Choom Holdings Inc. (CSE:CHOO), one of the Canadian marijuana stocks, said it has signed a LOI to acquire a Florida cannabis applicant
SmallCapPower | March 27, 2019: Choom Holdings Inc. (CSE:CHOO), one of the Canadian cannabis stocks, Monday announced that its wholly-owned U.S. subsidiary, Choom Holdings USA Inc, has signed a Letter of Intent (LOI) to purchase a 95% equity interest in a Florida-based, vertically-integrated cannabis applicant. The Florida-based company is filing its Master License application to operate ~25 retail locations with potential for more as the number of registered patients increase, along with a micro-processing and cultivation facility for medical purposes. Choom plans to use its medical brand, Clarity Medical Centres, to operate a network of branded Medical Marijuana Treatment Centers, once the transaction is complete. The transaction is indicative of Choom building on its plans to become a multi-state operator.
Florida represents one of the largest medical marijuana market in the United States, with an estimated 190,000 qualified patients, up from ~168,000 at the start of 2019. Florida has recently allowed the use of smokable medical marijuana products, potentially opening the program to a considerably larger audience.
Choom Holdings President and CEO Chris Bogart said, “We are very excited to be expanding into Florida and to bring Choom’s medical brand into that market. Florida’s medical marijuana program is a very attractive opportunity for us seeing that it allows for vertically-integrated operations and it has been a market we’ve had our sights on for a while now. This investment aligns with our strategy of becoming a multi-state operator in the U.S. 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.”
Choom Holdings stock currently trades at a market capitalization of C$127.1 million with a price-to-book multiple of 7.2x.
Disclosure: Neither the author nor his family own shares in the company mentioned above.
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