NEW YORK, NY / ACCESSWIRE / September 10, 2018 / SeeThruEquity, a leading independent equity research and corporate access firm focused on smallcap and microcap public companies, today announced it has initiated coverage on Sugarmade Inc. (OTCQB: SGMD) with a price target of $0.30.
The report is available here: Sugarmade Initiation Report.
We initiate coverage of Sugarmade, Inc. (OTCQB: SGMD, "Sugarmade") with a price target of $0.30. With headquarters in Monrovia, CA, Sugarmade is focused on supplying equipment and technologies to support the legal cultivation, processing and storage of cannabis and other agricultural products. Sugarmade entered this market in 2017, and has enhanced its position through marketing and distribution agreements with hydroponics supply company BizRight Hydroponics Inc. ("BizRight"), and Plantation Corp, which develops advanced storage solutions for cannabis under the BudLifeâ„¢ brand. Through the BizRight and BudLife programs, Sugarmade has positioned itself to compete as a meaningful supplier for the large and growing market for legal cannabis cultivation and storage in the US, beginning with California, Washington and Oregon. The company also announced that it had entered the hydroponics market in Europe on August 16, 2018, which is expected to augment growth opportunities. We are encouraged by initial guidance for FY2019, which calls for revenue of at least $30mn, primarily driven by sales from its new initiatives servicing the legal cannabis industry. We see Sugarmade as a speculative growth company targeting the rapidly emerging market for legal cannabis.
Highlights from the report include:
Sugarmade emerging as leading provider of hydroponics supplies
Sugarmade appears well-positioned to target the large and growing opportunity to supply hydroponics equipment and supplies to the cannabis cultivation market in the United States through its master marketing agreement with BizRight. The agreement provides the company with immediate scale with a $30mn annualized revenue run rate, enabling Sugarmade to emerge as a significant hydroponics supplier at a critical time of industry growth with the recent commencement of legal adult-use recreational marijuana in California. Indeed, according Cannabiz Media, the number of temporary marijuana licenses granted in California has grown by over 322% from 1,272 licenses on January 17, 2018 to 5,369 licenses on March 31, 2018. Sugarmade has stated that it April would be the first full month in which BizRight revenues would be consolidated at the company, placing it in an enviable position to capitalize equipment sales to new cultivator licensees in California. The company also plans to improve industry storage standards with its new BudLife Cannabis Storage Solutions, which utilize a proprietary atmospheric packaging technology to preserve cannabis for up to six months without refrigeration.
Legal cannabis among fastest growing markets in North America
We note that Sugarmade is emerging as a hydroponics and storage solutions supplier in one of the fastest growing markets in North America. Currently 29 US states have some form of legal cannabis, and Arcview Market Research estimates that spending on legal cannabis in North America is expected to grow from $9.2 billion in 2017 to $47.3 billion by 2027. Sugarmade's home market of California is quickly emerging as the largest US market; cannabis industry research firm BDS Analytics estimates that sales of cannabis in California alone will reach $3.7 billion by the end of 2018 and grow to $5.1 billion in 2019.
Initiate coverage of Sugarmade price target of $0.30
We initiate coverage of Sugarmade with a price target of $0.30 We view Sugarmade as a speculative growth company in the legal cannabis sector, which is seeking to emerge as a leading participant in hydroponics supplies. Sugarmade is differentiated from many companies in the cannabis space in that it is generating revenues, which are expected to surpass $30mn in FY2019. If achieved, the target of $0.30 represents potential upside of 130.8% from the recent price of $0.13 on September 3, 2018.
Please review important disclosures in the report and on our website at www.seethruequity.com.
About Sugarmade, Inc.
Sugarmade, Inc. is a product and brand marketing company investing in products and brands with disruptive potential. Sugarmade's brands include ZenHydro.com, CarryOutSupplies.com, and BudLife Cannabis Storage Solutions. For more information on the Company's products, see www.sugarmade.com/.
About SeeThruEquity
Since its founding in 2011, SeeThruEquity has been committed to its core mission: providing impactful, high quality research on underfollowed smallcap and microcap equities. SeeThruEquity has pioneered an innovative approach to deliver equity research of microcap and smallcap companies. SeeThruEquity has also been the host of acclaimed investor conferences that are the ultimate event for publicly traded companies with market capitalizations less than $1 billion since 2012.
SeeThruEquity is approved to contribute its research reports and estimates to Thomson One Analytics (First Call), the leading estimates platform on Wall Street, as well as Capital IQ and FactSet. SeeThruEquity maintains one of the industry's most extensive databases of opt-in institutional and high net worth investors. The firm is headquartered in Midtown Manhattan in New York City.
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SOURCE: SeeThruEquity
https://www.accesswire.com/511650/SeeThruEquity-Initiates-Coverage-on-Sugarmade-Inc