After a solid start to the year, Choom Holdings Inc (OTCMKTS: CHOOF) is turning out to be a bounce-back play in the wake of a minor correction from this year highs. The stock has started surging in what appears to be a continuation of a bull trend that started early this year.
Choom Holdings Price Analysis
The uptick in the upward momentum follows the confirmation that the company is poised to expand its footprint in the US cannabis marketplace. Choom has made a number of strategic investments as it seeks to become a multi-state cannabis operator in the US.
The company has also achieved a number of strategic growth initiatives as part of a retail development strategy, in pursuit of revenue streams. In the recent past, the company has inked a strategic collaboration with the Better Choice Company as it seeks to venture into the CBD animal health products.
It thus does not come as a surprise that the stock has started bottoming out from the $0.40 mark. An uptick in investors’ sentiments, as well as market activity, indicates the stock could be on its way back to the $0.56 mark, the immediate resistance level.
Choom Holdings might have to rally and close above the $0.56 mark to affirm its bounce back credentials after a harrowing crash late last year. Above the $0.56 technical resistance level, the next focus will be on the $0.80 mark standing in the way Choom Holdings turning bullish.
In our view, Choom Holdings remains well supported for further upside action after bottoming out from the $0.30 level.
About Choom Holdings
Choom Holdings engages in the cultivation, production, and distribution of cannabis for medical purposes as well as recreational use. The company is in the process of establishing one of the largest retail networks in Canada and the U.S.
Retail Distribution Network Expansion
Choom Holdings has started bottoming out following a steep pullback late last year. An uptick in market sentiments is well-supported by a flurry of positive developments that continue to strengthen investor’s sentiments in the stock.
It all started with the company confirming it is developing a robust retail distribution network as part of an effort of strengthening sales channels. Over the past few months, the company has secured 12 additional retail opportunities in Alberta and British Columbia.
The company has also completed the build-out of 17 retail locations in Western Canada as it also continues to work on eight additional retail locations.
The acquisition of Clarity Cannabis Medical has resulted in Choom Holdings gaining access to five new medical centers as well as an established telemedicine platform.
“Choom has demonstrated a strong commitment to rapidly executing its strategic growth plans by developing a sophisticated retail channel across Western Canada while diversifying their operations through further expansion into Ontario. Through our strategic investment, we have helped to expedite Choom’s commercial launch across Canada,” said Terry Booth, CEO of Aurora.
Entry into the US is one of the Company’s biggest achievements as it expands its footprint into the biggest cannabis marketplace with vast opportunities for growth. The country has already acquired an equity stake in a New Jersey-based medical, retail dispensary to kick-start its push for market share.
In New Jersey, Choom Holdings intends to advance its retail store strategy as it also eyes licenses to operate maximum allowable cannabis stores. Plans are underway to create a network of branded stores using Clarity Medical centers.
Choom has also set sights on the Florida Cannabis market as part of a plan to become a multi-state cannabis operator. The company has already inked a deal to acquire a 95% equity stake in a vertically integrated cannabis applicant in the state. The Florida company is pushing for Master License application that will allow it to operate up to 25 retail locations.
“This investment aligns with our strategy of becoming a multi-state operator in the US and helps us to bolster our growth targets. Florida is home to over 21 million residents and has shown impressive year over year growth on the number of registered patients with a large portion of the market being relatively uncaptured,” states Chris Bogart, President & CEO of Choom.
Choom Holdings has a lot of ground to cover on the upside after a steep pullback late last year. Improving underlying fundamentals should continue to support further upside action as the stock’s market sentiments continue to edge higher. Overall, Choom Holdings is an exciting long-term play on taking out the $0.56 resistance level.
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Disclosure: We have no position in CHOOF and have not been compensated for this article.