Perhaps the most interesting move to close out last week in the “quality” wing of the OTC cannabis patch was the powerful rebound and upside breakout in shares of KushCo Holdings Inc (OTCMKTS:KSHB). It’s important to remember that this name is riding y/y quarterly revenue growth of 222%. Hence, the breach of support found a bid probably representing real accumulation. It offers traders a chance to use the tail on the chart under $3.75/share as risk point of reference.
To further flesh out the story, the company just announced the creation of their new Retail Services division. According to the release, “The new business unit will focus on providing comprehensive retail solutions, through strategic partnerships with best-in-class sales agencies, to leading CBD brands. KushCo’s retail services division will focus on industry education and compliance, as well as building distribution networks of CBD brands across conventional retail channels. With Retail Services experienced leadership optimizing growth opportunities, this division will expand the Company’s platform and fuse two industries that have historically operated independent of each other.”
KushCo Holdings Inc (OTCMKTS:KSHB) is the parent company to a diverse group of business units that are transformative leaders in the cannabis, CBD and other related industries. KushCo Holdings’ subsidiaries and brands provide exceptional customer service, product quality, compliance knowledge and a local presence in serving its diverse customer base.
KushCo Holdings’ brands include Kush Bottles, a dynamic sales platform that is the nation’s largest and most respected distributor of packaging, supplies, and accessories, Kush Energy, which provides ultra-pure hydrocarbon gases and solvents to the cannabis and CBD sector, Hybrid Creative, a premier creative design agency for cannabis and non-cannabis ventures, and Koleto Packaging Solutions, the research and development arm driving intellectual property development and acquisitions.
Founded in 2010, KushCo Holdings has now sold more than 1 billion units and regularly services more than 5,000 legally operated medical and adult-use dispensaries, growers, and producers across North America, South America, and Europe. KushCo Holdings subsidiaries maintain facilities in the five largest U.S. cannabis markets as well as having a local sales presence in every major U.S. cannabis market.
According to its materials, “KushCo Holdings, strives to be the industry leader for responsible and compliant products and services in the legal cannabis and CBD industry. The Company has been featured in media nationwide, including CNBC, Los Angeles Times, TheStreet.com, Entrepreneur, and business magazine Inc. While KushCo Holdings services all facets of the cannabis and CBD industries, it has no direct involvement with the cannabis plant or any products that contain THC or CBD.”
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As noted above, KSHB just announced the creation of their new Retail Services division, helping to frame some turbulent but interesting recent action on the chart.
Over the past month, shares of the stock have suffered from clear selling pressure, dropping by roughly -7%. In addition, the company has benefitted from a jump in recent trading volume to the tune of 37% above the average volume levels in play in this stock over the longer term.
However, as noted above, the action to close out last week should be regarded as an important warning signal for those short the stock: it is Defended! (as far as we can tell, anyway).
According to the release, “In his position as Vice President of Retail Services, Ryan Savage will oversee sales agency partnerships, including C.A. Fortune, a leading full-service national consumer products sales and marketing agency focused on lifestyle brand partnerships. In addition, he will manage the expansion of CBD into the retail space across all channels, driving sales through management of brands, brokers, and customers to increase distribution and revenue growth. Ryan Savage has spent the past 15 years gaining knowledge of multiple aspects of the consumer packaged goods (CPG) industry. He has worked with many diverse, major retailers including Sprouts, Trader Joes, Target, Amazon, and Kroger, in both a branded and private label capacity.”
Now commanding a market cap of $390M, KSHB has a significant war chest ($12.2M) of cash on the books, which stands against about $29.8M 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 $121.9M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 221.5%. As more color becomes clear on the name, we will review the situation and update our take. 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.