Cannabis packaging company KushCo Holdings Inc (OTCQB:KSHB) reported earnings late Tuesday, nearly tripling its revenue year over year to US$25.3 million.
Despite the surge in revenue, its bottom line turned negative.
The California-based company said its net loss was $8.2 million compared to net income of $100,00 in the first quarter of fiscal 2018. The company said the loss per share was $0.10 versus a flat EPS in the first quarter of fiscal 2018.
The maker of packaging, containers and other products for the cannabis industry said short-term supply chain capacity issues and vendor control quality control initiatives affected results.
"This strong performance reflects the strength of our business model, which leverages our ecosystem of diverse business units and product categories to cross-sell product classes, reinforce the sticky nature of our business and support stable revenue growth," said Chairman and CEO Nick Kovacevich in a release.
KushCo is the parent company of industry leaders such as Kush Supply Co., Kush Energy, The Hybrid Creative, and Koleto Packaging Solutions, which provide a range of services and products for a variety of industries including the regulated cannabis and CBD industries.
“New opportunities continue to rapidly emerge in the industry. With the recent signing of the 2018 Farm Bill into law on December 20 to legalize industrial hemp, we expect to see more large-scale production and sale of CBD oil and related products, fueling demand for our packaging, supplies and labeling solutions, as well as for our solvents and marketing and branding services,” said Kovacevich.
“We also expect to see an increase in adult vaping of CBD, which is a major component of our business and a key driver behind our expanding customer base as vape sales attract new customers onto our sales platform,” he added.
Shares of KushCo closed at up 5.5% at $6.34 on Tuesday.