Organigram Holdings Inc. says a subsidiary of British American Tobacco has signed a deal to buy a 19.9 per cent stake in the cannabis company for $221 million.
Under the agreement, BAT will buy 58.3 million Organigram shares at a price of $3.792 per share.
Organigram says it has also signed a product development collaboration agreement with BAT that will see the creation of a “centre of excellence” that will focus on developing the next generation of cannabis products with an initial focus on CBD.
The centre will be located at Organigram’s indoor facility in Moncton and both companies will contribute scientists, researchers, and product developers.
Organigram says the BAT’s investment is expected to speed its research and development program and product development activities and bolster its ability to enter the U.S. and other international markets.
BAT will also be entitled to add two board members to Organigram’s board.
The Canadian Press