KushCo Holdings, Inc. (KSHB) formerly known as Kush Bottles said that it is expecting to report a 171% increase in annual revenue to over $51 million for the fiscal year ended August 31st, 2018. The stock popped over 8% to lately trade at $5.23 on the news.
“Our fiscal year 2018 revenue serves as a historic milestone, not just for KushCo Holdings, but for the entire cannabis industry,” said Nick Kovacevich, CEO, and Chairman of KushCo Holdings. “We believe that no U.S. based public cannabis-related company has ever before generated this level of annual sales revenue. Building on the Company’s year to date momentum, our expected fourth quarter achievement of approximate revenues in excess of $19 million is a testament to the highly innovative and strategic work by our team, completing and integrating key acquisitions, and the effectiveness of our sales model in meeting the evolving needs of the market. We are witnessing just how our scale allows us to leverage synergies which benefit both us and our great customers.”
The news wasn’t all good. KushCo gave the market a heads up on a balance sheet hit. The company said that it expects to take a $1.8 million inventory adjustment charge resulting largely from opening multiple new distribution centers and its lack of a global warehouse management system. KushCo said that the situation would be addressed with software solutions being evaluated for implementation in the first half of the 2019 fiscal year.
The company experienced significant growth and blamed the problems on “growing pains.” KushCo opened several new distribution centers including Worcester, Massachusetts and Las Vegas, Nevada.
It has been an incredibly busy year for the cannabis packaging pioneer. The company acquired Zack Darling Creative Associates and its wholly-owned subsidiary, The Hybrid Creative, in order to offer brand strategy, creative design and marketing, web application development, and e-commerce solutions to cannabis and non-cannabis clients. It also launched Kush Energy, a new division focused on supplying the cannabis industry with tested, ultra-high purity solvents and hydrocarbons and went global by launching Kush Supply Co. Canada headquartered in Toronto.
In addition to all of those efforts, the company also started Koleto Packaging Solutions, the research, and development arm focused on developing innovative packaging products and creating Intellectual Property.