One of the hottest stocks in play this week is certainly Sugarmade Inc (OTCMKTS:SGMD). The catalyst driving all the action here over recent days is the company’s move to spark a widespread consolidation in the hydroponics space. That took direct shape in the company’s announcement on Thursday of the closing of its acquisition of BZRTH, LLC, a leading ecommerce supplier to the rapidly expanding hydroponic agricultural space.
According to the release, the company expects the new combined entity to drive EBITDA profitability, net-positive cash flows, and top-line sales of $37 million on a forward basis. “As of today, Sugarmade is one of the largest publicly traded hydroponics companies in the world,” remarked Jimmy Chan, CEO of Sugarmade. “The most important idea we want to convey to our committed shareholders right now is that this move was not a one-off deal. It’s part of a multi-step roll-up strategy designed to create the dominant force in this market as we look ahead to a world where hydroponics becomes the difference between success and failure for producers in the rapidly growing market for hemp and hemp-related crops in North America.”
Sugarmade Inc (OTCMKTS:SGMD) bills itself as a company that engages in the supply of hydroponic and cultivation products, and products to quick service restaurants. It supplies hydroponic and indoor/outdoor cultivation products to the agricultural market sectors, including the legal cannabis cultivation, processing, and distribution sectors.
The company also produces and wholesales custom printed and generic supplies, such as double poly paper cups for cold beverage; and disposable, clear, and plastic cold cups, and paper coffee cups, yogurt cups, ice cream cups, cup lids, cup sleeves, edible packaging, food containers, soup containers, plastic spoons, and other related products.
Sugarmade, Inc. was founded in 2009 and is headquartered in Monrovia, California.
According to company materials, “Sugarmade, Inc. (OTCQB: SGMD) is a product and branding marketing company investing in operations and technologies with disruptive potential. The Company is becoming a leading supplier to the growing hemp industry and is benefitting from the growth of the hydroponic marketplace. The Company is in the process of acquiring several leading hydroponic and agricultural supply companies that are currently producing in excess of $70 million in annual revenues. The Company also operates Carryoutsupplies.com, a leader provider to the quick service restaurant industry.”
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As noted above, SGMD just announced the closing of the Company’s acquisition of BZRTH, LLC, a leading ecommerce supplier to the rapidly expanding hydroponic agricultural space.
The chart shows 80% piled on for shareholders of the stock during the trailing month. Furthermore, the listing has witnessed a pop in interest, as transaction volume levels have recently pushed 212% beyond what we have been seeing over the larger time frame.
Mr. Chan continued, “We plan to continue to be very aggressive on the M&A side. This space is extremely ripe for disruption through consolidation of successful entities. And we have strong momentum right now to snowball this process by combining and coordinating undervalued assets into a single dominant market force that benefits from powerful overlapping growth in ecommerce, hemp, and hydroponics.”
Now commanding a market cap of $14.7M, SGMD is pulling in trailing 12-month revenues of $4.6M. However, the company could see that number skyrocket as a result of the acquisition. You can bet we will update this one again as new information comes into view. Sign-up for continuing coverage on shares of $SGMD stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!
Disclosure: we hold no position in $SGMD, either long or short, and we have not been compensated for this article.