Choom Shareholder Update, September 2020.
Since we last connected, there has been an incredible amount of change that has happened in the world, as well as at Choom. The beginning of the year saw the cannabis industry take an exciting foray into the expansion of Cannabis 2.0 products; the additional product categories that were brought to market provided the industry with the opportunity for increased growth. Within the same quarter, we saw this excitement of the industry dim, as we began to face the unknown certainty of the market through the still unknown, long-term impact of the Covid-19 pandemic.
As the retail industry began to faulter, Choom’s agility was key and has separated us from those that are now on the decline in our space, and the broader retail industry. We took precautions for both the health of our staff and business by temporarily closing 6 locations, and as a result, we were able to remain nimble in manoeuvring through this uncertain time.
Through the economic hardship of the pandemic and the capital markets providing limited finances to the Canadian Cannabis sector, Choom was able to find opportunity; the acquisition of Phivida benefited the company on multiple levels. Firstly, from a tech standpoint, providing Choom with top tier platforming capabilities, which we are now in the process of adapting to best fit our goals. Secondly, from a monetary standpoint, the cash-on-hand will further support Choom’s operations. And lastly, the acquisition of Phivida’s portfolio of brands; Vita+, FeelOki, Greencamp, and Bloomgroove which, in the coming months, we will be looking to maximize value on.
Choom has seen a fruitful summer season, seeing record growth in customer count, transactions, basket growth, as well as positive margin expansion as we continue to refine our product assortment by geographic preferences. This upward trend has contributed to our profitability in our brick and mortar locations, which is in part thanks to the strong execution of our corporate strategy.
With the acquisition of Phivida, we are currently underway with a full re-platforming of our website that will completely unify the experience of our instore digital as well as online. As the platform is customized and wholly-owned by Choom, we will have the advantage of building out better capabilities in terms of our strategic needs. This competitive advantage for Choom will allow us to better leverage digital across the brand to improve business intelligence throughout our clients, people, product, and operations. With a 3-month development process to bring to life the Choom 2.0 website, we will be providing our client base with a true omnichannel experience. This will be enabled through the advanced capabilities in the e-commerce, SEO, the enablement for future delivery services, as well as conveying our brand story cohesively across all channels.
We continue to centralize and specialize our operating model by attracting and hiring talent with top tier retail experience. We have also recently formalized and rolled out a selling and servicing model, enabling and incentivising our instore educators to maximize their interactions with clients, enhancing the in-store experience.
We have begun the re-opening of our temporarily closed locations, with the reopening of Westlock in August, and an assessment underway for the re-opening of the balance of these stores. As we continue to look forward in our growth strategy, the next location in our build pipeline is Yaletown in Vancouver, which we are aiming to break ground on this fall, this on the heels of the opening of our Flagship location in Olympic Village, Vancouver, which opened in May. Vancouver will continue to be a focal point for Choom’s growth, as we have now acquired 4 locations in the city to operate, differentiating us from other national players, who have no presence in Canada’s second-largest city for Cannabis operations.
Choom has a bright future ahead of it, and I am excited to continue, with help of our exceptional team, to roll up our sleeves and drive the brand forward, with both short- and long-term goals in mind.
I thank you for your continued support of Choom, you are an integral part of this team.