Kush Bottles Inc (OTCMKTS:KSHB)
Investors who missed out on the internet explosion may wish to consider an industry that is experiencing similar growth and, due to proposed federal de-regulation, could continue its massive growth rates. The industry? Legalized marijuana. The North American legalized marijuana market grew by 30% in 2016 to record revenues of $6.7 billion. Kush Bottles Inc (OTCMKTS:KSHB) has participated in that growth without touching a single plant and is poised to continue eye-popping returns.
Consider the Q2 2017 financial results released by Kush Bottles Inc (OTCMKTS:KSHB) on April 12, 2017. Revenues were $3 million – up 65% YoY. On August 31, 2016 Kush reported a cash balance of $1 million and that number jumped to $2.8 million. Working capital nearly doubled from $2.03 million to $4.6 million.
Kush Bottles Inc (OTCMKTS:KSHB) supplies the legal marijuana industry with packaging and products to processors and retailers in the USA and Canada. Since its founding in 2010, Kush has sold over 100 million products, and 3,000 customers, in the B2B space of the sector. Their core clients are legally operated medical and adult-use dispensaries, as well as marijuana growers and marijuana-infused product manufacturers.
The branding of Kush Bottles Inc (OTCMKTS:KSHB) cannot be underestimated. Arcview, a market research firm that has been following the legal marijuana market since 2013, estimates that over 40% of all marijuana product sales involved recognized brands. Industry observers often compare the emerging industry with the beer industry of the early and mid-20th century when beer sales were dominated regionally by select brewers. As the market developed, those brewers were bought or squeezed out and the better branded brewers came to dominate the market. Helping set the stage for such an eventuality in the legalized marijuana market is proposed federal legislation seeking to de-criminalize marijuana. That effort has been ongoing but is also, undoubtedly, becoming more mainstream with each passing year. Every election cycle seems to witness another state’s voters giving the greenlight to legal marijuana usage. And Kush Bottles Inc (OTCMKTS:KSHB) share price seems to receive a lot of attention when that happens.
But it not only KSHB’s share price that receives a lot of attention. The burgeoning industry has received millions of dollars in free PR through the coverage of the mainstream media. Kush Bottles Inc (OTCMKTS:KSHB) has been featured on CNBC, the Los Angeles Times, TheStreet.com, and Entrepreneur and Inc. magazines.
Kush Bottles Inc (OTCMKTS:KSHB) has a 52-week high of $5.00 and a 52-week low of $0.90. Currently it is trading in the $2.50 – $2.60 range. But will momentum for legislation removing marijuana production and use from federal criminal codes continue? If so, it is easy to see that Kush Bottles Inc (OTCMKTS:KSHB) could become one of the better branded, and sought after, companies in the industry.
I have no positions in any stocks mentioned, and no plans to initiate any positions within the next 96 hours. All information, or data, is provided with no guarantees of accuracy.
About the author: Steve Clark is a 23-year Wall St professional with stints in M&A, risk management, and algorithm trading.