The election is looming. You can’t find a channel that isn’t covering the awful tedium and drumbeat of polarization and hyperpartisanship that has come to define the process here in the US, with the whole horrifying drama now marching steadily to a head.
But with that inevitable conclusion will also come a lot more than just a resolution to “more Trump or not more Trump”. We will also have a number of states likely voting to legalize pot. And we have a new administration in the White House far more receptive to taking steps toward a nationwide decriminalization or even legalization.
As we approach that decision point, we will likely start to see something in the vein of a fresh “Green Wave” for pot stocks. With that in mind, we would point out Sugarmade Inc (OTCMKTS:SGMD) as an interesting and very cheap stock in the space.
Sugarmade Inc (OTCMKTS:SGMD) is most significant for its role as a cannabis delivery player due to the company’s large stake in BudCars, a leading California mobile delivery-based dispensary business that has seen massive growth on strong margins so far this year.
So, SGMD is BudCars, for public stock market participants, for all intents and purposes. The company doesn’t own BudCars, but it holds a large stake and largely controls operations and future strategic decisions.
The main move underway right now is the process of opening two new BudCars hubs in the LA area. Up until now, BudCars has been focused in Northern California in the Sacramento area. That hasn’t stifled growth – not by a long shot, with BudCars showing massive monthly and quarterly growth data so far this year after SGMD management invested and took over core operations.
Growing Like a Weed
According to a recent release, total BudCars gross sales in July came in at of $662,836, representing 32% month-over-month sales growth. That’s not normal. 32% in sequential monthly growth. But that’s the fourth month in a row that we have seen it from this company.
However, it isn’t just a revenue story. Total July BudCars gross profits came in at $310,489, representing 36% month-over-month gross profit growth. Again – that’s insane.
We also saw average daily gross sales increase 32% m/m to $22,095, total customer tickets increase 33% m/m to 5,579, and calendar Q3 move to a pace to potentially more than double calendar Q2 total BudCars sales. That means we are likely going to see BudCars post over 100% sequential quarterly growth. Which basically is out of this world.
But no one seems to be paying attention, so SGMD shares haven’t really moved on this data. The stock is still trading at fractions of a penny per share.
The City of Angels
If there’s a catalyst that might suddenly make the world stand up and take note of this seeming discrepancy, it could be the official opening launch of “BudCars LA”, which could happen any day now according to company statements over the past couple months.
Obviously, it’s not easy to get city council folks to move fast on new applications and the appraisal of wheelchair ramps and public bathrooms for a new dispensary applicant during the heat of a pandemic crisis, so we can forgive the company for needing time to work with the folks in charge in LA. But the process doesn’t seem to be hung up on anything substantive, so it likely will happen.
And when it does, this juggernaut of the California cannabis delivery marketplace will suddenly be operating in multiple major metro areas including the global mecca of pot smoking just as we head into a likely green wave for pot stocks into the election.
That could make things awfully interesting for Sugarmade Inc (OTCMKTS:SGMD).
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Published at Thu, 27 Aug 2020 04:28:41 +0000