We like to review Kush Bottles Inc (OTCMKTS:KSHB) quite frequently, given that the company is piling up some extremely strong financials (nearly 250% in sales growth over the past year) and trading on a very small float (under 10 million shares), which creates the constant potential for dramatic upside action. We have also seen plenty of strong catalysts in play for this stock of late, which is another powerful reason to keep this one on the radar.
As a case in point, the company recently announced it has completed its acquisition of Summit Innovations, LLC, a leading distributor of hydrocarbons to the legal cannabis industry based in Denver, Colorado. According to the release, “Summit Innovations was acquired in exchange for 1,280,000 shares of Kush Bottles common stock and approximately $3.2 million in cash, subject to certain adjustments and holdbacks, as further described in the Company’s press release dated April 10, 2018.”
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, “Kush Bottles, Inc. (OTCQB: KSHB) is a dynamic sales platform that provides unique products and services for both businesses and consumers in the cannabis industry. Founded in 2010 as a packaging and supplies company for dispensaries and growers, Kush Bottles has sold more than 100 million units and now regularly services more than 5,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe. The Company has facilities in the three largest U.S. cannabis markets and a local sales presence in every major U.S. cannabis market.”
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As noted above, KSHB shares have been finding support and starting to move back higher in recent action.
According to the company’s most recent release, “Hydrocarbon gases are used to convert cannabis plants into oils, and this acquisition marks Kush Bottles’ entry into a new business vertical supplying gas to cannabis extractors. Summit Innovations operates seven distribution facilities located across the country. Its four core products are high purity butane, propane, iso-butane and blends. Summit Innovations works closely with legal cannabis manufacturers to ensure cleanliness, product quality, safety and compliance during the extraction process.“
“We are pleased to close this acquisition and secure our entry into the hydrocarbon segment of the cannabis market,” commented, Nicholas Kovacevich, CEO and Chairman of Kush Bottles. “Gas is the lifeblood of the cannabis market and Summit Innovations offers a broad range of hydrocarbon gases that meet the complex needs of cannabis extractors across the country. By bringing Summit Innovations under the Kush Bottles umbrella, we expect to leverage synergies in our distribution channels to grow sales at both Summit and our existing business lines. This is a major step forward in our strategy to position Kush Bottles as a one-stop shop for any business looking to operate responsibly within the legal cannabis market.”
Recent action has seen 14% piled on for shareholders of the name during the trailing month. What’s more, the name has seen interest climb, with an increase in recent trading volume of 13% over what the stock has registered over the longer term. This should not be overlooked due to the very limited float size in the stock (of 9.7 million shares), as noted above.
At this time, carrying a capital value in the market of $371M, KSHB has a significant war chest ($7.1M) of cash on the books, which is balanced by about $1.1M in total current liabilities. KSHB is pulling in trailing 12-month revenues of $32.6M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 248.8%. We will update the story again soon as further details emerge. 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.