Why Kush Bottles Inc (OTCMKTS:KSHB) Shares Rallied and Reversed

Cannabis Sativa

Kush Bottles Inc (OTCMKTS:KSHB) shares were up 3.66% on Monday to $4.55 then down 2.66% in after-hours trading to $4.16. Share prices have been trading in a 52-week range from $0.70 to $10.00. The company has a market cap of $201.92 million at 45.71 million shares outstanding.

Kush Bottles Inc is a company that offers packaging supplies for the cannabis industry. As such, it markets and sells packaging products and solutions to customers operating in the regulated medical and recreational cannabis industries, as well as custom branding on packaging products. Its packaging business primarily consists of bottles, bags, tubes and containers.

The company’s flagship product is Phillips RX pop-top vial, which requires a squeeze motion that actually pops the attached top up and open. Apart from that, it provides a range of packaging solutions in the form of a bag and a range of bags, such as child resistant exit bags, traditional paper exit bags, and a range of food-grade safe foil barrier bags. Kush Bottles Inc offers products under brands, such as Futurola, Philips RX, RAW, Dank’s Industries, Boveda and Nectar Collector.

Share prices of Kush Bottles Inc have nearly tripled in value since August, owing to its new packaging solutions and partnerships with Acology and Bud Bar Displays. The company is also able to take advantage of the strong growth in the cannabis industry leading up to the US elections, which could yield legislation that would support the legalization of cannabis for recreational purposes in several states. As it is, the company has already teamed up several innovative manufacturers in order to develop exit bags and other regulation-approved products for dispensaries to use as packaging for cannabis products.

One example of this its new ‘Kush N Slide’ child-resistant exit bag, which was announced a couple of months back. The company is hopeful that the increase in demand for cannabis products would also support the need for regulation-approved products such as those with child-resistant exit packaging.

Soon after, Kush Bottles Inc signed a partnership agreement with Acology whose signature product is MedTrainer, a store, grind and pour packaging solution for cannabis products in California.

The MedTainer is a great addition to our growing portfolio of customizable products, which have been shown to create a steady stream of recurring revenue, as customers typically reorder customized products. The MedTainer was particularly appealing to us because our customers can use it as a promotional giveaway or accessory cross-sell to help build their brand,” said Kush Bottles Inc CEO Nicholas Kovacevich.

Just last month, the company also partnered with Bud Bar Displays, which would market its high-end cannabis merchandising displays. As with their other products, these jar displays meet regulations in many states, thereby expanding their potential market reach. More details on these partnerships and initiatives will be shared at two prominent conferences in the coming weeks, namely the New England Cannabis Convention and the Entrepreneurial Opportunities Forum.

Of course much of the stock’s gains hinges on the outcome of the elections in terms of cannabis regulation, but industry experts are hopeful that the odds will favor legalization in several states.

On the daily time frame, it can be seen that price made a strong break out of consolidation for nearly a year and sustained its upside momentum. Volume has been considerably higher in the past few weeks, reflecting stronger investor interest. Price is in consolidation for the time being, potentially waiting for more bullish clues after the elections.

DISCLAIMER: There is a substantial risk of loss with any speculative asset, especially small cap stocks. The opinions expressed are those of the author, and do not constitute recommendations to buy or sell a stock. Do your own research before committing capital.