Choom Grows 200% in 2021
Choom Holdings, a Canadian retail cannabis company with stores in Alberta, BC, and Ontario, announced revenue growth of 200% in 2021 compared to 2020, earning $22.05 million this year. Through cost-efficiencies, new processes and great talent, the company significantly reduced its negative EBITDA.
During the 2021 fiscal year ending June 30, 2021, Choom reported revenue of $22.05 million, a significant increase over the $7.4 million earned in 2020. The brand’s gross margin increased 6.31% to 36.9% as well, which Choom says is the result of its pricing and assortment, utilizing a price-matching strategy to keep loyal customers from defecting to value players. In the process of refining its inventory management, Choom managed to decrease total inventory by 9% but turned that inventory over 15.3 times in 2021, compared to five times in 2020.
These refinements and tweaks didn’t stop in the sales and inventory department, however, and while salary and wages increased to $4.22 million compared to $2.53 million the year before, these wages only accounted for 19% of revenue rather than 34% the year before. General and administrative costs, as well, accounted for considerably less of the pie this year, with these expenses costing $4.04 million, or 18.33% of revenue, compared to $5.85 million, or 79.52% of revenue, in 2020.
“I am thrilled with the year-to-date performance of the brand, growing topline revenue by 200%, increasing gross profit at a faster rate than revenue with a 262% increase, and reducing our total SG&A spend on the year by 1.45%,” said Choom CEO Corey Gillon in a press release. “As COVID-19 restrictions continued to affect the broader retail landscape, cannabis retail was not exempt; from capacity restrictions to provincial lockdowns, the market was marred by its affects. Despite these headwinds, Choom continued to successfully execute on its strategy.”
Success in Sales
According to the results, Choom’s strongest market was in BC, where the brand operates two retail stores, reporting a 1860% year-over-year increase. In Ontario, with its significant increase in new retailers and restrictions for private retailers during COVID-19 lockdowns, sales slowed slightly in the latter part of the year, however, “Choom believes that there will be a market normalization on store count in Ontario in 2022, like what was seen in Alberta”, going on to say that with its price matching guarantee and its strategy of providing customers with a great experience, it has continued to see strong customer loyalty.
Choom has been seeing success online, too. After re-platforming its website and implementing an SEO strategy, e-commerce sales represented around $1 million to date since launching in March this year, as well as a 136% increase in clicks from Google, 508% more impressions from Google, and a 70.7% engagement rate on the website, with 80,000 monthly product impressions.
Currently, Choom operates 17 stores across Alberta, Ontario, and BC, with more in production in Vancouver and Ottawa.