LONDON (ShareCast) - (Sharecast News) - Organigram shares surged on Monday after it said that British American Tobacco has agreed to invest a further CAD124.6m (£74m) into the business.

At 1515 GMT, the shares were up 29% at CAD2.05.

The company, a licenced producer of cannabis, said the strategic partnership will see BAT - through subsidiary BT DE Investments - invest the cash between January 2024 and January 2025 and increase its stake from 19.9% to 45%.

The majority of the investment will be allocated for Organigram to establish a strategic investment pool, intended to be applied for emerging opportunities within the cannabis space "to accelerate its growth and to support geographic, technological and product expansion".

Organigram chief executive Beena Goldenberg said: "We are excited to bring this transformative transaction to Organigram's shareholders, reinforcing our commitment to delivering shareholder value. This investment bolsters an already strong balance sheet and solidifies our position as a leading cannabis company.

"In addition, this deepens the strategic partnership between Organigram and BAT, and we look forward to continuing to leverage BAT's global capabilities and scientific expertise."

Organigram announced back in March 2021 that BAT had bought a 19.9% stake in the company for around £126m.

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