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OrganiGram (NASDAQ: OGI) stocks are in strong motion on Thursday OGI stock was up nearly 40% in pre-market trading, it turns out that big news is moving the cannabis company

What kind of news is this? OrganiGram announced today that it has received $ 221 million from a subsidiary of British American Tobacco (NYSE: BTI) In addition, the tobacco company has around 583 million shares in OGI, which equates to almost 20% of the company’s shares

The important thing is that this deal goes beyond OrganiGram’s finances, the two companies will jointly enter into a product development collaboration agreement as a result of which they will create a center of excellence with the intent to develop next generation cannabis products, including CBD products Each company will contribute scientists and product developers to the Center of Excellence. In addition, the companies share intellectual property and British American Tobacco can appoint 20% of the OrganiGram board of directors

What does this deal really mean for OrganiGram? And why does it make sense for British American Tobacco?

According to the company, two of OrganiGram’s biggest takeaways revolve around the balance sheet and research pipeline The company believes the cash inflow will help shore up its financial position and accelerate research. At the moment, OrganiGram is working together with many of his cannabis colleagues still in the process of ramping up that level of financial support can give him a kick in the right direction

For British American Tobacco, this is also a step towards a more cannabis-filled future, as the company puts it, is committed to making a commitment to safer alternatives. Supporting cannabis and CBD products may help, as some Consumers are turning away from smoking tobacco products

What else should you know about OrganiGram and OGI stocks today? One thing to note is that, like other players in the Canadian cannabis market, OrganiGram hopes to grow its business through this deal, the company could reach new markets outside of Canada

The global level of cannabis legalization has weighed on expansion plans, however, while many investors continue to watch the U.S., Mexico could just have given the sector a big boost on Wednesday evening, Mexico City legislators approved a bill to legalize marijuana For recreational use it is noteworthy that experts are already saying that the country could become the largest marijuana market in the world

At the time of this writing, Sarah Smith held positions (either directly or indirectly) in any of the securities referred to in this article

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Source: https://investorplace.com/2021/03/ogi-stock-why-pot-play-organigram-is-soaring-today/