Business
Sugarmade Signs MOU to Acquire Three California Cannabis Licenses, Plans Large-Scale Nug Avenue Expansion in World’s Premier Cannabis Market
Sugarmade Signs MOU to Acquire Three California Cannabis Licenses, Plans Large-Scale Nug Avenue Expansion in World’s Premier Cannabis Market.
About this update from Sugarmade, Inc.
[{"type":"text","content":"\n NEW YORK, June 10, 2021 (GLOBE NEWSWIRE) -- via InvestorWire – Sugarmade, Inc. (OTCMKTS:SGMD) (“Sugarmade”, “SGMD”, or the “Company”) today announces the signing of a Memorandum of Understanding (the “MOU”) to obtain three non-storefront California Cannabis licenses from the Los Angeles Department of Cannabis Regulation (the “DCR”), along with corresponding licenses from the California Bureau of Cannabis Control (the “BCC”), which collectively provide the licensing foundation for the opening of three new Nug Avenue cannabis delivery hubs in the Los Angeles metro area. According to the terms of the MOU, the Company will control a joint venture created with the initial holder of the social equity license as of the closing date of the definitive agreement. Each of the three licenses can be used for three of the five categories of licensed cannabis-related business activities allowed under the terms of these licenses: retail delivery, manufacturing, distribution, transport-only and cultivation. The Company has determined it will most likely use each license for a combination of 1) retail delivery of cannabis products, 2) supply chain distribution of cannabis products, and 3) for manufacturing/packaging of cannabis products. Together, these licenses provide the licensing foundation for the opening of three new Nug Avenue locations in the Los Angeles metropolitan area. “Our first Nug Avenue location has been a tremendous success, but we need to expand due to overwhelming demand,” commented Jimmy Chan, CEO of Sugarmade. “Holding these licenses will provide an optimal solution to our current growth limitations.” Via a definitive agreement closed on Feb. 8, 2021, the Company acquired a 70% stake in the Lynwood, California, operations of Nug Avenue, allowing the Company to recognize 100% of revenue and 70% profits generated from Nug Avenue’s Lynwood delivery service operations. These terms will carry over to each new Nug Avenue location as the Company expands. Chan added, “By using these licenses to cover manufacturing, distribution and delivery, we hope to further develop our fully-vertical approach to the dynamic California cannabis delivery market. With this agreement, we gain the potential to manufacture and package our...