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Wednesday, January 20, 2021

Sugarmade Inc (OTCMKTS:SGMD) Pops on New Product Acquisition

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Sugarmade Inc (OTCMKTS:SGMD) is a penny stock that has started to garner attention as the stock bounces up the chart. The stock’s recent upward thrust is tied to the company’s announcement of the signing of a new contract to become the exclusive manufacturer of the SmelPro cannabis transport system, which enables nearly smell-proof and discrete shipping of cannabis. Additionally, the company has acquired an option to purchase the Company marketing the innovative product.

The chart shows 22% tacked on to share pricing for the listing in the past week, but this action is running counter to the larger trend in the name. However, SGMD has a history of dramatic rallies. In addition, the name has benefitted from a jump in recent trading volume to the tune of nearly 370% over what the stock has registered over the longer term.

Sugarmade Inc (OTCMKTS:SGMD) trumpets itself as a product and brand marketing company investing in products and brands with disruptive potential.

Sugarmade’s brands include: 1) CarryOutSupplies.com, which supplies generic and customer printed items to the quick service restaurant industry, 2) CannaShroud and DabBox, which are unique cannabis packaging products and 3) Sugarmade Paper a tree free office and copy paper made from sugarcane waste.

The Company will soon be launching Sriracha Stix, a revolutionary culinary seasoning product under official license from Irwindale, California-based Huy Fong Foods, Inc., the maker of Sriracha Hot Chili Sauce. The Company has also recently acquired international paper contracts from Bao Coc International Paper and Plastics Limited, located in Vietnam.

SGMD is currently in development of several other innovative product lines, which are planned for mid-2017 introduction.

According to company materials, “Sugarmade, Inc. is a product and brand marketing company investing in products and brands with disruptive potential. Sugarmade’s brands include CarryOutSupplies.com, Sugarmade Tree Free Paper, FreeHand ThumbTray and CannaShroud™, the world’s first Cannabis specific shipping systems. During early 2017, the Company will be launching Sriracha Stix, a revolutionary culinary seasoning product under official license from Irwindale, California-based Huy Fong Foods, Inc., the maker of Sriracha Hot Chili Sauce.”

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As noted above, the stock is on the move in recent days, and the catalyst is clear: the move to takeover the deal space for SmellPro. This is a product that obviously has a market to the extent people want to move large amounts of pot around without the distinctive scent giving it away.

We can think of several reasons why this might be beneficial. In any case, this is another peripheral cannabis patch play. These have been doing quite well lately.

According to the company’s release, the SmelPro product is a significant improvement over currently available transport units used in the cannabis sector. SmelPro utilizes the proprietary polyamide sandwiched tri-liners developed for Sugarmade’s CannaShroud product, combined with active carbon filtration to virtually eliminate all odors. The units are designed to be easy to carry, or to be worn as a backpack, and will initially be available in a choice of three colors, plus camouflage.

Jimmy Chan, CEO of Sugarmade commented, “We worked for months with our factory contacts to design advanced features into SmelPro. All closures utilize very low airflow technology, but to further reduce odor we added a unique Velcro closure. We also designed SmelPro with quality and field survivability in mind by using ultra-high quality materials and reinforcements. Thus, we are confident users will get years of service out of SmelPro. All of our units from our initial manufacturing run are already spoken for and interest is strong. We are so excited about this product, we also acquired rights not only manufacture, but also rights to acquire the entire company and all of its intellectual property.”

Now commanding a market cap of $12.4M, SGMD has virtually no cash on the books, which is balanced by about $1.2M in total current liabilities. SGMD is pulling in trailing 12-month revenues of $4.1M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -19.6%. You can bet we will update this one again as new information comes into view. For continuing coverage on shares of $SGMD stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!

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