Sugarmade Announces Fully Executed LOI Toward Minority Stake Acquisition of Turnkey Cannabis Cultivation Property
Sugarmade, Inc. (OTC Pink: SGMD) announced a Letter of Intent (LOI) to acquire a 40% stake in RMI Ventures, which operates the Jerusalem Grade Farm in Lake County, California. This acquisition includes valuable real estate, cannabis-related licenses, and operational facilities. The Company anticipates leveraging this acquisition to fulfill a contract with Cannabis Global for 25,000 pounds of Fresh Frozen cannabis, enhancing sales channels and production capabilities. The strategic move aims to optimize operations and costs while preparing for the activation of a larger cultivation site in 2023.
- Acquisition of a 40% stake in RMI Ventures enhances operational capacity.
- Strategic partnership with Cannabis Global to produce 25,000 pounds of Fresh Frozen cannabis.
- Utilization of turnkey operation to fulfill contracts, potentially increasing revenue.
- Reduction in costs and supply issues by activating a smaller cultivation area.
- None.
LOI provides for substantial stake in turnkey property, licensing, operations and associated equipment
NEW YORK, June 30, 2022 (GLOBE NEWSWIRE) -- via InvestorWire – Sugarmade, Inc. (OTC Pink: SGMD) ("Sugarmade", "SGMD" or the "Company") an emerging leader in the licensed cannabis sector, is excited to announce the signing of a Letter of Intent (the “LOI”) toward the acquisition of
According to the LOI, the Parties agree to be bound to an agreement to complete a Definitive Acquisition Agreement whereby Sugarmade will become a minority owner of RMI Ventures, controlling
The RMI acquisition follows the Company’s recently announced collaborative cannabis cultivation contract with Cannabis Global, Inc. (OTC Pink: CBGL) (“Cannabis Global”) to produce approximately 25,000 pounds of “Fresh Frozen” cannabis, which Cannabis Global will use in its product lines for distribution throughout the California cannabis marketplace.
“We plan to leverage this turnkey operation to fulfill some of the 25,000 pounds of fresh frozen flower stipulated in our purchase agreement with Cannabis Global,” noted Jimmy Chan, CEO of Sugarmade. “At the same time, this deal will allow us to seek more buyers and build our sales channel to support the eventual activation of our large production site at our nearby 640-acre project.”
Fresh Frozen cannabis is cultivated to be immediately flash frozen upon harvest (instead of the traditional post-harvest drying and curing process). As noted in the Company’s release dated May 4, Sugarmade and Cannabis Global signed a pre-booked, fixed-price contract in the amount of
The LOI with RMI Ventures covers a minority stake acquisition that includes the associated real estate (the “Property”), cannabis-related licenses and the business operation. The acquisition will include minority ownership of a 10-year cultivation license at the Property based on a cultivation canopy size and other information outlined in the license issued by the County of Lake, California. The licensed outdoor canopy area at the Property covers 43,560 square feet of the total property, which measures 21.38 acres.
In addition, the Property includes an installed irrigation system, weather station, cultivation nursery and biomass curing room. The Property is located near the Company’s recently acquired 640-acre cultivation property in Lake County, California, outside of the Commercial Cannabis Cultivation Exclusion Zones.
Deploying the Company's capital to acquire the minority stake in RMI Ventures' turnkey 1-acre production property rather than activate its large 640-acre production property will allow the Company to begin delivering on its "Fresh Frozen" cannabis contract with Cannabis Global this season.
In addition, it will enable the Company to avoid supply and demand issues due to the perishable nature of cannabis flowers' short shelf life, save on costs related to licensing and cultivation taxes by reducing the canopy square-footage basis from the first 8 acres to be activated to 1 acre, and have enough time to activate the license for the 640-acre production property for an entire grow season in 2023.
“This acquisition will allow us to be more efficient on every level,” noted Jimmy Chan, CEO of Sugarmade. “It gives us much more optionality in scaling our vertically integrated model while avoiding unnecessary costs and wasteful spending as we prepare to hit the gas pedal when market conditions are more advantageous. The RMI business is an excellent property, and we look forward to updating current and prospective shareholders as we move toward a definitive agreement and an expanded equity position.”
About Sugarmade
Sugarmade, Inc. (OTC Pink: SGMD) is a product and branding marketing company investing in operations and technologies with disruptive potential. Our Brand portfolio includes CarryOutsupplies.com, SugarRush™, NUG Avenue, Lemon Glow and Budcars.
For more information, please visit 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, uncontrollable forces of nature 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.
Corporate Contact:
Jimmy Chan
+1-(888)-982-1628
info@Sugarmade.com
Investor Relations Contact:
EDM Media, LLC
https://edm.media
Corporate Communications:
InvestorBrandNetwork (IBN)
Los Angeles, California
www.InvestorBrandNetwork.com
310.299.1717 Office
Editor@InvestorBrandNetwork.com
FAQ
What is the purpose of Sugarmade's LOI with RMI Ventures?
How will the acquisition of RMI Ventures impact SGMD's operations?
What is the financial significance of the contract with Cannabis Global for SGMD?
How does the RMI Ventures acquisition align with SGMD's growth strategy?
