Choom Holdings
Cannabis

Choom Holdings Inc (OTCMKTS:CHOOF) Plotting A Comeback As Retail Strategy Gains Traction

Choom Holdings Inc (OTCMKTS:CHOOF) is trying to make a comeback after coming under pressure from short sellers in recent weeks. The stock has lost a substantial amount of market value, since the start of the year, but as it stands, a reversal in trading trend may be around the corner.

Choom Holdings Price Action

The stock has gapped higher in a classic emerging bullish trend. However, taking into consideration the underlying long-term bear trend, it might be wise to wait for further confirmation on the stock closing above the $3 a share mark to reaffirm the emerging bullish trend.

CHOOF Daily Chart

A close above the $2.2 handle could open the door for the stock to rise to the $3 a share handle which happens to be a key resistance level. On the downside, Choom Holdings faces immediate support at the $1.64 handle below which, it remains susceptible to plunging to its 52-week low.

Choom Holdings has every reason to spike higher if recent development in the execution of its business plan is anything to go by.

Before we look at the catalysts likely reinvigorate the stock’s resurgence, let us look at what the company does in pursuit of growth.

Choom Holdings through its subsidiaries is engaged in the business of cultivating and selling cannabis for medicinal purposes. The company is seeking to build out a premier recreational brand across Canada, in pursuit of growth and shareholders value, in the multi-billion industry.

Cannabis Growing Ambitions

Choom Holdings has entered into a definitive agreement that paves way for it to complete the acquisition of international Tungsten Inc. which is in the process of acquiring Marijuana Specialty Products Inc.

The transaction will give Choom Holding access to a company that has submitted AOR evidence package to health Canada in pursuit of a cannabis cultivation license.

The management expects the acquisition to result in significant synergies and in the process accelerate Choom Holdings timeline towards achieving as a sales license needed to target Canada’s C$22.6 billion cannabis industry.

The acquisition should also improve and advance the company’s operational scale and production capacity. In addition, it marks an important milestone in the company’s bid to become a fully integrated cannabis company, representing premier lifestyle brands in the country.

Capital Raise

Choom Holdings balance sheet should be able to support the company’s expansion drive on completion of a receipt financing of $7 million. ABcann Global has already committed to investing $4 million into the company as part of the round of financing.

In February, the company closed a non-brokered private placement of C$2.7 million on the issuance of 5.4 million units. Choom Holdings has been raising capital to accelerate the advancement of its development strategy in pursuit of growth opportunities in the cannabis industry.

Strengthening Supply Channel

The company has also entered into a supply and financing agreement with ABcann Global, which is one of the nation’s largest licensed cannabis producers.

The supply agreement paves way for Choom Holdings to roll out its products across a wide range of retail outlets. It should also allow the company to expedite the development of recreational products.

“The Supply Agreement will demonstrate our commitment to becoming one of Canada’s leading retailers in the cannabis space. Working with ABcann will provide us with a premium line of products, with a strong focus on quality, in the roll-out of our retail store strategy, upon receipt of applicable regulatory approvals,” stated Chris Bogart, President, and CEO of Choom™.

Choom Holdings has already signed an agreement with Okanagan consortium as part of its retail strategy that seeks to develop a chain of branded retail cannabis dispensaries across Canada.

Pursuant to the agreement, the consortium now known as Thompson Okanagan Choom Group is to open multiple Choom branded retail dispensaries across Thompson-Okanagan region. The consortium is comprised of local investors and business partners with decades of business experience jay should help in the success of Choom locations

“Choom ™ is using design and retail strategies that have worked successfully at some of the most profitable storefronts in the country. We are telling our Choom story with our stores and will elevate the concept of a high-quality product through our new retail environments, and we’re inviting others to join us,” said Kent Adams – VP Marketing.

What Next for Choom Holding Stock

Despite its dwindling share price, Choom Holdings has continued to strengthen its growth prospects in the fast-growing marijuana industry. Partnerships with leading sales supply entities demonstrate the company’s ambitions of becoming a key player in the sale of marijuana in Canada.

There is no doubt that a dip in value from highs of $7 a share to the sub $1 a share handle, raises serious doubts the company’s prospects. However, given that the sell-off came at a time when the entire industry was under pressure, means the stock will be able to recover as sentiments in the industry improve.

Given the underlying bearish run, it may be wise to wait for the stock to rise above the $3 a share handle to take a position in the stock, as a long-term play.

Disclosure: We have no position in CHOOF and have not been compensated for this article.

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Choom Holdings Inc (OTCMKTS:CHOOF) Plotting A Comeback As Retail Strategy Gains Traction
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