California-based Kush Bottles, Inc. (KSHB), reported its financial results for its fiscal year ended August 31, 2017 with revenues climbing 129% year over year to $18.8 million. Net income came in at $69,000 down from 2016’s $72,000. Gross profits were $6.2 million, a nice jump over last year’s $2.6 million.
“Fiscal year 2017 was a pivotal year for the Company as we began a new and exciting chapter,” commented Nick Kovacevich, Chairman and Chief Executive Officer of Kush Bottles. “We implemented a series of growth initiatives intended to expand our product portfolio, strengthen our supply chain, increase our sales force and position Kush Bottles as the leading provider of ancillary products and solutions to the rapidly growing cannabis market. As a result of these initiatives, our sales growth steadily gained momentum throughout the year, resulting in record revenues of $18.8 million in fiscal year 2017, representing an increase of 129% compared with fiscal year 2016.”
Kovacevich noted that the company’s strong fourth quarter results were driven by the company’s acquisition of CMP Wellness that occurred in May of 2017. This enabled the company to take advantage of the explosive vape market.
“The acquisition brings significant revenue and growth opportunities in the vapor category, as well as synergies which expand our ability to grow the core packaging, supplies, and services business. This acquisition was the latest of several initiatives implemented throughout the year to diversify our product offerings to capture additional market share in the cannabis sector,” said Kovacevich. “We have made great strides to gain market share in new emerging cannabis markets such as Nevada and California, areas we expect to remain a large focus in fiscal year 2018.”
The company also stated in its annual report that on November 16, 2017, Kush Bottles and Kush International Corporation (KIM) as borrowers, and all of its other subsidiaries, as credit parties, entered into a Loan and Security Agreementwith Gerber Finance Inc., as the lender, effective as of November 6, 2017. The loan provides a secured revolving credit facility with an aggregate principal amount of up to $2.0 million at any time outstanding, of which $1,500,000 was drawn as of November 24, 2017. The proceeds of the loans under the Loan Agreement will be used for working capital and general corporate purposes. The revolving line has a maturity date of November 6, 2019.
Kush Bottles, Inc. markets and sells packaging products and solutions to customers operating in the regulated medical and recreational cannabis industries. Kovecevich told Green Market Report during the MJ Biz conference recently that California was a huge catalyst as the state embarks on new regulations that include new requirements for packaging.