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Friday, November 27, 2020

Is this a Pick-and-Shovel Boom for Kush Bottles Inc (OTCMKTS:KSHB)?

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As we have documented when looking at Kush Bottles Inc (OTCMKTS:KSHB), many of the company’s top-down metrics look convincing and the company occupies a strong pick-and-shovel niche in a high-growth space. Right now, the stock is sitting on huge gains over the past year – up well over 125% in that time – and in the midst of a technical consolidation that is currently testing the key 200-day SMA.

To further augment that story, the company just announced that it has launched three new child-resistant product lines, including three proprietary packaging lines, as the company continues to expand its product offering to include more variety and offer cannabis industry vendors more customizable, compliant packaging options. According to the release, “As part of the new product line announcement, Kush Bottles is also now a premiere distributor of LocTin by Compliant Packaging.”

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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Recent action has seen flat movement for shareholders over the trailing week. In addition, the stock has seen a growing influx of trading interest, with the stock’s recent average trading volume running 14% over the long run average. Traders should note this as important due to the tiny float size in the stock (of 9.7M shares).

“The launch of these new proprietary packaging solutions speaks directly to the dedication of our R&D staff to develop and provide our customers with the specialized packaging solutions that will help them differentiate themselves in the market,” said Nick Kovacevich, Kush Bottles’ Chief Executive Officer. “The ability to quickly develop and bring to market sleek new proprietary packaging options for our customers that are child-resistant, customizable and compliant with cannabis regulations is a true game-changer for this marketplace. We look forward to continuing along the path of developing and bringing innovative cannabis packaging solutions to market in a time- and cost-efficient manner.”

Currently trading at a market capitalization of $332.4M, KSHB has a significant war chest ($3.6M) of cash on the books, which stands against about $2.6M 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 $40.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 173.4%. 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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