Kush Bottles Inc (OTCMKTS:KSHB) Is Owed An Upside Run

Kush Bottles Inc (OTCMKTS:KSHB) is one of the most interesting stocks in cannabis right now. Companies in the sector, pretty much across the board, are bringing in what amounts to record volume, and we are seeing runs to the tune of hundreds, if not thousands, of percentage points. There are, of course, a large number of companies that are running up on hype, and will deflate once the industry gets a hold of itself.We've spent the last few weeks trying to identify those that won’t fall prey to the above described scenario, and Kush is one that deserves a place near the top of the list. Here's what we are looking at as supportive of this bias.For readers not familiar with Kush, the company is a retailer of cannabis related products, focused in States where cannabis is legal for recreational or medical (or both) use in the US. It's website, here, demonstrates the scope of its offerings; a scope so large that some have accused the company of operating by way of a drop ship agreement. This latter accusation is unsupported, however.Kush put out its latest financials at the turn of November, just ahead of the ballots in the US, and couldn’t have reported its numbers at a better time. Revenues during fiscal year 2016 hit $8.2 million – growth of more than 105% on fiscal year 2015. Operating income hit $85K – growth of 124% year over year. Working capital surplus, a figure on which a number of analysts have focused as Kush has expanded over the last twenty-four months or so, came in at $2.02 million – growth of 877% in this instance. Operating expenses as a percentage of revenues decreased by 12%. Simply put, all the right numbers are going up, and all the right numbers are going down.Record figures pretty much across the board, and that’s in the year leading up to legalization. This is the kind of growth that many companies are forecasting on the back of recreational market expansion in the likes of California, Nevada, etc. Kush is already logging this growth, and it's got the legalization expansion to come, starting this quarter.Our thesis is not that easy to get across in text form, but stick with us.Basically, what we’ve got with Kush, is a company that has risen in value rapidly on the back of the recreational vote, and the wider industry response, and this is masking what's really going on under the hood. Not masking in a negative way – we would probably have seen growth like this had the recreational vote not taken place, and Kush had just reported its numbers as part of its standard reporting cycle – but overshadowing the growth that this company has managed to string together organically, without the help of political reform, legal overhaul etc.Yes, the company has corrected from highs recorded on legalization day, but this is wider industry sentiment driven, and not representative of the underlying fundamentals. It's only going to be a matter of time before the industry recognizes the fact that Kush would have expanded in valuation without the legalization ballot, and at this point, markets should start to apply what we see as a sort of credit to its market cap. In other words, the company should have risen once on legalization, and once on its numbers. It's not done. It's risen once on legalization, and then corrected as risk off players (likely, and arguably reasonably, driven by Trump winning the election) have taken profits off the table. Markets will start to shift upwards once again once these players are flat, and at that point, we'll see both credits applied to Kush's market cap account.We will be updating our subscribers as soon as we know more. For the latest updates on KSHB, sign up below!Disclosure: We have no position in KSHB and have not been compensated for this article.