Sugarmade Announces Fully
Executed LOI Toward Minority Stake Acquisition of Turnkey Cannabis
LOI Provides for Substantial Stake
in Turnkey Property, Licensing, Operations, and Associated
NEW YORK, NY -- June 30, 2022 --
InvestorsHub NewsWire -- 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
forty percent (40%) of the business and associated property known
as RMI Ventures (d/b/a Jerusalem Grade Farm) located in Lake
County, California ("RMI Ventures" or "RMI").
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 forty percent (40%) of the
equity of RMI Ventures. Sugarmade management notes that the Company
plans to pursue the acquisition of additional equity in RMI
Ventures next year as market conditions improve.
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
"We plan to leverage this
turnkey operation to fulfill some of the 25,000 lbs. 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
$700,000, which provides for cash payments from Cannabis Global to
Sugarmade of $300,000 and notes for the balance 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 six-hundred-forty
(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 one-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
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 eight acres to be activated to
one acre, and have enough time to activate the license for the
640-acre production property for an entire grow season in
"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."
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.
information, please visit www.Sugarmade.com.
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
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