NEW YORK, March 04, 2020 (GLOBE NEWSWIRE) — via NetworkWire – Sugarmade, Inc. (OTCQB:SGMD) (“Sugarmade”, “SGMD”, or the “Company”) is excited to announce a dramatic 300 percent sequential monthly jump in delivery volume in BudCars Cannabis Delivery Service (“Budcars”) in February. The rise in volume follows the Company’s negotiated agreement toward a controlling stake in Budcars and its investment in expanding the leading delivery service’s operations and reach in Northern California. Management now projects a Budcars top-line run-rate capable of surpassing $15 million in sales in 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.
The Company has negotiated a 40 percent stake in Budcars with a provisional option to assume a controlling ownership position through the acquisition of an additional 30 percent stake.
“Some of our shareholders have suggested that our vision for a massively expanded and vertically integrated Budcars might be explained to the world as the ‘Uber Eats of the cannabis market.’ But we believe that’s actually a dramatic underestimation of where Budcars is headed,” remarked Jimmy Chan, CEO of Sugarmade. “This is far more promising from a bottom-line perspective, given that we aren’t simply delivering someone else’s product. The retailer gets the juicy 20 percent net margin in this business. We are positioning ourselves as a ‘Cannabis concierge service’ focusing on a truly unique cannabis experience.”
Management notes that recent regulatory changes in the California legal cannabis market point to a dramatic turnaround in progress in 2020 as competition from unregulated suppliers is suppressed, widening margins for licensed producers and distributors. The Company cites this transition as key in driving its strategic investment in Budcars, which was predicated on a verticalization premise that positions the Company as a dominant cannabis supplier, driving market share gains through the value-add of its efficient delivery service without sacrificing the core margin opportunity coming into place as a legal cannabis supplier.
Since Sugarmade management became heavily involved in the day-to-day operational and strategic foundation of Budcars in early February, following its initial investment and investor agreement, the Company has witnessed a dramatic expansion in overall delivery volume with February deliveries topping January volume by more than 300 percent. 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. 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.
Chan continued, “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.”
About Sugarmade, Inc.
Sugarmade, Inc. (OTCQB: SGMD) is a product and branding marketing company investing in operations and technologies with disruptive potential. Our Brand portfolio includes CarryOutsupplies.com, SugarRush™ and Budcars.com. For more information please reference www.Sugarmade.com.
FORWARD-LOOKING STATEMENTS: This release contains “forward-looking statements” within the meaning of the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995. Forward-looking statements also may be included in other publicly available documents issued by the Company and in oral statements made by our officers and representatives from time to time. These forward-looking statements are intended to provide management’s current expectations or plans for our future operating and financial performance, based on assumptions currently believed to be valid. They can be identified by the use of words such as “anticipate,” “intend,” “plan,” “goal,” “seek,” “believe,” “project,” “estimate,” “expect,” “strategy,” “future,” “likely,” “may,” “should,” “would,” “could,” “will” and other words of similar meaning in connection with a discussion of future operating or financial performance. Examples of forward looking statements include, among others, statements relating to future sales, earnings, cash flows, results of operations, uses of cash and other measures of financial performance.
Because forward-looking statements relate to the future, they are subject to inherent risks, uncertainties and other factors that may cause the Company’s actual results and financial condition to differ materially from those expressed or implied in the forward-looking statements. Such risks, uncertainties and other factors include, among others, such as, but not limited to economic conditions, changes in the laws or regulations, demand for products and services of the company, the effects of competition and other factors that could cause actual results to differ materially from those projected or represented in the forward looking statements.
Any forward-looking information provided in this release should be considered with these factors in mind. We assume no obligation to update any forward-looking statements contained in this report.