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Sugarmade, Inc. (SGMD) Building Supply Resources to Ride Wave of Cannabis Industry Growth

  • Cannabis industry revenues expected to top $20 billion this year and grow to over $63 billion by 2024
  • Hydroponics market expectations will rise with cannabis’ fortunes, anticipating a 20.7 percent CAGR worldwide through 2023
  • The predictions have captured specialty product supplier Sugarmade’s attention, and the company continues to develop its hydroponic supply lines
  • Sugarmade’s acquisition agreement with hydroponics supplier Sky Unlimited and the company’s investment in hemp cultivator Hempistry exemplify its growth plans

Specialty product supplier Sugarmade, Inc. (OTCQB: SGMD) is sweetening its investment in the increasingly legalized hemp sales markets by strengthening its grasp on hydroponic system supplies and inverting capital into cultivation.

Sugarmade has developed its vision as a company that provides what certain food industry businesses need by establishing itself as a supplier for a variety of products. The company’s CarryOutSuppies.com operation provides custom-printed and generic quick-service restaurant supplies including paper and plastic cups for cold beverages, cups for coffee and ice cream, cup sleeves, plastic spoons, etc. The company claims a market share of between 25 and 30 percent of such products in the frozen yogurt and ice cream industries.

The swelling tide of public interest in legalizing cannabis and cannabis-derived products has created new opportunity for Sugarmade and its hydroponics supply business. That opportunity has captured Sugarmade’s attention, and the company stated in its most recent 10-Q filing that it planned to continue concentrating “primarily on the hydroponic and cultivation market place,” along with its restaurant supplies, and that “we are currently analyzing expanding our business operations into the hydroponic and cultivation retail sector via direct acquisitions of participants in that market sector.”

Hydroponics involves cultivating plants in a manner that conserves water, nutrients, lighting and labor to the extent possible through best efficiency practices, and Sugarmade’s products include soil-containing grow bags, odor-resistant transport and storage products, and lighting. Since the filing of the 10-Q statement in August, the company has reached an acquisition agreement with Nevada-based Sky Unlimited that gives it control over an increased array of products ranging from advanced lighting systems to the super-oxygenating AeroFlo 60 aeroponic system, which is praised by growers, academics and researchers alike for its consistent quality of performance. Researchers continue searching for ways to apply technology to the needs of hydroponic systems to maximize the predictability of their outcomes and augment the efficiency of labor (http://cnw.fm/kF9qB).

Sugarmade’s decision to increase its 2019 fiscal calendar revenue guidance from $30 million to $70 million following the acquisition of Sky Unlimited, as well as its agreement to invest up to $1 million in Hempistry’s hemp-growing operation in Kentucky, is evidence of the revenue that Sugarmade expects such operations to generate. Industry publication BitCanna reported in July that worldwide legal cannabis spending topped $14 billion in 2016, grew to $16.6 billion in 2017 and is on track to top $20 billion this year, drawing on various analysts’ statistics. The trending increase in those numbers creates a scenario for what BitCanna refers to as a “hotbed for investment,” and the publication anticipates further growth to as much as $63.5 billion by 2024 (http://cnw.fm/aJmw0).

A recent CannabisNewsWire report noted projections that the hydroponics industry will benefit in tandem with cannabis’ fortunes, anticipating a six-year CAGR of 20.7 percent to a $13.84 billion worldwide industry in 2023, with a similar CAGR driving the U.S. market alone to about $3.7 billion in revenues by 2025 (http://cnw.fm/5YAsb).

For more information, visit the company’s website at www.Sugarmade.com

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