- SGMD
acquires significant stake in Sacramento-based Budcars Cannabis Delivery
Service
- Sugarmade
sees dramatic expansion in overall delivery volume; March deliveries top
Februray volume by more than 300%
- Company’s
strategy to capture healthy margins, nail down competitive advantage in
market share looks to be right move
A “new and bold shift in its business strategy” made earlier
this year by Sugarmade Inc. (OTCQB: SGMD) appears to have paid off
big time for the company. Committed to play in the Hemp and Cannabis space,
SGMD announced (http://ibn.fm/LAMBY)
that it was moving “toward the virtualization of the cannabis sector as part of
the major shift in the U.S. business model toward an on-demand economy.”
In the weeks following the announcement, Sugarmade made
several strategic moves to launch on-demand and related business operations
through internally developed initiatives and new relationships with proven
sector business operators. Among the most immediately successful of those moves
was the company’s acquisition (http://ibn.fm/ttrAi)
of a significant stake in Sacramento-based Budcars Cannabis Delivery Service,
owned by Indigo Dye Group Corp.
An agreement announced in February 2020 stipulated that
Sugarmade would acquire 40% of Budcars and would be granted an option to
purchase an additional 30% stake, ultimately providing SGMD with a controlling
interest in the growing delivery service, which serves the greater Sacramento
metropolitan area. Budcars delivers a wide range of cannabis products to the
metropolitan area, where the population is showing growing acceptance of
cannabis usage and delivery and scores above the 50% percentile in terms of
cannabis usage per capita.
Less than a month after making that initial announcement,
Sugarmade followed with a second, even more impressive, statement. Since
becoming heavily involved in the day-to-day operational and strategic
foundation of Budcars following its initial investment and investor agreement,
SGMD had seen a dramatic expansion in overall delivery volume with March
deliveries topping Februaryvolume by more than 300%.
“The company believes this jump has been driven by an
improving overall cannabis market in California, an infusion of operational
talent and resources, and an expanded geographic service area,” the statement
detailed (http://ibn.fm/701ih).
“In order to meet demand, Budcars is increasing its road fleet, inventory,
staffing, and will be positioning strategic billboard campaigns along major
freeways in the service region… Management now projects a Budcars top-line
run-rate capable of surpassing $15 million in annualized sales before end of
2020, provided recent data on growth in daily orders is reliable and indicative
of the impact of the Company’s recent measures over coming months.”
Sugarmade CEO Jimmy Chan observed that “our move to take a
controlling interest in Budcars is about capturing the healthy margins set to
define the California legal cannabis market in 2020 and beyond, and about
nailing down a competitive advantage in market share afforded by a
well-organized delivery service, which is an enormous customer hot-button in
the legal cannabis marketplace. So far, we are seeing powerful
performance-based feedback from the marketplace that we’re on the right track.”
Based in Monrovia, California (a suburb of Los Angeles),
Sugarmade is a product and brand marketing company with numerous operations,
such as packaging, sanitary supply and paper goods for diverse industries.
Dedicated to getting the highest caliber of THC and CBD to its customers’ door,
the company’s priority is to ensure that its customers receive the
highest-quality cannabis product free from logistical hassles. SGMD specializes
in growing and acquiring innovative brands to maximize value for company
employees, shareholders and other stakeholders. Sugarmade believes the future is
extremely promising as the company expands operations within the cultivation
sector and rapidly increases its revenue base.
For more information, visit the company’s website at www.Sugarmade.com
NOTE TO INVESTORS: The latest news and updates
relating to SGMD are available in the company’s newsroom at http://ibn.fm/SUGAR
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