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OrganiGram CEO Denis Arsenault talks to Cantech Letter

Sitting in a quiet Vancouver Fairmont Waterfront ballroom hallway, OrganiGram’s Denis Arsenault is both open and candid as he talks with me about the company, the Canadian marijuana industry, and its potential social impact. Arsenault is visiting Vancouver as one of fifteen executives from Canada’s biggest marijuana companies for the Canaccord Genuity Cannabis Conference.

“We’re not the first to blaze this trail,” he points out when asked how Canada will be changed by legal marijuana. Arsenault looks at Colorado as a good example where he believes studies are indicating that “some crime has gone down and deaths related to drunk driving are down, and their social fabric hasn’t collapsed.”

Market opportunities from the consumerization of marijuana will undoubtedly be substantial, as PI Financial analyst Jason Zandberg for example has estimates that the market will be worth $4.6-billion. While the potential social concerns over the recreational usage of marijuana can’t be dismissed it can’t be overblown either. “I just don’t see a really big change in our society” said Arsenault. He added, “the odds of trouble being stirred up during a night on the town isn’t going to be from someone who is under the influence of marijuana, it’s going to be fueled by alcohol.”

Arsenault added more to the conversation in response to these questions.

One of the distinguishing features of OrganiGram is its organic status. Will the recent recall affect that?
We don’t think so. I think we’re trying to get the recall behind us and I think we’re well on our way there. We’re working with the regulators and are confident it will all wash out in the near term and long term.” Arsenault also highlighted that part of OrganiGram’s strategy involves transitioning production to both organic and non-organic as part of getting ready for the recreational market.

How big of a role do you think marketing will play in the marijuana space?

“I’m 100% convinced that the regulators will allow for the branding of products at the retail level. But I don’t imagine we’ll see billboards on the sides of our roads. The government has indicated there will be stringent requirements intending to kill the black-market in terms of the current situation.” He reflected on the importance of the retail experience, noting it will play a key role in expanding the customer base and encouraging consumers to buy from legal sources.

The Trailer Park Boys are experiencing international success lately. What do you think your brand affiliation will do for OrganiGram?

For OrganiGram it’s about developing several brands for the marketplace for the distinct taste of different consumers. In the case of working with Trailer Park Boys brand it’s about OrganiGram connecting with that specific market segment.

You are proudly from Moncton, NB. What kinds of cost savings can you realize from your location?

A recently released survey about the relationship between the cost of home ownership in relation to people’s income. While Vancouver ranked third highest after Hong Kong and Sydney, Moncton was first on the list in terms of affordability. It’s a very telling sign about the quality of life, where the costs are low. Relative to our industry as it matures, costs will become everything. KMPG reported that Moncton New Brunswick was the lowest cost jurisdiction to do business in Canada. I think this all bodes well for OrganiGram in the future.

Is the Canadian marijuana space as a whole undervalued, overvalued, or properly valued right now?
Tough question, because I think as a whole the sector is undervalued, but a couple companies in my opinion are very overvalued relative to their peers.

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One thought on “OrganiGram CEO Denis Arsenault talks to Cantech Letter

  1. When I think about who I trust in medicine, the Trailer Park Boys don’t come to mind immediatley.

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