Sugarmade, Inc. (SGMD) Growing through Acquisition and Brand Expansion as Supplier to the Cannabis Cultivation Market

  • Sugarmade has agreed to acquire Sky Unlimited, LLC, a hydroponic cultivation supplier
  • SGMD has a second formal acquisition proposal in place
  • The company has directly invested in hemp production to benefit from explosive growth in the market for CBD products
  • Sugarmade is also targeting the European hydroponics market

California-based hydroponics company Sugarmade, Inc. (OTCQB: SGMD) is growing in the rapidly expanding cannabis industry through acquisition and expansion as an equipment supplier to cultivators. Sugarmade recently announced that it had agreed to acquire Sky Unlimited, LLC, dba Athena United, a major wholesale supplier of hydroponic cultivation supplies. The deal is expected to add $40 million to SGMD’s 2019 revenues.

“This new revenue stream combined with our recently upwardly guided revenue forecast of $30 million for next year will make Sugarmade one of the largest publicly traded suppliers to the booming cannabis cultivation marketplace, with a combined revenue forecast for next year in excess of $70 million,” Sugarmade CEO Jimmy Chan stated in a news release (http://cnw.fm/7WkWe).

Sugarmade’s success has come through the expansion of hydroponics. Hydroponic equipment is key to cannabis cultivation and, as a result, hydroponics suppliers have seen substantial growth over the past few years. The company is building on its growth with a second formal acquisition proposal targeting a profitable Washington state-based retailer with positive cash flow and revenues of about $5 million. In a HempWire Audio Press Release titled “Hemp and CBD Set to Eclipse the THC Marijuana Market,” Sugarmade’s recognition of the need to research, offer and implement new CBD products is featured (http://cnw.fm/wS6Qq).

Sugarmade is also positioned to benefit through a more direct investment in the cultivation of hemp for production of cannabidiol, or CBD, a compound with therapeutic benefits. Sugarmade recently committed a million-dollar investment in Hempistry, Inc., which is cultivating an ultra-high-CBD strain of hemp on 23,000 acres in Kentucky. The Hemp Business Journal has forecast that the U.S. market for hemp products will reach $1.9 billion by 2022, with $646 million of that coming from CDB.

“We are especially excited about the particular strain of hemp that was planted, which is expected to yield up to 14 percent CDB,” Chan commented in a news release (http://cnw.fm/POMd9). “Such a strain of product is in significant demand and it is expected the entire crop will be sold prior to harvest.”

In addition, Sugarmade is targeting the European hydroponics market, supplying multiple products for cultivators through the Amazon UK program. The company is entering the European market as a new report by analyst group Prohibition Partners projects that the cannabis market will be worth €115 billion ($130.6 billion) annually by 2028, making Europe the world’s largest single region for cannabis products (http://cnw.fm/Zl0XA).

Sugarmade, Inc., one of the largest publicly traded hydroponics supply companies moving into the industrial hemp space, is a product and brand marketing company investing in products and brands with disruptive potential. Sugarmade’s brands include ZenHydro.com, CarryOutSupplies.com and BudLife. Headquartered in Monrovia, California, a city within Los Angeles County, Sugarmade has various business operations in diverse marketplaces including packaging and paper goods for various industries and agricultural supplies.

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

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