Recent investments, partnerships and acquisitions in the Canadian cannabis industry highlight the importance of recreational branding as the country transitions focus from medical marijuana to adult-use, recreational cannabis. The marketing of recreational products to a mass audience differs significantly from the marketing of medical products to a narrower audience, and an examination of investments in the space can serve to put a perceived value on brands that are focused on the mass market.
Choom Holdings Inc. (CSE: CHOO) (OTCQB: CHOOF) is a company that started with one specific goal in mind – develop a brand that would have broad appeal in the nascent Canadian recreational cannabis industry. Choom is a local Hawaiian term for smoking marijuana, and the company aims to bring the spirit of relaxed good times from the islands straight to the Canadian cannabis consumer’s door.
Follow the link to get Choom’s corporate presentation and company updates.
Recent Deals
Shortly on the heels of announcing a supply agreement between the two companies, Emblem Corp. (TSX-V: EMC) announced that it was acquiring an interest in Fire & Flower. Fire & Flower is a corporately-owned retail cannabis lifestyle brand and store concept, and it has announced its application for 37 retail licenses in Alberta. The company is also contemplating retail efforts in British Columbia, Saskatchewan and the Atlantic provinces, though nothing official has been announced.
Determining the value of Fire & Flower is a little bit tricky, but according to a recent press release from TerrAscend Corp. (CSE: TER), its C$2.5 million investment amounts to about 5% of the outstanding Fire & Flower shares. Simple math puts the value at about $50 million for the company, with a retail concept and a number of applications on its books.
Hiku Brands (CSE: HIKU) is another interesting story. The company was very recently formed through the merger of DOJA Cannabis, a smaller licensed producer, and Tokyo Smoke, a cannabis-oriented retailer of coffee, clothing and accessories in British Columbia, Alberta, and Ontario. In a recently-announced deal, Hiku is merging with WeedMD (TSX-V: WMD) to combine the retail company with the more-established medical marijuana producer.
In the end, should the deal pass muster with shareholders and regulators, Hiku shareholders will own about 51.75% of the company and WeedMD holders about 48.25%. This means that the companies are on nearly equal footing, perhaps a surprising development for the merger between the more established medical licensed producer and the smaller producer/retail concept company. The companies currently feature market caps of approximately $178 million for WeedMD and about $195 million for Hiku.
There are also deals like Aphria’s acquisition of Broken Coast Cannabis for $230 million to consider, and Supreme Pharma’s purchase of a 10% stake in BlissCo. But you get the picture. Licensed producers are putting tremendous resources into retail brands and companies in often very early stages of development.
Follow the link to get Choom’s corporate presentation and company updates.
Choom’s Place in the Market
Choom™ emerged in the public markets in late 2017, formed with the intent of developing a great brand focused exclusively on the recreational cannabis consumer. Management was reading the tea leaves, and the company is one of the very few recreational pure-play public entities. It also has a relatively impressive list of assets and accomplishments as it builds a dedicated recreational cannabis company, vertically integrated from seed through retail sales.
Choom owns two late stage licensed producer applicants, both based in British Columbia. It also has agreements in place, pending details, to acquire two more late stage applicants, one in BC and one based in Saskatchewan. All of these applications are anticipated to be approved in the near term. To hedge against delays in ramping up its own production, Choom has a supply agreement in place with ABcann (TSX-V: ABCN). The Ontario-based producer also chipped in $4 million in Choom’s recent $7 million raise.
Choom has announced plans for retail applications and locations throughout Saskatchewan, Alberta, and British Columbia, totalling 48 potential retail outlets to this point. The company is also eyeing further opportunities further east in Canada, but has been initially focused on covering the three westernmost provinces, accounting for about 27% of the country’s population.
With a current market cap in the neighborhood of $60 million, it could be argued that Choom is undervalued when compared with the recent investments in the retail brand space. That argument would only grow more convincing should any of the company’s four applicants advance through the next phases of licensing. Similarly, should Choom receive approval for its planned retail outlets, the company could look like a bargain compared to some of its retail-hopeful brethren. All of the above bears watching.
Follow the link to get Choom’s corporate presentation and company updates.
SOURCE: CFN MEDIA
Disclaimer
The above article is sponsored content. Emerging Growth LLC, which owns CannabisFN.com and CFN Media, has been hired to create awareness. Please follow the link below to view our full disclosure outlining our compensation: http://www.cannabisfn.com/legal-disclaimer
_________________________________________________________________________________________
Please see full disclaimers at www.TheSeedInvestor.com applicable to all content provided by TSI, wherever published or re-published: http://theseedinvestor.com/about/disclaimer
Disclaimer: This release/advertorial is a commercial advertisement and is for general information purposes only. This release/advertorial does not constitute an offer or solicitation to buy or sell any securities or individualized investment advice. This is a native advertisement, meaning it is an informational paid marketing piece. THESEEDINVESTOR.com (TSI) makes no recommendation that the securities of the companies profiled or discussed on this website should be purchased, sold or held by viewers that learn of the profiled companies through our website. Please review all investment decisions with a licensed investment advisor. TSI receives payments ranging from approximately $25,000 to $150,000 to publish and/or distribute advertisements on behalf of a company. TSI retains any excess sums after expenses as its compensation. TheSeedInvestor.com and its owners, operators and affiliates may benefit from any increase in the share prices of the profiled companies. TheSeedInvestor.com may be paid for services using options or free-trading shares. TheSeedInvestor.com and/or its owners, operators and affiliates may be selling shares of stock at the same time the profile (or other information) is being disseminated to potential investors; TheSeedInvestor.com will not advise when it or its affiliates decide to sell. Investors must make all investment decisions based on their own judgment of the market and the particular securities.
This advertorial contains forward-looking statements that involve risks and uncertainties. This advertorial contains or incorporates by reference forward-looking statements, including certain information with respect to plans and strategies of the featured company. As such, any statements contained herein or incorporated herein by reference that are not statements of historical fact may be deemed to be forward-looking statements. Without limiting the foregoing, the words “believe(s),” “anticipate(s),” “plan(s),” “expect(s),” “project(s),” “will,” “make,” “told,” “could,” “might,” and similar expressions are intended to identify forward-looking statements. There are a number of important factors that could cause actual events or actual results of the company to differ materially from these indicated by such forward-looking statements. Certain statements contained herein are forward-looking statements as defined in Section 27A of the Securities Act of 1933 and 21E of the Exchange Act of 1934. Such statements include, without limitation, statements regarding business, financing, business trends, future operating revenues and expenses. There can be no assurance that such expectations will prove to be correct. Investors are cautioned that any forward-looking statements made by the company, or contained in this advertorial are not guarantees of future performance, and that the issuer’s actual results may differ materially from those set forth in the forward-looking statements. We undertake no obligation to update any statements made herein except as required by law. Differences in results can be caused by various factors including, but not limited to, the company’s ability to be able to successfully complete planned funding agreements, to successfully market its products in competitive industries or to effectively implement its business plan or strategies. To reiterate, information presented in this advertorial contains “forward-looking statements.” Any statements that express or involve discussions with respect to predictions, expectations, beliefs, plans, projections, objectives, goals, assumptions, or future events or performance are not statements of historical fact and may be “forward-looking statements.” Forward-looking statements are based on expectations, estimates, and projections at the time the statements are made that involve a number of risks and uncertainties which could cause actual results or events to differ materially from those presently anticipated. More information on the company may be found at http://www.sec.gov where readers can review all public filings submitted by the company. TheSeedInvestor.com is not a certified financial analyst or licensed in the securities industry in any manner. The information in this advertorial is subjective opinion and may not be complete, accurate or current and was paid for, so this could create a conflict of interest. Read Full Disclaimer at http://theseedinvestor.com/about/disclaimer
Read More