11th Mar 2021 11:57
(Alliance News) - British American Tobacco PLC on Thursday said it has entered a "strategic" collaboration with Organigram Inc focused on research and product development activities of adult cannabis products.
Organigram Inc is a wholly-owned subsidiary of Canadian cannabis producer Organigram Holdings Inc.
Under the terms of the transaction, a BAT subsidiary will acquire just under a 20% stake in Organigram Holdings to become the largest shareholder, with the ability to appoint two directors to its board.
The investment is valued at around GBP126 million, or ZAR2.63 billion.
"These funds will provide a significant injection of capital for Organigram that will enable them to expand and accelerate their R&D and product development activities, and support business expansion," BAT said.
The tobacco giant said this will accelerate its 'beyond nicotine' strategy.
A centre will be established at Organigram's indoor facility in New Brunswick, Canada, to focus on developing the next generation of cannabis products. Both BAT and Organigram will contribute scientists, researchers, and product developers to the centre.
As part of the agreement, BAT and Organigram will grant each other a licence to certain intellectual property to enable the development of new and "potentially disruptive" novel products.
Through the collaboration, BAT will gain access to "R&D technologies, product innovation and cannabis expertise".
BAT Director of Scientific Research David O'Reilly said: "We believe this collaboration has significant potential to enhance our activities, allowing us to combine our world-class expertise while enabling scientists from both BAT and Organigram to work closely together and share information real-time. We know that in R&D this is how you make real breakthroughs and accelerate progress."
By Greg Roxburgh; [email protected]
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