Germany Is the Engine: What BAT Knows That Cannabis Doesn't ft. James Yamanaka

James, before you became CEO of Organigram, what was your involvement with Organigram from the BAT side?

Yeah, my involvement with Organigram was actually quite distant.

I think during most of the initial investments in Organigram and in cannabis in general, I was actually running the Japan, Korea, Taiwan part of the business.

So what the corporate strategy was relative to cannabis just was fairly irrelevant to me because I was running a market and it was all about driving things in nicotine and the pouches and those sorts of things.

I did join the group strategy team three years before I came here, so I was aware of the investment strategy that BAT had.

And the strategy toward cannabis was very much about a long-term bet, pending legalization in the U.S. at a federal level, and the removal of something called POCA in the U.S., the Proceeds to Crime Act.

which prohibits UK companies from investing in businesses that are illegal.

So it's very much a long-term bet on the assumption that it would get there.

And what they were looking at is Organigram as kind of the hub of their investments, where it would be the investment vehicle without ever taking a majority share.

So I knew about it.

I was never directly involved in the cannabis strategy, but I was aware it was happening.

And, you know, once I was put in the hat for the candidate for this job and I did go through sort of the whole recruitment process, I went to, you know, saw the psychometric, did the interviews, multiple rounds of it.

I had to recuse myself from anything related to it.

I had known about the sanity deal being discussed, but I couldn't be involved in it at all.

So I knew about it.

I knew what the strategy was, but I was never sort of directly involved in the cannabis strategy.

Just staying with the thesis side, I'm always fascinated to understand when we're taking that long-term approach and say, okay, a ground program is going to be a part of like a longer-term strategy.

How much effort goes into understanding core structure of the business, where it's positioned, how the industry operates as a whole? Cannabis has that unique dynamic nature where Canada and US and Europe, they all operate a little differently.

So when you're picking... an asset to think about from a long-term bet.

How much due diligence goes in from the BAT side to understand core structure, what the strategy is, and how to think about it long-term so that actually kind of can fit into that roadmap down the road?

Yeah.

I mean, there's a huge amount of diligence that go into it.

They'll look at historical performance.

They'll look at cash positions.

They'll look at debt.