Cannabis growers and retailers are not the only stocks worth buying in the marijuana industry
KushCo Holdings KSHB (OTCMKTS), a niche United States cannabis stock, turned heads last week with its preliminary sales results from fiscal 2018. In a press release from the company, it boasted $51 million in sales, marking a 171 percent increase in revenue from the prior fiscal year.
KushCo made a similarly outstanding announcement last year when its 2017 sales were up 129 percent over the fiscal year 2016. The company is one of the many ancillary marijuana businesses that are rising right along with the more talked about direct cannabis businesses such as growers, processors, distributors, and retailers.
KuskCo provides a key piece of the legal marijuana market puzzle: packaging. The company is in line for major profits in the legal Canadian market with its niche ability to produce the packaging required by Health Canada.
Strict new Canadian rules require cannabis products to become in tamper and child-resistant packaging. They also must bare bright yellow health warning logos, meet strict product label specifications on everything from the size of the logo to the font used in its text.
However, there are a few things about KushCo’s recent activity that investors should be aware of before they buy. The company recently completed major acquisitions that greatly extend its portfolio. The costly buyouts include the branding, marketing, and e-commerce company The Hybrid Creative along with the hydrocarbon gas and solvent company Summit Innovations.
Between the cost of the acquisitions and the amount KushCo plans to spend reinvesting in new infrastructure, the company could post full-year losses in 2019 and possibly 2020.