Kush Archives - Green Market Report

Jack SmithJuly 12, 2018


Kush Bottles (OTC: KSHB) said third-quarter revenue rose 173 percent year-over-year as organic growth continued to remain strong and the company’s acquisition strategy is paying off.

Santa Ana, Calif.-based Kush Bottles, which sells everything from packaging to supplies to vaporizers and accessories for the cannabis industry, saw third-quarter revenue climb to $12.9 million, up from $4.7 million in the year-ago period. Gross margins took a hit, falling to 28.3 percent, down from 35.5 percent, as the vaporizer and cartridge segments continue to see increased competition.

Kush Bottle’s Chairman and CEO Nick Kovacevich said in a statement the results were driven by “organic growth across all our major markets and product lines as well as the inclusion of our new operating company Summit Innovations.”

During the quarter, which ended on May 31, Kush closed on its acquisition of Summit Innovations, which expands Kush’s offerings into the hydrocarbon and solvent market. The company also acquired a digital creative agency, The Hybrid Creative, which Kovacevich said has a big roster in both the cannabis and traditional industries.

Net loss during the quarter was $258,837 and the company finished the period with $3.6 million in cash, up from Aug. 31, 2017, due in large part to a $6 million investment from Merida Capital Partners in February 2018.

Kush, which describes itself on its website as “the nation’s largest and most respected distributor of packaging, supplies, and accessories,” also said its new Nevada-based distribution center will allow it to further expand and better serve its customers.

After the quarter, the company raised $32.9 million, which Kovacevich said gives the company a “financial foundation for continued expansion in support of our growth strategy.”

Kovacevich highlighted that the company has laid the foundation for its growth as a result and will increase staff to help meet its customers’ needs.

“The introduction of a number of innovative new proprietary products, as well as increased investment in research and development, further strengthens the sustainability and defensibility of the Company,” Kovacevich added. “During the quarter, the company witnessed strong growth in our custom branded products as customers seek differentiated brand building solutions and we believe there is significant opportunity to continue to increase sales in this regard.”

Debra BorchardtJuly 11, 2018


It’s time for your Daily Hit of cannabis financial news for July 11, 2018.

On The Site

Aurora Cannabis Inc.

Aurora Cannabis Inc. (ACBFF) announced today a pair of agreements aimed at strengthening the company’s brand recognition and product offerings.

First, Aurora announced that it has signed a binding term sheet with CannaRoyalty Corp. (CNNRF) to purchase CannaRoyalty’s exclusive license to use and commercialize pre-roll technology developed by Wagner Dimas in Canada for a price of $7 million CAD.

Aurora also announced that it has entered into a partnership agreement with Evio Beauty Group, whereby Aurora will make a strategic investment in Evio. Aurora and Evio will work together to develop a line of co-branded cosmetic products containing hemp seed oil as well as CBD infused beauty products. Evio Beauty is a company with a wide portfolio of conscious lifestyle brands and its sister cosmetic brand, Evelyn Iona, has a diverse consumer base and a strong e-commerce platform. Both Aurora and Evio hope that this partnership will help increase both companies brand recognition and cross-selling opportunities.

Canopy Growth Corp.

Canopy Growth Corporation (CGC) is acquiring Hiku Brands Company Ltd.  (HIKU.CN) and paying a premium for the shares. Canopy is paying C$1.91 per share, which is a 33% premium based on the average price over a 20-day period. Hiku shareholders will receive 0.046 each of a Canopy Growth share.

Consequently, WeedMD has terminated its plans to merge with Hiku and will receive a $10 million termination fee. The companies had announced an “Arrangement Agreement” back in April. That deal was more a merger than an acquisition.

In Other News

Kush Bottles Inc.

Kush Bottles, Inc. (KSHB) acquired Zack Darling Creative Associates, LLC along with its wholly-owned subsidiary, The Hybrid Creative, LLC, a specialist design agency based in Santa Rosa, California. Kush Bottles acquired ZDCA for a total purchase price of $1.45 million in cash and 360,000 shares of Kush common stock.

Following the acquisition, ZDCA will operate as a wholly-owned subsidiary of Kush Bottles, with The Hybrid Creative continuing to operate as a wholly-owned subsidiary of ZDCA. The agency’s full portfolio of cannabis and non-cannabis projects will be operated through The Hybrid Creative subsidiary. Kush Bottles will also issue earn-out payments of up to $1.75 million, through a combination of cash and stock payments, based on Hybrid achieving certain milestones.

William SumnerFebruary 13, 2018


Cannabis packaging company Kush Bottles today announced that the company has entered into a strategic partnership with Merida Capital, a private equity fund targeting the cannabis industry. Kush has received a $6 million equity investment from Merida, which the company will use to expand its product portfolio, build new distribution channels and penetrate new legalized markets.

The announcement comes in the wake of the company reporting a 285% rise in revenue for the first fiscal quarter of 2018, with a net income of $94,615 compared to the previous year’s loss of $161,000.

The strategic partnership will leverage Merida’s strong East Coast presence to help build Kush Bottles’ distribution platform and expand the company’s footprint in East Cost medicinal and recreational market; offering the opportunity for the company to develop and execute its acquisition pipeline with Merida’s help.

In a statement Nicholas Kovacevich, the Chairman and CEO of Kush Bottles said that Merida’s understanding of the unique dynamics of the cannabis industry, as well as its strong networks and willingness to finance Kush Bottles’ growth, would serve as an invaluable asset as the company moves to explore new markets and opportunities.

“We plan to use this capital investment to expand our range of proprietary products to meet the needs of the industry, advance our M&A strategy to take advantage of consolidation in the industry and grow market share,” Kovacevich said.

Echoing Kovacevich’s words, Merida’s Managing Partner, Mitchell Baruchowitz, expressed admiration for the team behind Kush Bottles and their work.

“Since we first started discussing a partnership and investment in Kush Bottles nearly seven months ago, we have been deeply impressed by the vision of Nick and his team and the progress they have made strategically positioning Kush Bottles as much more than simply a packaging company. Kush Bottles’ acquisitions and in-house development efforts have established the Company as a critical link in the supply chain for more than 5,000 cannabis growers, extractors, manufacturers, and retailers. The Merida team could not be more excited to put significant resources to work to build on this foundation to expand Kush Bottles’ leading position,” added Baruchowitz.

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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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