How These Canadian Companies Are Preparing for Potential $6 Billion Market

How These Canadian Companies Are Preparing for Potential $6 Billion Market
How These Canadian Companies Are Preparing for Potential $6 Billion Market
by is licensed under

The Canadian recreational cannabis market is one of the most exciting markets in the world. In summer 2018, Canada will become one of the first countries in the world to fully legalize recreational marijuana. In their Recreational Marijuana - Insights and Opportunities report, Deloitte estimates the market to be approximately $6 Billion, but it could be anywhere between a $4.98 - $8.78 Billion dollar opportunity, while a recent report says that in 2015 Canadians already spent $6.5 Billion on marijuana.

Big cannabis brands are taking opportunity very seriously and are moving quickly to prepare. Companies like Aphria Inc. (TSX: APH OTCQB: APHQF) and Aurora Cannabis Inc. (TSX: ACB) (OTCQB: ACBFF) are preparing by making strategic investments and purchases to bolster their rec presence.
The rec market is such a huge opportunity that even big alcohol is getting in on it, with Constellation Brands (NYSE: STZ and STZ.B) investing $190 Million USD ($245 Million CDN) in Canopy Growth Corporation (TSX:WEED) (OTC: TWMJF).
These are examples of brands that specialize in medical marijuana trying to pivot and prepare for the rec market. But the recreational market will demand different brands then medical.
For investors looking to capitalize on this huge opportunity, we’ve discovered a small Canadian company with 2 ACMPR licenses in late stage reviews that was built for the recreational market: Choom™ (CSE: CHOO) (OTC: CHOOF).
We will look at Choom in a bit, but first let’s look at the recreational industry and what companies are doing to prepare.
Trends for 2018

After a crazy market uptick over Christmas and into the New Year, the Canadian Marijuana industry prepares for a big year.

Marijuana Index

Branding In The Canadian Recreational Industry

Advertising standards and regulations for the legalized marijuana industry are still being finalized, but it looks like there will be very strict controls on advertising. Companies will have to be focused only on their own brand and adhere to ad standards of Canada. This results in branding being one of the most important aspects of the new recreational industry.

Established companies were traditionally set up for medical and now have to transition for recreational.

Below are a few key deals:
  • Aphria (TSX: APH OTCQB: APHQF) signed an agreement to acquire 100% of Broken Coast Cannabis, a premium cannabis producer located in British Columbia for $230 million in stock and cash. The deal will add incremental annual production of 10,500 kgs, some of that cannabis being market ready today. This addition will boost Aphria’s forecast annual production to 230,000 kgs. The transaction also gives Aphria more geographic diversification, a cross-Canada distribution platform, and access to over 40,000 medical patients.
  • Recent merger of DOJA Cannabis Company Limited (CSE: DOJA) and TS Brandco Holdings Inc. ("Tokyo Smoke") created the first brand and retail-focused, Hiku, craft cannabis producer, with a portfolio of highly recognizable brands. Hiku is strategically positioned to become the preeminent cannabis brand house in the Canadian adult-use cannabis market. Concurrently, DOJA entered into a binding agreement with Aphria pursuant to which Aphria has committed to make a $10 million strategic equity investment into Hiku. Additionally, the parties have agreed on the terms of a supply agreement to secure cannabis concentrate supply for Hiku's premium brand portfolio. Upon completion of the merger, the Company will have a robust cash position of approximately $31 million, which it plans to invest in expanding its cannabis production capacity, growing its retail footprint, and adding select brands to its portfolio through highly strategic and complementary acquisitions.
  • Aphria (TSX: APH OTCQB: APHQF) entered a five-year agreement to supply pharmacy chain Shoppers Drug Mart with medical cannabis. The company will provide the pharmacy with four strains of dried marijuana flower in two different sizes and four cannabis oils. All 12 products will carry the Aphria brand name.
  • Harvest One Cannabis  (TSXV:HVST) (OTC: HRVOF) through its wholly owned subsidiary United Greeneries announced the launch of retail sales beginning February 2018. Starting February 2018, United Greeneries will launch a new online retail platform for medical clients under the Access to Cannabis for Medical Purposes Regulations (“ACMPR”). The initial offering will consist of two distinct cannabis brands, providing patients a wide range of different strains and cannabinoid profiles.
  • Aurora Cannabis Inc. (TSX: ACB) (OTCQB: ACBFF) has bought in 17% stake in The Green Organic Dutchman (TGOD), with option to Increase to in Excess of 50%.  As part of the agreement, the companies shall enter into a supply contract, providing Aurora with the right to purchase up to 20% of TGOD’s annual production of organic cannabis from TGOD’s Ancaster and Valleyfield facilities. Consequently, Aurora anticipates being able to procure in excess of 20,000 kg per annum of premium organic products once TGOD`s Valleyfield and Ancaster facilities are completed and at full capacity. The supply contract provides Aurora with the right to purchase up to 33% of TGOD’s production at the two facilities if Aurora increases its ownership interest to 31%.
  • Canada's move toward legalization has already inspired one U.S. Company, the New York-based alcohol beverage producer Constellation Brands (NYSE: STZ and STZ.B), to buy a 10% stake in the Canadian pot company Canopy Growth Corporation (TSX:WEED) (OTC: TWMJF) for $190 million.
Choom™ (CSE: CHOO) (OTC: CHOOF) – Perfectly Positioned for Rec

Unlike medical marijuana brands who have to acquire brands to prepare for rec, this small cap Canadian company was created with a focus on the recreational market. Choom was inspired by the Choom Gang, a group of buddies in Honolulu during the 1970’s. Now, after four decades, Choom is bringing the spirit of Hawaii to the Okanagan and Canada. The company has been an ACMPR applicant since November 2013 in Vernon, BC., and has security clearance and is currently in the detailed review stage. They just announced the acquisition of a 2nd ACMPR license in the confirmation of readiness stage.

Investors have already proven that they are excited about the Choom brand, as it has seen a 149% gain on the CSE since beginning trading in November, and just started trading on the OTC Markets on December 29, 2017.

Investment Highlights
  • ACMPR Application in Detailed Review: Choom has security clearance, and is focused on achieving a license to produce and sell high-grade handcrafted cannabis in Canada. Choom is an ACMPR applicant currently in the detailed review stage.
  • 2nd ACMPR Application in Confirmation of Readiness Stage:  2nd ACMP has confirmation of readiness, and is focused on achieving a license to produce and sell high-grade handcrafted cannabis in Canada.
  • Cultivating Experience: Founded on the Choom principle of good times and good friends, the plan is to curate the right products and experiences for the cannabis consumer.
  • Documented Brand History: The Choom brand is inspired by Hawaii’s “Choom Gang” a group of buddies in Honolulu during the 1970’s who loved to smoke weed—or as the locals called it, choom.
  • Adaptive Business Model: Choom are experienced curators of cannabis, who will use their products and services to grow and adapt to the changing cannabis landscape.
  • Facility and Capacity: Choom has a planned Phase 1 cannabis production facility that will be capable of producing approximately 660 kg of dried cannabis per annum. The planned Phase 2 expansion plans, within the existing facility would increase its cannabis production capacity to a total of ~1500 kg/year.

Recreation legalization will create a brand new wave of investment opportunity. While established companies that started with medical brands are trying to address the upcoming recreational market with acquisitions and capacity expansions, companies entering the recreational market directly like Choom will have a distinct competitive advantage given their recreational only business model.

Choom is one of our favorite new brands in the market due to their impressive investment highlights.

For investors looking to get into the huge potential of the recreational market with a small cap company, Choom™ (CSE: CHOO) (OTC: CHOOF) might be a good option.
Cannabis News, Investing News
Thumbnail Photo Credit: by is licensed under
The Seed Investor Report disclaimer
The Seed Investor (TSI) SAFE HARBOR STATEMENT: Statements contained in this online report and document, including those pertaining to estimates and related plans, potential mergers and acquisitions, estimates, growth, establishing new markets, expansion into new markets and related plans other than statements of historical fact, are forward-looking statements subject to a number of uncertainties that could cause actual results to differ materially from statements made. TSI provides no assurance as to the subject company’s plans or ability to affect any planned and/or proposed actions. TSI has no first-hand knowledge of management and therefore cannot comment on its capabilities, intent, resources, nor experience and makes no attempt to do so. Statistical information, dollar amounts, and market size data was provided by the subject company or its agent and related sources believed by TSI to be reliable, but TSI provides no assurance, and none is given, as to the accuracy and completeness of this information.

Please see full disclaimers at applicable to all content provided by TSI, wherever published or re-published:
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. (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. and its owners, operators and affiliates may benefit from any increase in the share prices of the profiled companies. may be paid for services using options or free-trading shares. 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; 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 where readers can review all public filings submitted by the company. 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.