British American Tobacco is a very strong partnerBAT is a huge company with operations all over the world. Now OGI has a very strong partner with huge financial strength. Anytime OGI dilutes they have the option to main their 20 % shareholding which means that 20 % of future funding from the equity dilution is ensured.
C$221 M that they are investing in OGI is petty cash for them. They can easily gobble up the entire company with pocket change. One day they might do that exactly and swallow up the company.
This collaboration will take the OGI products to another international level. Under the agreement Costs relating to the Center of Excellence will be funded equally by Organigram and BAT and $30 m will be restricted cash to meet OGI obligations. So basically they can use about $191 m for other things.
Basically, this agreement can amount to opening the door to test the waters and buying an option to take over the company if things work out.
OGI has gone to bed with a massive company that is the granddaddy of smoking.