Sugarmade Signs Definitive Agreement to Acquire California Cannabis Licenses to Provide for the Opening of Three New Vertically Integrated Nug Avenue Locations
August 31, 2021 at 08:30 am EDT
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Sugarmade, Inc. announced the signing of a Definitive Agreement 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 for the licensing of three new vertically integrated Nug Avenue cannabis delivery hubs. Each of the three licenses can be used for up to 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. By using each license for a combination of 1) retail delivery of cannabis products, 2) supply chain distribution of cannabis products, and 3) manufacturing/packaging of cannabis products, the Company now possesses the licensing credentials to open three new Nug Avenue locations in the Los Angeles metropolitan area. As announced in its release dated August 17, the Company has already acquired a property in Los Angeles that will serve as the first of these new Nug Avenue cannabis delivery hubs. 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. In addition, the entity possessing the new licenses is SugarRush 5058 LLC (“SugarRush”), a subsidiary of Sugarmade. Due to Los Angeles social equity statutes governing the transferability of cannabis licenses, the seller of the licenses retains a 33.33% ownership stake in SugarRush. Sugarmade has an option to take full ownership over SugarRush via a $25k payment to the seller any time after January 1, 2025, or when allowed by the City of Los Angeles.
Sugarmade, Inc. is a product and branding marketing company. The Company operates through two segments: paper and paper-based products and cannabis products delivery. The paper and paper-based products segment focuses on supply of disposable products to the quick-service restaurant and as an importer and distributor of non-medical personal protection equipment to business and consumers, via its Carry Out Supplies subsidiary. Carry Out Supplies is a producer and wholesaler of custom printed and generic supplies. The primary products are plastic cold cups, paper coffee cups, yogurt cups, ice cream cups, cup lids, cup sleeves, edible packaging, food containers, soup containers, plastic spoons, and similar products. The Company also focuses on investing in cannabis real estate, cultivation, and wholesale sectors vs. cannabis retail operations. It is also engaged in selected cannabis and hemp projects. Its subsidiaries include SWC Group, Inc., NUG Avenue, Inc., and Lemon Glow Company, Inc.
Sugarmade Signs Definitive Agreement to Acquire California Cannabis Licenses to Provide for the Opening of Three New Vertically Integrated Nug Avenue Locations