Born on Third Base: Chapter 3 - Cracking Hearts Open

Chapter 3 – Cracking Hearts Open

This chapter starts off with the author giving a speech about wealth inequality. He talks about how Boeing has been using corporate loopholes to doge paying federal taxes. After his speech, he is approached by Hank, a retired high-level executive at Boeing, who has a question for him. Hank told the author how he is embarrassed by how his company takes so much from tax payers and doesn’t help support the nation’s infrastructure and education systems. He then told the author a story about when he was an engineer building water systems in Kenya. Every day while he was working, kids from the area would come and watch him. One day Hank asked where the kids lived, and they took him back to their orphanage (which was not in a good condition). Hank vividly remembers being overwhelmed with emotions and crying on the drive back to his first world hotel (an hour away from the kids’ orphanage). The next day he went back and asked if he could help build a new facility for the kids.

Hank came back to America, but he was never the same. His heart was cracked open, his life was transformed by these kids. For hank it wasn’t about charity, he was walking dead before, and helping the kids helped him feel alive. After coming home his wife and kids thought that he was a much better person. His wife said, “you remind of the sweet guy I married 48 years ago.” His children said he was more present, generous, and connected with them.  After his story, Hank finally asked his question – “is it too late for me… Is it too late to make changes?"  The author replies no it’s not too late, you are so alive! Hank explains how he has had a different way of living before that was all based on corporate motivation for money. But that now he feels like the curtains have been lifted and he is making connections with everything around him –  nature, people, kids, poverty, inequality, it’s all coming together in his mind.

The first step in the journey to reach more people when it comes to extreme inequality really stood out to me. It is to crack open their hearts by taking people to Kenya (or any third world country). Because when people see children far away, they can’t just pretend that the children deserve to be poor or justify their situation by blaming their parents.  Another huge part of the journey is to reflect and see that we live our lives by powerful myths and norms that govern our decision making but separate us from one another and nature. The last part is to understand that deep systems are driving us toward climate catastrophe and economic polarization. The author then explains that path towards changing the 1 percent starts with connection, empathy, respect, and love. Only then can we start to change through inspiration, accountability, and challenge.

Finally, the author talks about the story of deservedness –  inequality exists because of differences in effort, skill, intelligence, creativity, etc. This is true, there are differences in the attributes listed, and it makes sense if those with the highest level got paid 10 times more for their extra effort. But the author finds it ridiculous for them to be paid 1,000 times or even 10,000 times more, because everyone forgets the main thing – the difference in opportunity which propels some and restricts others. This misunderstanding of how big of a role opportunity plays causes the privileged to accelerate while the unprivileged dig themselves into a deeper hole.

AMDP Final

To: Clark Hansen, CEO

From: Matthew Edgar, Research and Development

Subject: Investment Opportunity – OrganiGram

Date: March 1^st, 2019

Clark, I have found the perfect company for AMDP to invest in – OrganiGram. A for-profit cannabis producing company located in the heart of Atlantic Canada. I have concluded from my research that OrganiGram seamlessly aligns with the values that made AMDP what it is today. In this memo you will find the following:

·      Our standards for any investment

·      Overview of OrganiGram – background and financial analysis

·      Critical appraisals of OrganiGram from industry sources

·      My recommendation for why AMDP should invest in OrganiGram

AMDP Standards

Triple Bottom Line

The Triple Bottom Line is an accounting framework that expands a business’ focus on its net profits by including social and environmental concerns. The Triple Bottom Line is formed by the synergy of 3 “P’s”:

·      People: Fairness and beneficial practices to your customers, employees, and communities. Trying to do the greatest good for the people.

·      Planet: Outmost respect for the environment by trying to reduce a company’s impact on it.

·      Profit:  Earn more $ than you spend – a financial gain.

Corporate Social Responsibility

Corporate social responsibility is a metric that puts social accountability on the company. It ensures that companies are conscious of the impact they have on all aspects of society. This includes – but is not limited to – company diversity, labor practices, volunteer efforts, philanthropic efforts, and environmental conservation. (Leonard)

Social Enterprise

A social enterprise is a cause-driven business whose main objective is to serve the common people by improving society. Social enterprises are not centered around creating profits for its shareholders, rather they are centered around increasing the sustainability and impact of its social mission. (Cadwell)

Carbon Footprint

A company’s carbon footprint is the total amount of greenhouse gas emissions produced through its business activities. Carbon footprint is measured in tons on “C02 equivalent,” meaning that your total footprint isn’t just a measure of C02, it is a measure of all gases that affect our climate. This is calculated by converting other harmful gases into the amount of C02 that would cause the same environmental impact and adding this value to the amount of C02 your company emits (Livingston). It is important for a company to reduce its carbon footprint because these harmful gases decrease the value of our environment and the longevity of our earth.

Overview of OrganiGram

Background

OrganiGram produces and sells dried cannabis and cannabis oil in Canada. The company provides wholesalers and retailers with cannabis plant cuttings, dried flowers, blends, pre-rolls, and cannabis oils to retailers and wholesalers (Our Story). OrganiGram was established in 2013 and is headquartered in Moncton, Canada. As of right now, OrganiGram is a small/medium player in the cannabis industry but it is in a perfect position to capitalize on the growing cannabis industry with its elite management, quality products, and strong community roots.

OrganiGram is a for-profit company, but it’s invested in the continuous growth of its employees, clients, and community since the beginning. “Improving the quality of life for Canadians is not just about getting safe, quality product to them effectively. It’s about creating jobs, being good neighbors, and contributing to our community” (Our Story).

Financial Analysis

After the legalization of cannabis in Canada, revenues for OrganiGram increased 287% in Q1 2019 (Oleinic). Yes, the cannabis industry is on fire right now, but it won’t always be. In order for us to determine if this is a good investment for the long run, we need to know what differentiates OrganiGram from its competitors. I researched how the company compares to the three biggest players in the Canadian cannabis market – Canopy Growth Corporation, Aurora, and Aphria. These numbers were not easy to find/calculate. The results below illustrate why I believe this investment could really be something special. OrganiGram:

·      produces the most cannabis per year (36,000 kgs)

·      produces its cannabis in the most efficient method ($0.58 per gram)

·      has the most potential for future growth ($954 million market cap)

Company	Market Cap	Current Production	Cost per gram	Stock Price (USD)
Organigram (OGRMF)	954 Million	36,000 KGs/Yr	$0.58 (Indoor)	$6.60
Canopy Growth Corporation (WEED)	28.3 Billion	31,000 KGs/Yr	$1.05	$45.40
Aurora (ACB)	8.15 Billion	30,000 KGs/Yr	$1.69	$7.75
Aphria (APH)	3.4 Billion	34,500 KGs/Yr	$0.95	$9.55

Critical Appraisals and Awards

OrganiGram has received the following awards and recognitions –

·      Silver winner for the Company of the Year (2018 Winners)

·       #1 voted sativa flower in all of Canada (Canadian Cannabis Awards)

·      Top licensed producer for compassionate pricing (Canadian Cannabis Awards)

The Motley Fool

Sean Williams, a former financial advisor with First Investors of New York, describes how OrganiGram is one of the cheapest and most overlooked pot stocks. OrganiGram’s value proposition is its state of the art facility that currently produces 36,000 kgs/yr. Sean explained that by the end of 2019, this facility is expected to yield a whopping 113,000 kgs/yr. He then stated “what's truly a jaw-dropper is that OrganiGram’s market cap, despite this amount of production, is under $1 Billion. There isn't another cannabis grower with a lower market cap that's expected to be a top-tier producer” (Williams).

Insider Financial

Jim Bloom, a former investment banking guru with over 20 years of experience, thinks that OrganiGram is a great buy for three reasons. First, equity research firm Jefferies rated OrganiGram as a buy with a target of $10. This is an important signal for OrganiGram because equity research firms usually stay away from cannabis stocks. Second, OrganiGram recently signed a letter of intent to supply cannabis in Quebec. OrganiGram is now one of only three licensed producers to secure distribution agreements with all 10 provinces (Bloom). And third, is the fact that OrganiGram plans to triple its cannabis production capacity by the end of 2019 to 113,000 kgs/yr.

My Recommendation

Given the information highlighted above, I believe OrganiGram would make an excellent addition to AMDP’s investment portfolio. Both the financial analysis and critical appraisals demonstrate that Organigram is currently undervalued. This company produces the most cannabis in Canada, yet it has one of the lowest market caps. And the best part is that Organigram holds a high value on corporate social responsibility just like AMDP does.

Let me know if you agree so we can begin to move forward with this investment.

Regards,

Matthew J. Edgar

------------------------------------------------------------------------------------------------------------------------- 

Works Cited

“2018 Winners.” Best in Biz Awards, 28 Nov. 2018, www.bestinbizawards.com/2018-winners/.

Bloom, Jim. “Why OrganiGram Holdings Inc (OTCMKTS:OGRMF) Is Still A Buy.” Insider Financial, 1 Mar. 2019, insiderfinancial.com/this-is-why-organigram-holdings-inc-otcmktsogrmf-still-buy.

Cadwell, AmyAnn. “What Is A Social Enterprise? A Simple Definition & 3 Examples.” The Good Trade, The Good Trade, 6 Aug. 2018, www.thegoodtrade.com/features/what-is-a-social-enterprise.

“Canadian Cannabis Awards 2017 Winners.” Canadian Cannabis Awards, 30 Nov. 2017, canadiancannabisawards.com/cca2017/.

Leonard, Kimberlee. “Four Types of Corporate Social Responsibility.” Small Business - Chron.com, Chron.com, 12 Feb. 2019, smallbusiness.chron.com/four-types-corporate-social-responsibility-54662.html.

Livingston, Amy. “What Is Your Carbon Footprint - How to Calculate & Reduce It.” Money Crashers, 21 Feb. 2019, www.moneycrashers.com/carbon-footprint-definition-calculate-reduce/.

Oleinic, Alex. “Organigram's Revenue Jumps 287% Sequentially After Canadian Legalization (OTC:OGRMF).” Benzinga, Benzinga, 28 Jan. 2019, www.benzinga.com/markets/cannabis/19/01/13049105/organigrams-revenue-jumps-287-sequentially-after-canadian-legalizati.

“Our Story.” OrganiGram, www.organigram.ca/our-story/.

Williams, Sean. “Should You Buy OrganiGram Holdings in 2019?” The Motley Fool, The Motley Fool, 11 Jan. 2019, www.fool.com/investing/2019/01/11/should-you-buy-organigram-holdings-in-2019.aspx.

AMDP - Rough Draft

To: Clark Hansen, CEO

From: Matthew Edgar, Research and Development

Subject: Investment Opportunity – Organigram

Date: March 1^st, 2019

Clark, I have found the perfect company for AMDP to invest in – Organigram. A for-profit cannabis producing company located in the heart of Atlantic Canada. I have concluded from my research that Organigram perfectly aligns with the values that made AMDP what it is today. In this memo you will find the following:

1.     Our standards for any investment

2.    Background, financial analysis, and a future market forecast for Organigram

3.    Critical appraisals of Organigram from well-regarded industry sources

4.    My recommendation for why AMDP should invest in Organigram

Let me know if you agree so we can begin to move forward with this investment.

AMDP Standards

Triple Bottom Line

The Triple Bottom Line is an accounting framework that expands a business’ focus on their net profits by including social and environmental concerns. The Triple Bottom Line is formed by the synergy of 3 “P’s”:

·      People: Fairness and beneficial practices to your customers, employees, and communities. Trying to do the greatest good for the people.

·      Planet: Outmost respect for the environment by trying to reduce a company’s impact on it.

·      Profit:  Earn more $ than you spend – a financial gain.

Corporate Social Responsibility

Corporate social responsibility is a metric that puts social accountability on the company. It ensures that companies are conscious of the impact they have on all aspects of society. This includes – but is not limited to – company diversity, labor practices, volunteer efforts, philanthropic efforts, and environmental conservation. (Leonard)

Social Enterprise

A social enterprise is a cause-driven business whose main objective is to serve the common people by improving society. Social enterprises are not centered around creating profits for its shareholders, rather they are centered around increasing the sustainability and impact of their social mission. (Cadwell)

Carbon Footprint

A company’s carbon footprint is the total amount of greenhouse gas emissions produced through their business activities. Carbon footprint is measured in tons on “C02 equivalent,” meaning that your total footprint isn’t just a measure of C02, it is a measure of all gases that affect our climate. This is calculated by converting other harmful gases into the amount of C02 that would cause the same environmental impact and adding this value to the amount of C02 your company emits (Livingston). It is important for a company to reduce its carbon footprint because these harmful gases decrease the value of our environment and the longevity of our earth.