Why Kush Bottles Inc (OTCMKTS:KSHB) Shares Just Broke Support

Why Kush Bottles Inc (OTCMKTS:KSHB) Shares Just Broke Support


Kush Bottles Inc (OTCMKTS:KSHB) broke key chart support on Friday, cracking sharply under the critical $6/share level on a clear jump in trading volume. The only linked catalyst in association with this move was a Form 4 filed by the company detailing the issuance of stock options to a Donald Hunter. The day before, the company announced the appointment of Mr. Hunter to its Board of Directors.

According to the release, “Mr. Hunter is Principal at Donald Hunter, LLC, a consulting practice that assists private equity firms and entrepreneurs to enhance the value of their technology companies. He previously served as Chief Operating Officer and Chief Financial Officer of Harbor Global Company Limited, a publicly traded investment management, natural resources, and real-estate company, from 2000 through 2006, and as a senior executive at The Pioneer Group, Inc. from 1988 through 2000. Mr. Hunter began his career at the General Electric Company, where he was a member of the corporate audit staff and a graduate of its Financial Management Training Program.”

Kush Bottles Inc (OTCMKTS:KSHB) provides packaging products and solutions to producers, processors, and retailers operating in the regulated medical and recreational cannabis industry.

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.

It offers pop top bottles; child resistant exit, paper exit, and foil barrier bags; tubes; and polystyrene, polypropylene, or silicone containers to urban farmers, greenhouse growers, and medical and recreational cannabis dispensaries.

According to the company’s press messaging, “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 B2B 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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As noted above, shares of the stock cracked key support on Friday in a move that doesn’t really mesh with the company-level catalysts in play for the stock at the time, suggesting that we are dealing with a move that is more technical in nature.

In fact, the move to add Mr. Hunter to the board seems like a positive for further cultivating legitimacy in a market space starved for strong expressions of that attribute.

“Don has more than 25 years of public company experience and brings a wealth of knowledge in corporate governance and internal control, financial reporting, process improvements, mergers and acquisitions, international operations, and strategic planning.  We look forward to his contributions as a member of our board of directors,” said Nick Kovacevich, Chairman and CEO of Kush Bottles.

Mr. Hunter commented, “I’m pleased to join the Board at such a promising time in the company’s development. Kush Bottles is uniquely positioned to thrive in the growing cannabis market and I look forward to working with its Board and management team to help scale the business and develop long-term value for shareholders.”

KSHB is a stock with a past that has featured a litany of sudden rips to the upside. What’s more, the listing has seen a growing influx of trading interest, with the stock’s recent average trading volume running a bit over 330% above the average volume levels in play in this stock over the longer term. This is particularly important due to the extremely small float size in the stock (of 9.7M shares).

Now commanding a market cap of $324.4M, KSHB has a significant war chest ($5.5M) of cash on the books, which compares with about $1.9M in total current liabilities. One should also note that debt has been growing over recent quarters. KSHB is pulling in trailing 12-month revenues of $25.2M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 257.9%. This may be a very interesting story and we will look forward to updating it again soon. Sign-up for continuing coverage on shares of $KSHB stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $KSHB, either long or short, and we have not been compensated for this article.

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