Sugarmade (OTCQB: SGMD) today announced that, in anticipation of the planned expansion of the BudCars cannabis delivery service into new territories, it has undertaken an analysis of the efficacy of marketing spending relative to market size and population for the existing BudCars regional delivery footprint. According to the update, Sugarmade believes this may provide some insight into performance benchmarks and expectations related to the anticipated expansion into the North San Francisco Bay Area and the Wine Country counties, followed by Los Angeles. “We are very confident in the ROI associated with spending on BudCars marketing in connection with BudCars’ expansion,” said Jimmy Chan, CEO of Sugarmade. “We have seen at least a six-to-one multiple in terms of sales relative to marketing expenditure overall, with more than twice the market share and total sales where investments have focused more on cultivating new customers. We believe this bodes well for the marketing approach as BudCars enters the North Bay and LA Metro markets.”
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About Sugarmade Inc.
Sugarmade is a product and branding marketing company investing in operations and technologies with disruptive potential. The company’s brand portfolio includes CarryOutsupplies.com, SugarRush(TM) and Budcars.com. For more information, visit www.Sugarmade.com. Sugarmade is an investor in BudCars and joint operator of BudCars’ first operating location in Sacramento, California. During early 2020, Sugarmade gained a 40% stake in BudCars and in the Sacramento delivery operations via the acquisition of a 40% stake in Indigo Dye Group. Under the terms of Sugarmade’s agreement with Indigo, Sugarmade also acquired an option to purchase an additional 30% interest in Indigo, upon the closing of which would provide Sugarmade with a 70% controlling interest. As of the date hereof, this option has not yet been exercised, Sugarmade’s stake in Indigo remains at 40%, and there is no assurance that Sugarmade will exercise the option to acquire an additional 30% interest in Indigo. However, since late May 2020, Sugarmade has been actively involved in development of Indigo’s operations with power to direct the activities and significantly impact Indigo’s economic performance. Sugarmade also has obligations to absorb losses and right to receive benefits from Indigo. As such, in accordance with the Financial Accounting Standards Board’s Accounting Standards Codification 810-10-25-38A through 25-38J, Indigo is considered a variable interest entity (“VIE”) of Sugarmade.
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