Organigram Holdings Inc. said Monday that growing marijuana cost it nearly 50% more in cash and harmed its earnings last quarter because the cannabis company tried — and failed — to develop a more efficient growing technique.

Cash and all-in costs of cultivation increased to C$0.95 and C$1.29 per gram of dried flower, respectively, from C$0.65 and C$0.95 per gram in the previous quarter. The costs stemmed from attempts to develop an alternative technique to plant fresh cannabis that worked with a few strains of cannabis but didn’t work at large scale, Organigram OGI, -2.77% OGI, -0.43% Chief Executive Greg Engel told MarketWatch in a telephone interview.

Some cannabis operators grow pot by trimming bits off an already growing plant and using that organic material instead of a seed for a new plant, a process called “cloning.” The trimmings are usually taken from so-called mother plants to ensure genetic consistency, but the Moncton, New Brunswick, company attempted to instead use organic material from plants in their early stages of life.

“We did an experiment where we take early flower, which you’re going to trim the bottom leaves all off anyway, and use those to clone from,” Engel said. “In the early experiment, we had really positive results, then we went to a broader group and it was variable by strain and the results were inconsistent. That had a significant impact on yield.”

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Engel said that Organigram staff figured out that the new method of trimming from plants wasn’t working as planned within a couple of weeks, but reverting to the previous method took several weeks. In the end, there was a period of four to six weeks in which a significant number of the company’s grow rooms were affected.

Many cannabis growers have previously attempted the same experiment as Organigram with similarly mixed results, according to multiple sources in California’s renowned Emerald Triangle pot-growing region. According to those pot farmers, it's possible with certain types of pot but not others, and considerably more challenging than other planting techniques.

While this experiment was on a larger scale and affected more of the company’s product than other tests, Engel said Organigram is constantly working to innovate and improve its grow operations. For example, the company figured out that if it reduced the number of plants per rooms, it could actually increase the yield from the space.

“This one was of interest to us for two reasons,” Engel said. “It would allow us to not have to grow out those vegetative plants a little longer, so it would free up space. And it would make the process of trimming off the plants that were in flower more effective because you’re going to use that material. It was kind of a double efficiency.”

Engel said that because of the way the company stages and produces cannabis, it’s not efficient to use the experimental technique on just a few plants.

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Organigram, the first major Canadian cannabis company to report earnings this season, may be something of a bellwether for the rest of the industry, giving investors clues as to what to expect with larger-by-market-value rivals such as Aurora Cannabis Inc. ACB, -2.88% ACB, -1.88% and Canopy Growth Corp. CGC, -0.70% WEED, -0.36% .

The company reported a net loss of C$10.2 million ($7.8 million), or 7 cents a share, after a profit of C$2.8 million, or 3 cents a share, in the year-ago period. Gross revenue increased nearly ninefold to C$30.4 million, while net revenue excluding excise taxes rose to C$24.75 million ($19.0 million) from C$3.4 million.

The FactSet consensus was for a profit of 3 cents and revenue of C$29.7 million. Organigram’s fiscal third quarter ended May 31.

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During the quarter, the company’s raw tonnage of pot decreased sequentially to 4.6 metric tons from 4.99 metric tons because Ontario acquired a large amount of cannabis to ensure it would have enough weed to sell to the initial 25 retailers, according to Engel. A source familiar with retail buying said stores that did not buy the 100 kilograms initially available have had trouble ensuring there is enough product available and some have closed for several days a week.

“There was this big pipeline fill, and subsequent to that, they did put this cap in place where beyond the initial first order of 100 kilograms, stores were allowed to buy 25 kilograms a week,” Engel said. “It’s a way of staging things, but there are a few products outside of that, such as our Trailblazer brand.”

Organigram Holdings’ U.S.-traded stock closed up 4.6% Monday. The stock has shed 8.3% over the past three months through Friday, while the ETFMG Alternative Harvest ETF MJ, +0.48% has slid 13.1% and the S&P 500 SPX, +1.59% has gained 3.7%.

Additional reporting by Tomi Kilgore.