The world’s largest legal cannabis industry is months away from its most sweeping change ever.
The change is the complete legalization of recreational cannabis use in Canada and it is poised to ignite a growth industry. Prominent analysts expect this market could expand rapidly to $6 billion by 2021, about the same size as Canada’s alcohol and tobacco industries. According to Canadian Prime Minister Justin Trudeau, Canadian legislators and regulators have targeted “summer 2018” to complete the legal framework to make Canada the first major world economy to fully legalize cannabis use.
This event will be a turning point for the legal cannabis industry and its creating a massive opportunity for Canada’s leading cannabis companies. Canada’s cannabis companies are gearing up for this major change by creating and investing in recreationally focused branded producers and retailers, this is the new frontier on the changing cannabis industry landscape. Like alcohol and tobacco, the brands will be one of the most valuable aspects of the entire industry.
The race is on to establish branded cannabis products and retail distribution and Canada’s top cannabis companies are reacting to the move. One early mover into branded cannabis production and distribution is CHOOM Holding Inc. (CSE: CHOO) (OTCQB: CHOOF). CHOOMTM is a Canadian cannabis start-up with two pending ACMPR applications for legal cannabis production in Canada. These licenses are expected to be issued in the summer of 2018 at the same time Canada fully legalizes recreational use cannabis.
The other vertically integrated Canadian cannabis companies includes the top names in Canadian cannabis like Canopy Growth Corp. (TSX: WEED) (OTC: TWMJF), Aurora Cannabis, Inc. (TSX: ACB) (OTCQB: ACBFF), Aphria, Inc. (TSX: APH) (OTC: APHQF), and HIKU Brands Ltd. (TSX: HIKU) (OTCQB: DJACF).
All of these companies have recently revealed the moves they’re taking to capitalize on the opportunity for branded cannabis and retail distribution created by the coming legalization of recreational use cannabis.
CHOOM™ is much more than a cannabis production company. It is also developing the Choom™ brand for cannabis on the foundation of its Hawaiian-derived heritage and high-quality product. The company is also building out a network of high-end luxury cannabis stores through a proven method of retail partner program to deliver its products to customers and giving them a complete retail experience similar to those offered by the most successful retail companies in the world. The combination of all three aspects – branding, production, and retail – will make CHOOM™ into one of a handful of vertically integrated cannabis companies in all of Canada, specifically targeting the coming recreational market.
Another example, Canopy Growth Corp. (TSX: WEED) (OTC: TWMJF) is the largest legal cannabis company in the world. It has laid the foundation for having a big role in recreational use cannabis, with their own high profile internal brands. It’s largest partnership to date involved a direct investment from Constellation Brands, the maker of Corona and other popular alcohol products.
Aurora Cannabis, Inc. (TSX: ACB) (OTCQB: ACBFF) recently invested C$100+ million into Liquor Stores, a wine and spirits retail distributor and retailer in western Canada, in part of a partnership to develop a retail distribution network for its recreational cannabis products.
Aphria, Inc. (TSX: APH) (OTC: APHQF) is another major Canadian cannabis company which recently committed to the recreational cannabis market. They have announced investments in HIKU Brands notably Tokyo Smoke and B.C. producer Broken Coast, which they spent C$230M in stock and cash to acquire.
HIKU Brands Company Ltd. (TSX: HIKU) (OTCQB: DJACF) was created when separate cannabis companies combined to form a high-profile marijuana lifestyle brand. The HIKU amalgamation brought together Tokyo Smoke, a cannabis brand and cannabis coffee shops; DOJA Cannabis Company, a publicly traded Canadian cannabis company; and a $10 million investment from Aphria Inc.
CHOOM Holdings (CSE: CHOO) (OTCQB: CHOOF) is right there with all of those major cannabis companies. It has brought together all the aspects of the most successful Canadian cannabis companies under one corporate umbrella. Choom™ plans to grow branded high-end marijuana strains, through their two cannabis production licenses in the final approval stages. It also has its retail distribution model to facilitate the rapid expansion of a distribution arm for its products through local, store-based partnerships.
The timing of CHOOM™ and their ramp up of a vertically integrated strategy along with other major cannabis companies’ efforts to get a foothold in retail distribution coincide perfectly with the full legalization of recreational cannabis use in Canada. With full legalization of recreational use cannabis, the Canadian cannabis industry is just months away from entering its next and largest phase of growth.
In this next stage the value of branded cannabis production, products and distribution will be the main driver of growth within an industry expected to reach $6 billion by 2021 and be on a similar level as alcohol and tobacco industries in Canada. These are just a few of the Canadian companies that are getting a “head start” on the one of the most significant and growth opportunities of the decade.