Sugarmade Announces Analysis of BudCars’ Marketing Activities and Expenditures Ahead of Planned BudCars Expansion

MONROVIA, Calif., Nov. 05, 2020 (GLOBE NEWSWIRE) -- via InvestorWire – Sugarmade, Inc. (OTCQB:SGMD) (“Sugarmade”, “SGMD”, or the “Company”) today announced that in anticipation of the planned expansion of the BudCars cannabis delivery service into new territories, Sugarmade has undertaken an analysis of the efficacy of marketing spending relative to market size and population for the existing BudCars regional delivery footprint. Sugarmade believes this may provide some insight into performance benchmarks and expectations related to the anticipated expansion into the North San Francisco Bay Area and the Wine Country counties, followed by Los Angeles.

Sugarmade is an investor in BudCars and joint operator of BudCars' first operating location in Sacramento, California. During early 2020, Sugarmade gained a 40% stake in BudCars and in the Sacramento delivery operations via the acquisition of a 40% stake in Indigo Dye Group (“Indigo”). Under the terms of Sugarmade’s agreement with Indigo, Sugarmade also acquired an option to purchase an additional 30% interest in Indigo, upon the closing of which would provide Sugarmade with a 70% controlling interest. This option has not yet been exercised; Sugarmade’s stake in Indigo remains at 40%, and there is no assurance that Sugarmade will exercise the option to acquire an additional 30% interest in Indigo. However, since late May 2020, Sugarmade has been actively involved in development of Indigo’s operations, with power to direct the activities and significantly impact Indigo’s economic performance.

BudCars' current territory serves an area comprised of a total population of 2.6 million residents in Northern California, with 16,252 customers (representing 0.6% of the total population) using BudCars to date in 2020, spending a total of $3.4 million on BudCars’ cannabis deliveries this year, with an average per-customer spend of $213 and an average order size of $129 across over 29,000 separate orders. BudCars has invested more heavily in marketing to residents of Sacramento, where 1.29% of residents have been active as BudCars customers this year, accounting for over half of total BudCars sales.