In the race to hold more assets as the adult-use legalization of cannabis arrives in Canada, Choom (CSE:CHOO; OTCQB:CHOOF) announced on Monday (March 19) that the company will acquire a late stage Access to Cannabis for Medical Purposes Regulations (ACMPR) applicant through an amalgamation deal.
The transaction will take place between Choom’s subsidiary Arbutus Brands and International Tungsten. The actual license, if approved, will come from Specialty Medijuana Products, a company based in Sooke, B.C. which International Tungsten has agreed to acquire.
According to Choom, Specialty Medijuana Products submitted its Affirmation of Readiness evidence package to the country’s regulatory agency in the cannabis industry, Health Canada. Choom added it expects a cultivation license to arrive “within the next several weeks.”
Choom also provided an outline of the development the company plans to follow with the current facilities up for inspection by Health Canada. For the next two phases of development, Choom plans to expand the current production capacities to over 29,000 square feet. Then it will construct two new additional buildings for the increase of total production.
“This new facility, a hybrid model of indoor and greenhouse production, is expected to bring Choom’s total production capacity to over 750,000 [square feet,]” Choom revealed.
Details of the transaction for Choom
Holders of International Tungsten common shares will be issued, according to Choom, one common share of the company in exchange for every share of held, up to a combined maximum of 92,000,000 common shares.
“Choom has completed an offering of subscription receipts, at a price of $0.60 per subscription receipt, for aggregate gross proceeds of $7.0 million,” the company said.
Choom is a company in the movement of brand recognition leading its pitch to investors. Its products are designed to appeal to the lifestyle aspect of consuming cannabis and, so far, the company has not made a big push into the cannabis for medical purposes business.
Steven Feldman is an active cannabis investor and serves as a co-founder and director of Liberty Leaf Holdings (CSE:LIB), who also manages the popular @CanadaPotStocks Twitter account,told INN some of the newcomers in the public space are starting to downplay the production capacities and focusing on the lifestyle aspect or the brands proposed to display for consumers.
According to the TMX Money tool on Monday, Choom’s share price closed with a day increase of 19.10 percent, equaling a $0.17 gain to reach $1.06.
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Securities Disclosure: I, Bryan Mc Govern, hold no direct investment interest in any company mentioned in this article.