Regional Diversity Important for Retail Cannabis Operators in Canada
April 24th, 2018
Exclusive, News, Top News
With the Canadian federal government set to implement full legalization of adult-use marijuana this coming summer, many of the details have been left to provincial governments to create their own unique regulatory frameworks. This type of arrangement makes it more difficult for aspiring retail brands to implement a strategy that will work across provinces, but it’s a challenge that needs to be overcome if a brand has national aspirations. And in a national market projected to exceed $10 billion annually over the next few years, any brand worth its salt should definitely be thinking larger than just its home province.
Choom™ Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) is one such company, and recent developments show its commitment to spreading its Hawaiian-inspired good times and premium cannabis far beyond its British Columbia home.
Choom™ Moving Quickly
Choom™ owns two late stage licensed producer applicants in British Columbia, one in the Okanagan Valley in the interior, and one just recently announced on Vancouver Island. The company has also announced intentions to acquire two other late stage applicants, one on Vancouver Island and the other based in Saskatchewan. The Saskatchewan deal also comes with a consumer brand company whose focus on elevating the retail cannabis experience beyond the traditional dispensary vibe fits in nicely with Choom’s clean, inviting retail concept.
With a geographically diverse supply chain in the works, Choom™ has set about securing retail locations across Saskatchewan, Alberta, and British Columbia. While the retail licenses are yet to be awarded, the company has a large number of locations chosen and applications submitted. And while these provinces account for about 27% of the country’s total population, Choom™ does not intend to stop there.
“This is a significant step towards delivering the Choom™ experience of ‘good times with good friends’ for Canadians across the country,” states Choom’s president and CEO, Chris Bogart. “We have now established a footprint to position Choom™ as a leading private cannabis retailer in Western Canada. We will continue to pursue retail licensing opportunities across the country and remain committed to serving all Canadians in the coming consumer cannabis market. Choom’s vision of delivering an elevated customer experience through our curated retail environments, with the creation of modern, stylish storefronts is well underway.”
Investments and Acquisitions Ahead of Full Legalization
The recently announced merger of Hiku Brands and WeedMD is the latest in a string of investments and acquisitions that highlight a trend in the industry. Namely, medical marijuana providers are actively seeking partners to help them navigate the pending recreational market. With the adult use market expected to dwarf the existing legal medical market, producers are scrambling to find the most effective means for marketing to and supplying recreational consumers. It’s like the difference between selling prescription drugs and beer.
Prior to Hiku/WeedMD, Aphria had invested in Hiku to get a piece of the retail brand. Aphria also bought Broken Coast Cannabis, a smaller producer of premium retail strains, for $230 million. Constellation Brands, a major alcohol conglomerate, bought 10% of Canopy Growth to develop cannabis-based beverages for the retail market. Supreme Pharmaceuticals bought a 10% stake in BlissCo to access that upstart’s retail and distribution strength in British Columbia.
With Choom’s lifestyle branding and retail concept of marketing Hawaiian beach good times in a upscale but inclusive atmosphere firmly in place, the company dipped its toes into the trending waters by cutting a deal with ABcann. Based in Ontario, ABcann invested $4 million in Choom’s recent private placement. ABcann also agreed to supply Choom™ with its renowned line of premium cannabis products, allowing Choom™ to jumpstart its retail sales while the company’s own production comes online.
Choom™ appears to be picking up the pace in implementing its retail strategy across Canada as full legalization quickly approaches. The company bears watching, as does the industry in general, with major deals, partnerships, and acquisitions marking progress in one of the most dynamic sectors of the North American investing landscape.
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