Sugarmade Inc. (SGMD) Enters Kentucky Hemp Boom, Announces Completion of BZRTH Audit

• Sugarmade recently announced an initial investment in Kentucky’s Hempistry
• The company is in the process of acquiring leading hemp-supply firms that are currently producing more than $70 million in annual revenue
• Sugarmade has announced the completion of audits for BZRTH, a target acquisition

Sugarmade Inc. (OTCQB: SGMD), a product and brand marketing company investing in products and brands with disruptive potential, initially entered the burgeoning hemp sector through hydroponics. Today, Sugarmade is one of the leading providers of hydroponic equipment and supplies in the industrial hemp space.

A recent article discussed Kentucky’s hemp boom and the interest it is creating for investors (http://ibn.fm/0fvFH). The surge is providing an alternative crop for farmers struggling to make a living in the weakening farming industry. Sugarmade participates in supporting farmers through both investment and by offering necessary hydroponic supplies.

In 2014, Kentucky had 20 approved hemp growers across 33 acres in a trial run. By 2018, those numbers had increased to 210 growers and 6,700 cultivated acres. This sustained rapid expansion has been aided considerably by the passage of the 2018 Farm Bill; recent numbers indicate that 60,000 acres throughout the state are now devoted to hemp production, with nearly a thousand jobs created. Political support has helped Kentucky become the second-largest producer of hemp, while Colorado holds the number one spot.

Hempistry Inc. is a Kentucky-based hemp cultivator that began legal hemp cultivation in Western Kentucky last year. Sugarmade announced an initial investment of $190,000 in Hempistry (http://ibn.fm/na2SQ), part of a secured option to invest up to $1 million, that will allow the company to receive 12 percent of Hempistry’s biomass and converted distillate or isolate cannabidiol (CBD) profits for the upcoming 2019 farming season.

“We are also pleased to report we have made an initial investment in hemp cultivator Hempistry where Sugarmade will have a direct participation in the profits from this year’s hemp crop,” Sugarmade CEO Jimmy Chan noted in a news release. “Operations in Kentucky are well underway.”

Sugarmade is also in the process of acquiring several leading hemp-supply firms that are currently producing more than $70 million in annual revenue. BZRTH Inc., a hydronic-cultivation supplier, is a target acquisition of the company. Sugarmade recently announced that BZRTH has wrapped up its audits for previous financial periods, putting SGMD one step closer to finalizing the acquisition. The overall progress of the strategic move is dependent on completion of the audit – now done – and the availability of funds to close the transaction. Currently, $1 million has been paid toward closing the deal.

“The closing of the BZRTH audit provides Sugarmade with several more options for growth and our recently effective S-1 filing open doors for financing options,” Chan added. “We are analyzing several of these options in order to select the path for greatest shareholder maximization.”

Sugarmade is striving to be one of the largest publicly traded hydroponic supply companies and will continue to capitalize of the market boom through investment in the hemp and CBD spaces. In addition to expanding its North American footprint, Sugarmade is also expanding into the European hydroponics supply market, opening additional revenue opportunities. By 2025, the global hydroponics market is anticipated to reach $12.1 billion, with Europe dominating the industry (http://ibn.fm/V4TUs).

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 athttp://ibn.fm/SUGAR

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