Kush Bottles Inc (OTCMKTS:KSHB) is a penny play on the accessory side of the marijuana space. The last time we took a look at this stock, we said it looked a bounce opportunity based on the nature of recent action and the trends in place for the company. We did see an immediate 40% rip off that piece, but the stock has slid back down into the same area on the chart at this point, and it seemed like a good time to take another look.
KSHB has evidenced sudden upward volatility on many prior occasions, which makes it an interesting issue to track for traders. Moreover, the listing has registered increased average transaction volume recently, with the past month seeing 180% above the average volume levels in play in this stock over the longer term. This is particularly important with a float in play that’s tight — just a tad more than 16M shares. Traders should not overlook this combination, as a mechanically driven price squeeze can result from this type of mix of small float and ramping attention from traders.
Kush Bottles Inc (OTCMKTS:KSHB) bills itself as a company that markets and sells packaging products and solutions for the medical and recreational cannabis industries in the United States.
It offers pop top bottles; child resistant exit, paper exit, and foil barrier bags; tubes; and polystyrene, polypropylene, or silicone containers to urban farmers, green house growers, and medical and recreational cannabis dispensaries.
KSHB sells primarily into the b2b market, which includes legally operating medical and adult-use dispensaries, growers, and MIP producers (Marijuana Infused Products) in states with marijuana programs. The company’s goal is to reach a diversified customer base through direct sales, web, and re-distribution channels. Kush Bottles Inc was founded in 2010 and is based in Santa Ana, California.
According to the company’s press messaging, “Kush Bottles, Inc. provides packaging products and solutions to producers, processers and retailers operating in the regulated medical and recreational cannabis industry. Founded in 2010, Kush Bottles has sold more than 100 million bottles and regularly services thousands of customers across the United States and Canada. The company primarily services the business-to-business market, which includes legally operated medical and adult-use dispensaries, growers and marijuana-infused product manufacturers. Kush Bottles aims to be the gold standard for responsible branding and packaging in the cannabis industry.”
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The only clear, new catalyst in play since our last update is the company’s decision to appoint Eric Baum to its board of directors, effective December 7, 2016. Eric Baum’s appointment coincides with Director Greg Gamet’s resignation from the Board after 18 months of service. Baum brings more than 15 years of experience in advising executive teams across a variety of industries, ranging from high-profile Fortune 50 companies to emerging ventures.
Mr. Baum currently serves as a managing director at Acquis Consulting Group and its affiliate, Solidea Capital. Baum utilizes his extensive management consulting experience to guide companies through corporate strategy, market positioning, board governance, financing and risk evaluation, among other business initiatives.
“Eric has an impressive track record of helping companies of all sizes take the next step in their growth strategies,” said Nick Kovacevich, CEO of Kush Bottles. “His exposure to businesses across all stages of development positions him well to provide a unique perspective for the board. Eric will be an invaluable asset to Kush Bottles as we look to capitalize on the rapidly evolving and growing cannabis marketplace.”
Otherwise, the numbers look strong and the company is well-positioned to take advantage of growth in California and Oregon. As noted recently, total revenues increased from $4,013,571 in fiscal 2015 to $8,215,452 in fiscal 2016, an increase of $4,201,881 or 105%. This increase is primarily attributed to continued penetration of existing markets in California, Colorado, Washington, and Oregon as well as growth in new markets in other states. In addition, growth in volume of customer orders throughout the fiscal year in these markets contributed to the increase in revenues.
At this time, carrying a capital value in the market of $134.2M, KSHB has a decent store ($1.03M) of cash on the books, in a pool of total assets a bit over $5.6M, which compares with very little total accumulated debt. KSHB is making real money, with trailing 12-month revenues coming in at 8.22M. In addition, Kush Bottles Inc is seeing major top line growth, with y/y quarterly revenues growing at 54.6%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. For continuing coverage on shares of $KSHB stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!