Stem Holdings, Inc. d/b/a Driven by Stem (OTCQX: STMH) (CSE: STEM) (the “Company” or “Stem“), the first multi-state, vertically integrated Farm-to-Home™ (F2H) cultivation and technology omnichannel cannabis company featuring a proprietary Delivery-as-a-Service (DaaS) marketplace platform, today announced that it has received a non-storefront license to open a distribution hub in Mendota, located in the county of Fresno, enabling it to provide better service to consumers with its Budee™ e-commerce platform in four key counties in Northern California, home to 2.3 million residents*.
This expansion is expected to drive topline sales with greater efficiency, as the Company anticipates savings of up to $1 million in operating expenses including, but not limited to, gross receipt taxes over the next eighteen months. The Mendota facility will have a fixed tax rate that is 3% lower than the Company’s Oakland facility, representing approximately 25% of the total savings afforded by this facility.
In October 2021, the Company plans for the Mendota hub to become operational through a new 2,000 square foot facility, which will be dedicated to delivery service in 60 minutes or less. The city of Fresno is planning to license up to 21 retail dispensaries**, the first since legalization, by the end of this year. Budee maintains its unique position as a legal delivery service already reaching 92% of California’s population and is poised to service the Fresno market.
“The new Fresno distribution hub for non-storefront retail sales is the first of several planned initiatives to enhance revenue and reduce SG&A while improving service and variety for our valued Budee customers,” stated Adam Berk, Chief Executive Officer of Stem. “With cannabis sales on the rise in the region, our high-quality product assortment includes best-selling cannabis brands across all product segments available through Budee’s convenient delivery service and is a driver of market share gains.”
Continued Mr. Berk, “In addition to the newly added distribution hub, our three existing distribution hubs, as well as a medical cannabis dispensary, provide widespread delivery service to the significant population throughout California. An additional benefit of our Budee operating model includes the unique ability to market our well-known brands of products in contiguous states with our partners of leading cannabis brands directly to consumers, removing extraneous costs. Overall, the Company is well-positioned as a cannabis operations leader in California to build shareholder value. We remain focused on the operational improvements required to become the leading market share player in direct-to-consumer delivery throughout California, and we will continue to drive our expansion in the Western U.S.”
*ca.gov
** “Fresno finally approves its weed dispensary licenses” Fresno Bee, 9/9/21.
