E-commerce company Sugarmade said Wednesday it is shifting its business focus via a yet-to-be announced move to “significantly expand its business operations within the fast-growing cannabis sector.”
David Royse | LedeTree
The company said in a statement that it is in late-stage negotiations with a major distributor of cannabis cultivation and hydroponic supplies. The distributor has revenues over $30 million, is profitable, and is growing rapidly, Sugarmade said.
“We are especially excited because the cannabis-related acquisition will be highly accretive to share value for current holders of Sugarmade,” said Sugarmade CEO Jimmy Chan. “With California legalization of cannabis only about 60 days away, we are very pleased to be expanding our operations in several different ways. The successful completion of this acquisition will make Sugarmade one of the largest, if not the largest, publicly traded supplier to the hyper-growth cannabis sector.”
Sugarmade first disclosed the plans in a report filed last month with the Securities and Exchange Commission. The company said in its SEC filing that it plans to phase out its legacy tree-paper business “and several other nonstrategic product offerings that are experiencing less than robust growth.
“Sugarmade plans to maintain its corporate policy of doing business in only the non-plant areas of the growing cannabis sector, although this is subject to change,” the company said in the SEC filing.
The City of Industry, Calif.-based company company also said it plans to expand its hydroponic and cannabis-related product lines.
“The Company believes the number of products related to this area will expand over the coming months and that this market sector will be a major focus for the Company moving forward,” Sugarmade said in its SEC filing.