Moncton cannabis 'centre of excellence' to result from $221M Organigram stock deal

·3 min read
Organigram produces indoor-grown cannabis for patients and adult recreational consumers in Canada. (Brian Chisholm/CBC - image credit)
Organigram produces indoor-grown cannabis for patients and adult recreational consumers in Canada. (Brian Chisholm/CBC - image credit)

A centre of excellence focused on developing new cannabis products is planned in Moncton as part of a tobacco company's purchase of a nearly 20 per cent stake in Organigram.

Organigram announced Thursday that the centre of excellence, focused on "developing the next generation of cannabis products with an initial focus on CBD," will be located at the company's indoor facility in Moncton.

It's part of a deal with British American Tobacco, which purchased $221 million in Organigram stock as it looks to diversify its existing line of cigarette and tobacco products.

Speaking with CBC's Harry Forestell, Greg Engel, Organigram's CEO, said 50 new jobs will be created in Moncton over the next eight to 12 months. Some of them will be filled by existing Organigram and British American Tobacco staff, but many will be new hires, he said.

Greg Engel, CEO of Organigram, said the centre of excellence on cannabis research will put Moncton on the map.
Greg Engel, CEO of Organigram, said the centre of excellence on cannabis research will put Moncton on the map.(CBC)

"And these will really be, you know, technical jobs in terms of researchers, scientists, product developers," he said.

"I think we're going to see, you know, an ability to put Moncton on the map as a leading global centre in cannabis research."

The announcement comes months after Organigram slashed 220 of its workers, most of whom had been temporarily laid off earlier in 2020 because of the COVID-19 pandemic.

Those lay-offs in July left 433 active employees working out of the company's indoor production plant in Moncton.

Under the "product development collaboration agreement," the two companies will have access to each other's intellectual property and have the right to independently commercialize the products, technologies and intellectual property created by the centre of excellence, according to an Organigram media release.

From the proceeds of the $221-million stock purchase, $30 million will be spent on creating the centre of excellence, though the footprint of Organigram's existing facility won't need to be expanded to do so, Engel said.

"There are some opportunities to reconfigure some space, certainly in technical equipment, and testing equipment will be coming to the facility.

"We don't have to expand it, per se, but creating new workspaces or evolved workspaces for people working in the centre of excellence is going to be a key part of it."

Organigram's cannabis production facility in Moncton.
Organigram's cannabis production facility in Moncton. (Shane Magee/CBC)

With the deal, British American Tobacco gets two seats on Organigram's board.

Asked about any possibility of the Moncton facility eventually being relocated, Engel said his company has "built a great thing" in the city.

"And we're really happy to be able to kind of bring these new positions and offer some moves for some of our existing staff to take on roles within the centre of excellence.

"So, you know, we had town halls today with our staff. Everybody's extremely excited about this because it brings new opportunities."

In the media release, British American Tobacco director of scientific research Dr. David O'Reilly, said the deal is part of furthering its multi-category, consumer-centric approach, which aims to provide choice and meet the evolving needs of adult consumers.

"Choice that provides reduced risk alternatives to combustible cigarettes, as well as going beyond tobacco and nicotine into new and exciting areas of product innovation," O'Reilly said.