- SGMD releases key numbers for BudCars Q3 2020 financial report
- CEO reports that company “continues to perform, setting records in basically every key metric we track”
- BudCars has seen consistent growth since Sugarmade acquired 40% stake in the Sacramento-based cannabis delivery service
Steadily growing gross margins, more than 60% growth and $2 million in gross receipts are a few of the highlights in an announcement (https://ibn.fm/8gnHK) made by Sugarmade (OTCQB: SGMD) featuring the Q3 2020 numbers for BudCars Cannabis Delivery Service. SGMD owns a 40% stake in BudCars, along with an option to acquire an additional 30%.
“BudCars continues to perform, setting records in basically every key metric we track,” said Sugarmade CEO Jimmy Chan. “It was a tremendous quarter, with a big jump in customers and regional market share and robust margins on every sale. That paints a very motivating picture as we gear up to significantly expand our service territory, with upcoming expansion into the North Bay and Wine Country areas, as well as our upcoming grand opening of BudCars LA.”
The preannouncement of BudCars’ performance for the three months ended Sept. 30, 2020, included the following key numbers:
- Total Q3 2020 BudCars gross receipts over $1.9 million, which represents a 66% increase quarter over quarter
- Total Q3 BudCars gross profits of $903,667, representing 64% gross profit growth quarter over quarter on a steady 47% gross profit margins
- Average daily gross sales increased $21,246, a 68% increase quarter to quarter
- Total customer tickets increased 62% quarter to quarter on 3% growth in average ticket size
BudCars has seen consistent growth since Sugarmade acquired a 40% stake in the Sacramento-based cannabis delivery service earlier this year (https://ibn.fm/jjr74). In fact, the company has performed ahead of expectations almost every month since March 2020, seeing consistent growth in almost every area, including increasing new customers, strong repeat business, increasing orders per customer per period, and increasing ticket sizes.
BudCars isn’t the only bright spot on the Sugarmade horizon. The company also recently secured rights to a property zoned for cannabis cultivation (https://ibn.fm/ps9IP). The company is already in the process of obtaining cannabis cultivation licensing, preparing archaeological and biological surveys, and assembling documentation related to the architectural and engineering plans for construction of greenhouses and a processing building.
“We believe we have all of the strategic pieces in place to capitalize on cultivation, with the market currently chronically undersupplied,” said Chan. “We also have relationships in place, especially through our BudCars investment, to hit the ground running on the branded products side, driving strong margins up and down the chain.”
BudCars is a retail business that offers same-day delivery of top-quality cannabis. Customers choose from a variety of products including edibles, flower, pre-rolls, vapes, tinctures and concentrate across dozens of premium brands. Once consumers complete their purchases online, they receive their order the same day via BudCars Cannabis Delivery Service.
Sugarmade is a product and branding marketing company investing in operations and technologies with disruptive potential. The company’s brand portfolio includes CarryOutsupplies.com, SugarRush(TM) and Budcars.com. Sugarmade is an investor in BudCars and a 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. As of the date hereof, 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. Sugarmade also has obligations to absorb losses and right to receive benefits from Indigo. As such, in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification 810-10-25-38A through 25-38J, Indigo is considered a variable interest entity (“VIE”) of Sugarmade.
For more information, visit the company’s website at www.Sugarmade.com.
NOTE TO INVESTORS:: The latest news and updates relating to SGMD are available in the company’s newsroom at http://ibn.fm/SUGAR
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