Driven By Stem Expands California E-Commerce and Delivery Footprint with New Distribution Hub License

New distribution hub serves four key counties in Northern California – Fresno, Merced, Stanislaus and Tulare

Reduces annualized operating expenses and gross receipt taxes

BOCA RATON, Fla., Sept. 27, 2021 (GLOBE NEWSWIRE) — 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.”


** “Fresno finally approves its weed dispensary licenses” Fresno Bee, 9/9/21.

About Stem Holdings, Inc.

Stem Holdings is a leading omnichannel, vertically-integrated cannabis branded products and technology company with state-of-the-art cultivation, processing, extraction, retail, distribution, and delivery-as-a-service (DaaS) operations throughout the United States. Stem’s family of award-winning brands includes TJ’s Gardens™, TravisxJames™, and Yerba Buena™ flower and extracts; Cannavore™ edible confections; Doseology™, a CBD mass-market brand launching in late 2021; as well as DaaS brands Budee™ and Ganjarunner™ through the acquisition of Driven Deliveries. Budee™ and Ganjarunner™ e-commerce platforms provide direct-to consumer proprietary logistics and an omnichannel UX (user experience)/CX (customer experience).

Cautionary Note Regarding Forward-Looking Information

This press release contains statements that constitute “forward-looking information” within the meaning of applicable securities laws, including statements regarding the plans, intentions, beliefs and current expectations of the management of Stem with respect to future business activities. Forward-looking information is often identified by the words “may,” “would,” “could,” “should,” “will,” “intend,” “plan,” “anticipate,” “believe,” “estimate,” “expect” or similar expressions and includes information regarding: (i) expectations around the accretive nature of the Fresno facility; (ii) the expansion of the Company’s market following the development of the Fresno facility and the ability to scale operations; and (iii) the launch of delivery services into Stem’s current and future markets. Investors are cautioned that forward-looking information is not based on historical facts but instead reflects the management of Stem’s expectations, estimates or projections concerning future results or events based on the opinions, assumptions and estimates of management considered reasonable at the date the statements are made. Although Stem believes that the expectations reflected in such forward-looking information are reasonable, such information involves risks and uncertainties, and undue reliance should not be placed on such information, as unknown or unpredictable factors could have material adverse effects on future results, performance or achievements of the Company. Among the key factors that could cause actual results to differ materially from those projected in the forward-looking information are the following: changes in general economic, business and political conditions, including changes in the financial markets; the ability of the Company to raise debt and equity capital in the amounts and at the costs that it expects; adverse changes in the public perception of cannabis; construction delays; decreases in the prevailing prices for cannabis and cannabis products in the markets that the Company operates in; adverse changes in applicable laws; adverse changes in the application or enforcement of current laws, including those related to taxation; the inability to locate and acquire suitable companies, properties and assets necessary to execute on the Company’s business plans; political risk; and increasing costs of compliance with extensive government regulation. This forward-looking information may be affected by risks and uncertainties in the business of Stem and market conditions.

Should one or more of these risks or uncertainties materialize, or should assumptions underlying the forward-looking information prove incorrect, actual results may vary materially from those described herein as intended, planned, anticipated, believed, estimated or expected. Although Stem has attempted to identify important risks, uncertainties and factors which could cause actual results to differ materially, there may be others that cause results not to be as anticipated, estimated or intended. Stem does not assume any obligation to update this forward-looking information except as otherwise required by applicable law.

No securities regulatory authority has in any way passed upon the merits of the proposed transactions described in this news release or has approved or disapproved of the contents of this news release.

Stem Holdings
Investor Relations Contact:
KCSA Strategic Communications
Valter Pinto, Managing Director
1 212.896.1254
[email protected]

Media Contact:
Mauria Betts
Director of Branding and Public Relations
[email protected]