KushCo Holdings Inc (OTCMKTS:KSHB) reports a marginal growth of 9.0% YoY to $32.884 million in Q2 2021. The company made a turnaround by reporting a profit of $6.441 million in Q2 2021.
Progress in partnerships
CEO and Chairman of KushCo, Nick Kovacevich, said the company is excited to report a meaningful growth of 9% in Q2 2021. The company also makes progress in its partnerships with leading brands, licensed producers, and multistate operators to boost growth.
Its top 25 customers accounted for 77% of the overall revenues in Q2 2021. The company secured a long-term contract from a leading operator. KushCo is working relentlessly to add more such contracts for stainless steel tanks.
KushCo expects to improve revenues from its customized packaging products. The company posted higher revenues in Q2 2021 but experienced uncontrollable and temporary shipping delays, just like in Q1 2021.
The shipments to the US destinations are delayed mainly because of coronavirus restrictions. Its margins are affected because of higher freight costs.
Its spending also increased in Q2 2021 because of the opening of a new California housing. However, KushCo expects to generate annual savings of over $1 million from this initiative.
Expects solid growth
KushCo expects to report solid growth in the future because of the legalization of cannabis in several US states like New York and Virginia. The expected integration with Greenlane and favorable cannabis reforms at the central level will position KushCo to capitalize on the tailwinds.
KushCo also expects to benefit from cross-selling opportunities, differentiated customer offerings, and improved scale.
Outlook for 2021
KushCo retracted its revenue guidance of $130 million for 2021 because of its expected integration with Greenlane, likely before Q3 2021.
Retires unsecured term debt
KushCo paid $17 million to retire its senior unsecured term debt, which includes interest and principal balance, on March 29, 2021. The company mobilized funds in 2019 through unsecured debt to support sales growth and realign its capital structure.
Renews pact with Abstrax Tech
KushCo is pleased to renew its association with Abstrax Tech on February 17, 2021. The company has proven itself a reliable partner in offering ancillary products/ solutions to MSOs, CBD industries, LPs, and regional brands.
KushCo Holdings Inc (OTCMKTS: KSHB) 3Q2021 Revenue Increases 27% YoY To $28.3 Million
KushCo Holdings Inc (OTCMKTS: KSHB) recently announced financial results for 3Q2021 ended May 31, 2021. The company reported a 27% YoY increase in its net revenue to $28.3 million, attributed to its existing customer base of Multi-State Operator (MSO) and Licensed Producers (LP), and securing new MSO customers. In addition, KushCo recently opened a 130,000 sq ft West Coast warehouse in Moreno Valley, California, to reap about $1.3 million in annual cost savings, in line with its warehouse consolidation strategy. The company has also scheduled a special shareholder meeting in August 2021 to approve a transformative merger with Greenlane Holdings Inc (NASDAQ: GNLN), which will create the leading ancillary cannabis company.
3Q2021 financial summary
KushCo reported $9.1 million in SG&A expenses, a decrease from $12.7 million reported for 3Q2020. The YoY decrease was attributed to reductions in consulting spend, headcount, bad debt expense, and stock compensation expenses, primarily due to the company’s 2020 implementation plan and the COVID-19 pandemic. KushCo reported a net loss of $8.0 million on a GAAP basis, a YoY decrease from $13.5 million in 3Q2020. Loss per share was $0.05 compared to $0.11 in the prior-year quarter. Higher revenue and cost reductions helped achieve adjusted EBITDA of ($1.1) million in 3Q2021 than ($2.7) million in 3Q2020.
KushCo reported cash of $1.1 million as of May 31, 2021, compared to $35.0 million at the end of February 28, 2021. The QoQ decrease in the case was attributed to using a portion of its proceeds from the equity raise to pay off $17 million term debt and existing balance on the revolving line of credit. The company reported a total debt outstanding of approximately $0.7 million as of May 31, 2021.
Nick Kovacevich, Chairman, Co-founder, and Chief Executive of KushCo, mentioned that the 3Q2021 represented another significant period, with the 2nd consecutive quarter of YoY growth in revenue. The growth was driven by a 60% YoY increase in sales to the company’s top 25 customers. Alongside, the customers’ quality also continued to improve, putting KushCo in a solid position to capitalize on the next stage of growth. In addition, fiscal prudence in the company’s operations helped it report one of the lowest SG&A expenses in recent quarters.
GreenGro Technologies, Inc. Common Stock (OTCMKTS: GRNH) Launches New Hemp-Infused Product Line Under Greengro Brand
GreenGro Technologies, Inc. Common Stock (OTCMKTS: GRNH) recently announced the launch of its much-awaited product line of hemp-infused topicals, tinctures, oil, and capsules. The launch will focus on the product range that contains the main psychoactive component, tetrahydrocannabinol (THC), found in cannabis. The newly launched products under GreenGro Brand will be available online through its eCommerce platform and its distributor network. In addition, GreenGro also announced two new distribution agreements with a network of pharmacies, pain management clinics, and dispensaries for marketing and selling the new product line.
Operational focus and management comment
GreenGro is committed to creating shareholder value by maximizing profit by licensing its eco-friendly technological solutions for the hemp and cannabis industry. The company’s operating divisions GenoBreeding, Cannabis Ventures, and CBD Ventures, allows it to operate in the cultivation, extraction, production, and retail aspects of the market. In addition, GreenGro’s three business divisions allow an efficient, synergistic, and highly profitable business model by leveraging each other’s strengths.
Tom Schaefer, Chief Executive Officer of CBD Ventures, a wholly-owned subsidiary of GreenGro, expressed that the recent launch underlines the company’s commitment to continually offer new and innovative hemp-infused products with various delivery methods. Additionally, these products will be available through a network of independent retailers in Arizona and California and contribute to future revenue growth.
Operational update and expansion plans
GreenGro recently announced a strategic multi-year marketing and distribution agreement for Neurofarms’ latest products and formulations across national and international markets. Neurofarms is a San Diego-based developer and provider of top-grade medicinal cannabis products and cannabinoid medicines. GreenGro will resume the build-out of its cannabis dispensary located near Palm Springs in Riverside County, in Cathedral City, California. The announcement follows the recent approval of Conditional Use Permits for the manufacturing, distribution, and delivery licenses. The dispensary will be an integral part of the company’s regional expansion strategy in Southern California. GreenGro recently appointed Charles Garavitt as its Chief International Officer, responsible for overseeing a global market presence primarily through a franchise business model.
Namaste Technologies Inc (OTCMKTS: NXTTF) Subsidiary Will Be The Exclusive Distributor For Rapid Dose Therapeutics’ Branded Cannabis Products Across Canada
Namaste Technologies Inc’s (OTCMKTS: NXTTF) subsidiary CannMart Inc. entered a Master Distribution Agreement with Rapid Dose Therapeutics Corp. to distribute their innovative cannabis brands across Canada. The products include QuickStrip™ and QuickSips™, a 10 mg Tetrahydrocannabinol (THC) sublingual oral dissolving strip and 100% biodegradable THC-lined drinking straw. QuickStrip™ quickly delivers the primary psychoactive compound in cannabis into the bloodstream resulting in rapid onset of action bypassing first-pass metabolism. QuickSips™, made from sugarcane fibers, quickly dissolves in hot or cold beverages to deliver a precise dose in a few sips.
CEO comments about the agreement
Meni Morim, Chief Executive Officer of Namaste Technologies, expressed excitement to sign the agreement with Rapid Dose Therapeutics to distribute their innovative cannabis product range. The QuickStrip™ and QuickSips™ present the addition of a new category of products in line with the company’s continuing focus to build a broad spectrum of cannabis products leveraging both conventional and newer delivery platforms. Additionally, CannMart receives many requests from vendors across North America to host their products on the CannMart.com marketplace platform. As a result, its SKU count now stands at approximately 700. The CEO expressed that the partnership with RDT will be successful and a contributor to the company’s growth objectives.
Operational focus and corporate update
Namaste Technologies serves Canadian medical customers with a diverse range of cannabis products from the licensed cultivators. The company also provides U.S. customers with access to CBD and smoking accessories. Its cutting-edge technology and continuous innovation address local needs with intelligent solutions in the rapidly growing cannabis industry. Its subsidiary CannMart recently received the first purchase orders from Manitoba and Saskatchewan for its recreational house brand ‘Roilty’ Concentrates. Roilty will be positioned as a premium, legacy-inspired brand with a product range consisting of distillate vapes, shatter, crumble, live resin, and wax in the coming quarters.
Rapid Dose Therapeutics is a life sciences company focused on innovative, proprietary drug delivery technologies to improve medicinal outcomes. Its primary work revolves around clinical research and product development across nutraceutical, pharmaceutical, and cannabis industries. RDT’s innovative healthcare solutions aim to improve the quality of life for humans, animals, and plants.