Organigram Holdings Inc. (NASDAQ:OGI) Q1 2023 Earnings Call Transcript

And in the latest four weeks, have seen already a rebound to some of that softness that resulted as a result of that price compression. So further to what Derrick said earlier, we do have price compression. There is a lot of flower out in the marketplace today, more supply across all the other competitors and us than there is demand. We have heard from other competitors, they’re looking at moving production capacity to grow (ph). This is the reality of the market, which is what our projecting some price compression, especially in the large-format products. And as a result, we adjusted our pricing. That being said, we adjusted it to the point where we’re comfortable with the profit that we generate from that business. So back to your question of market share over profitability, we will be managing that tightly with certainly our interest to continue to drive our revenue.

But again, there will be a continued focus on profitable sales growth.

Aaron Grey: Okay. Great. That was really helpful answer there. Some question for me just want to switch over to international, another really nice quarter there that we saw the last quarter. So just on the go forward, are you guys still confident in being able to maintain or build off that base of about $6 million or so in the go forward or anything that we should think about? I know some competitors had kind of stalled on Israel. You guys were remaining pretty heavy there talking about your indoor premium sale, which I know is in high demand. So just your outlook on international would be very helpful? Thank you.

Beena Goldenberg: Yes, certainly. Listen, I think we’ve seen some good growth actually in our shipments to Australia. We’ve increased customers. We have a long-standing relationship with Cannatrek. But last year, we added Medcan to our customer base and continue to add new cultivars and interest remains strong from both of our Australian customers. And so besides the Canndoc agreement that we have in industry, we have a growing business in Australia. And at the same time, we’re looking at other markets. We are in conversations with some customers in Germany. The reality is this is an area of the — we could not take advantage of last year when we just didn’t have the flower capacity and we were operating hand to mouth just the supply of the Canadian market and our existing international customers.

So by having this excess flower, we have engaged in several conversations, and we do have confidence that we will grow our international business, and we’ll have more to share on that in the upcoming quarters.

Operator: Your next question comes from the line of Tamy Chen from BMO Capital Markets. Your line is open.

Tamy Chen: I’ve got two here. One is, Beena, follow-up to the comment you made that you saw some softness was at the end of the quarter or just after the quarter on your large format and that you made some adjustments to pricing, is that a meaningful assessment? I wasn’t sure how to take that or was it just some modest tweaking on your 28-gram flower.

Beena Goldenberg: So in answer to that, the competitive activity came into the market in October. We were watching our off-take and seeing the impact. We did make adjustments that announced the market that didn’t take effect in the quarter, but after the quarter ended. So, we have some adjustments to pricing. In terms of whether it’s a full scale, listen, it’s an adjustment on our 28-gram large-format flower, but not to all of our SKUs. So, it depended on the kind of turns we had on our SKUs, so we’re being selective to make sure we remain competitive. We are excited about the fact that we will be introducing our Holy Mountain large-format offering in this quarter. And we will come in with what is a brand that has been grounded in consumer insights.