When we first began talking about Sugarmade, Inc. (OTCMKTS:SGMD) on Street Register earlier this year, our primary focus was on the company’s cannabis packaging solutions. Later on, we admired SGMD’s multi-pronged approach as it teamed up with Huy Fong Foods, the makers of Sriracha on a unique culinary product.
But the focus has shifted once again back to cannabis, as a potential acquisition in the sector has been outlined in the company’s latest PR, wherein it claimed the deal would effectively create the largest public cannabis industry supply company. Also mentioned was a second possible acquisition in an unrelated field, so it appears SGMD is holding its trend of diversification as well.
Sugarmade, Inc. (OTCMKTS:SGMD) has announced a realignment of its business direction and outlines negotiations currently underway to significantly expand its business operations within the fast growing cannabis sector. The Company had entered into late stage negotiations with two companies regarding possible acquisition or merger and has entered into other discussions with potential financing sources to facilitate these transactions.
“We are especially excited because the cannabis-related acquisition will be highly accretive to share value for current holders of Sugarmade. With California legalization of cannabis only about 60 days away, we are very pleased to be expanding our operations in several different ways,” commented Jimmy Chan, CEO of Sugarmade. “The successful completion of this acquisition will make Sugarmade one of the largest, if not the largest, publically traded supplier to the hype-growth cannabis sector. We have already begun to make an impact on the sector through the pending introduction of BudLife™, the world’s first patented storage containers for long-term cannabis storage.”
Sugarmade is in late stage acquisition negotiations with a major distributor of cannabis cultivation and hydroponic supplies. Under the framework of the current negotiations, Sugarmade would acquire this privately-held entity through a combination of cash and Company common shares, with Sugarmade being the surviving entity. This distributor is currently producing in excess of $30 million per year in revenues, is growing rapidly, and is profitable.
Sugarmade will be changing its corporate strategic direction toward e-commerce marketing of innovative and disruptive brands. Over the past two years, the Company has increasingly turned toward online marketing for generation of its revenues. The CarryOutSupplies brand has grown its web presence very significantly with management holding the belief that online and e-commerce sales for its custom and generic paper products for the quick service restaurant industry will continue to expand.
Sugarmade is also in late stage acquisition negotiations with an importer of custom vanities and fixtures. This entity is a significant supplier to a major home improvement retailer and produces revenues in excess of $30 million per year. Under the framework of the current negotiations, the Company would acquire this privately held entity through a combination of cash and Company common shares. Management of Sugarmade believes there could be significant cost synergies relative to international importation, logistics, warehousing, shipping, and back office functions that can be gained through this acquisition. Sugarmade’s management believes this acquisition would be highly accretive and beneficial to Sugarmade shareholders. (Source: PR Newswire)
As we stated above, perhaps one of the most attractive features of SGMD is its wide diversification, which pursuant to the completion of the above mentioned deal, would span at least three sectors. Keep it locked to Street Register for updates, and we’ll deliver those important developments on SGMD to you as they unfold. In the meantime, if you’ve yet to sign up for our 100% free newsletter, do so now! Just enter your active email address into the box below and submit!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in SGMD stock, short or long.