Canada's Sizeable Shift From Medical to Recreational Branding

As Canada prepares to make the jump to legalized recreational adult use, the country’s cannabis industry reflects on its branding. Recreational branding is now the hot topic as new partnerships and acquisitions form in the wake of recreational legalization expected to take place this summer.

Narrow audience medical cannabis marketing and recreational cannabis mass audience marketing are vastly different.

Who’s investing in the space? What companies are focused on the Canadian mass market? Here’s the rundown.

One brand to watch is Hiku Brands (CSE:HIKU), newly formed as a result of a merger between Tokyo Smoke, a cannabis retailer of coffee and clothing, and small licensed producer DOJA Cannabis. Furthermore, Hiku just announced a merger with WeedMD (TSX-V: WMD), an effort to join the retail company with the well-known and established producer of medical marijuana in a 51.75 percent Hiku / 48.25 percent WeedMD deal.

Big player Aphria Inc. (TSX:APH) has also been wheeling and dealing. The company recently acquired Broken Coast Cannabis for $230 million.

All of these examples demonstrate just how much money licensed producers are investing in retail brands and companies, many of which are in the early stages of development.

One great example is Choom Holdings Inc. (CSE:CHOO) (OTCQB:CHOOF), which was founded on the premise of developing a brand that would have mass appeal in the Canadian recreational cannabis industry. “Choom” means “smoking marijuana” in Hawaiian. That’s exactly the vibe Choom is going for--the spirit of relaxed good times—straight from the Hawaiian islands to Canadian front doors.

Choom’s exclusive focus is on the recreational cannabis consumer. In fact, they’re one of the very few pure-play recreational public entities. The company has done an impressive job building its vertically integrated, seed-to-sale dedicated recreational cannabis company.

Choom and Emblem Corp. (TSX-V:EMC) just signed a supplier agreement, and Emblem has also acquired an interest in Fire & Flower, a retail cannabis store concept, and lifestyle brand. F&F, valued at approximately $50 million, has applied for 37 retail licenses in Alberta alone and is also exploring retail interests in other Canadian provinces like British Columbia and Saskatchewan.

Choom also owns two British Columbia-based licensed producer applicants, both of which are late-stage applicants. They have agreements in place to acquire two more. With all four poised for approval soon, Choom can ramp up its own production soon. As a plan B, Choom has also entered into a supply agreement with ABcann (TSX-V:ABCN). They’re close partners indeed; in Choom’s recent $7 million raise, ABcann kicked in $4 million.

Choom is casting a wide net when it comes to retail outlets. They’re focusing retail locations and opportunities on the western provinces of Saskatchewan, Alberta, and British Columbia. Currently, Choom has about 50 retail outlets planned there. After that, they’ll focus on moving east. Despite their sizeable investment in the retail brand space, many financial experts say that Choom is undervalued given its market cap of around $60 million.

The market is watching. Their retail outlets should be approved, and any one of its four applicants could be licensed. Time will tell.

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