Sugarmade, Inc. (OTC: SGMD) is headquartered in Monrovia, California, where the company recognizes new opportunities in the cannabis delivery space and in the market for supplies to the quick-service restaurant industry – both of which have fast-changing dynamics due to the recent outbreak of coronavirus in the United States.
The Coronavirus Cannabis Boom Market
Retailers across the nation are closing their doors and curtailing operations due to the coronavirus pandemic, inherently pinching sales. In the California cannabis sector, however, business has never been better – especially relative to home delivery.
California’s cannabis industry continues to operate, and media reports reveal booming cannabis sales as the state’s citizens stay home to wait out current events. The Los Angeles Times recently published the headline, “Marijuana Sales on Fire amid Virus Outbreak; New York Post “Cannabis sales hit new highs”; USA Today “American Stock Up on
Pot” Fox News “California marijuana sales surge”; and ABC News Cannabis Shops thrive in coronavirus pandemic.
The state of California benefits from the ultra-high taxes paid by the highly regulated cannabis industry, and has thus deemed cannabis companies as “essential” businesses, allowing for full operations to continue. While pot shops are seeing strong foot traffic, the real growth action is in-home delivery as consumers seek to embrace social distancing. Many delivery
operators are reporting difficulty in meeting demand with sales growth of up to 10% sequentially each week. It is certainly a boom time for the industry.
- While many businesses are seeing coronavirus downturns, cannabis delivery service companies are seeing boom times
- Despite reported issues within California’s regulated cannabis industry, positive changes have occurred as regulators work to improve the system
- As black-market operators are driven out of the market, a need for legal operators is created
- Sacramento population—as California’s third-largest metropolitan area at 2.4 million people—shows growing acceptance of cannabis use and delivery
- Strategic investment in Hempistry, allowing Sugarmade shareholders to possibly benefit from a relationship with industrial-hemp cultivation companies
- The global industrial hemp market size was estimated at USD $4.71 billion in 2019 and is expected to register a revenue-based CAGR of 15.8% over forecast period 2016-2027
- Led by experienced team of executives instrumental in successfully growing multiple business operations