Debra Borchardt
Cannabis packaging company Kush Bottles, Inc. (KSHB) reported rising revenue and net income for its first fiscal quarter of 2018, for the period ending November 30, 2017. Revenue rose 258% to $8.85 million over last year’s $2.4 million and net income was $94,615 versus last year’s net loss of $161,000. Gross margins fell from 34% to 30% as business increased in the lower margin vaporizer category.
“We entered fiscal 2018 with excellent momentum as we saw the impact of the strategic initiatives implemented throughout 2017 start to take hold,” said Nick Kovacevich CEO of Kush Bottles. “This strength in the business led to net profits of $94,615 in fiscal Q1 2018. We also saw our cash balance increase to $5.5 million, which we plan to invest towards inventory purchasing, development of proprietary products, and other strategic initiatives.”
The company’s gross profits rose to $2.6 million in the quarter over last year’s $834,643. Total operating expenses also increased to $2.5 million over last year’s $971,624.
Kovacevich added, “During the first fiscal quarter of 2018, we saw the release of California’s new temporary regulations for medical and adult-use cannabis sales, which took effect on January 1, 2018. California is not only the U.S.’s largest cannabis market but also our home market where we have already extensively invested in sales, marketing, and infrastructure. We consider the legalization of adult-use cannabis sales to be a major opportunity to scale the business throughout 2018 and beyond, and we have made significant headway to establish the Company as a leader in this market. Many of our clients have been granted temporary licenses and we are working with them closely during this hectic transition period as California finalizes its permanent regulations over the next 6 to 12 months.”
Last week, the company announced management changes. Ben Wu, who has served as Chief Operating Officer since 2014 was stepping down and Jim McCormick will assume the role of Chief Operating Officer in addition to continuing to serve in his current capacity as Chief Financial Officer.
The company will host a conference call after the market closes on Tuesday. The stock was lately trading at $6.70 for a year high, quite a nice move over the 52-week low of $1.61.
