- SGMD expanding BudCars Cannabis Delivery Service into LA area
- Sugarmade forecasts BudCars business to top $30 million in annualized revenues in Sacramento alone
- Company sees potential for up to 20 new BudCars hubs across California over next two years
Sugarmade Inc. (OTCQB: SGMD), a product and branding marketing company investing in operations and technologies with disruptive potential and an early pioneer within California’s regulated cannabis industry, announced that its recently acquired BudCars Cannabis Delivery Service is expanding into the Southern California marketplace (http://cnw.fm/9n3mD). Initially launched in the Sacramento area, the cannabis home-delivery service has seen unprecedented growth in its first months of operation.
“Our Sacramento locations will pass the $10 million mark for annualized sales within the next 60 to 90 days,” Sugarmade CEO Jimmy Chan stated in a news release. “The growth has been so dramatic that we have had to drastically revise our expectations to the upside, which demands expansion, both in terms of staff and fleet in Sacramento, and in terms of regional expansion into Southern California. As a result, we are acquiring two distribution hub locations in the LA area with cannabis licenses included so we can hit the ground running.”
In the expansion announcement, the company reported that BudCars’ primary Sacramento locations have seen tremendous growth, with revenues consistently increasing 10% week over week. While the growth has been attributed to exploding demand for contactless delivery of cannabis products due to the COVID-19 pandemic, company officials expect the upward spike to continue, even after social-distancing restrictions are loosened. SGMD forecasts its BudCars business to top $30 million in annualized revenues this year in Sacramento alone.
In addition, based on data gathered from its current operations as well as trends in the LA region, the Sugarmade team is confident that each of the two new LA BudCars hubs will provide an annual revenue run-rate of $15 to 20 million – as a moderate baseline estimate. Sugarmade officials pointed to its Sacramento locations, which are reporting a consistent 19–20% net profit on sales, noting that the same margins are expected in the Southern California market.
The two LA locations are just the beginning of the CarBuds expansion. Officials see further expansion potential for up to as many as 20 new BudCars hubs across California over the coming two years, funded primarily by cash from operations.
“We are hiring and expanding our fleet as fast as we can right now to keep up with demand,” said Chan. “We can’t expand fast enough. But that’s a great problem to have, and LA represents an ideal new market for BudCars.”
As one of the few cannabis companies pursuing a vertically integrated business model, SGMD is placing its current focus on the expansion of non-storefront cannabis delivery. In addition to BudCars, the Sugarmade brand portfolio includes CarryOutsupplies.com, SugarRush(TM) and Budcars.com. Sugarmade has benefitted from a remarkable growth spurt thus far in 2020 and will seek to maintain its recent trajectory going forward.
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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