Organigram Holdings Inc.’s chief executive officer warned that the industry will remain unpredictable until the final quarter of this year, even as the pot producer’s stock headed for its biggest gain ever.

Organigram shares surged as much as 38 per cent Wednesday in New York after its fiscal first-quarter revenue beat the highest analyst estimate and it returned to positive adjusted Ebitda after a loss in the prior quarter. Investors are eager to see cannabis companies report profits, rewarding the few that have and punishing those that haven’t.

However, it will take a few more quarters before the industry can generate predictable results, said CEO Greg Engel.

“I still think we’re not going to hit any sense of normalcy or predictability until the fourth quarter of this year,” Engel said in a phone interview.

One of the biggest unknowns is how Canada’s rollout of newly legal products including vapes and edibles will go. Engel said Organigram has already seen provinces submit reorders for its vapes, which hit shelves on Dec. 17, and one province tripled its initial order for Organigram’s chocolates, which won’t begin selling until later this quarter.

The company acquired a high-capacity chocolate production line in October and would be willing to do white-label manufacturing for other companies, Engel said.

Organigram will also continue to sell its cannabis to third parties, he said. The company booked an unexpected $9.2 million in wholesale revenue in the first quarter as its competitors showed a willingness to pay for high-quality product, the main reason it was able to beat revenue estimates.

“We’ve had multiple companies come to us who are more reliant on this model both as a strategy and/or in the near term and we saw it as a diversification opportunity,” he said.

Analysts applauded the quarter and said Organigram appears to be one of the better-positioned Canadian pot producers.

“We are pleasantly surprised to see Organigram beat our estimates, as well as the street’s; Organigram has successfully sidestepped industry roadblocks that some of its peers have met, violently, head-on,” Raymond James analyst Rahul Sarugaser said in upgrading the stock to outperform from market perform. “We believe clear skies are visible on Organigram’s horizon.”

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