Skip to main content

Sugarmade Inc. (OTC US: SGMD) Positions as Vertically Integrated Farm-to-Door Cali Cannabis Leader (NASDAQ: GNLN) (OTC US: CRLBF) (NASDAQ: SNDL)

By: OTC

The legal cannabis trend is a long-term phenomenon driven by expanding demand as the inevitable broad legalization of recreational pot marches forward.

New York and New Jersey were the most recent states to join the trend in the US. But California is still the biggest market, and it likely will be for the long run.

That’s why we turn here to a very interesting developing story in the space: Sugarmade Inc (OTCMKTS:SGMD), a small-cap pot stock with designs on uplisting to a major exchange to join companies like Greenlane Holdings Inc (NASDAQ:GNLN), Cresco Labs Inc (OTCMKTS:CRLBF), and Sundial Growers Inc (NASDAQ:SNDL).

 

Once Upon a Farm

The Sugarmade story is particularly interesting given news out from the company this morning.

It appears SGMD is positioned to make good on the strategic objectives it has outlined in recent updates: to become a fully vertically integrated farm-to-door cannabis company with an expanding supply base and an expanding end market footprint.

SGMD has already become one of the fastest growing cannabis delivery dispensary plays in the booming California cannabis marketplace. It has a thriving hub in Sacramento and just entered the LA metro area with a secondary hub. It also plans additional expansion steps with new hubs, according to an update put out late last year.

This model has been highly successful over the trailing twelve-month period. However, the company wants to widen its margins, which demands an in-house supply infrastructure.

Accordingly, Sugarmade Inc (OTCMKTS:SGMD) has recently talked up the idea of acquiring a major cannabis production facility or farm to supply itself and cut out the supplier burden, widening margins and driving more of its growing revenues to the bottom line for shareholders.

This morning’s news would appear to represent just such a move. To wit: the company announced the signing of a binding LOI for the acquisition of Lemon Glow Company, Inc., a California corporation, including all of Lemon Glow’s assets, interests, property, and rights, which includes Six Hundred Forty (640) acres of real estate located in Lake County, California, outside of the Commercial Cannabis Cultivation Exclusion Zones.

According to the release, as stipulated in the LOI, thirty-two (32) acres of the Property have been designated for outdoor cannabis cultivation. Sugarmade and Lemon Glow management have agreed that the annual potential cultivation yield at the Property is approximately four thousand (4,000) pounds of dry trimmed cannabis flower per acre, or approximately 128,000 pounds of dry trimmed cannabis flower per year.

In other words, according to the company, the cultivation property at its apparently soon-to-be-acquired farm has the capacity to produce as much as 64 tons of dried, trimmed cannabis flower, which would make it one of the most prolific outdoor cannabis cultivation farms in California.

 

From the Ground Up

With the ability to produce massive quantities of dried flower at cost of basic production, Sugarmade Inc (OTCMKTS:SGMD) stands to book enormous gains in profitability on its rapidly growing delivery distribution system.

But will it actually happen? And will it be run effectively if so? Those questions were also addressed in the company’s release.

In the latter case, according to the release, Lemon Glow executive team members Sam Luu and Ryan Santiago will, according to the LOI, become the core management team at Sugarmade’s cannabis cultivation site at the Property, with both continuing on with the business operation under three-year management contracts. The core management team has more than 30 years of combined experience in cultivation.

And in the former case, Sugarmade has apparently already deposited $400K in earnest money towards the acquisition. The Company has thirty (30) days to close the acquisition from the effective date of the LOI, which has been established as March 28, 2021.

In other words, there’s a ticking clock already in action. And one would certainly assume that the company wouldn’t have already put down nearly half a million dollars in earnest money on a deal it plans to walk away from.

“As discussed in our recent corporate update, we are taking aggressive steps toward the establishment of full farm-to-door cannabis operations at scale in the California cannabis marketplace, and this acquisition represents a major part of that strategy,” commented Jimmy Chan, CEO of Sugarmade.

DISCLAIMER:  EDM Media LLC (EDM), is a third party publisher and news dissemination service provider, which disseminates electronic information through multiple online media channels.  EDM is NOT affiliated in any manner with any company mentioned herein.  EDM and its affiliated companies are a news dissemination solutions provider and are NOT a registered broker/dealer/analyst/adviser, holds no investment licenses and may NOT sell, offer to sell or offer to buy any security.  EDM’s market updates, news alerts and corporate profiles are NOT a solicitation or recommendation to buy, sell or hold securities.  The material in this release is intended to be strictly informational and is NEVER to be construed or interpreted as research material.  All readers are strongly urged to perform research and due diligence on their own and consult a licensed financial professional before considering any level of investing in stocks.  All material included herein is republished content and details which were previously disseminated by the companies mentioned in this release.  EDM is not liable for any investment decisions by its readers or subscribers.  Investors are cautioned that they may lose all or a portion of their investment when investing in stocks.  For current services performed EDM has been compensated five thousand dollars for news coverage of the current press releases issued by Sugarmade Inc by a third party.

EDM HOLDS NO SHARES OF ANY COMPANY NAMED IN THIS RELEASE.

This release contains “forward-looking statements” within the meaning of Section 27A of the Securities Act of 1933, as amended, and Section 21E the Securities Exchange Act of 1934, as amended and such forward-looking statements are made pursuant to the safe harbor provisions of the Private Securities Litigation Reform Act of 1995. “Forward-looking statements” describe future expectations, plans, results, or strategies and are generally preceded by words such as “may”, “future”, “plan” or “planned”, “will” or “should”, “expected,” “anticipates”, “draft”, “eventually” or “projected”. You are cautioned that such statements are subject to a multitude of risks and uncertainties that could cause future circumstances, events, or results to differ materially from those projected in the forward-looking statements, including the risks that actual results may differ materially from those projected in the forward-looking statements as a result of various factors, and other risks identified in a company’s annual report on Form 10-K or 10-KSB and other filings made by such company with the Securities and Exchange Commission. You should consider these factors in evaluating the forward-looking statements included herein, and not place undue reliance on such statements. The forward-looking statements in this release are made as of the date hereof and EDM undertakes no obligation to update such statements.

 

 

 

 

 

Media Contact:

EDM Media LLC

Email: IR@EDM.Media

Office: 800-301-7883

EDM.Media

 

 

Data & News supplied by www.cloudquote.io
Stock quotes supplied by Barchart
Quotes delayed at least 20 minutes.
By accessing this page, you agree to the following
Privacy Policy and Terms and Conditions.