Sugarmade has signed a nonbinding Letter of Intent with LMK Capital. Sugarmade and LMK have agreed to work toward the negotiation of a definitive lease agreement for access to as much as 40 acres of property in Northern California. The Company intends to use 5 acres of the property to operate a regulated and licensed cannabis cultivation business. Jimmy Chan, Sugarmade’s chairman of the board, chief executive officer, chief financial officer and majority stockholder, is also majority owner of LMK.
“We continue to take strategic steps toward broadening our exposure to the growth trend in the cannabis market,” Chan commented. “We see this as a secular growth trend that is still very much in its early innings. And we believe our positioning in California puts us close to the current epicenter of that trend. In addition, we are committed to increasing verticalization of operations as a context for our investment in the BudCars cannabis delivery business. If we are able to finalize the lease, we expect that this could drive a substantial widening of margins on the growing volume of BudCars sales.”
Sugarmade has a 40% stake in BudCars, with the option to acquire an additional 30%. Because BudCars is a rapidly growing distribution channel, Sugarmade believes it will have a direct channel in the marketplace to establish its own branded cannabis product line, which can then be distributed through multiple distribution partners at premium pricing.
Sugarmade’s in-house analysis suggests that control over 5 acres of this property carries the potential to yield as much as 8,000 pounds (or more than 3,628,700 grams) of cannabis flower per year.
The LOI is nonbinding on the parties and there can be no assurance the parties will enter into a definitive lease agreement.
For more information:
Sugarmade
750 Royal Oaks Drive Suite 108
Monrovia, CA 91016, USA
[email protected]
sugarmade.com