 | | | (37) | % |
| Inventories | $ | 106,023 | | | $ | 67,351 | | | 57 | % |
| Working capital | $ | 158,738 | | | $ | 208,897 | | | (24) | % |
| Total assets | $ | 562,211 | | | $ | 407,860 | | | 38 | % |
| Total current and long-term debt | $ | — | | | $ | — | | | — | % |
Non-current financial liabilities(1) | $ | 76,401 | | | $ | 34,414 | | | 122 | % |
| Total shareholders' equity | $ | 349,130 | | | $ | 305,989 | | | 14 | % |
Note 1: Non-current financial liabilities excludes non-monetary balances related to contingent consideration, derivative liabilities and deferred income taxes.
On September 30, 2025, the Company had total cash and short term investments of $84,420 compared to $133,426 at September 30, 2024. The decrease is primarily due to cash (net) payments of $65,620 for the acquisitions of Motif and CPL. The funds used to finance these acquisitions were not drawn from the Jupiter Pool.
Management believes its capital position, including access to the $10 million of previously restricted funds pursuant to a temporary waiver granted by BAT, provides sufficient liquidity to fund operations in the near to medium term. The Company's cash balances fluctuate significantly on a quarterly basis due to the timing of excise duty obligations. Management assesses additional financing alternatives regularly, including for strategic growth initiatives. Furthermore, the Company may be able to, if necessary and subject to prevailing market conditions, obtain equity or debt financing through capital markets. Additionally, subject to the restrictions in the amended and restated investor rights agreement dated January 23, 2024 between the Company and BAT, the Company may be able to use its shares as a currency for additional acquisitions. The Common Shares are listed for trading on both the Nasdaq Global Select Market ("NASDAQ") and the Toronto Stock Exchange (the "TSX"), and there is analyst coverage among sell-side brokerages. However, there can be no assurance that capital will be available on terms acceptable to the Company or at all.
In April 2024, the Company successfully closed an offering of units of the Company for gross proceeds of $28.8 million pursuant to a base shelf prospectus and the corresponding Form F-10 registration statement.
The following highlights the Company’s cash flows during Q4 Fiscal 2025 and Q4 Fiscal 2024:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Q4-F25 | | Q4-F24 | | Fiscal 2025 | | Fiscal 2024 |
| Cash provided by (used in): | | | | | | | |
| Operating activities | $ | (1,452) | | | $ | 8,893 | | | $ | (7,591) | | | $ | 3,872 | |
| Financing activities | (565) | | | 41,011 | | | 39,333 | | | 107,779 | |
| Investing activities | 214 | | | $ | (5,995) | | | (81,066) | | | $ | (30,803) | |
| Cash provided by (used in) | $ | (1,803) | | | $ | 43,909 | | | $ | (49,324) | | | $ | 80,848 | |
| Cash position | | | | | | | |
| Beginning of period | 85,031 | | | 105,116 | | | 132,605 | | | 51,757 | |
| End of period | $ | 83,228 | | | $ | 149,025 | | | $ | 83,281 | | | $ | 132,605 | |
| Short-term investments | 826 | | | 821 | | | 826 | | | 821 | |
| Cash and short-term investments | $ | 84,054 | | | $ | 149,846 | | | $ | 84,107 | | | $ | 133,426 | |
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 14
Cash used in by operating activities for Q4 Fiscal 2025 and Fiscal 2025 was $1,452 and $7,591, respectively, compared to cash generated in the Q4 Fiscal 2024 and Fiscal 2024 of $8,893 and $3,872, respectively. The increase in cash used in operating activities is primarily due to higher working capital requirements resulting from increased sales in the current period.
Cash (used in) provided by financing activities for Q4 Fiscal 2025 and Fiscal 2025 was $(565) and $39,333, respectively. In comparison, for Q4 Fiscal 2024 and Fiscal 2024 cash provided by financing activities was $41,011 and $107,779, respectively. For Fiscal 2025 and Fiscal 2024, proceeds from the Follow-on BAT Investment were the primary source of cash provided by financing activities.
Cash (used in) provided by investing activities for Q4 Fiscal 2025 and Fiscal 2025 was $214 and $(81,066), respectively, compared to cash (used in) provided by investing activities of $(5,995) and $(30,803) in Q4 Fiscal 2024 and Fiscal 2024, respectively. The increase in cash used by investing activities for Q4 Fiscal 2025 and Fiscal 2025 is primarily due to the acquisition of subsidiaries, for which the Company paid cash consideration of $65,620.
Free Cash Flow
Free Cash Flow is a Non-IFRS Measure and is calculated by the Company as net cash provided by or used in operating activities less the purchase of property, plant and equipment. Management believes that Free Cash Flow is a useful indicator of the Company's capacity to fund operations from internally generated cash flows, without the need for additional borrowings or use of existing cash reserves under normal operating conditions. See "Cautionary Statement Regarding Certain Non-IFRS Measures". The most directly comparable measure to Free Cash Flow in accordance with IFRS is net cash and restricted cash provided by (used in) operating activities.
| | | | | | | | | | | | | | | | | | | | |
| | | | |
| Q4-F25 | | Q4-F24 | Fiscal 2025 | | Fiscal 2024 |
| Net cash and restricted cash provided by (used in) operating activities | $ | (1,452) | | | $ | 8,893 | | $ | (7,591) | | | $ | 3,872 | |
| | | | | | |
Deduct: Change in property, plant and equipment | 764 | | | (1,810) | | (17,022) | | | (4,731) | |
| Free Cash Flow | $ | (688) | | | $ | 7,083 | | $ | (24,613) | | | $ | (859) | |
OFF BALANCE SHEET ARRANGEMENTS
There were no off-balance sheet arrangements during Q4 Fiscal 2025 and Fiscal 2025.
RELATED PARTY TRANSACTIONS
MANAGEMENT AND BOARD COMPENSATION
Key management personnel are those persons having the authority and responsibility for planning, directing, and controlling activities of the Company, directly or indirectly. The key management personnel are the members of the Company’s executive management team and Board of Directors. The transactions are conducted at arm’s length and in the normal course of operations.
For Q4 Fiscal 2025 and Fiscal 2025 and for Q4 Fiscal 2024 and Fiscal 2024, the Company's expenses included the following:
Management and Board compensation:
| | | | | | | | | | | | | | | | | | | | | | | |
| | | |
| Q4-F25 | | Q4-F24 | | Fiscal 2025 | | Fiscal 2024 |
| Salaries, bonus and consulting fees | $ | 1,620 | | | $ | 1,743 | | | $ | 5,616 | | | $ | 7,155 | |
| Share-based compensation | 606 | | | 806 | | | 2,698 | | | 4,620 | |
| Total key management compensation | $ | 2,226 | | | $ | 2,549 | | | $ | 8,314 | | | $ | 11,775 | |
During Q4 Fiscal 2025 and Fiscal 2025, nil and nil stock options (Fiscal 2024 – nil and 62,000) were granted to key management personnel with an aggregate fair value of $nil and $nil, respectively (September 30, 2024 – $nil and $123). In addition, during the Q4 Fiscal 2025 and Fiscal 2025, nil and 404,905 RSUs, (September 30, 2024 – 29,762 and 2,175,879), were granted to key management personnel with an aggregate fair value of nil and 1,538,000, respectively (September 30, 2024 – $nil and $4,373). For Q4 Fiscal 2025 and Fiscal 2025, nil and 404,905 PSUs, (September 30, 2024 – nil and 678,717) were issued to key management personnel with an aggregate fair value of $nil and $457, respectively (September 30, 2024 – $nil and $543).
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 15
SIGNIFICANT TRANSACTIONS WITH ASSOCIATES AND JOINT OPERATIONS
The Company has transactions with related parties, as defined in IAS 24 Related Party Disclosures, all of which are undertaken in the normal course of business.
For Q4 Fiscal 2025 and Fiscal 2025, under the PDC Agreement, BAT incurred $968 and $2,965 (Fiscal 2024 - $504 and $3,708) for direct expenses and the Company incurred $1,289 and $5,421 (Fiscal 2024 - $1,266 and $9,623) of direct expenses and capital expenditures of $nil and $9 (Fiscal 2024 - $nil and $96) related to the CoE, respectively. The Company recorded $1,105 and $4,193 (Fiscal 2024 - $885 and $6,666) of these expenditures in the consolidated statements of operations and comprehensive loss. For Q4 Fiscal 2025 and Fiscal 2025, the Company recorded $nil and $5 (Fiscal 2024 - $nil and $49) of capital expenditures in the consolidated statements of financial position.
During Q4 Fiscal 2025 and Fiscal 2025, BAT did not exercise any Top-up Rights. As at September 30, 2025, there is a receivable balance of $701 (September 30, 2024 - $3,169) from BAT.
FAIR VALUE MEASUREMENTS
(i) Financial Instruments
Financial instruments recorded at fair value on the consolidated statements of financial position are classified using a fair value hierarchy that reflects the significance of the inputs used in making the measurements. The Company categorizes its fair value measurements according to a three-level hierarchy. The hierarchy prioritizes the inputs used by the Company’s valuation techniques. A level is assigned to each fair value measurement based on the lowest-level input significant to the fair value measurement in its entirety.
The three levels of the fair value hierarchy are described as follows:
•Level 1 inputs are quoted prices in active markets for identical assets or liabilities that the entity can access at the measurement date;
•Level 2 inputs, other than quoted prices included within Level 1, that are observable for the asset or liability, either directly or indirectly; and
•Level 3 inputs are unobservable inputs for the asset or liability.
As at September 30, 2025, the Company held financial instruments that are measured at fair value at each reporting date. The valuation of these instruments is performed using various models, which, due to the complexity and nature of the instruments, primarily rely on Level 3 inputs within the fair value hierarchy. These inputs are unobservable and reflect the Company’s own assumptions about the assumptions that market participants would use in pricing the instruments. Refer to Note 19 of the Financial Statements for further information.
OUTSTANDING SHARE DATA
(i) Outstanding Shares, Warrants and Options and Other Securities
The following table sets out the number of Common Shares, options, warrants, Top-up Rights, RSUs and PSUs outstanding of the Company as at September 30, 2025 and December 11, 2025:
| | | | | | | | | | | |
| SEPTEMBER 30, 2025 | | DECEMBER 11, 2025 |
| Common shares issued and outstanding | 134,461,029 | | 135,004,752 |
Preferred shares(1) | 13,794,163 | | 13,794,163 |
| Options | 2,301,674 | | 2,262,196 |
| Warrants | 4,450,500 | | 4,450,500 |
| Top-up rights | 18,251,858 | | 18,019,383 |
| Restricted share units | 2,996,794 | | 2,414,860 |
| Performance share units | 1,677,762 | | 1,661,907 |
| Total fully diluted shares | 177,933,780 | | 177,607,761 |
Note 1: The preferred shares are eligible, under certain scenarios, to be converted into common shares equalling 14,456,471 consisting of the original preferred shares of 13,794,163 that convert into one common share and accretion amounts that accrue to the preferred shares at an annual rate of 7.5% per annum. Since the preferred shares were issued under the second and third tranches of the Follow-On BAT Investment, they have collectively accrued 662,308 of additional common share conversion value.
CRITICAL ACCOUNTING ESTIMATES AND JUDGMENTS
The preparation of the consolidated financial statements in conformity with IFRS requires management to make judgments, estimates and assumptions that affect the application of accounting policies and the reported amounts of assets, liabilities, income
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 16
and expenses. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis. Revisions to accounting estimates are recognized in the year in which the estimates are revised and in any future years affected.
The following are the estimates and judgments made by management in applying the accounting policies of the Company that have the most significant effect on the consolidated financial statements:
1.Biological assets and inventories
Determination of the fair value of biological assets requires management to make a number of estimates, including estimating the average selling price per gram and expected average yield per plant. The Company records obsolete and unsalable inventories at the lower of cost and net realizable value. Adjustments to the carrying value of inventories are based on obsolescence trends, historical experience, forecast demand and average selling price for obsolete and unsalable inventories. Refer to Notes 6 and 7 for further information.
2.Useful lives and impairment of property, plant and equipment and finite-life intangible assets
Amortization of property, plant and equipment and finite life intangible assets requires estimates of useful lives, which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts, taking into consideration factors such as economic and market conditions.
3.Share-based payments
In determining the fair value of options and related costs, management estimates the expected life of the option, the expected volatility of the Company’s share price, the risk-free interest rate, and the rate of forfeitures. Refer to Note 14 for further information.
4.Provision for returns and price adjustments
Government customers typically have the right to return products, and in some cases, the right to pricing adjustments for products that are subsequently discounted or sold for a lower price in another jurisdiction. The estimation of potential future returns and pricing adjustments includes the use of management estimates and assumptions that may not be certain given the evolving nature of the industry.
5.Impairment of non-financial assets
The recoverable amount of an individual CGU and group of CGUs is determined based on value in use which involves the use of a discounted cash flow model and significant assumptions which include forecasted cash flows, terminal growth rate and post-tax discount rates. In allocating any impairment loss, the Company determines the recoverable amounts of its property, plant and equipment. The recoverable amount of property and plant is determined based on fair value less costs of disposal and involves the use of capitalization rates, market rentals, market transactions and demolition costs. Refer to Note 8 for further information.
6. Derivative liabilities
Warrants issued pursuant to equity offerings that are potentially exercisable in cash or on a cashless basis resulting in a variable number of shares being issued are considered derivative liabilities and therefore measured at fair value through profit or loss. The Company uses the Black-Scholes option pricing model to estimate the fair value of such warrants at inception, on each exercise, and subsequently at the period end date. The key assumption used in the model is the expected future volatility in the price of the Company’s Common Shares.
The potential issuance of Common Shares related to Top-up Rights is classified as a derivative liability and is therefore measured at fair value through profit or loss. The Company uses the Monte Carlo pricing model to estimate the fair value of such Top-up Rights at inception, upon each exercise, and at year-end. The key assumption used in the model is the expected future volatility of the price of the Company's Common Shares. The impact of changes in these key assumptions is described in Note 12.
7. Recognition and measurement of preferred shares and derivative financial instrument
In determining the initial and subsequent measurement of the Preferred Shares and relative derivative, management has applied significant judgment and estimation in regards to the fair valuation of the Preferred Shares and related derivative liability. Refer to Notes 12 and 19 for further information.
8. Recognition and measurement of other financial assets
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 17
In determining the initial and subsequent recognition and measurement of the other financial assets, management has applied significant judgment and estimates including but not limited to determining the appropriate valuation methodology and key inputs. Refer to Notes 11 and 19 for further information.
9. Business Combinations
Management performs a valuation analysis to allocate the purchase price based on the acquisition date fair values of the identifiable assets acquired and liabilities assumed. Determining the fair value of identifiable assets acquired and liabilities assumed on the acquisition date and contingent consideration requires the use of judgment and estimates. With respect to the acquisitions, the significant assumptions related to estimating the fair value of the acquired brands and customer relationships, included: the royalty rate, forecasted revenues, and forecasted cash flows. Valuations are highly dependent on the inputs used and assumptions made by management regarding the future performance of these assets and any changes in the discount rate applied.
New and amended accounting standards effective for the current year
Amendments to IAS 1: Classification of Liabilities as Current or Non-Current and Non-current Liabilities with Covenants
In January 2020 and October 2022, the IASB issued amendments to IAS 1 to specify the requirements relating to determining whether a liability should be presented as current or non-current in the statement of financial position. Under the new requirements, the assessment of whether a liability is presented as current or non-current is based on the contractual arrangements in place as at the reporting date and does not impact the amount or timing of recognition. These amendments also clarify how conditions with which an entity must comply within twelve months after the reporting period affect the classification of a liability. The amendments apply retrospectively for annual reporting periods beginning on or after January 1, 2024. These amendments do not have a material impact on the Company’s consolidated financial statements.
Amendments to IFRS 16: Lease Liability in a Sale and Leaseback
On September 22, 2022, the IASB issued amendments to IFRS 16 Leases, to specify the requirements that a seller-lessee uses in measuring the lease liability arising in a sale and leaseback transaction, to ensure the seller-lessee does not recognize any amount of the gain or loss that relates to the right of use it retains. The amendments are effective for annual reporting periods beginning on or after January 1, 2024 and must be applied retrospectively to sale and leaseback transactions entered into after the date of initial application of IFRS 16. Earlier application is permitted and that fact must be disclosed. The Company has not entered into any sale and leaseback transactions in the past and does not anticipate doing so in the future. Therefore, these amendments do not have an impact on the Company's consolidated financial statements.
Amendments to IAS 7 and IFRS 7: Supplier Finance Arrangements
In May 2023, the IASB issued amendments to IAS 7 Statement of Cash Flows and IFRS 7 Financial Instruments: Disclosures to clarify the characteristics of supplier finance arrangements and require additional disclosure of such arrangements. The disclosure requirements in the amendments are intended to assist users of financial statements in understanding the effects of supplier finance arrangements on an entity’s liabilities, cash flows and exposure to liquidity risk. These amendments do not have an impact on the Company’s consolidated financial statements.
Accounting standards issued but not yet effective
The new and amended standards and interpretations that are issued, but are not yet effective, up to the date of issuance of the Company's consolidated financial statements are disclosed below. The Company intends to adopt these new and amended standards and interpretations when they become effective.
Amendment to the Classification and Measurement of Financial Instruments – Amendments to IFRS 9 and IFRS 7
In May 2024, the IASB issued amendments to IFRS 9 and IFRS 7 to respond to recent questions arising in practice, and to include new requirements not only for financial institutions but also for corporate entities. These amendments:
•clarify the date of recognition and derecognition of some financial assets and liabilities, with a new exception for some financial liabilities settled through an electronic cash transfer system;
•clarify and add further guidance for assessing whether a financial asset meets the solely payments of principal and interest (SPPI) criterion;
•add new disclosures for certain instruments with contractual terms that can change cash flows (such as some financial instruments with features linked to the achievement of environment, social and governance targets); and
•update the disclosures for equity instruments designated at fair value through other comprehensive income (FVOCI).
These amendments are effective for annual reporting periods beginning on or after January 1, 2026, and must be applied retrospectively. Earlier application is permitted. The Company is currently evaluating the full potential impact of these amendments on the consolidated financial statements.
IFRS 18 Presentation and Disclosure in Financial Statements
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 18
In April 2024, the IASB issued IFRS 18, which replaces IAS 1 Presentation of financial statements. IFRS 18 introduces new requirements for presentation within the statement of profit or loss, including specified totals and subtotals. Furthermore, entities are required to classify all income and expenses within the statement of profit or loss into one of five categories: operating, investing, financing, income taxes and discontinued operations, whereof the first three are new.
It also requires disclosure of newly defined management-defined performance measures, subtotals of income and expenses, and includes new requirements for aggregation and disaggregation of financial information based on the identified "roles" of the primary financial statements (PFS) and the notes.
In addition, narrow-scope amendments have been made to IAS 7 Statement of Cash Flows. These include changing the starting point for determining cash flows from operations under the indirect method from "profit or loss" to "operating profit or loss" and removing the optionality around classification of cash flows from dividends and interest. In addition, there are consequential amendments to several other standards.
IFRS 18 and the amendments to the other standards, are effective for annual reporting periods beginning on or after January 1, 2027, but earlier application is permitted and must be disclosed. IFRS 18 will apply retrospectively. The Company is currently evaluating the potential impact of IFRS 18 on the Company’s consolidated financial statements.
IFRS 19 Subsidiaries without Public Accountability: Disclosures and amendment
In May 2024, the IASB issued amendments to IFRS 19, which permits an eligible subsidiary (i.e., a subsidiary without public accountability, whose ultimate or intermediate parent prepares consolidated financial statements under IFRS) to apply reduced disclosure requirements while otherwise applying full IFRS recognition, measurement and presentation requirements.The standard is effective for annual periods beginning on or after January 1, 2027 and may be applied prospectively, with earlier application permitted.
As the Company is not a subsidiary and has public accountability (its shares are publicly traded), it is not eligible to apply IFRS 19 and therefore these amendments are not expected to have any impact on the Company’s consolidated financial statements.
Amendments to IAS 21 - Lack of Exchangeability
In August 2023, the IASB amended IAS 21 to clarify when a currency is exchangeable into another currency and how a company estimates a spot rate when a currency lacks exchangeability. The amendments are effective for annual reporting periods beginning on or after January 1, 2025 and must be applied prospectively to foreign-currency items entered into after the date of initial application. These amendments are not expected to have a material impact on the Company’s consolidated financial statements.
ACQUISITION OF SUBSIDIARIES
i.Acquisition of Motif
On December 6, 2024, the Company acquired 100% of the issued and outstanding shares of Motif, a Canadian leader in the vape and infused pre-roll categories backed by a portfolio of strong owned brands, for upfront consideration of $90 million. This included $50 million in cash and $40 million of the Company's common shares priced based on the 30 day trading volume-weighted average price ("VWAP") of $2.3210. In addition, Motif shareholders are entitled to receive an additional contingent consideration of $10 million payable in the Company's common shares, conditional on the Company achieving a price per share exceeding $3.2203 per share, based on the rolling 30-trading day VWAP on the TSX, within 12 months of the date of the transaction. The acquisition was accounted for as a business combination under IFRS 3. For additional details regarding the accounting treatment of the acquisition, refer to Note 26 of the Financial Statements.
The acquisition of Motif resulted in Organigram becoming the #1 LP in Canada by market share11 and added two purpose-built facilities to its portfolio that are optimized for cannabis extraction, processing, manufacturing, and distribution. Motif's product portfolio is highly complementary to Organigram's, with minimal portfolio overlap.
On April 1, 2025, the Company completed the amalgamation of Motif and it continued as a single legal entity under the name Organigram Inc. Integration efforts are substantially complete, with core systems, operational processes, and organizational structures largely aligned. Management continues to monitor residual integration matters as part of normal operations.
ii.Acquisition of CPL
On March 31, 2025, the Company acquired 100% of the issued and outstanding shares of CPL, a company operating in the cannabis and hemp-derived THC beverage categories, supported by a portfolio of strong owned brands, for upfront consideration of $6 million. CPL's former shareholder is also entitled to receive up to additional consideration of $24 million in contingent consideration, subject to achievement of certain milestone and earnout targets. The acquisition was accounted for as a business
11 Source: Hifyre (all provinces other than QC, NB and NS), Weedcrawler (QC), and Board Data (NB, NS, PE), R3M Oct 30
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 19
combination under IFRS 3. For additional details regarding the accounting treatment of the acquisition, refer to Note 26 of the Financial Statements.
Through the Company's acquisition of CPL, the Company entered the cannabis beverage category in Canada and the hemp-derived THC beverage category in the U.S. In Canada, the Company has captured 5.5% of the beverage category12 and intends to further expand in this category by leveraging sales capabilities and the FASTTM nanoemulsion technology. In the U.S., CPL beverages are currently distributed in approximately 25 states through its online DTC platform and retail brick and mortar locations across several states.12
Refer to Note 26 to the Financial Statements for further information.
CONTINGENT LIABILITIES
The Company recognizes loss contingency provisions for probable losses when management can reasonably estimate the loss. When the estimated loss lies within a range, the Company records a loss contingency provision based on its best estimate of the probable loss. If no particular amount within that range is a better estimate than any other amount, the mid-point of the range is used. As information becomes known a loss contingency provision is recorded when a reasonable estimate can be made. The estimates are reviewed at each reporting date and the estimates are changed when expectations are revised. An outcome that deviates from the Company’s estimate may result in an additional expense or release in a future accounting period.
DISCLOSURE CONTROLS AND PROCEDURES AND INTERNAL CONTROL OVER FINANCIAL REPORTING
In accordance with National Instrument 52-109 - Certification of Disclosure in Issuers’ Annual and Interim Filings (“NI 52-109”) and Rule 13a-15 under the United States Securities Exchange Act of 1934, as amended (the “Exchange Act”), the establishment and maintenance of Disclosure Controls and Procedures (“DCP”) and Internal Control Over Financial Reporting (“ICFR”) is the responsibility of management.
The Company engaged PKF O'Connor Davies ("PKF"), the Company's independent registered public accounting firm, to perform an “integrated audit” which encompassed an opinion on the fairness of presentation of the Company’s annual consolidated financial statements for the year ended September 30, 2025, as well as an opinion on the effectiveness of the Company’s ICFR. PKF, has audited the Company's Financial Statements and has issued an adverse report on the effectiveness of ICFR. PKF‘s audit report on the Company’s ICFR is incorporated by reference into the Company’s annual report on Form 40-F under the Exchange Act for the year ended September 30, 2025.
DISCLOSURE CONTROLS AND PROCEDURES
The Company maintains a set of DCP designed to provide reasonable assurance that information required to be publicly disclosed is recorded, processed, summarized and reported on a timely basis. As required by NI 52-109 and Exchange Act Rule 13a-15(b), an evaluation of the design and operation of our DCP was completed as of September 30, 2025 under the supervision and with the participation of management, including our Chief Executive Officer who departed subsequent to Fiscal 2025 effective November 30, 2025, and our Executive Chair who is acting in the capacity of Chief Executive Officer effective December 1, 2025 (“CEO”) and Chief Financial Officer (“CFO”) using the criteria set forth in Internal Control - Integrated Framework, issued by the Committee of Sponsoring Organizations of the Treadway Commission (the “COSO 2013 Framework”). Based upon this evaluation, our CEO and CFO concluded that because of the material weaknesses in our ICFR described below, our DCP were not effective as of such date.
LIMITATIONS ON SCOPE OF DESIGN
The Company has limited the scope of its evaluation of DCP and ICFR to exclude controls, policies and procedures over entities that were acquired by the Company not more than 365 days before the end of the financial period. The only entities controlled by
12 As of September 30, 2025 - Multiple sources (Hifyre, Weedcrawler, OCS wholesale sales and e-commerce orders shipped data, provincial boards data and internal sales data)
12See amendments to definition of hemp in the 2018 Farm Bill as described in greater detail in the "Outlook" section of this MD&A.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 20
the Company but that was scoped out of the evaluation of DCP and ICFR were Motif (acquired effective December 6, 2024), CPL and CPL USA (both acquired effective March 31, 2025).
Excluding goodwill and intangible assets, Motif constitutes approximately $52,485 of the Company’s current assets, $78,093 of total assets, $40,000 of current liabilities and $55,518 of total liabilities as of the acquisition date. During the three months and year ended September 30, 2025, Motif contributed $42,463 and $137,793 in gross revenue to the consolidated results.
Excluding goodwill and intangible assets, CPL constitutes approximately $2,523 of the Company’s current assets, $2,523 of total assets, $1,097 of current liabilities and $5,030 of total liabilities as of the acquisition date. As of the date of this MD&A, the purchase price allocation for CPL has not yet been finalized.
INTERNAL CONTROL OVER FINANCIAL REPORTING
NI 52-109 requires the CEO and CFO to certify that they are responsible for establishing and maintaining ICFR for the Company and that those internal controls have been designed and are effective in providing reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements in accordance with IFRS. Similarly, Exchange Act Rule 13a-15(c) requires the Company's management, with the participation of the CEO and CFO, to evaluate ICFR as of the end of the fiscal year. The CEO and CFO are also responsible for disclosing any changes to the Company’s internal controls during the most recent period that have materially affected, or are reasonably likely to materially affect, its internal control over financial reporting.
MATERIAL CHANGES TO INTERNAL CONTROL OVER FINANCIAL REPORTING
There has been a change to the Company’s ICFR during the three months ended September 30, 2025 that has materially affected, or is likely to materially affect, the Company’s ICFR. In the fourth quarter of fiscal year 2025, staff turnover among personnel responsible for preparing and reviewing complex spreadsheets related to biological assets and inventory impacted management’s ability to maintain effective operation of applicable controls.
Security and Administration and Monitoring of Service Organizations
With respect to the material weakness related to the information process during Fiscal 2025, the following remedial activities were completed and the material weakness assessed as remediated in Q4 of Fiscal 2025:
•Engaged internal control specialists that assisted management in evaluating internal controls and in designing remediation plans;
•Hired a VP, Information Technology to oversee and enhance the IT department and support the remediation of deficiencies in general IT controls;
•Hired and trained a dedicated resource to review the third-party service organization control reports and assess their impact in relation to the Company’s control environment;
•Remediated certain IT General controls; and
•Remediated the identified deficiencies related to the design, implementation, and operation of certain process-level and financial statement close controls.
MANAGEMENT’S EVALUATION OF INTERNAL CONTROL OVER FINANCIAL REPORTING
The Company’s management, under the supervision and with the participation of its CEO and CFO, conducted an evaluation of the effectiveness of the Company’s ICFR as defined by NI 52-109 and Rule 13a-15(f) of the Exchange Act as of September 30, 2025, using the criteria set forth by the COSO 2013 Framework. Based on this evaluation, management concluded that the Company's ICFR was not effective as of September 30, 2025.
A material weakness is a deficiency, or a combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company’s annual or interim financial statements will not be prevented or detected on a timely basis. Management has identified the following material weakness:
•Management review controls designed to ensure the completeness and accuracy of complex spreadsheets used in the biological assets and inventory valuation processes, as well as user access rights and related controls over the inventory management application Ample system, were not designed or operating effectively. The material weakness related to the inventory management application Ample system was remediated through the decommissioning of the system application in the first quarter of Fiscal 2026, and the system application is no longer in use.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 21
STATUS OF REMEDIATION PLAN
The Company was successful in remediating the material weakness related to IT General Controls and made progress in remediating other control deficiencies as discussed above under “Material Changes to Internal Control Over Financial Reporting” as at the end of Fiscal 2025. Management, with the assistance of external and internal specialists, has continued reviewing and revising its ICFR, and remains committed to implementing changes to its ICFR to ensure that the control deficiencies that contributed to the remaining material weakness is remediated in Fiscal 2026.
The following remedial activities remain in progress as at the date of this MD&A and are expected to continue at least throughout the first half of Fiscal 2026. The controls associated with these remedial activities have not yet been subject to control testing to conclude on the design or operational effectiveness.
•The Company will continue to streamline complex spreadsheet models related to biological assets and inventory to reduce the risk of errors in mathematical formulas and to improve the ability to verify the logic of complex spreadsheets, while continuing to automate processes, and leverage the Company's new inventory costing upgrades in its ERP system.
A component of the material weakness related to the inventory management application Ample system was remediated through the decommissioning of the system application in the first quarter of Fiscal 2026, and the system application is no longer in use.
Following the improvement and remediation of the material weakness related to IT General Controls, senior management has discussed the remaining material weakness with the Audit Committee which will continue to review progress on these remediation activities. While we believe these actions, including the third phase of the ERP system, will contribute to the remediation of the material weakness, we have not yet completed all of the corrective processes, procedures and related evaluation or remediation that we believe are necessary. As we continue to evaluate and work to remediate the remaining material weakness, we may need to take additional measures to address the deficiencies. Until the remediation steps set forth above, including the efforts to implement any additional control activities identified in the process, are fully implemented and operate for a sufficient period of time that they can be concluded to be operating effectively, the remaining material weakness described above will not be considered fully remediated. While significant progress has been made toward remediation of the remaining material weakness, no assurance can be provided at this time that the actions and remediation efforts will effectively remediate the remaining material weakness described above or prevent the incidence of other material weaknesses in the Company’s ICFR in the future. Management expects to fully remediate the remaining material weakness identified before the end of Fiscal 2026. See “Risk Factors” in this MD&A and the AIF.
Management, including the CEO and CFO, does not expect that DCP or ICFR will prevent all misstatements, even as the remediation measures are implemented and further improved to address the material weakness. The design of any system of internal controls is based in part upon certain assumptions about the likelihood of future events, and there can be no assurance that any design will succeed in achieving the stated goals under all potential future conditions.
RISK FACTORS
The Company’s business is subject to risks inherent in a high growth, heavily regulated enterprise. We have identified certain risks pertinent to our business that may have affected or may affect our business, financial conditions, results of operations and cash flows, as further described throughout this MD&A and under “Risk Factors” in the AIF. For additional risk factors, readers are directed to the Company’s AIF, which is (a) available under the Company’s issuer profile on SEDAR+ at www.sedarplus.ca, and (b) incorporated into and forms part of the Company's annual report on Form-40F filed on EDGAR at www.sec.gov. As a general matter, management of the Company attempts to assess and mitigate any risks and uncertainties by retaining experienced professional staff and ensuring that the Board of Directors and senior management of the Company are monitoring the risks impacting or likely to impact the business on a continuous basis.
(i) Credit Risk
Credit risk arises from deposits with banks, short-term investments, outstanding trade and other receivables, restricted cash and other financial assets. For trade receivables, the Company does not hold any collateral as security but mitigates this risk by dealing only with what management believes to be financially sound counterparties and, accordingly, does not anticipate significant loss for non-performance. For other receivables, outside of the normal course of business, management generally obtains guarantees and general security agreements. The maximum exposure to credit risk of cash, short-term investments, restricted cash, other financial assets and accounts receivable and other receivables on the statement of financial position at September 30, 2025 approximates $198,827 (September 30, 2024 - $211,306).
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 22
As of September 30, 2025 and September 30, 2024, the Company’s aging of trade receivables was as follows:
| | | | | | | | | | | |
| SEPTEMBER 30, 2025 | | SEPTEMBER 30, 2024 |
| 0-90 days | $ | 56,442 | | | $ | 32,349 | |
| More than 90 days | 12,846 | | | 5,502 | |
| Gross trade receivables | $ | 69,288 | | | $ | 37,851 | |
| Less: Expected credit losses and reserve for product returns and price adjustments | (5,703) | | | (5,196) | |
| $ | 63,585 | | | $ | 32,655 | |
(ii) Liquidity Risk
The Company’s liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due. The Company manages its liquidity risk by reviewing its capital requirements on an ongoing basis. As at September 30, 2025, the Company had $28,200 (September 30, 2024 – $106,745) of cash and working capital of $158,738 (September 30, 2024 - $208,897). Further, the Company may access equity capital through the capital markets and may also obtain debt financing, if required.
The Company is obligated to the following contractual maturities relating to their undiscounted cash flows as at September 30, 2025:
| | | | | | | | | | | | | | | | | | | | |
| Carrying Amount | Contractual Cash Flows | Less than
1 year | 1 to 3 years | 3 to 5 years | More than
5 years |
| Accounts payable and accrued liabilities | $ | 89,247 | | $ | 89,247 | | $ | 89,247 | | $ | — | | $ | — | | $ | — | |
| Long-term debt | 25 | | 25 | | 25 | | — | | — | | — | |
| Lease obligations | 8,727 | | 11,298 | | 1,584 | | 3,159 | | 2,939 | | 3,616 | |
| $ | 97,999 | | $ | 100,570 | | $ | 90,856 | | $ | 3,159 | | $ | 2,939 | | $ | 3,616 | |
The contractual maturities noted above are based on contractual due dates of the respective financial liabilities.
In connection with the Company’s facilities, the Company is contractually committed to approximately $266 of capital expenditures.
(iii) Market Risk
Market risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market prices. Market risk for the Company is comprised of interest rate risk, which is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. The Company’s exposure to the risk of changes in market interest rates relates primarily to the Company’s debt obligations with a floating interest rate. The Company has determined that a 1% change in rates would not have a material impact on the consolidated financial statements.
(iv) Concentration risk
The Company’s accounts receivable are primarily due from provincial government agencies (four of which, individually, represented more than 10% of the Company’s revenues during the year ended September 30, 2025), corporations (four of which represented more than 10% of the Company’s revenues during the period), and legal trusts and, thus, the Company believes that the accounts receivable balance is collectible.
(v) Risks related to third party data
The Company relies on independent third party data for market share position and there is no assurance third party data provides an accurate representation of actual sales as some third parties use different methodologies or calculations to estimate market share position, and because market and industry data is inherently imprecise, subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process, and other limitations and uncertainties inherent in any statistical survey or data collection process. The Company also relies on its own market research and internal data to determine the accuracy of such third-party data.
(vi) Information Systems Risk
The Company’s business operations are managed through a variety of information technology ("IT") systems. Certain of the Company’s key IT systems are dated and require, or are in the process of, modernization. The Company’s IT systems may also be vulnerable to damage or interruption from circumstances beyond the Company’s control, including fire, flood, natural disasters, systems failures, network or communications failures, power outages, public health emergencies, security breaches, cyber-attacks and terrorism. If one of the Company’s key IT systems were to suffer a failure, no assurance can be given that the Company’s backup systems or contingency plans will sustain critical aspects of the Company’s operations, and the Company’s business, results of operations or financial condition could be materially adversely affected. Further, the Company relies on large outsourcing contracts for IT services with major third-party service providers, and if such service providers were to fail or the
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 23
relationships with the Company were to end, and the Company were unable to find suitable replacements in a timely manner, the Company’s business, results of operations or financial condition could be materially adversely affected.
The Company is continually modifying and enhancing its IT systems and technologies to increase productivity, efficiency and security. As new systems and technologies are implemented, the Company could experience unanticipated difficulties resulting in unexpected costs and adverse impacts to its financial reporting and manufacturing and other business processes. When implemented, the systems and technologies may not provide the benefits anticipated and could add costs and complications to ongoing operations, which may have a material adverse effect on the Company’s business, results of operations or
financial condition.
During fiscal year 2023 and Fiscal 2024, the Company launched a new ERP system, which provides for a more robust and secure financial system of record, among other supply chain and operational data. Various IT general controls are now centralized currently in the midst of stabilizing a new ERP system, which replaces its previous financial system. There can be no assurance
that the ERP system will provide the information and benefits expected by management.
Phase 3 of the Company’s ERP system has been implemented; however, there remains a risk of post-implementation challenges during the stabilization period, which could adversely affect operational efficiency or internal controls over financial reporting if not effectively managed.
CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING INFORMATION
Certain information herein contains or incorporates comments that constitute forward-looking information within the meaning of applicable securities legislation (“forward-looking information”). Forward-looking information, in general, can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “could”, “would”, “might”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “continue”, “budget”, “schedule” or “forecast” or similar expressions suggesting future outcomes or events. They include, but are not limited to, statements with respect to expectations, forecasts or other characterizations of future events or circumstances, and the Company’s objectives, goals, strategies, beliefs, intentions, plans, estimates, projections and outlook, including statements relating to the Company’s plans and objectives, or estimates or predictions of actions of customers, suppliers, partners, distributors, competitors or regulatory authorities; and statements regarding the Company’s future economic performance. These statements are not historical facts but instead represent management beliefs regarding future events, many of which by their nature are inherently uncertain and beyond management control. Forward-looking information in this MD&A is based on the Company’s current expectations about future events.
Certain forward-looking information in this MD&A includes, but is not limited to the following:
•Expectations regarding production capacity, including seed-based cultivation, capability of the beverage manufacturing line, facility size, THC content, costs and yields;
•Expectations regarding the prospects of the Company’s collaboration and investment transaction with BAT;
•Expectations regarding the prospects for the Company’s primary operating subsidiary, Organigram Inc.;
•Expectations around demand for cannabis and related products, future opportunities and sales, including the relative mix of medical versus recreational cannabis products, the relative mix of products within the recreational category;
•Changes in legislation related to permitted cannabis types, forms, and potency, and legislation of additional cannabis types and forms for adult use recreational cannabis in Canada, including regulations relating thereto, the timing and the implementation thereof, and our future product forms;
•Expectations around branded cannabis products with respect to timing, launch, product attributes, composition and consumer demand;
•Expectations around the revenue growth from innovative products, particularly the commercialization of its new FASTTM nanoemulsion technology;
•The scope of protection the Company is able to establish and maintain, if any, for its intellectual property ("IP") rights;
•Strategic investments and capital expenditures, and expected related benefits;
•Expectations regarding the Company's investments in OBX, Phylos and Sanity Group;
•Expectations regarding EU-GMP certification, including successful completion of the audit and timing for the issuance of the certification, if successful;
•The general continuance of current, or where applicable, assumed industry conditions;
•Changes in laws, regulations, guidelines, and policies, and the interpretation thereof, including those relating to the recreational and/or medical cannabis markets domestically and internationally, minor cannabinoids and environmental programs;
•The price of cannabis and derivative cannabis products;
•The impact of the Company’s cash flow and financial performance on third parties, including its supply partners;
•Fluctuations in the price of Common Shares and the market for Common Shares;
•The treatment of the Company's business under international regulatory regimes and impacts on changes thereto on the Company's international sales;
•The Company’s growth strategy, targets for future growth and forecasts of the results of such growth;
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 24
•Expectations concerning access to capital and liquidity, and the Company’s ability to access the public markets from time to time to fund operational activities and growth;
•Expectations concerning the Company's financial position, future liquidity and other financial results;
•The ability of the Company to generate cash flow from operations and from financing activities;
•The competitive conditions of the industry, including the Company’s ability to maintain or grow its market share;
•Expectations regarding the Company's ability to generate cost savings from operational effectiveness and automation initiatives;
•Expectations regarding capital expenditures and timing thereof; and
•Expectations concerning the Company's performance during the first quarter of fiscal year 2026 and full-year fiscal 2026, including with respect to revenue, adjusted gross margin, selling, general and administrative expenses, adjusted EBITDA Free Cash Flow, and cash from operations before working capital changes.
Forward-looking information is provided for the purposes of assisting the reader in understanding the Company and its business, operations, risks, financial performance, financial position and cash flows as at and for the periods ended on certain dates, and to present information about management’s current expectations and plans relating to the future, and the reader is cautioned that such statements may not be appropriate for other purposes. In addition, this MD&A may contain forward-looking information attributed to third party industry sources. Undue reliance should not be placed on forward-looking information, as there can be no assurance that the plans, intentions or expectations upon which they are based will occur. Forward-looking information does not guarantee future performance and involves known and unknown risks, uncertainties and other factors that may cause actual results or events to differ materially from those anticipated in the forward-looking information. By its nature, forward-looking information involves numerous assumptions, known and unknown risks and uncertainties, both general and specific, that contribute to the possibility that the expectations, predictions, forecasts, projections and conclusions will not occur or prove accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. These and other factors may cause actual results or events to differ materially from those anticipated in the forward-looking information.
Factors that could cause actual results to differ materially from those set forth in forward-looking information include, but are not limited to: financial risks; cyber security risks; dependence on senior management and other key personnel, the Board, consultants and advisors; availability and sufficiency of insurance including continued availability and sufficiency of director and officer and other forms of insurance; the Company and its subsidiaries being able to, where applicable, cultivate cannabis pursuant to applicable law and on the currently anticipated timelines and in anticipated volumes; industry competition; global events, including heightened economic and industry uncertainty as a result of any pandemic or epidemic and governmental action in respect thereto, including with respect to impacts on production, operations, disclosure controls and procedures or internal control over financial reporting, and supply chain and distribution disruptions; facility and technological risks; changes to government laws, regulations or policy, including the amendment of the definition of hemp in the 2018 Farm Bill to effectively eliminate hemp-derived THC products, environmental or tax, or the enforcement thereof; agricultural risks; ability to maintain any required licenses or certifications; supply risks; product risks; construction delays or postponements; packaging and shipping logistics; inflationary risk, expected number of medical and recreational cannabis users in Canada and internationally; continuation of shipments to existing and prospective international jurisdictions and customers; potential time frame for the implementation of legislation to legalize cannabis internationally; the Company’s, its subsidiaries' and its investees’ ability to, where applicable, obtain and/or maintain their status as LP or other applicable licensees; risk factors affecting its investees; availability of any required financing on commercially acceptable terms or at all; the potential size of the regulated recreational cannabis market in Canada; demand for and changes in the Company’s cannabis and related products, including the Company’s derivative products, and the sufficiency of the retail networks to supply such demand; ability to enter and participate in international market opportunities; general economic, financial market, regulatory, industry and political conditions affecting the Company; the ability of the Company to compete in the cannabis industry and changes in the competitive landscape; a material decline in cannabis prices; the Company’s ability to manage anticipated and unanticipated costs; the Company’s ability to implement and maintain effective internal control over financial reporting and disclosure controls and procedures; risks relating to potential failure of the Company's IT system; ongoing expansions to the Company's ERP system; continuing to meet listing standards for the TSX and the NASDAQ; risks relating to the Company's IP; liquidity risk; concentration risk; and other risks and factors described from time to time in the documents filed by the Company with securities regulators in Canada and the United States. Material factors and assumptions used in establishing forward-looking information include that production activities will proceed as planned, and demand for cannabis and related products will change in the manner expected by management. All forward-looking information is provided as of the date of this MD&A.
Certain forward-looking information included herein may also constitute a "financial outlook" within the meaning of applicable securities legislation. Financial outlook involves statements about the Company's prospective financial performance and financial position that are based on and subject to the assumptions about future economic conditions and courses of action described above as well as management's expectations regarding a strong innovation pipeline, increasing international sales, high cannabis quality and higher potency, commercialization of FAST nano-emulsion technology in ingestible formats, and receipt of the EU-GMP certification. Such assumptions are based on management's assessment of the relevant information currently available and any financial outlook included herein is provided for the purpose of helping readers understand managements's current expectations and plans for the future as of the date hereof. The actual results of the Company's operations may vary from the amounts set forth in any financial outlook and such variances may be material. Readers are cautioned that reliance on any
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 25
financial outlook may not be appropriate for other purposes, or in other circumstances and that the risk factors described above and other factors may cause actual results to differ materially from any financial outlook.
The Company does not undertake to update any such forward-looking information whether as a result of new information, future events or otherwise, except as required by law.
ADDITIONAL INFORMATION ABOUT THE ASSUMPTIONS, RISKS AND UNCERTAINTIES OF THE COMPANY’S BUSINESS AND MATERIAL FACTORS OR ASSUMPTIONS ON WHICH INFORMATION CONTAINED IN FORWARD-LOOKING INFORMATION IS BASED IS PROVIDED IN THE COMPANY’S DISCLOSURE MATERIALS, INCLUDING IN THIS MD&A UNDER “RISK FACTORS” AND THE COMPANY’S CURRENT AIF UNDER “RISK FACTORS”, FILED WITH THE SECURITIES REGULATORY AUTHORITIES IN CANADA AND AVAILABLE UNDER THE COMPANY’S ISSUER PROFILE ON SEDAR+ AT WWW.SEDARPLUS.CA, AND FILED WITH OR FURNISHED TO THE SEC AND AVAILABLE ON EDGAR AT WWW.SEC.GOV. ALL FORWARD-LOOKING INFORMATION IN THIS MD&A IS QUALIFIED BY THESE CAUTIONARY STATEMENTS.
CAUTIONARY STATEMENT REGARDING CERTAIN NON-IFRS MEASURES
This MD&A contains certain financial and operational performance measures that are not recognized or defined under IFRS (i.e. non-IFRS measures). As there are no standardized methods of calculating these non-IFRS measures, the Company's approaches may differ from those used by others and this data may not be comparable to similar data presented by other LPs and cannabis companies. For an explanation of these measures to related comparable financial information presented in the Financial Statements prepared in accordance with IFRS, refer to the discussion below.
The Company believes that these non-IFRS measures are useful indicators of operating performance and are specifically used by management to assess the financial and operating performance of the Company. These non-IFRS measures include, but are not limited to, the following:
•Adjusted gross margin is calculated by subtracting cost of sales, before the effects of: (i) unrealized gain on changes in fair value of biological assets; (ii) realized fair value on inventories sold and other inventory charges; (iii) realized fair value on inventories sold from acquisitions; (iv) provisions and impairment of inventories and biological assets; and (v) provisions to net realizable value. Adjusted gross margin percentage is calculated by dividing adjusted gross margin by net revenue. Adjusted gross margin is reconciled to the most directly comparable IFRS financial measure in the "Financial Results and Review of Operations" section of this MD&A.
Management believes that these measures provide useful information to assess the profitability of our operations as they represent the normalized gross margin generated from operations and exclude the effects of non-cash fair value adjustments on inventories and biological assets, which are required by IFRS. The most directly comparable measure to adjusted gross margin calculated in accordance with IFRS is gross margin before fair value adjustments.
•Adjusted EBITDA is calculated as net income (loss) excluding: financing costs, net of investment income; income tax expense (recovery); depreciation, amortization, impairment, normalization of depreciation add-back due to changes in depreciable assets resulting from impairment charges, (gain) loss on disposal of property, plant and equipment (per the consolidated statement of cash flows); share-based compensation (per the consolidated statement of cash flows); share of loss (gain) from investments in associates including impairment loss; change in fair value of contingent consideration; change in fair value of derivative liabilities, other financial assets and preferred shares; expenditures incurred in connection with research and development activities (net of depreciation); unrealized gain on changes in fair value of biological assets; realized fair value on inventories sold and other inventory charges; provisions and net realizable value adjustments related to inventory and biological assets; government subsidies, insurance recoveries and other non-operating expenses (income); legal provisions (recoveries); ERP implementation costs; transaction costs; share issuance costs; and provision for Canndoc (as defined herein) expected credit losses. Adjusted EBITDA is reconciled to the most directly comparable IFRS financial measure in the "Financial Results and Review of Operations" section of this MD&A.
During the second quarter of Fiscal 2024, management changed the calculation of adjusted EBITDA and has conformed prior quarters accordingly to include provision for expected credit losses.
Adjusted EBITDA is intended to provide a proxy for the Company’s operating cash flow and derives expectations of future financial performance for the Company, and excludes adjustments that are not reflective of current operating results. The most directly comparable measure to adjusted EBITDA calculated in accordance with IFRS is net income (loss).
•Free Cash Flow provided by (used in) operating activities is calculated as net cash provided by or used in operating activities less the purchase of property, plant and equipment. Free Cash Flow is reconciled to the most directly comparable IFRS financial measure in the "Balance Sheet, Liquidity and Capital Resources" section of this MD&A.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 26
Free Cash Flow is a useful indicator of the Company's capacity to fund operations from internally generated cash flows, without the need for additional borrowings or use of existing cash reserves under normal operating conditions. The most directly comparable measure to Free Cash Flow calculated in accordance with IFRS is net cash and restricted cash provided by (used in) operating activities.
Non-IFRS measures should be considered together with other data prepared in accordance with IFRS to enable investors to evaluate the Company’s operating results, underlying performance and prospects in a manner similar to the Company’s management. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS.
MANAGEMENT’S DISCUSSION AND ANALYSIS | FOR THE YEAR ENDED SEPTEMBER 30, 2025 AND 2024 27
Organigram Reports Record Fourth Quarter and Fiscal 2025 Results
Record annual revenue, adjusted EBITDA1, and international sales.
TORONTO, ON, December 16, 2025 - Organigram Global Inc (NASDAQ: OGI) (TSX: OGI), (the “Company” or “Organigram”), Canada's #1 recreational cannabis company by market share2, is pleased to announce record results for the fourth quarter and twelve months ended September 30, 2025 (“Q4 Fiscal 2025” or "Fiscal 2025"). All financial information in this press release is expressed in Canadian dollars ("$").
FOURTH QUARTER 2025 FINANCIAL HIGHLIGHTS
•Gross Revenue: $123.3 million (+76% year-over-year).
•Net Revenue: $80.1 million (+79% year-over-year).
•Adjusted Gross Margin1: $30.6 million or 38%.
•Adjusted EBITDA1: $9.8 million (+69% year-over-year).
FISCAL 2025 FINANCIAL HIGHLIGHTS
•Gross Revenue: $403.0 million (+63% year-over-year).
•Net Revenue: $259.2 million (+62% year-over-year).
•Adjusted Gross Margin1: $91.0 million or 35%.
•Adjusted EBITDA1: $21.9 million (+160% year-over-year).
FISCAL 2025 COMPANY HIGHLIGHTS
•#1 Market Share in Canada: Maintained recreational market leadership across Canada with 11.9% share of the market in Fiscal 2025.2
•Record International Revenue: $26.3 million (+173% year-over-year)
•Fast Acting Soluble Technology (FASTTM): Launched FASTTM with plans to leverage the platform further in future launches of ingestible products.
•Motif Acquisition: Acquired Motif Labs Ltd. ("Motif"), expanding Ontario footprint and extraction capabilities, becoming Canada’s #1 cannabis company by market share and the leader in pre-rolls and vapes, while realizing approximately $7.1 million of $15 million in identified synergies to date.
•Collective Project Acquisition: Acquired Collective Project Limited and entered both the Canadian and U.S. cannabinoid beverages market.3
•Genomics R&D: Identified genetic markers for powdery mildew resistance and began breeding resistance into key cultivar which is expected to reduce plant care and increase yields over time.
•Seed-Based Cultivation: Leveraged investment in Phylos Bioscience Inc. to achieve consistent seed-based cultivation while increasing room turns and reducing labour costs.
1 Adjusted gross margin, adjusted gross margin %, and adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meanings under IFRS, as issued by the International Accounting Standards Board, and might not be comparable to similar financial measures disclosed by other issuers; please refer to “Non-IFRS Financial Measures” in this press release for more information.
2 Multiple Sources (Hifyre, Weedcrawler, provincial boards, internal modelling) as of September 30, 2025.
3 In November 2025, the U.S. enacted the Continuing Appropriations and Extensions Act of 2026 (H.R. 5371), which includes a provision (section 781) to amend the definition of hemp in the 2018 Farm Bill to effectively eliminate hemp-derived THC products, although the change does not become effective for 365 days from the date of enactment. Organigram’s U.S. offerings would be directly impacted by this change in law; additionally, Organigram has investments in hemp seed and hemp ingredient manufacturers in the U.S. that may be impacted by this legislation. Efforts are underway to repeal, replace, or delay this amendment, but whether any change will occur is uncertain. If current federal legislation is not amended or reversed, Organigram may have to sell, wind-down or otherwise restructure its hemp THC product related activities in the U.S. by November 2026.
•Record Harvest: Achieved largest annual harvest in Company history through enhanced cultivation practices, upgraded lighting, and seed-based cultivation.
“Fiscal 2025 was marked by purposeful growth and a continued shift toward platforms that scale at home and abroad,” said Peter Amirault, Executive Chair. “Our acquisitions broadened our capabilities in extraction, beverages, and brand-led innovation, while strengthening our leadership in core categories. We expanded our international presence and advanced the technologies that will support the next phase of our portfolio, from seed-based cultivation to fast-acting ingestible delivery. These initiatives reflect a consistent strategy: support future growth through operational scale, IP, and market access to compete globally. With our incoming Chief Executive Officer, James Yamanaka, whose global experience will be invaluable, Organigram is positioned to translate its domestic leadership into sustained international growth and long-term value creation.”
FISCAL 2025 FINANCIAL OVERVIEW
•Net Revenue:
◦Increased 63% to $259.2 million from $159.8 million in the year ended September 30, 2024 ("Fiscal 2024") primarily due to an increase in recreational and international revenue.
•Cost of Sales:
◦Increased to $174.9 million, compared to $111.4 million in Fiscal 2024, due to higher overall sales.
•Gross Margin Before Fair Value Changes:
◦Increased to $84.3 million from $48.5 million in Fiscal 2024, primarily due to higher net revenue and the realization of operational efficiencies.
•Adjusted Gross Margin4:
◦Increased to $91.0 million, or 35% of net revenue, compared to $53.9 million, or 34% in Fiscal 2024. The improvement was primarily due to higher international sales, improved product mix, selected price increases, and lower cultivation and post-harvest costs.
•Selling General and Administrative ("SG&A"):
◦Increased to $90.6 million, compared to $64.8 million in Fiscal 2024. Annual SG&A expenses as a percent of net revenue decreased to 35% from 41%, due to cost savings initiatives, partially offset by implementation costs related to the final phase of the Company's new ERP system.
•Adjusted EBITDA4:
◦Increased 160% to $21.9 million in Fiscal 2025, compared to $8.4 million in Fiscal 2024 as a result of higher recreational cannabis revenue and a higher adjusted gross margin.
•Net Loss:
◦Decreased 46% to $24.8 million, compared to net loss of $45.4 million in Fiscal 2024. A primary factor contributing to net loss was non-cash changes in fair value of derivative liabilities, preferred shares and other financial assets. The decrease in net loss from the comparative period is primarily due to higher gross margin and a deferred tax recovery that was recorded in Fiscal 2025.
•Net Cash (used in) Provided by Operating Activities:
◦Cash used in operating activities increased to $7.6 million, compared to net cash provided of $3.9 million in Fiscal 2024 due to higher investment in working capital.
4 Adjusted gross margin, adjusted gross margin %, and adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meanings under IFRS, as issued by the International Accounting Standards Board, and might not be comparable to similar financial measures disclosed by other issuers; please refer to “Non-IFRS Financial Measures” in this press release for more information.
◦Cash used in operating activities before working capital changes decreased 51% to $5.5 million from cash used of $11.1 million in Fiscal 2024.
FOURTH QUARTER FISCAL 2025 FINANCIAL OVERVIEW
•Net Revenue:
◦Increased 79% to $80.1 million, from $44.7 million in the fourth quarter ended September 30, 2024 ("Q4 Fiscal 2024") primarily due to the contributions from the Motif acquisition, higher recreational cannabis sales and higher international sales.
•Cost of Sales:
◦Increased to $52.1 million, from $30.9 million in Q4 Fiscal 2024, primarily due to higher overall net revenue.
•Gross Margin Before Fair Value Changes:
◦Increased to $28.0 million from $13.8 million in Q4 Fiscal 2024, driven by a higher proportion of international sales, lower cost of sales achieved through operating efficiencies, and reduced inventory provisions and net realizable value adjustments.
•Adjusted Gross Margin5:
◦Increased to $30.6 million, or 38% of net revenue, compared to $16.5 million, or 37%, in Q4 Fiscal 2024, largely due to higher international sales, improved product mix, selected price increases, and lower cultivation and post-harvest costs.
•Selling General and Administrative ("SG&A"):
◦Increased to $26.6 million from $14.2 million in Q4 Fiscal 2024, primarily due to the inclusion of Motif expenses, implementation costs related to the final phase of the Company's new ERP system, partially offset by cost savings initiatives.
•Adjusted EBITDA5:
◦Increased to $9.8 million compared to $5.9 million in Q4 Fiscal 2024, primarily attributable to higher net revenue, lower general and administrative expenses as a proportion of net revenue and the increase in adjusted gross margins.
•Net Loss:
◦Increased to $38.0 million, compared to a net loss of $5.4 million in Q4 Fiscal 2024. The increase in net loss from the comparative period is primarily due non-cash changes in fair value of derivative liabilities, preferred shares and other financial assets.
•Net Cash (used in) Provided by Operating Activities:
◦Increased to $(1.5) million, compared to cash provided of $8.9 in Q4 Fiscal 2024 due to increased investment in working capital.
◦Cash provided in operating activities before working capital changes increased 161% to $3.1 million from $1.2 million in Q4 Fiscal 2024.
“As we near the close of the calendar year, we are pleased with our performance in Fiscal 2025 and are looking forward to the year ahead. We delivered international growth, realized synergy savings from the Motif integration, and improved our adjusted gross margin and adjusted EBITDA through capacity expansion and operational efficiencies,” said Greg Guyatt, Chief Financial Officer. “Looking to Fiscal 2026, we believe we are well-positioned for strong revenue growth with net revenue expected to exceed $300 million in Fiscal 20266, along with margin expansion supported by increasing domestic and international demand, stronger cultivation performance, streamlined logistics, and product mix.”
5 Adjusted gross margin, adjusted gross margin %, and adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meanings under IFRS, as issued by the International Accounting Standards Board, and might not be comparable to similar financial measures disclosed by other issuers; please refer to “Non-IFRS Financial Measures” in this press release for more information.
6 This assumes that the Company continues to have a strong innovation pipeline, increasing international sales, high cannabis quality and higher potency, commercialization of FAST nanoemulsion technology in ingestible formats, and receipt of the EU-GMP certification. Please refer to "Forward-Looking Information" in this press release for more information.
International Business Unit
•In Fiscal 2025, the Company achieved record international sales of $26.3 million compared to $9.7 million in Fiscal 2024.
•U.S. Expansion: Further expanded U.S. presence with the launch of happly edibles powered by FASTTM, designed to target consumer mood states like relax, socialize, and sleep with the inclusion of functional ingredients like caffeine, l-theanine, and chamomile extract.7
•EU-GMP: The Company completed its EU-GMP audit in November 2024, provided additional information to the regulator in October 2025, and is awaiting confirmation of certification or any required next steps.
Balance Sheet and Liquidity
•On September 30, 2025, the Company had cash, restricted cash, and short-term investments of $84.4 million compared to $133.4 million at September 30, 2024.
| | | | | | | | | | | |
| Select Balance Sheet Metrics (in $000s) | SEPTEMBER 30, 2025 | SEPTEMBER 30,
2024 | % Change |
| Cash, restricted cash & short-term investments | 84,420 | | 133,426 | | (37) | % |
| Biological assets & inventories | 123,954 | | 82,524 | | 50 | % |
| Other current assets | 76,523 | | 46,269 | | 65 | % |
| Accounts payable & accrued liabilities | 89,247 | | 47,097 | | 89 | % |
| | | |
| Working capital | 158,738 | | 208,897 | | (24) | % |
| Property, plant & equipment | 122,977 | | 96,231 | | (3) | % |
| | | |
| Total assets | 562,211 | | 407,860 | | 37 | % |
| Total liabilities | 213,081 | | 101,871 | | 109 | % |
| Shareholders’ equity | 349,130 | | 305,989 | | 13 | % |
| | | | | | | | | | | |
Select Key Financial Metrics
(in $000s unless otherwise indicated) | Fiscal 2025 | Fiscal 2024 | % Change |
| Gross revenue | 403,024 | | 247,177 | | 63 | % |
| Excise taxes | (143,841) | | (87,336) | | 65 | % |
| Net revenue | 259,183 | | 159,841 | | 62 | % |
| Cost of sales | 174,850 | | 111,390 | | 57 | % |
| Gross margin before fair value changes to biological assets & inventories sold | 84,333 | | 48,451 | | 74 | % |
Realized loss on fair value on inventories sold and other inventory charges | (67,125) | | (52,078) | | 29 | % |
Unrealized gain on changes in fair value of biological assets | 73,008 | | 51,151 | | 43 | % |
| Gross margin | 90,216 | | 47,524 | | 90 | % |
Adjusted gross margin1 | 91,004 | | 53,934 | | 69 | % |
Adjusted gross margin %1 | 35 % | 34 % | 1 | % |
Selling (including marketing), general & administrative expenses2 | 90,596 | | 64,806 | | 40 | % |
Adjusted EBITDA1 | 21,855 | | 8,416 | | 160 | % |
Net loss | (24,759) | | (45,440) | | (46) | % |
Net cash (used in) provided by operating activities before working capital changes | (5,468) | | (11,085) | | (51) | % |
Net cash (used in) provided by operating after working capital changes | (7,591) | | 3,872 | | nm |
1 Adjusted gross margin, adjusted gross margin %, and adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meanings under IFRS, as issued by the International Accounting Standards Board, and
7 In November 2025, the U.S. enacted the Continuing Appropriations and Extensions Act of 2026 (H.R. 5371), which includes a provision (section 781) to amend the definition of hemp in the 2018 Farm Bill to effectively eliminate hemp-derived THC products, although the change does not become effective for 365 days from the date of enactment. Organigram’s U.S. offerings would be directly impacted by this change in law; additionally, Organigram has investments in hemp seed and hemp ingredient manufacturers in the U.S. that would also likely be negatively impacted by this legislation. Efforts are underway to repeal, replace, or delay this amendment, but whether any change will occur is uncertain. If current federal legislation is not amended or reversed, Organigram may have to sell or wind-down its hemp THC product related activities in the U.S. by November 2026.
might not be comparable to similar financial measures disclosed by other issuers; please refer to “Non-IFRS Financial Measures” in this press release for more information.
2 Excluding non-cash share-based compensation.
| | | | | | | | | | | |
Select Key Financial Metrics
(in $000s unless otherwise indicated) | Q4-2025 | Q4-2024 | % Change |
| Gross revenue | 123,250 | | 69,877 | | 76 | % |
| Excise taxes | (43,189) | | (25,179) | | 72 | % |
| Net revenue | 80,061 | | 44,698 | | 79 | % |
| Cost of sales | 52,053 | | 30,907 | | 68 | % |
| Gross margin before fair value changes to biological assets & inventories sold | 28,008 | | 13,791 | | 103 | % |
Realized loss on fair value on inventories sold and other inventory charges | (25,406) | | (15,365) | | 65 | % |
Unrealized gain (loss) on changes in fair value of biological assets | 29,236 | | 18,790 | | 56 | % |
| Gross margin | 31,838 | | 17,216 | | 85 | % |
Adjusted gross margin1 | 30,578 | | 16,543 | | 85 | % |
Adjusted gross margin %1 | 38 % | 37 | % | 1 | % |
Selling (including marketing), general & administrative expenses2 | 26,565 | | 14,226 | | 87 | % |
Adjusted EBITDA1 | 9,843 | | 5,860 | | 68 | % |
Net loss | (37,964) | | (5,433) | | 599 | % |
Net cash (used in) provided by operating activities before working capital changes | 3,113 | | 1,191 | | 161 | % |
| Net cash (used in) provided by operating activities | (1,452) | | 8,893 | | nm |
1 Adjusted gross margin, adjusted gross margin %, and adjusted EBITDA are non-IFRS financial measures not defined by and do not have any standardized meanings under IFRS, as issued by the International Accounting Standards Board, and might not be comparable to similar financial measures disclosed by other issuers; please refer to “Non-IFRS Financial Measures” in this press release for more information.
ADJUSTED GROSS MARGIN AND ADJUSTED EBITDA RECONCILIATION
| | | | | | | | | | | | | | |
Adjusted Gross Margin Reconciliation
(in $000s unless otherwise indicated) | Q4-2025 | Q4-2024 | Fiscal 2025 | Fiscal 2024 |
| Net revenue | $ | 80,061 | | $ | 44,698 | | $ | 259,183 | | $ | 159,841 | |
| Cost of sales before adjustments | 49,483 | | 28,155 | | 168,179 | | 105,907 | |
| Adjusted gross margin | 30,578 | | 16,543 | | 91,004 | | 53,934 | |
| Adjusted gross margin % | 38 | % | 37 | % | 35 | % | 34 | % |
| Less: | | | | |
Provisions of inventories and biological assets | 1,603 | | 2,043 | | 3,085 | | 4,657 | |
| Provisions to net realizable value | 967 | | 709 | | 1,133 | | 826 | |
| Incremental fair value component on inventories sold from acquisitions | — | | — | | 2,453 | | — | |
| | | | |
| | | | |
| Gross margin before fair value adjustments | 28,008 | | 13,791 | | 84,333 | | 48,451 | |
| Gross margin % (before fair value adjustments) | 35 | % | 31 | % | 33 | % | 30 | % |
Add: | | | | |
| Realized loss on fair value on inventories sold and other inventory charges | (25,406) | | (15,365) | | (67,125) | | (52,078) | |
| Unrealized gain on changes in fair value of biological assets | 29,236 | | 18,790 | | 73,008 | | 51,151 | |
| Gross margin | 31,838 | | 17,216 | | 90,216 | | 47,524 | |
| Gross margin % | 40 | % | 39 | % | 35 | % | 30 | % |
| | | | | | | | | | | | | | |
Adjusted EBITDA Reconciliation
(in $000s unless otherwise indicated) | Q4-2025 | Q4-2024 | Fiscal 2025 | Fiscal 2024 |
Net loss as reported | (37,964) | | (5,433) | | (24,759) | | (45,440) | |
Add/(deduct): | | | | |
| Investment income, net of financing costs | (73) | | (960) | | (1,150) | | (3,311) | |
Income tax (recovery) expense | (3,761) | | 30 | | (13,770) | | — | |
| Depreciation, amortization, and (gain) loss on disposal of property, plant and equipment (per statement of cash flows) | 4,960 | | 3,073 | | 17,975 | | 12,836 | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| Share-based compensation (per statement of cash flows) | 947 | | 1,093 | | 4,217 | | 7,182 | |
| | | | |
| Legal provisions (recoveries), government subsidies, insurance recoveries and other non-operating expenses (income) | 42,539 | | 6,646 | | 17,799 | | 13,080 | |
| | | | |
| | | | |
| ERP implementation costs | 951 | | 465 | | 3,540 | | 1,636 | |
| Transaction costs | 448 | | 74 | | 6,580 | | 915 | |
| Provisions (recoveries) and net realizable value adjustments related to inventory and biological assets | (1,260) | | (673) | | (1,665) | | 6,410 | |
| Research and development expenditures, net of depreciation | 3,056 | | 1,545 | | 10,605 | | 10,869 | |
| Provision for expected credit losses | — | | | | 4,239 | |
| Adjusted EBITDA | $ | 9,843 | | $ | 5,860 | | $ | 19,372 | | $ | 8,416 | |
FOURTH QUARTER AND FULL YEAR FISCAL 2025 CONFERENCE CALL
The Company will host a conference call to discuss its results with details as follows:
Date: December 16, 2025
Time: 8:00 am Eastern Time
To register for the conference call, please use this link:
https://registrations.events/direct/Q4I9676638
To ensure you are connected for the full call, we suggest registering a day in advance or at minimum 10 minutes before the start of the call. After registering, a confirmation will be sent through email, including dial in details and unique conference call codes for entry. Registration is open through the live call.
To access the webcast:
https://events.q4inc.com/attendee/724034228
A replay of the webcast will be available within 24 hours after the conclusion of the call at https://www.organigram.ca/investors and will be archived for a period of 90 days following the call.
Non-IFRS Financial Measures
This news release refers to certain financial performance measures (including adjusted gross margin, adjusted gross margin % and adjusted EBITDA) that are not defined by and do not have a standardized meaning under International Financial Reporting Standards (“IFRS”) as issued by the International Accounting Standards Board. Non-IFRS financial measures are used by management to assess the financial and operational performance of the Company. The Company believes that these non-IFRS financial measures, in addition to conventional measures prepared in accordance with IFRS, enable investors to evaluate the Company’s operating results, underlying performance and prospects in a similar manner to the Company’s management. As there are no standardized methods of calculating these non-IFRS measures, the Company’s approaches may differ from those used by others, and accordingly, the use of these measures may not be directly comparable. Accordingly, these non-IFRS measures are intended to provide additional information and should not be considered in isolation or as a substitute for measures of performance prepared in accordance with IFRS. Adjusted EBITDA is a non-IFRS measure that the Company defines as net income (loss) excluding: financing costs, net of investment income; income tax expense (recovery); depreciation, amortization, impairment, normalization of depreciation add-back due to changes in depreciable assets resulting from impairment charges, (gain) loss on disposal of property, plant and equipment (per the consolidated statement of cash flows); share-based compensation (per the consolidated statement of cash flows); share of loss (gain) from investments in associates and impairment loss; change in fair value of contingent consideration; change in fair value of derivative liabilities, other financial assets and preferred shares; expenditures incurred in connection with research & development activities (net of depreciation); unrealized gain on changes in fair value of biological assets; realized fair value on inventories sold and other inventory charges; provisions and net realizable value adjustments related to inventory and biological assets; government subsidies, insurance recoveries and other non-operating expenses (income); legal provisions (recoveries); ERP implementation costs; transaction costs; share issuance costs; and provision for Canndoc expected credit losses. Adjusted EBITDA is intended to provide a proxy for the Company’s operating cash flow and derive expectations of future financial performance for the Company, and excludes adjustments that are not reflective of current operating results.
Adjusted gross margin is a non-IFRS measure that the Company defines as net revenue less cost of sales, before the effects of (i) unrealized gain (loss) on changes in fair value of biological assets; (ii) realized fair value on inventories sold and other inventory charges; (iii) realized fair value on inventories sold from acquisitions; (iv) provisions (recoveries) and impairment of inventories and biological assets; (iv) provisions to net realizable value. Adjusted gross margin % is calculated by dividing adjusted gross margin by net revenue. Management believes that these measures provide useful information to assess the profitability of our operations as they represent the normalized gross margin generated from operations and excludes the effects of non-cash fair value adjustments on inventories and biological assets, which are required by IFRS.
The most directly comparable measure to adjusted EBITDA, calculated in accordance with IFRS is net income (loss) and please refer to "Adjusted Gross Margin and Adjusted EBITDA Reconciliation" in of this press release for a reconciliation to such measure. The most directly comparable measure to adjusted gross margin calculated in accordance with IFRS is gross margin before fair value
adjustments and please refer to "Adjusted Gross Margin and Adjusted EBITDA Reconciliation" in this press release for a reconciliation to such measure.
About Organigram Global Inc.
Organigram Global Inc. is a NASDAQ Global Select Market and TSX listed company whose wholly-owned subsidiaries include Organigram Inc., a licensed cultivator and processor. Through its recent acquisition of Collective Project Limited, Organigram participates in the US and Canadian cannabinoid beverages markets.
Organigram is focused on producing high-quality cannabis for adult consumers, as well as developing international business partnerships to extend the Company's global footprint. Organigram has also developed and acquired a portfolio of cannabis brands, including Edison, Big Bag O’ Buds, SHRED, Monjour, Tremblant, Collective Project, Trailblazer, BOXHOT and DEBUNK. Organigram operates facilities in Moncton, New Brunswick and Lac Supérieur, Quebec, with a dedicated edibles manufacturing facility in Winnipeg, Manitoba. The Company also operates two additional cannabis processing facilities in Southwestern Ontario; one in Aylmer and the other in London. The facility in Aylmer houses best-in-class extraction capabilities, and is optimized for formulation refinement, post-processing of minor cannabinoids, and infused pre-roll production. The Company is regulated by Health Canada under the Cannabis Act and the Cannabis Regulations (Canada).
Forward-Looking Information
This news release contains forward-looking information. Forward-looking information, in general, can be identified by the use of forward-looking terminology such as “outlook”, “objective”, “may”, “will”, “could”, “would”, “might”, “expect”, “intend”, “estimate”, “anticipate”, “believe”, “plan”, “continue”, “budget”, “schedule” or “forecast” or similar expressions suggesting future outcomes or events. They include, but are not limited to, statements with respect to expectations, projections or other characterizations of future events or circumstances, and the Company’s objectives, goals, strategies, beliefs, intentions, plans, estimates, forecasts, projections and outlook, including statements relating to the Company’s future performance, expectations for increasing domestic and international demand, stronger cultivation performance, streamlined logistics, and product mix, expected revenue growth, net revenue, and margin improvement in Fiscal 2026, expectations regarding the next phase of the Company's portfolio, from seed-based cultivation to fast-acting ingestible delivery; expectations regarding EU-GMP certification; statements regarding the changes in laws, regulations, guidelines, and policies, and the future of the Company's hemp THC product related activities in the U.S.; and, statements regarding the Company’s future economic performance. These statements are not historical facts but instead represent management beliefs regarding future events, many of which, by their nature are inherently uncertain and beyond management control. Forward-looking information has been based on the Company’s current expectations about future events.
Forward-looking information involves known and unknown risks, uncertainties and other factors that may cause actual events to differ materially from current expectations. These risks, uncertainties and factors include: general economic factors; receipt of regulatory approvals or consents and any conditions imposed upon same and the timing thereof; the Company's ability to meet regulatory criteria which may be subject to change; change in regulation including restrictions on sale of new product forms; change in stock exchange listing practices; the Company's ability to manage costs, timing and conditions to receiving any required testing results and certifications; results of final testing of new products; timing and nature of sales and product returns; customer buying patterns and consumer preferences not being as predicted; material weaknesses identified in the Company’s internal controls over financial reporting; the completion of regulatory processes and registrations including for new products and forms; market demand and acceptance of new products and forms;
unforeseen construction or delivery delays including of equipment and commissioning; increases to expected costs; competitive and industry conditions; and changes in crop yields. These and other risk factors are disclosed in the Company's documents filed from time to time under the Company’s issuer profile on the Canadian Securities Administrators’ System for Electronic Document Analysis and Retrieval+ (“SEDAR”) at www.sedarplus.ca and reports and other information filed with or furnished to the United States Securities and Exchange Commission (“SEC”) from time to time on the SEC’s Electronic Document Gathering and Retrieval System (“EDGAR”) at www.sec.gov, including the Company’s most recent MD&A and AIF. Readers are cautioned not to place undue reliance on these forward-looking statements, which speak only as of the date of this news release.
Certain forward-looking information included herein may also constitute a "financial outlook" within the meaning of applicable securities legislation. Financial outlook involves statements about the Company’s prospective financial performance and financial position that are based on and subject to the assumptions about future economic conditions and courses of action described above as well as management's expectations regarding a strong innovation pipeline, increasing international sales, high cannabis quality and higher potency, commercialization of FAST nano emulsion technology in ingestible formats, and receipt of the EU-GMP certification. Such assumptions are based on management's assessment of the relevant information currently available and any financial outlook included herein is provided for the purpose of helping readers understand management's current expectations and plans for the future as of the date hereof. The actual results of the Company’s operations may vary from the amounts set forth in any financial outlook and such variances may be material. Readers are cautioned that reliance on any financial outlook may not be appropriate for other purposes or in other circumstances and that the risk factors described above and other factors may cause actual results to differ materially from any financial outlook.
The Company disclaims any intention or obligation, except to the extent required by law, to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. Forward looking information is subject to risks and uncertainties that are addressed in the “Risk Factors” section of the MD&A dated December 16, 2025 and there can be no assurance whatsoever that these events will occur.
Third-Party Information
This news release contains information concerning our industry and the markets in which we operate, including our market position and market share, which is based on information from independent third-party sources. Although we believe these sources to be generally reliable, market and industry data is inherently imprecise, subject to interpretation and cannot be verified with complete certainty due to limits on the availability and reliability of raw data, the voluntary nature of the data gathering process, and other limitations and uncertainties inherent in any statistical survey or data collection process. We have not independently verified any third-party information contained herein.
For Investor Relations enquiries, please contact:
Max Schwartz, Director of Investor Relations
For Media enquiries, please contact:
Megan McCrae, Senior Vice President, Global Brands and Corporate Affairs
