Sugarmade Inc (OTCMKTS:SGMD) Makes Its Play, Near Term Upside On The Cards

Sugarmade Inc (OTCMKTS:SGMD) Is an interesting exposure right now. The company is riding the wave of speculative marijuana capital (although it is a little late to the party) and is looking likely to close out the week close to 200% up on its midweek pricing. Under normal conditions, no more than 50,000 shares trade hands daily, and that's on the very top days. On November 3, however, 2.05 million shares went back and forth, and those on the right side of the transaction picked up a quick turnaround and profit.The question is, can this momentum continue, or is it just a short-term injection of speculative attention? Let's take a look.It's worth mentioning, initially, that before Thursday, Sugarmade hadn’t really drawn any marijuana sector related attention – and if it had – it was very much under the radar. The company has essentially traded flat around the $0.1 mark since the beginning of September, with the aforementioned very low volume prohibiting any considerable moves. It just announced the unveiling of a new marijuana transport packaging system, however, opening the floodgates for speculators looking for another cannabis play.At its root, the product is pretty neat. It's essentially a way to hide the fact that retailers and distributors are sending cannabis products through the mail by way of an air tight sealed bag wrapped in what is designed to look like a standard generic packaging material. It falls in line with the company's legacy operations (altered for cannabis application). However, as yet, aside from a press release stating that the product will be stocked in local dispensaries and hydroponic supply stores, and will be available to consumers online over the coming months, there's very little substance underpinning the products retail strategy and – in turn – prospects.Outside of its marijuana packaging operations, Sugarmade has recently made a couple of announcements relating to products set to hit shelves near term, but again, we don't really see these as game changing. If anything, the marijuana packaging business has the highest potential of the lot. The two primary announcements related to a Sriracha seasoning stick, which the company is developing in conjunction with California-based Huy Fong Foods, Inc., the maker of Sriracha Hot Chili Sauce, and a type of slip cover designed to improve the game Beer Pong for which it is acting as manufacturer and distributor on behalf of the inventors.So what is the deal here? Where is the company headed, and is there any momentum left to be taken advantage of in the wake of the recent 200% revaluation?The short answer is yes, probably.Although it's very much one of those stocks traders don't want to get too attached to. It has a decent link to the cannabis space – one that is far less tenuous than those of many other companies picking up even higher revaluations – and this link will likely drive speculative investment as we head into the upcoming legalization ballots and beyond. After all, retailers are going to need some form of discrete packaging with which they can limit the potential for theft along the supply chain, and while we don't know too much about it right now, at concept, at least, Sugarmade seems to have the solution in production.If this side of the company's operations takes off, there's probably some decent long-term potential. Having said this, at its current $50 million valuation, a large portion of this potential is already priced in, and longer-term we are probably looking at some level of correction before the company executes on a strategy to warrant this degree of market capitalization. Revenue isn't terrible, circa $1 million a quarter on average across the last four quarters, but cash is practically non existent and a dilutive raise can’t be far away.Bottom line, there is short-term opportunity here, and if the company can execute to the letter, there might be some longer-term gains to be had as well. Right now, however, we are focusing on the former as the only real viable play.We will be updating our subscribers as soon as we know more. For the latest updates on SGMD, sign up below!Disclosure: We have no position in SGMD and have not been compensated for this article.