Business
Sugarmade Places on Hold Reverse Split - Plans to Enter Regulated Cannabis Market as Industry Turmoil Creates Opportunities
Sugarmade Places on Hold Reverse Split - Plans to Enter Regulated Cannabis Market as Industry Turmoil Creates Opportunities.
About this update from Sugarmade, Inc.
[{"type":"text","content":"\n NEW YORK, Jan. 22, 2020 (GLOBE NEWSWIRE) -- via NetworkWire – Sugarmade, Inc. (OTCQB:SGMD) (“Sugarmade”, “SGMD”, or the “Company”), today announces the Company has placed a hold on plans to complete a reverse split of its common shares. Pending a vote by its board of directors, management believes temporarily holding the reverse split or canceling the reverse split altogether may be the best future course of action. The Company is also announcing its planned entry into the regulated and licensed portion of the cannabis marketplace, with an emphasis on the California distribution and retail sectors. Jimmy Chan, CEO of Sugarmade commented, “For at least the time being, we do not see a reason to move forward with the reverse stock split. However, we reserve the right, should circumstances warrant, to reactivate the reverse. We are in the process of modifying our business strategy to better align with where the cannabis marketplace is headed and thus our cancellation of the previously proposed transaction. We see significantly larger opportunities in the California cannabis distribution arena and have entered into advanced talks to make a strategic move into this area.” The cannabis industry in California is rapidly evolving. As recently as only a few months ago, the competitive landscape for legal and licensed cultivators, processors, distributors and retailers was bleak, but the situation has rapidly improved as the crackdown on illegal market participants in California has shown great success. Sugarmade expects these successes to continue. Sugarmade sees a strong opportunity to enter this business arena as the environment changes and as long-time industry participants seek publicly traded partners. The Company recently announced the rescission of an agreement to acquire a hydroponic equipment supplier. In a filing with the U.S. Securities & Exchange Commission, Sugarmade outlined that approximately 1.2 billion common share equivalents will be returned to the Company’s treasury. In addition, the rescission is estimated to save Sugarmade approximately $1 million per month over the next seven months. Sugarmade’s board of directors has determined the business combination was no longer viewed as the best shareholder maximization strategy as industry upheaval acce...