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Sugarmade Inc.’s (SGMD) Shift Toward Virtualization of Cannabis Sector, On-Demand Economy Pays Off with Dramatic Increase in Volume

  • 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://cnw.fm/5NxAD) 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://cnw.fm/jUX5t) 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://cnw.fm/O0C5k). “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://cnw.fm/SUGAR

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