Business
Sugarmade Announces Fully Executed LOI Toward Minority Stake Acquisition of Turnkey Cannabis Cultivation Property
Sugarmade Announces Fully Executed LOI Toward Minority Stake Acquisition of Turnkey Cannabis Cultivation Property.
About this update from Sugarmade, Inc.
[{"type":"text","content":"\n 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 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 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 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 $700,000, which provides for cash payments from Cannabis Global to Sugarmade of $300,000 and notes for the balance of $400,000. 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 bas...