After disappointing quarterly numbers from Organigram (Organigram Stock Quote, Chart, News, Analysts, Financials TSX:OGI), Raymond James analyst Rahul Sarugaser has lowered his target price, saying in a report to clients on Tuesday that the cannabis company should return to revenue growth in a couple of quarters. New Brunswick-based Organigram said its fiscal second quarter ended February 28, 2021, was challenged on a number of fronts, with the cannabis company pointing in its press release to industry dynamics, COVID-19 impacts and staffing limitations. The company\u2019s Q2 was delivered on Tuesday and featured revenue down 37 per cent year-over-year to $14.6 million, an adjusted EBITDA loss of $8.6 million compared to an even second quarter in fiscal 2020 and net loss of $66.4 million compared to a loss of $6.8 million a year earlier. Organigram has been busy of late, with the company announcing on March 11 a collaboration with British American Tobacco which will see BAT take a 19.9 per cent stake in OGI for about $221 million, followed on April 6 by an announced acquisition of The Edibles and Infusions Corp. In his comments in the Q2 press release, OGI CEO Greg Engel said the company is currently tracking to have higher revenue for its fiscal third quarter as the company\u2019s product portfolio gains traction and staffing gets filled. \u201cOur recent acquisition of The Edibles and Infusions Corporation (EIC) positions us to generate revenue from the largest single category of edibles, soft chews or gummies,\u201d Engel wrote. \u201cWe also see the potential for meaningful gross margin improvement over time as we revitalize our dried flower portfolio with new Edison and Indi strains and execute on a number of opportunities including the refinement of our cultivation, post harvesting and packaging processes. Longer term, we are extremely excited about developing innovative and appealing products to consumers in collaboration with BAT.\u201d OGI finished the quarter with cash and short-term investments of $232 million and current and long-term debt of $58.8 million compared to $115.3 million a half-year earlier, as the company has now paid off the full outstanding balance of its $58.5-million credit facility with BMO (for about $2.7 million in annual interest savings) and intends to terminate the credit agreement. By the numbers, Sarugaser said the fiscal second quarter was filled with big misses: the $14.6 million in revenue was lower than the analyst\u2019s $18.5-million forecast and the consensus call for $19.3 million, the Adjusted EBITDA loss of $8.6 million was bigger than Sarugaser\u2019s $6.5 million estimate and the consensus loss of $5.3 million, and OGI\u2019snet loss of $66.4 million was a wide miss of Sarugaser\u2019s negative $11.3 million and the Street\u2019s negative $10.1 million. \u201cWe note that, much like in 1Q21, OGI did see strong demand for its adult-use products, but production and processing constraints caused the company to miss significant sales opportunities, this time to the tune of $7 million in unfulfilled demand,\u201d Sarugaser said. \u201cWe understand that OGI has since been staffing up and expect the benefits of these hires will be realized in 3Q21 and 4Q21. So, while OGI will likely be taken out to the woodshed on this quarter\u2019s results, we look forward to 4Q21-2022 and onward, particularly as OGI digs into its R&D collaboration with British American Tobacco and drives stronger order fulfillment than in 1Q\/2Q21,\u201d Sarugaser wrote. Sarugaser said the third wave of the pandemic is going to have its impact on Canadian cannabis companies. \u201cIn the shorter-term, we do caution that all LPs will be affected by current COVID-19 lockdowns, particularly in ON; this will hit OGI's 3Q21, potentially attenuating its anticipated sales growth, which we then expect to rebound into 4Q21,\u201d Sarugaser said. With the update, Sarugaser has maintained his \u201cOutperform 2\u201d rating for OGI but dropped his target from $6.00 to $5.00, which at the time of publication represented a projected 12-month return of 42.9 per cent. The analyst has revised his estimates and is now calling for Organigram to deliver full fiscal 2021 revenue of $69 million (previously $88 million) and EBITDA of negative $35 million (previously negative $21 million). For fiscal 2022, he is calling for revenue of $112 million (previously $139 million) and EBITDA of $12 million (previously $8 million). Organigram\u2019s share price had been dropping since mid-2019 but it spiked in early February, taking the stock from $1.69 at the start of January to as high as $7.62 by February 11. OGI has since fallen back into the mid-$3.00 range. On the EIC deal, announced on April 6, OGI acquired the Winnipeg, Manitoba-based company for $22.0 million plus up to $13.0 million more in earnouts. \u201cThe EIC acquisition further broadens Organigram\u2019s continuum of product offerings and provides an operational footprint in Western Canada,\u201d said Organigram in a press release.