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Choom (CHOO.C) has advanced aggressively into Canada, planting its flag in the rapidly growing legal cannabis industry with a fun, funky brand of handcrafted herb.

As legend has it, “Choom was inspired by a group of buddies in Honolulu during the 1970’s who loved to smoke weed—or as the locals called it, Choom.”  One of those locals was former U.S President Barrack Obama according to Adam Sorensen at TIME.

Choom’s 3-pronged Strategy:

  • Create a supply of cannabis through the acquisition of ACMPR licenses
  • Deliver elevated customer experiences through a portfolio of brands.
  • Vertically integrate production with a distribution network of retail stores.

So far, the company has been hitting its milestones – and then some.

On August 23, 2018 Choom announced that it has significantly advanced its retail portfolio in Alberta and British Columbia.

Choom has secured the rights to an additional 5 retail locations in Alberta and 7 in B.C. These new retail opportunities bring Choom’s total retail potential up to 52 locations across western Canada.

In the press release Choom warns that the “retail opportunities are subject to all necessary governmental and municipal approvals being granted.”

Indeed, waiting for legal Canadian recreational weed is like being pregnant in a heat wave.

There’s the euphoria of the announcement, hot flashes, some vomiting, the belly bump, percussive kicks from within.

But every day you wake up and the damn thing isn’t born yet!

There’s still a lot of hand-wringing – and some confusion – about the impending new world of legal rec weed.

According to the Conference Board of Canada, “more than half of Canadian businesses are “concerned” or “very concerned” with the upcoming legalization of cannabis.

In contrast, Vancouver’s marijuana dispensaries seem to think it’s already legal.

We walked into a local pot shop in Kitsilano last week and had the following conversation.

EG:  I want to buy CBD.
Dispensary:  With THC?
EG: I don’t have a prescription for THC.
Dispensary: If you join our club, you don’t need one.
EG: What’s does a membership cost?
Dispensary:  $8 – but we’ll waive the fee.

Choom’s retail opportunity map confirms that it is currently “negotiating additional leases with the intention of submitting applications for retail licenses.”

“In the burgeoning recreational sector, the consumer will be difficult to acquire,” predicted President and CEO of Choom, Chris Bogart.  “Choom’s brand was created exclusively for the adult use market.”

Additionally, Choom has received Development Permits in 11 municipalities and is in the process of its retail store buildouts.

This summer, Choom bulked up its Board of Advisors with veterans in “Consumer Branding, Retail Supply Chain, Government Relations and Financial Services.”

Derek Chan, the former CFO for Vega, North America’s leading all-natural health and performance nutrition brand, helped grow 15X culminating in the successful sale of Vega to White Wave Foods for US$550 million.

John Heaney, the former Chief of Staff for the Government of Alberta, where he was a key official in developing the Alberta government’s energy royalty review and climate-change legislation.

Bobby Black, former senior editor of the iconic High Times Magazine, current host of Blazin’ With Bobby Black on Cannabis Radio.

On June 26, 2018 Choom announced the appointment of Kyp Rowe to be the new Director of Operations. Rowe will advance the retail roll-out for the recreational market in Canada.

A “seed to sale” veteran, Rowe helped bring Sante Veritas Therapeutics, to the final stages of licensing. For almost a decade, he was a Vineyard Manager in the Okanagan.  He also managed “a European breeding facility that produced cannabis seeds for worldwide distribution, as well as overseeing a large cannabis production farm.”

“Kyp brings over 20 years of domestic and international premium cultivation and genetic development expertise to Choom,” stated Bogart, “having operated award-winning production facilities overseas and throughout North America.”

On June 15, 2018 Choom acquired Specialty Medijuana Products (SMP).

SMP, based in Sooke, BC, is committed to becoming a Licensed Producer of cannabis under the ACMPR.

Phase I – First Facility: AOR evidence package submitted to Health Canada
Phase II – Second Facility:
Bring total production capacity to over 29,000 sq. ft.
Phase IIINew Facility Hybrid model of indoor and greenhouse production, is expected to bring Choom’s total production capacity to over 700,000 sq. ft.

The Municipality of Sooke has approved cannabis production zoning for the site. Final planning for this expansion is currently underway.

“We are excited to add SMP to the Choom group of companies under our Arbutus Brands subsidiary,” stated Bogart, “Arbutus Brands will add value to the entire Choom supply chain, from seed to sale.”

Transaction Benefits for Choom:

  • SMP expects to receive its cultivation license at any time;
  • Synergies in operational infrastructure.
  • Bulked up expertise across multiple disciplines
  • Advance operational scale and production capacity
  • Move close to full seed-to-sale integration.

According to Equity Guru’s Chris Parry, “It doesn’t matter how much you can grow if the market gets sucked up by a sweet ass brand from a smaller player who can sell at high prices because everyone wants his version of ‘Heisenberg Blue’ over Canopy’s Lemon Skunk.”

Choom’s rapidly expanding provincial presence now stands at 29 leases in highly strategic locations in Alberta with 28 applications submitted, in combination with 17 retail opportunities in B.C.

The troops have arrived.

When the Canadian federal government finally gives a green light to recreational weed – the war will begin.

Full Disclosure: Choom is an Equity Guru marketing client, and we own stock.

Disclaimer: ALWAYS DO YOUR OWN RESEARCH and consult with a licensed investment professional before making an investment. This communication should not be used as a basis for making any investment.

Lukas Kane

Lukas Kane is a Vancouver-based investor and writer.Previously the CEO of a North American investment news syndicate, Mr. Kane was also the Communication Director for a consortium of resource extraction companies.In the course of his career, he has toured copper mines on the Antagfonasto desert in Chile, potash projects in Saskatchewan, cannabis labs in California and clothing factories in Shenzhen, China. A rudimentary speaker of Mandarin, Mr. Kane’s passions are his family, writing and playing football (real football - with the spherical ball).

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