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Failed Marijuana Experiment Slams Organigram Earnings

The results came after a grow technique was tested on their crops

Organigram Holdings Inc. said Monday that growing marijuana cost it nearly 50% more in cash and harmed its earnings last quarter because the cannabis company tried — and failed — to develop a more efficient growing technique.

Cash and all-in costs of cultivation increased to C$0.95 and C$1.29 per gram of dried flower, respectively, from C$0.65 and C$0.95 per gram in the previous quarter. The costs stemmed from attempts to develop an alternative technique to plant fresh cannabis that worked with a few strains of cannabis but didn’t work at large scale, Organigram Chief Executive Greg Engel told MarketWatch in a telephone interview.

Some cannabis operators grow pot by trimming bits off an already growing plant and using that organic material instead of a seed for a new plant, a process called “cloning.” The trimmings are usually taken from so-called mother plants to ensure genetic consistency, but the Moncton, New Brunswick, company attempted to instead use organic material from plants in their early stages of life.

“We did an experiment where we take early flower, which you’re going to trim the bottom leaves all off anyway, and use those to clone from,” Engel said. “In the early experiment, we had really positive results, then we went to a broader group and it was variable by strain and the results were inconsistent. That had a significant impact on yield.”


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