Agreement to cultivate 25,000 pounds

US (CA): "Fresh frozen cannabis is the place to be for the 2022 cultivation season"

Sugarmade announced its first transaction relative to its collaborative cannabis cultivation strategy via a definitive and executed contract with Cannabis Global.

Under the terms of the agreement, Sugarmade, via partner licensed and permitted Lake County, California, cannabis cultivators, will produce approximately 25,000 pounds of “Fresh Frozen” cannabis, which Cannabis Global, Inc. will use in its product lines and will distribute to the California marketplace. Fresh Frozen cannabis is cultivated to be immediately flash frozen upon harvest instead of the traditional treatment of drying and curing after harvest. The companies have signed a pre-booked, fixed-price $700,000 contract, including cash payments from Cannabis Global to Sugarmade of $300,000 and notes for the balance of $400,000. The planting of the cultivators is expected to begin in mid-May and continue into early June.

Jimmy Chan, CEO of Sugarmade, commented, “As we recently announced to our shareholders, we see a strong business model of utilizing now idle resources of other California cultivators who have decided they can no longer afford to cultivate cannabis and market their biomass into the marketplace. This new model will allow local Lake County, California, cannabis companies to remain in business to do what they do best - cultivate cannabis - while allowing Sugarmade to concentrate on the distribution and marketing of cannabis flower and manufactured products.”

The cannabis strains for Cannabis Global’s cultivation will be specifically selected for attributes conducive to producing ultra-premium solventless extracts and products based on live rosin and hash concentrates. Upon harvest, all cannabis plants will be trimmed with the best flowers immediately flash-frozen to preserve the delicate oil-containing trichomes. This Fresh Frozen cannabis will then be stored at ultra-low temperatures until processed via 100% solventless extraction technologies.

“The market for Fresh Frozen cannabis is snowballing. Thus we believe it is the place to be for the 2022 cultivation season,” commented Arman Tabatabaeii, CEO of Cannabis Global. “We plan to process a large portion of the 25,000 pounds of ultra-premium cannabis at our Lynwood, California, laboratory, creating premium solventless extracts for sale into the market and for use in our own manufactured products, thus creating vertical integration to reduce our costs of goods sold. We also plan to store a significant portion of the biomass in the Los Angeles area to create an active wholesale market for the many new solventless extractors in the area via our wholly-owned distribution company, Northern Lights Distribution. We have integrated this cultivation effort into our strategic plan for 2022 and 2023 as an important component to further boost our already fast-growing revenue base.”

The trend toward Fresh Frozen cannabis is being driven by consumer demand. Many educated cannabis consumers are looking beyond ordinary high THC products and seeking naturally produced cannabis products full of natural plant terpenes and flavors. Not only is the market for Fresh Frozen cannabis flower growing, but so is the category of products based on the extracts produced from this form of cannabis biomass. In many ways, the advent of fresh Frozen-oriented cannabis cultivation has turned the cannabis cultivation model on its head. Where cultivators traditionally harvested cannabis plants and then spent weeks or months drying, curing, and processing plant materials, all the while battling heat, humidity, molds, and other factors that could affect the product, Fresh Frozen oriented cultivation allows growers to ditch the traditional model by cutting down the plants at the peak of freshness, stripping the large leaves, branches and stems and then bagging the remaining materials bound for storage in industrial freezers at temperatures well below -5 F. With the rapid harvesting process, airtight storage and near cryogenic storage temperatures, almost all of the natural cannabis plant essence is preserved.

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