With the recent signing of a management services agreement (“MSA”), Sugarmade is making key progress toward the goal of strengthening its position in the California cannabis space. SGMD signed the MSA through its subsidiary, SugarRush, which entered into the agreement with Canndis, a California cannabis micro license holder.
Canndis holds a license that covers delivery, manufacturing, distribution, and cultivation rights, and the agreement will enable Sugarmade to expand its manufacturing and distribution footprint.
“This deal will provide us with a new income stream as we apply our expertise and experience to mobilize Canndis’ assets and market positioning,” said Sugarmade CEO Jimmy Chan. “But it also has substantial strategic value because it lays a foundation for a significantly expanded manufacturing and distribution infrastructure under our control when we harvest our first crop.”
Sugarmade is anticipating harvesting that crop in the coming weeks, an accomplishment made possible through the company’s acquisition of a minority stake in RMI Ventures; the property is licensed for 43,560 square feet of the outdoor canopy area and is currently growing at full capacity this season. Sugarmade and RMI Ventures signed an LOI earlier this year.
These strategic agreements are essential pieces of Sugarmade’s focus on growing its presence in the cannabis space. The MSA calls for Sugarmade to assume management responsibilities and operational control over the manufacturing and distribution of cultivated cannabis produced Jerusalem Grade Farm. The agreement also expands Sugarmade’s manufacturing and distribution footprint and will provide for the establishment of a new strategically located manufacturing and distribution hub near Palm Springs, California, as Sugarmade brings that harvest to market.