Analyst loves this Canadian pot stock

Haywood Securities analyst Neal Gilmer reiterated his “Buy” rating on New Brunswick-based Organigram (Organigram Global Stock Quote, Chart, News, Analysts, Financials TSX: OGI), recommending investors purchase shares at current levels following the company’s latest European expansion move.

On Feb. 18, Organigram announced a definitive agreement to acquire Berlin-based Sanity Group GmbH, establishing a direct presence in Germany and a platform for broader European growth.

In his Feb. 18 research report, Gilmer called the transaction strategically significant, positioning Organigram among the top cannabis companies in Germany, the world’s second-largest federally legal cannabis market after Canada, where Organigram holds the number-one market share position.

Sanity generated approximately €60-million in 2025 revenue, including €19-million in Q4/25, and reported positive EBITDA for the year. Gross margins improved to 47% in 2025 from 15% in 2023. The company is also expanding into the U.K., Poland and Czechia, providing Organigram with exposure to emerging European medical markets and longer-term adult-use optionality.

Total upfront consideration is €113.4-million (C$183.7-million), comprised of €80.0-million in cash and €33.4-million in Organigram shares priced at C$3.00 per share — a 71% premium to the Feb. 17 closing price of C$1.75. Vendors may also receive up to €113.8-million in earnout payments tied to future performance.

Gilmer viewed the deal positively, citing international exposure and higher-margin European flower sales, but is not revising estimates pending shareholder and regulatory approval. He maintained his $3.25 target price, based on 1.75x EV/Revenue applied to his F2027 forecast and discounted by 10%.

He forecasts Organigram will generate $33.7-million in Adjusted EBITDA on revenue of $302.2-million in fiscal 2026, improving to $39.5-million in EBITDA on revenue of $330.0 million in fiscal 2027.

Gilmer noted the company has strengthened its balance sheet through strategic investments from British American Tobacco and prior acquisitions, including Motif Labs and The Edibles and Infusions Corporation, which expanded its edibles, hash and vape categories. He believes the Sanity acquisition further enhances Organigram’s global growth profile in a capital-constrained industry.

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