NEW YORK, Feb. 11, 2020 (GLOBE NEWSWIRE) — via NetworkWire – Sugarmade, Inc. (OTCQB:SGMD) (“Sugarmade”, “SGMD”, or the “Company”), today announces the closing of an agreement to acquire a significant stake in Sacramento-based Budcars Cannabis Delivery Service, owned by Indigo Dye Group Corp. Sugarmade will acquire 40% of Budcars for $700,000 and will be granted an option to purchase an additional 30% stake, providing Sugarmade with a controlling interest in the growing delivery service, which serves the greater Sacramento metropolitan area.
“Many of us have seen the multitudes of negative news stories about problems in California’s regulated cannabis industry. While there certainly are issues, there are also many positive changes happening as state regulators fine-tune the system,” commented Jimmy Chan, CEO of Sugarmade. “One of these positive changes is the ongoing crackdown on illegal black-market operators, who have made it difficult for licensed operators to make profits. As illegal operators are driven out of the market, companies like Budcars will have meaningfully improved business fundamentals. While this was an important consideration relative to our investment, we are also excited about many other aspects of the Budcars business and its future growth prospects.”
Budcars offers a wide range of cannabis products for delivery to the greater Sacramento, California metropolitan area. The greater Sacramento-Roseville-Folsom metropolitan statistical area, according to data from the State of California, is California’s third-largest consisting of approximately 2.4 million people with growth of approximately 20% over the past decade. The Sacramento area population is showing growing acceptance of cannabis usage and delivery and scores above the 50% percentile in terms of cannabis usage per capita. Budcar’s pricing philosophy is to price for value via a strategy of directly acquiring products from farms and processors. By maintaining its own cars, California licenses, and its own fulfillment center, Budcars is able to maintain tight cost controls allowing some of these savings to flow to consumers via lower prices.
The $700,000 investment in Budcars will be utilized by the firm for service and product improvements and to expand the number of geographic areas served. None of the investment is being used to buy out previous equity stakeholders of Budcars.
Mr. Chan continued, “Sugarmade is in talks with multiple other licensed cannabis processors, delivery services and retailers for similar business combinations, as part of our corporate growth initiative. We plan to take advantage of the many changes in the California marketplace, with Budcars being the first of what we expect to be many other growth-oriented corporate actions.”
About Sugarmade, Inc.
Sugarmade, Inc. (OTCQB: SGMD) is a product and branding marketing company investing in operations and technologies with disruptive potential. 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.