Canada’s newly-legal marijuana industry is exceeding all expectations.
Canada’s government statistics bureau found that a staggering 15.4% of all Canadians have marijuana in the first three months it was legal.
The earnings reports from the big marijuana companies – where 100%+ revenue growth is the norm – reflect it too.
However, there is a problem in all this that’s creating a big opportunity.
Canada’s Next Marijuana Boom Starts Now
When Canada legalized marijuana, it left most of the regulatory details up to individual provinces.
As a result, the rollout has been slow and disjointed across the country.
The delays and confusion can be seen throughout the industry.
There were the long lines last October during the first day of legal marijuana.
Online marijuana companies told customers it was going to take weeks for orders to be delivered.
Some wholesale distributors completely ran out of inventory.
And since marijuana wasn’t technically illegal and most regulations weren’t set, only a handful of retail stores were able to be built in advance of the legalization date.
The last part about the retail stores is the key.
Because it’s changing fast.
And the race to build out retail stores and ride the big Canadian marijuana boom is now in full swing.
And one company just took a big step to capitalizing on the coming boom in retail marijuana.
Marijuana Upstart Cements Leadership Position
Choom Holdings (CAN:CHOO / US:CHOOF) is a leading Canadian marijuana retail company.
The Seed Investor has been following this company for a long time and it’s time to take a closer look at it again.
Because marijuana retail is taking off and Choom is making big moves.
Most recently Choom acquired Clarity Cannabis MD Holdings.
Clarity is an established retailer with a handful of operating retail stores and has many more in development throughout Alberta.
The full press release is available here.
Clarity has three marijuana retail stores already opened, construction completed on seven more stores, two under construction and 15 government-issued licenses for more.
Altogether, Clarity owns 27 retail opportunities.
They’re all in a great location too.
Clarity is mainly focused on Alberta which is one of the provinces most open to privately-owned marijuana retail stores.
And many estimates show Alberta’s marijuana industry to pass $1 billion.
This acquisition gives Choom another leg up in the retail boom by expanding Choom’s already-sizeable footprint in western Canada.
This is a big deal for Choom. But it’s just part of a much bigger trend.
Moving Forward In Canada’s Nascent Marijuana Retail Sector
Choom has been on a roll recently.
For example, Choom announced it was able to complete a deal which gives it direct access to Ontario’s legal marijuana market.
Ontario is the most populous province in Canada and retailers there are going to do very well.
However, retail stores will be very limited because Ontario isn’t issuing many licenses.
Just look at how the first licenses were issued to see what mean.
Demand for retail store in Ontario were so high that regulators held a lottery to determine who would get them.
There were only 25 winners.
Choom entered an agreement with one of the lottery winners to get its foot in the door in the massive Ontario marijuana market.
This will mean a lot to Choom going forward. But again, it’s just part of a bigger trend for Choom.
Before these deals were done, Choom reported managed to get a C$20 million investment from Aurora Cannabis (CAN:ACB / US:ACB).
That investment brought Aurora’s total funding for Choom to C$27 million (first C$7 million and second of C$20 million).
Finally, Choom is advancing the 54 retail opportunities it has identified well before marijuana went fully legal in Canada.
In the end, the reasons to look at Choom again are many.
But the most important is the timing.
With marijuana sales climbing and Canada’s retail market just starting to take shape, the whole sector is finally set to take off and Choom has positioned itself to be a prime player in it all.
The Seed Investor