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Choom Holdings Inc CHOOF

Choom Holdings Inc. is a Canada-based retail cannabis company, which is established as store networks in Canada. The Company’s Choom brand is inspired by Hawaii's Choom Gang, a group of buddies in Honolulu, who loved to smoke weed or, as the locals call it, Choom. The Choom Gang pursued a ‘live in the moment’ lifestyle and their energy has helped shape the Choom culture, which is rooted in the shared belief of cultivating time with friends. The Company is focused on delivering an elevated customer experience through its curated retail environments, offering a diversity of brands for Canadians across a national retail network. The Company operates through two segments: Retail Cannabis and Corporate Operations. The Company’s business strategy is to build retail cannabis chains, with locations across Canada in the provinces that allow for private retailers.


GREY:CHOOF - Post by User

Post by CANNABISCANADAon Dec 03, 2020 8:12am
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Post# 32024648

Post on retail in Canada

Post on retail in Canada
 3 MIN READ  •  BY MICHAEL BERGER
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As the number of COVID-19 cases continues to trend higher, countries are announcing new restrictions and lockdown measures. 

For months, experts like Dr. Anthony Fauci and former Food and Drug Administration (FDA) commissioner Scott Gottlieb have been warning about a resurgence of the virus in the winter and we have been seeing that prediction come to fruition. 

The question for the market this time around is related to the industries and the companies that have the ability to survive the current economic climate. In Canada, the cannabis industry is one of the verticals that is expected to survive the COVID pandemic and we will monitor how the companies adapt to new lockdown measures. 

When the first wave of the COVID pandemic hit Canada, cannabis retailers needed to adapt to a curbside pickup model. Although the transaction process takes longer in the current market environment, demand for cannabis has not been impacted by the pandemic. So far, consumers seem to be willing to deal with the inconveniences in order to stay safe and we are favorable on the defensive nature of the industry. 

Similar to alcohol and cigarettes, demand for cannabis remained strong during a turbulent first half of the year. According to Health Canada data, cannabis revenues have been trending higher on a monthly basis and has exceeded $200 million of revenue in four straight months (June to September). When compared to the same period last year, this represents more than 100% growth and we find this to be significant. 

During the first half of the year, we learned a lot about Canadian cannabis companies that were able to remain profitable in a post-COVID world. Many of these companies had to cut costs to improve margins and several industry leaders announced huge losses after reporting massive write downs of previously acquired assets. 

On the retail side of the Canadian cannabis industry, Fire & Flower Holdings Corp. (FAF.TO) (FFLWF)Canopy Growth Corporation (WEED.TO) (CGC) and Alcanna Inc. (CLIQ.TO) (LQSIF), are considered to be industry leaders. We expect these operators to report major changes to the retail side of the business. We believe that these changes will look a lot like what we saw earlier in the year. 

When compared to the first lockdown, we expect the second lockdown to be different for the cannabis industry from a scale standpoint. Many operators were not positioned for success in the first lockdown and had to revamp the business to be able to capitalize on the new market environment. As the country heads into a second lockdown, more businesses are positioned to be able to capitalize on the cannabis industry and this is a trend that we will be following. 

From a population standpoint, Ontario is the largest province in Canada and we expect other provinces to follow its lead. Going forward, we will monitor how British Columbia responds to rising COVID cases and this is a province to be aware of. We would not be surprised if the cannabis sector came under pressure as a result of the lockdown in Ontario, but believe that the industry is better positioned to handle a crisis than it was earlier this year.

 

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