Financials Trend (FT) take on Canada’s recreational marijuana legalization this summer is a real HIGH when it comes to picking our favorite Company. Choom Holdings Inc. (CSE: CHOO) (CNSX: CHOO) (CHOO.CN) (OTCQB: CHOOF) could really strike it rich for our readers.
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.
Choom is impressive, with company-wide focus on developing a Brand that includes a seed to sale recreational brand strategy, one that includes RETAIL distribution. CSE: CHOO, OTCQB: CHOOF is developing its unique consumer brand with an impressive design for its retail stores that consumers will find modern and inviting – even its name carries brand recognition, taken from the Hawaiian term for smoking marijuana – CHOOM.
Can you say, FRANCHISE? CSE: CHOO. OTCQB: CHOOF is among the first Canadian retail dispensary companies to attempt a franchise style concept with its stores, having launched a retail investor program in February ahead of the recreational marijuana legalization in Canada, opting to build a portfolio of interested franchise participants that could jump in once summer arrives.
In the last month, Choom Holdings has seen its shares range from a low of $0.46 to a high of $0.95, having settled somewhere in the middle in the low $0.62 range waiting for news on its business plans. A time to strike? Phase One in Cannabis investing was big Medical marijuana companies that focused on Medical users and huge growing operations, and investors that got in early saw fantastic gains in Companies like Canopy Growth (WEED), Aurora (ACB) and Aphria (APH). We are now entering the second phase of the Canadian Cannabis Market, the Recreation Market. With the popularity of marijuana stocks, both in Canada and the U.S., CSE: CHOO, OTCQB: CHOOF is standing in the front of the line. FT sees Choom as a potential double-bagger – or more.
Ok, where does that take on CHOOM come from? Simple, lets look at CSE: CHOO, OTCQB: CHOOF a little more in-depth.
Recently, Tokyo Smoke went public on the CSE, after merging with B.C.-based licensed producer, DOJA Cannabis Company Ltd., to create a new company, Hiku Brands Company Ltd. The Company was valued at $70 million – though it doesn’t own one retail marijuana store. Tokyo Smoke operates six coffee shops with Cannabis accessories. Coffee Shops! Valued at $70 million?
That may seem off, but Tokyo Smoke was nominated as the best cannabis brand in Canada and they did successfully enter into a qualifying merger with investment bankers seeing its value. The point being that the market overall is ripe for cannabis consumer-oriented stocks.
Inner Spirit Holdings, a Canadian marijuana dispensary company sold Cannabis Wheaton 18% of the company for $2M – that represented a $10 million valuation! AND IT DOESN’T HAVE ANY STORES OPEN.
But to Spirit’s credit they do say that they have 55 franchise buyers. Inner Spirit Holdings is similar to Choom in that it is already moving to franchise stores, though in comparison to CSE: CHOO, OTCQB: CHOOF Choom Holdings has gone out of its way to professionally design store layouts so it’s ready when Canada’s recreational law goes into effect this summer. Inner Spirit Holdings says it will open its first flagship store in Calgary in July 2018.
Seed to Sale
CSE: CHOO, OTCQB: CHOOF has two grow facilities currently, with expansion plans in effect that would take them to 13,600 square feet and 9,000 square feet, in the works. The combined forecast production would be close to 1500 kg per year once they ramp up. So, CHOOM is well positioned to enter the recreational marijuana arena once the Summer Games [recreational marijuana] begin when Canadians can legally buy pot for recreational consumption.
CHOOM is currently valued at approximately $43 million, based on 109 million shares issued and outstanding – inclusive of options and warrants – and with recreation on the horizon it could significantly ramp up. So its finalizing two separate growing operations and its getting READY TO OPEN RETAIL STORES – just waiting for Canada to legalize recreational marijuana use.
CSE: CHOO, OTCQB: CHOOF has a potential of $6.6 million in revenue to achieve during phase one of its development plans and when phase two kicks in late this year CHOOM could see its revenue rise to over $15 million. Against 109 million shares outstanding, fully diluted, that would place revenue at more-than $0.15 per share AND WHAT IS THE MULTIPLE POT STOCKS TRADE AT? In Canada, in recreational marijuana, there is no multiple – yet. But suffice it to say, its likely to be 20X or more. That equates to WAY MORE THAN A DOUBLE BAGGER. That’s why FT sees CHOOM as its next rising star investors should watch but ‘don’t be late to participate’ as CSE: CHOO, OTCQB: CHOOF has a DOUBLE MARKET FOOTPRINT FOR ITS STOCK, which means the buy pressure from the U.S. – and Canadian stock markets – could push its shares much, much higher.
The demand for recreational marijuana is huge. Earlier this year customers lined up around building to purchase recreational marijuana legally for the first time in California as the new year brought broad legalization some two decades after the state was the first to allow pot for medical use. In Las Vegas demand was so high the first week Nevada went recreation stores literally ran out of product to sale.
The Las Vegas market is but a scratch on the surface when compared to an entire Country, like Canada. Marijuana sales in Canada is forecast at $6 billion but that figure may lower than actual revenue, once consumers can legally purchase recreational marijuana this summer. That could be HUGE for companies like CSE: CHOO, OTCQB: CHOOF.
Demand to Fuel Stocks
When summer arrives, look for retail-oriented marijuana stocks to fuel a buying frenzy – both in Canada and the United States. Choom Holdings (CSE: CHOO, OTCQB: CHOOF), Canopy Growth (WEED), Aurora (ACB) and Aphria (APH) will lead the pack in price appreciation. Driven by consumer spending, expansion and supply, these Pot Stocks should stand out above the pack. FT forecasts CHOOM as the leader, due to its professional approach to uniformity in retail store design – not unlike how and other consumer-oriented companies approach the market through Brand Identification.