Category Archives: Medical Marijuana

How the Global Health Crisis Affected 3 of Europe’s Most Promising Industries

How the Global Health Crisis Affected 3 of Europe’s Most Promising Industries

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Published at Mon, 20 Jul 2020 16:45:00 +0000

Psychedelic Drugs and Seniors Health

Psychedelic Drugs and Seniors Health

A funny thing has happened as cannabis legalization is pushing across North America. The fastest-growing demographic of cannabis consumers today are senior citizens.

Are Baby Boomers suddenly rediscovering their hippie roots from the 1960s? No.

Rather, awareness about the many potent medicinal properties of cannabis has spread. And as the age demographic that has the most health problems (and most-serious health problems), senior citizens have been gravitating toward medicinal cannabis use in steadily increasing numbers.

Is the same trend about to repeat itself with psychedelic drugs?

It’s very possible.

Seniors still have the most health issues. Even with the benefits derived from medicinal cannabis, many areas of seniors healthcare are still in need of better treatment options.

Psychedelic drugs offer great promise in a number of these areas. Depression and anxiety are two rapidly worsening mental health issues where psychedelic drugs are showing exciting potential as a solution.

Those health issues affect all age levels. However, a 2016 clinical study reported that 80% of terminally-ill patients receiving psilocybin therapy experienced reduced levels of depression and anxiety. Senior citizens represent the majority of those with terminal illnesses.

Ketamine and MDMA are two psychedelic drugs that are seen as having potential pain-management applications. Chronic pain is another medical problem that tends to be more severe with age.

More specifically to seniors, Eleusis Ltd. is presently in early clinical trials to treat Alzheimer’s disease with microdoses of LSD.

This is exclusively a senior’s health issue. It’s one of the most endemic medical problems that confront senior citizens. And existing therapies generally offer poor treatment outcomes.

If successful, this one medical application alone would raise psychedelics usage rates among seniors dramatically. However, Eleusis CEO Shlomi Raz strongly believes that LSD in particular may have a multitude of medical applications for more complex neurological disorders.

In a February 2020 interview, he made the following observations.

“Most biotechnology companies try to develop a [Alzheimer’s] drug that hits a single target and nothing else. But Alzheimer’s is a complex disease with multiple therapeutic targets, and as single target approaches continue to fail, there is a growing and widespread belief that a successful therapeutic approach will have to hit multiple targets simultaneously.”

“LSD in particular seemed like an attractive candidate for such a therapeutic approach, as it is capable of potent and prolonged activation of the serotonin and dopamine neurotransmission receptors implicated in Alzheimer’s disease, and specifically the serotonin 2A receptor.”

Other complex neurological conditions such as multiple sclerosis and Parkinson’s disease may also benefit from the “multi-target” efficacy of psychedelic drugs. These are degenerative conditions and thus those with the greatest treatment needs will be older patients.

Of equal significance is that Eleusis’s focus on an Alzheimer’s treatment that requires only micro-dosing. This greatly increases the potential for market penetration for a number of reasons.
 

  • Cheaper
  • Safer and better tolerated
  • More convenient (no medical supervision required)

If the psychedelic drug applications currently being researched exclusively involved (larger) “experiential” doses of psychedelic drugs, then perhaps senior citizens would never be a large potential consumer base for these substances.

However, at the microdose level (where there are no psychoactive drug effects) consuming a psychedelic drug becomes no different than any other medication.

Psychedelics continue to demonstrate superior efficacy (in many medical contexts) to existing pharmaceuticals in current clinical trials.

If this R&D translates into a new class of (highly effective) drugs, then seniors may become the biggest growth market for psychedelic drugs just as they are for medicinal cannabis.
 

Published at Fri, 17 Jul 2020 17:17:04 +0000

Hawaii Legislature Approves Bill Allowing Cannabis Edibles, Illinois Collects More Than $52 Million in Adult-Use Tax Revenue to Date: Week in Review

Hawaii Legislature Approves Bill Allowing Cannabis Edibles, Illinois Collects More Than $52 Million in Adult-Use Tax Revenue to Date: Week in Review

Helping to build a brand-new industry is generally a once-in-a-lifetime experience, but for Michael Cohen, co-founder and president of The Pass, a vertically integrated adult-use cannabis operator in Massachusetts, the cannabis industry gave him a second opportunity to be at the start of something big.

Cohen launched one of the first internet ad buying agencies in 1996, when online advertising was in its infancy.

“I was part of this string of industry professionals where we were all true believers,” Cohen says. “People would say, ‘I don’t get online advertising, I would never click on one of those banners.’ We would tell people, ‘This is the future of marketing,’ and three years later, it was just booming.”

Cohen sold the company and turned to consulting and investing as he waited for his next business opportunity. Now, almost 20 years later, he’s found it in the cannabis industry.

Cohen and his partner have been building their cannabis business for nearly three years, and currently hold three licenses in Massachusetts for cultivation, processing and retail. They operate indoor and greenhouse cultivation facilities  in Sheffield, Mass., in Berkshire County, and have a provisional license for an outdoor grow site. The Pass opened its first dispensary location in the Berkshires July 17 and has the option to open two more storefronts with its current retail license.

“When we first started, when we were interviewing lawyers, our first question to our lawyer was, ‘What are the chances we’re going to end up in handcuffs?’” Cohen says. “That was an issue for us. It just felt like there was a lot more stigma three years ago. … We’re just really proud to be creating a product that provides people with inspiration, relaxation, relief and stimulation.”

Photos courtesy of The Pass

The vertically integrated company opened its first dispensary location in the Berkshires July 17.

Cohen describes the Berkshires as “an intersection of nature and culture,” a place where families visit to connect with nature and art, and he has worked to make his dispensary an extension of that.

“The Pass brand we also believe is representative of the cannabis experience,” he says. “The Pass stands for ‘permission.’ We’ve been given the pass to consume—this is now legal. It represents communal sharing. It represents passing from one state to another. It represents the mountain passes in which we live … and getting from one hard-to-reach place to another.”

Preparing for Opening Day

Leading up to the dispensary’s grand opening on July 17, Cohen and his team were busily training retail staff, setting up merchandising displays and, of course, grappling with the necessary precautions to keep employees and customers safe during the ongoing COVID-19 pandemic.

The Pass hired 25 new retail employees for its Berkshires store, and Cohen says he became emotional walking into the conference room this past week to give a presentation to the new hires.

“You have this idea, then you start pursuing it, and I’ve had so many of these over the years just not come to fruition, and this one really has,” he says. “We’re so proud to be working in the cannabis industry.”

The Pass has 40 total employees for its vertically integrated operations, and Cohen hopes to expand his staff to 50 by the end of the month as it hires for cultivation, manufacturing, logistics and sales positions.

The Pass operates indoor and greenhouse cultivation facilities in Sheffield, Mass.

“It’s so amazing to be able to provide a full range of jobs and career opportunities for people in the Berkshires, which is a place that has been hard hit by COVID, like others,” he says. “It’s historically a beautiful place to raise a family, but a hard place to make a living. We have jobs for people who need to feed themselves and we have serious career opportunities in an industry that is a generational business opportunity.”

“I just remember building a team back in the ’90s and how amazing it was to be a part of a team of people who really believed in what they were doing,” Cohen adds. “We were doing something really exciting, and it’s like the same thing all over again, 20 years later. We’re really trying to build a culture—we’re building a diverse culture of people that really want to be here and I’m totally thrilled.”

The Pass cultivates 40 different varieties of cannabis, and its cultivation team has completed its first harvest at the indoor facility  in Sheffield. The greenhouse has been planted, with some rows just beginning to flower.

“The guys who grow [the plants], they talk about it like a sommelier talks about wine,” Cohen says. “They’re just in love with the plants.”

With final inspections recently completed by the Massachusetts Cannabis Control Commission, The Pass’ packaging operations are now in full swing to package the vape cartridges, concentrates, edibles, tinctures and topicals produced at the company’s processing facility.

The Pass is also in the process of launching its marketing efforts, which include a billboard and a print ad in Berkshire Magazine.

The Pass produces and sells vape cartridges, concentrates, edibles, tinctures and topicals.

When Massachusetts reopened after shutting down nonessential businesses in response to the COVID-19 pandemic, adult-use cannabis dispensaries could reopen for curbside service only, and The Pass set to work creating SOPs for curbside pickup.

Now, the dispensary is permitted to offer in-store sales with a limited number of people allowed in the store at any given time, and the Pass requires all staff and customers to wear masks at all times.

“One of the nice things about our space is it’s really lofty,” Cohen says. “It’s a big open barn, a modern barn. The ceilings are really high, and it feels spacious, but obviously, we have the stickers on the floor to mark 6 feet. … We’re taking it seriously.”

Upcoming Plans

Now that the dispensary has officially opened, Cohen is most excited to learn who The Pass’ customers are and which products they are most interested in.

All aspects of the company’s supply chain maintain constant communication, so the processing team can design its products around the specific genetics produced by the cultivation team. In addition, the retail space is located adjacent to the lab, which allows the processing team to answer the dispensary staff’s questions or address concerns about specific products.

“Education and listening are a really big part of the process from a retail standpoint,” Cohen says. “We’ll have all these different consumers who will be coming for all these different needs and many will have a lot of questions, so we want to educate them.”

The Pass’ dispensary is a lofty, modern barn with high ceilings, which Cohen says works well to promote social distancing during the ongoing COVID-19 pandemic.

Although The Pass’ specific sales analytics remain to be seen, Cohen has been studying the sales data in Massachusetts and has found that flower comprises 50% to 60% of the market, whereas vape cartridges and edibles make up 10% to 15% of all cannabis sales.

“I think that with COVID, which attacks the lungs, it’s reasonable to think that edibles and tinctures will probably be a product group that grows in this current environment,” he says. “I think that flower is king, and I think for us, we’re creating a full range of products, and we’ll probably want to expand on that over time.”

The Pass plans to sell its products in other dispensaries throughout Massachusetts, and it already carries other brands’ products in its store, as well.

“Our short-term goals are to be a viable, successful business, to provide a full range of experience, to enhance our consumers’ lives [and] to broaden a higher level of consciousness,” Cohen says. “We are committed to education. We are committed to inhibiting underage consumption. … We want to provide people with career opportunities and development opportunities. We want to make a positive impact on our community and our environment. We want to be responsible stewards of the plant and of our products.”

Published at Sat, 18 Jul 2020 12:00:00 +0000

SGMD BudCars: Built to Thrive

SGMD BudCars: Built to Thrive

In California, the business context is reverting back to fears around another wave of full economic shutdowns due to the increasing numbers of coronavirus infections, hospitalizations, and deaths in recent weeks. Besides the inherently tragic nature of this dark turn in events, many industries and businesses are now faced with the unthinkable prospect of “turtling” and praying for rain from the Federal Reserve and the Federal Government in the form of another bridge made of printed and borrowed money to help survive a drop-off in commercial activity.

This even applies to the cannabis market. The distribution landscape for cannabis in California, and elsewhere, is predominantly structured like any other retail market: with physical stores that consumers drive to and shop at. As consumers choose to stay at home more and more while the lockdowns go back into effect in many areas, cannabis product retailers will be in the same position that other businesses in the state are in: praying for survival.

Even though cannabis stores are considered essential goods during this process, we will no doubt see them suffer as they did in March, April, and May.

However, this throws the spotlight back on an upstart name in the space with a model that has paid huge dividends during this period: Sugarmade Inc (OTCMKTS:SGMD), a cannabis player that operates now mostly through its controlling stake in BudCars, a leading California cannabis delivery company that operates on a traditional retail model with consistent 45-50% gross margins on cannabis inventory.

Sugarmade’s BudCars model has been feasting on increasing market share during the pandemic for obvious reasons: cannabis consumers can order their favorite products and have them delivered right to the door in touchless convenience.

Organic Explosion

That dynamic has presented SGMD shareholders with a dramatic boom over recent months. Since Sugarmade took over control of BudCars in March, the outfit has posted 10% week-over-week sales growth basically at a minimum. With that growth, the rate of sales growth expected from the company in 2020 has walked up a steep ladder, with the latest guidance suggesting we could see it north of $30 million in annualized terms by year-end.

According to the company’s most recent release, based on robust growth and underlying data trends witnessed in May and June, and continued very strong performance underway so far in July, management now forecasts continued month-over-month sequential sales growth of 30% in July and August, positioning the company for July sales of at least $650K, and a pace lined up to close out September with annualized BudCars revenues running at or above $11 million.

Jimmy Chan, CEO of Sugarmade, noted, “We believe we have enough visibility and enough data in hand to forecast that we will continue to see extremely robust growth in July and August. Many of the trends we saw come together in June to drive our performance remain in place and suggest new records across many metrics are likely this month as well.”

However, astute observers will note that this is the company firing on only one engine: organic execution at its initial hub.

Why you ain’t seen nothin’ yet

We would submit that the explosive rate of growth for BudCars at its home Sacramento hub is certainly impressive and suggests shares of the stock are probably undervalued at present levels. But that doesn’t begin to scratch the surface of where this story may be heading when one starts to figure in geographic expansion.

The next phase later this year will likely be the launch of BudCars in the Southern California marketplace through the acquisition of two locations in the greater Los Angeles area (according to a recent press release).

As noted there, the BudCars Sacramento has been experiencing dramatic growth, with revenues consistently increasing 10% week-over-week, driven by exploding demand for contactless delivery of cannabis products due to the coronavirus lockdown. And that makes expansion necessary.

As Chan noted there: “Our Sacramento locations will pass the $10 million mark for annualized sales within the next 60-90 days. The growth has been so dramatic that we have had to drastically revise our expectations to the upside, which demands expansion, both in terms of staff and fleet in Sacramento, and in terms of regional expansion into Southern California. As a result, we are acquiring two distribution hub locations in the LA area with cannabis licenses included so we can hit the ground running.”

Based on data from its current operations as well as trends in the LA region, management believes that each additional new BudCars hub will provide an annual revenue run-rate of $15-20 million as a moderate baseline estimate.

Published at Wed, 15 Jul 2020 07:23:45 +0000

Cannabis Strategic Ventures (OTCMKTS:NUGS) and the Take-Out Contest

Cannabis Strategic Ventures (OTCMKTS:NUGS) and the Take-Out Contest

The cannabis cycle has been brutal in both directions, skyrocketing speculation gave way to dark depts of bankruptcy and bag-holding. That last part came to an end in March, when the cannabis patch capitulated into a final, trend-ending crash that killed off the rest of the weak hands – both in terms of bag-holders and bad balance sheets.

Now, here we are, with the herd thinned out and cash pouring onto the strong balance sheets from private equity, family offices, partners, institutional investors, and growing sales. With the space on strong-footing and analyst ratings starting to move higher (ie, companies able to grow fast enough that sandbagged outlooks are still above current forecasts), the next step is a likely wave of industry consolidation.

With that in mind, we want to talk about a tiny-cap cultivator in Northern California: Cannabis Strategic Ventures (OTCMKTS:NUGS).

When understanding how to invest on a “take-out” thesis, you have to realize you are moving out of the Keynesian Beauty Contest game – which is probably the most famous version of what the Game Theory folks call a “Common Knowledge Game”.

The Beauty Contest

The Keynesian Beauty Contest is something derived from how the legendary economist, John Maynard Keynes, used to explain what produced the movements of stocks in the stock market.

It works like this: imagine a beauty contest on a stage. In front of the stage are 3 judges. Behind them are rows of people in the audience. And you are standing at the back of the room watching it all.

The job of the judges is to decide which of the contestants is the most beautiful. To do that, they look at the contestants and pick who think is the prettiest.

Imagine that there was a contest going on at the same time that was an audience betting activity, where audience members could write on their seat-numbered ticket stubs who they thought the judges were going to pick as the winner. They would then turn in those stubs in a pass-the-hat process before the winner was announced. Anyone who got it right would win a prize.

Your job, standing at the back of the room, is to bet on which of the contestants will be the most popular choice by the audience.

So, everyone is watching the contestants. The judges are evaluating which is the most beautiful. The audience is judging which one looks like the one the judges will think is most beautiful. This is a different idea. Imagine the guy sitting in seat 1A. Let’s call him “Bob”. Bob may like contestant 2 the most. #2 is the one he thinks is the prettiest. But maybe that’s because she kind of reminds him of his babysitter – he had a huge crush on her when he was nine. So, Bob probably isn’t going to write “#2” on his ticket stub if he wants to win. However, if Bob was a judge, he might vote for #2. But #3 is the one he can tell is the more classically beautiful woman, so he writes “#3” on his ticket stub and puts it in the hat.

And you are judging which one you think the audience will think the judges will think the prettiest. It is one more step removed. And that’s the same job equity market investors have when selecting which stocks to invest in. You are trying to be one step ahead of the crowd, which means you have to figure out which one the crowd will end up liking the most.

The Take-Out Contest

As noted above, the takeout contest is a different game. Here, you move from the back of the room and sit in the audience. The big cash-rich mid-cap and large-cap companies and private equity investment fund boards are the judges. Your job is no longer about what the crowd is going to think. It’s about what the judges are going to like.

Which brings us back to Cannabis Strategic Ventures (OTCMKTS:NUGS). At 1x forward sales (based on extrapolation of the past 3 months), the stock is massively undervalued relative to larger peers given its recent jump in topline growth and new premium product pricing standard.

To hammer this home further, the company just announced record topline performance data for the month of June, which featured over $1.3 million in sales, representing over 40% sequential monthly revenue growth.

“June set new records for the Company, with a massive acceleration in the pace of growth, which is so far continuing in July,” stated Simon Yu, CEO of Cannabis Strategic Ventures. “We have successfully repositioned ourselves in the ecosystem of the California cannabis marketplace, moving up the ladder and widening our distribution footprint. We will continue to focus on ramping production capacity and steadily driving gains in quality, efficiency, and volume. That has been our focus all year. Besides dramatic expansion in sales volume by weight, we have also been rewarded by the market with steady gains in pricing. That represents the ultimate positive reinforcement.”

According to the release, helping to drive performance in June, management notes that the Company’s move in April to more than double its production capacity paid off in the form of expanded production last month as harvest size increased sharply. Prior to the expansion in harvest size, the Company had been consistently selling out of its entire inventory on a weekly basis.

The company is also setting up to expand its production capacity again, bringing on another 300k sq ft of capacity to power continued growth in the second half of the year.

NUGS has also demonstrated a power position in the California cannabis market in terms of distributor relationships.

The stock deserves a look as something the judges may pick as the prettiest face. The growth is spectacular, and the company has built up serious production capacity potential and a powerful position in the California market. For large balance sheet players that don’t have exposure to the California market, it might be an interesting opportunity.

This article is part of JournalTranscript.com Networks. Read the JournalTranscript.com Networks Disclaimer.

Published at Fri, 17 Jul 2020 04:57:43 +0000

Colorado Approves Additional Pesticides for Use On Cannabis

Colorado Approves Additional Pesticides for Use On Cannabis

TORONTO, July 14, 2020 (GLOBE NEWSWIRE) -PRESS RELEASE- WeedMD Inc. a federally-licensed producer and distributor of cannabis, announced today that it is one of the licensed producers to have its products and strains included in the University Health Networks’ first-of-its-kind Medical Cannabis Real-World Evidence study. UHN is launching Canada-wide clinical trials studying cannabis use on chronic pain, issues with sleep, anxiety and depression. Participating patients can select medical cannabis products via the Medical Cannabis by Shoppers portal, and registered under the TruTrace Technologies’ medical cannabis verification program. Read UHN’s announcement here.

WeedMD is the only LP with all of its cannabis strains registered under TruTrace’s proprietary StrainSecure platform. The program focuses on testing and verification to confirm the origin, cannabinoid authenticity and quality assurance of cannabis products. A medical cannabis supplier to Shoppers since February 2019, WeedMD was the first LP to partner with TruTrace and utilize the StrainSecure platform to register its genetics in late 2018 with 40 proprietary strains initiated, including all products currently sold in Canada. 

“Recognizing the importance of strain validation as cannabis products advance through Canada’s medical and pharmaceutical channels is paramount for building trust and accountability in our industry and we congratulate UHN, Shoppers and TruTrace on this breakthrough initiative,” said Angelo Tsebelis, CEO of WeedMD. “As the only producer with all its products registered under StrainSecure, we are proud to be included. Patients and their medical practitioners expect traceability, origin assurance and consistency in their medicine, particularly when used as a natural alternate for treating traumatic indications such as pain management – this study will present much needed evidence and we’re looking forward to the results.”

The study is led by Dr. Hance Clarke, Director of Pain Services at Toronto General Hospital, a recognized leader in educating Canadians about chronic pain and the risk factors of opioids. 

“Shoppers Drug Mart is trusted by patients and healthcare providers to provide medical products that have been tested and validated, regardless of whether that medication came from a lab or a greenhouse,” said Ken Weisbrod, pharmacist and vice president of business development/cannabis strategy, Shoppers Drug Mart. “Many partners came together to launch this initiative and we are proud to work with industry leaders to further our ability to provide Canadians with safe, consistent, rigorously tested cannabis-based medication.”

Published at Tue, 14 Jul 2020 21:00:00 +0000

Schwazze, Formerly Operating as Medicine Man Technologies, Terminates Los Suenos Farms and Dabble Extracts Acquisitions

Schwazze, Formerly Operating as Medicine Man Technologies, Terminates Los Suenos Farms and Dabble Extracts Acquisitions

Schwazze, formerly operating as Medicine Man Technologies, Inc., a vertically-integrated Colorado cannabis company, today provided a business update. Specifically, the company shared the pro forma financial results that reflect the acquisition of Mesa Organics, which closed on April 20, 2020, and announced the termination of previously named term sheets including “the Dabble Term Sheet” with Cold Baked, LLC and Golden Works, LLC, the “Los Sueños Term Sheet” with Los Suenos, LLC and Emerald Fields Grow, LLC, and the “Farm Boy Term Sheet” (as part of the Los Sueños Farm acquisition) with Farm Boy, LLC and Baseball 18, LLC.

Pro Forma Financial Results Including Acquisition of Mesa Organics

The company provided unaudited condensed combined pro forma financial results for the first three months of 2020, the full year 2019, and balance sheet as of March 31, 2020. These financial results reflect the acquisition of Mesa Organics, which closed on April 20, 2020. The company believes that providing the pro forma results will enable shareholders to evaluate its ongoing performance more accurately.

Nancy Huber, Chief Financial Officer of Schwazze said, “We are excited to have Mesa Organics and the extraction and manufacturing business, Purplebee’s, as a cornerstone in the vertically integrated platform we are building in Colorado. In the pro forma 2019 Income Statement, Mesa Organics was accretive to Schwazze by $0.09 cents per share, and we believe this business will continue to be accretive to our overall platform. Additionally, since the closing of the acquisition, we have made significant progress in integrating the Mesa Organics and Purplebee’s operations. We are excited about the opportunity ahead and look forward to sharing our results going forward.”

The unaudited condensed combined pro forma results including standalone Schwazze and Mesa Organics historical results, and explanatory notes were included in a Form 8-K/A filed with the U.S. Securities and Exchange Commission on July 2, 2020.

Acquisition Strategy Update

Schwazze terminated the binding term sheets for two announced acquisitions with Dabble Extracts, a cannabis concentrates company, and Los Sueños Farms, an outdoor and greenhouse cannabis cultivator. Following the signing of Colorado House Bill 19-1090, the Company quickly moved forward on numerous term sheets with Colorado cannabis operators with limited due diligence completed. However, throughout the Company’s rigorous M&A process, key business and valuation issues were identified and as such, the Company decided to no longer pursue the acquisitions of Dabble and Los Sueños Farms.

Justin Dye, Chairman and Chief Executive Officer of Schwazze shared, “We know that continuing to focus on shareholder return is the right thing to do at this time. Our Board believes that it is in our best interest to build a differentiated business in Colorado. Additionally, we remain confident in our ability to grow organically and through future merger and acquisition opportunities. We have a strong M&A and real estate growth plan and infrastructure to provide us a pipeline of opportunities in the marketplace.”

The company reiterated its commitment to establishing a leading vertically integrated platform in the cannabis space. With a proven leadership team comprised of Fortune 500 executives and cannabis experts, the company will continue to make decisions that uniquely position Schwazze to provide the most trusted products and experiences for consumers. The company remains in negotiations with the following announced acquisitions, Roots Rx, Medicine Man, MedPharm, Canyon Cultivation, and Medically Correct.

For more information about Schwazze, please visit https://www.Schwazze.com/.

Published at Thu, 09 Jul 2020 18:29:00 +0000

The Big Test for Sugarmade Inc (OTCMKTS:SGMD)

The Big Test for Sugarmade Inc (OTCMKTS:SGMD)

In March, after running BudCars for a month and watching the growth curve in full effect, Sugarmade Inc (OTCMKTS:SGMD) management gave guidance about its new subsidiary, suggesting that it might be capable of as much as $15 million in annualized revenues.

In the course of the development of any “stock story” in the market, we always reach the moment where we must come to terms with how credible a company is in its own forecasting.

What Sort is SGMD?

That narrative always tips in one of two directions: 1. They overpromise and underdeliver, or 2. They sandbag and blow it out.

So far, SGMD appears far more aligned toward option number two than option number one – they undershoot when they put out guidance, and then they leap gracefully over the bar.

With that in mind, the company just provided updated revenue expectations for July and calendar Q3 BudCars performance. According to the release, based on robust growth and underlying data trends witnessed in May and June, and continued very strong performance underway so far in July, management now forecasts continued month-over-month sequential sales growth of 30% in July and August, positioning the company for July sales of at least $650K, and a pace lined up to close out September with annualized BudCars revenues running at or above $11 million.

Hence, the company’s most recent data covering its June performance suggests closer to $25-30 million in annualized revenue pace by year end than $15 million. In other words, either the company was being conservative in March or things have turned out to be much more promising than expected, or possibly both.

In any case, Sugarmade Inc (OTCMKTS:SGMD) put out new guidance focused on Q3 performance. If you do the math from the numbers given, we are looking at gargantuan m/m and q/q topline and gross profit growth continuing in July and beyond as BudCars continues to ramp higher.

Jimmy Chan, CEO of Sugarmade, noted, “We believe we have enough visibility and enough data in hand to forecast that we will continue to see extremely robust growth in July and August. Many of the trends we saw come together in June to drive our performance remain in place and suggest new records across many metrics are likely this month as well.”

Drilling Down

According to the company’s most recent release, BudCars saw improvement in every major metric during June, as covered in detail in the Company’s July 1 release. Mutually reinforcing trends in increasing new customers, strong repeat business, increasing orders per customer per period, and increasing ticket sizes continue to define performance thus far in July, suggesting a high degree of confidence in continued 30% sequential monthly topline growth and the likelihood that the Company will close out its calendar Q3 with extremely strong metrics in place heading into year-end.

In other words, the headline data points are further supported by a deeper data analysis, with the underlying trends placing this outperformance on a firm foundation, or so it would appear from the company’s account in its recent communications.

We would also point out that SGMD management has been strategizing with a long-term vision in mind, apparently, including strategic expansion into new markets and margin expansion through a clear verticalization agenda.

From its release, “In addition, Sugarmade continues to focus on further bolstering future top and bottom-line growth through aggressive expansion and verticalization plans, including the upcoming opening of its BudCars LA hub and the establishment of inhouse cultivation and product manufacturing operations at its new 5,000 square-foot indoor premium cannabis cultivation facility located in very close proximity to its Sacramento BudCars hub.”

Anyone who spends any time researching the global legal cannabis market knows that LA is ground zero. This is the promised land for pot producers.

Pair that with the ability to source its own raw supply, and you have a material basis for potential upside here: More sales on widening margins in more markets.

This article is part of JournalTranscript.com Networks. Read the JournalTranscript.com Networks Disclaimer.

Published at Thu, 09 Jul 2020 05:14:55 +0000

Former Steep Hill Labs CEO Sues Company and Investors to Block Sale of Assets

Former Steep Hill Labs CEO Sues Company and Investors to Block Sale of Assets

California-based Success Centers launched roughly 40 years ago to assist youth released from detention centers with life skills and employment. Now, the organization has expanded to the cannabis industry, where it helps connect employers with qualified job seekers in the Bay Area with a focus on social equity.

Success Centers assists job seekers in multiple industries, from construction to the arts, and hosts Employer Spotlight hiring events to connect employers with job seekers. To serve the cannabis industry specifically, Equity for Industry Program Manager Angela White has created the Budding Industry Job Shop, where several employers give presentations about their companies and what a day in the job looks like.

“We’ll have the job description pulled up, and what’s different is we’ll have questions from the audience of job seekers,” White says. “We want to have a good retention rate. We don’t only want people hired at these companies, but we want them to feel comfortable and safe and … to be a good fit there.”

Following the events, employers interview potential candidates, and Success Centers is an active participant in the process, ensuring job seekers have all the necessary resources.

Under San Francisco’s Equity Program, cannabis dispensaries must staff 35% of their operations with social equity applicants, and Success Centers works specifically with these companies to connect them with verified candidates.

The organization also assists social equity applicants who are trying to launch their own businesses through its Equity for Industry Workshops, which connect entrepreneurs with cannabis industry professionals who can help them set their plans in motion.

“If you’re affected by the war on drugs, that means you didn’t go to college—a lot of folks didn’t—your family was separated and you don’t know a lot of the business acumen,” White says. “We bring in industry professionals to teach [entrepreneurs] about the different aspects of the business. We have all kinds of workshops [covering topics such as] how to understand contracts, understanding nondisclosure agreements, managing a cash-only business [and] insurance.”

Success Centers recently hosted a workshop on extraction, as well as a presentation on California’s track-and-trace system.

Since the onset of the COVID-19 pandemic, many of the organization’s events have shifted to the virtual space, and White says she has seen an increase in out-of-state participants.

“I have people from Georgia joining in and Alabama because they want to know about this industry,” she says. “As the industry becomes legal across the country, … the equity community is all over, and we want them to be ready and understand … how they can get their foot in the door.”

Another aspect of Success Centers’ budtender education focuses on the terminology of the legal cannabis industry. Job seekers learn about terpenes, for example, and how to talk with customers and patients about terpene content.

“Some of the dispensaries, they’ll have these three qualifying questions when people go to apply,” White says. “If you don’t know those terms, … you’re denied right away, so I wanted to eliminate that. Learning the lingo is very important for folks from our community.”

Success Centers has partnered with Eminent Consulting in Oregon to provide a budtender training course that teaches the science behind budtending, and the organization offers a scholarship to help with the cost associated with the program.

Photo courtesy of Success Centers

Many of Success Centers’ in-person workshops have transitioned to the virtual space since the onset of the COVID-19 pandemic.

To help teach job seekers and entrepreneurs the fundamentals of business, Success Centers also collaborates with Oaksterdam University.

“We have a cannabis scholarship for folks that want to learn the business side, and they learn everything from how to purchase the plant to how much moisture should be in it to how to lay out their building,” White says. “They cover all of that in their seminars, and they also have an exam … at the end so they can get their certificate for completing the program.”

Oaksterdam University also offers a 14-week horticulture class that teaches the fundamentals of indoor and outdoor cannabis cultivation, from lighting to pH levels.

“It’s a wonderful program, and we’re happy to be partnered with them,” White says. “They understand what it means to our community to have this opportunity, so I really appreciate the team at Oaksterdam University.”

Although Success Centers’ cannabis programming is still fairly new (White says the program launched roughly two and a half years ago), it has already celebrated its first award-winning budtender. William Brown, one of the first cannabis clients White ever worked with, was named the 2019 Budtender of the Year for his work at Harborside’s Oakland dispensary.

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“I’m really excited about that,” White says. “It’s been an awesome journey, having someone actually win something like this. … When he got his trophy, it was so funny—I drove to meet him over in Oakland, and he had his trophy with him, and I was smiling harder than he was. I felt like I won the trophy.”

In order to reach more people, Success Centers recently launched a pilot program called Entrepreneurship in a Nutshell, which supports those looking to launch businesses in the industry.

“It gets people in the entrepreneurship mindset, and it helps them work with business models [and] put their ideas together so that they’re ready to start a business at the end of that,” White says. “They win prizes and have an opportunity to get out and pitch their business in front of investors. We just keep trying to grow the program, growing people who want to participate and work.”

Looking ahead, White would like to create a mentorship program where entrepreneurs have the opportunity to discuss their business plans with industry professionals, who can then offer their experiences and guidance.

“We’re just really excited about the future of this industry,” White says. “It’s a rough journey, and we want to be here to make sure our folks are getting in. We would love to move this across the nation, building a model for how things should be done.”

Published at Tue, 07 Jul 2020 20:48:00 +0000