Kush Bottles Inc (OTCMKTS:KSHB) Is Today's Cannabis Focus

Kush Bottles Inc (OTCMKTS:KSHB) has finally made its move up the charts after delivering a strong earnings report last week. For most of this year, shares have hovered just above the $1 support level. Now we think things are starting to heat up and Mr Market is taking notice to what's going on with Kush Bottles.Kush Bottles hit the OTC Markets back in January of this year. Since the time, the company has made considerable progress. For those not familiar with Kush, it's a premier packaging supplier, offering certified child-resistant and custom-branded solutions in all states that permit medical or recreational cannabis use. With over 100 million bottles sold, the company is respected for its quality products, exceptional customer service, fast deliveries, and innovative custom design and branding solutions. The company has been featured in media nationwide, including CNBC, Los Angeles Times, TheStreet.com, and Inc. Magazine.Shares started climbing this month after Kush reported record financial results for its third quarter and nine months ended May 31, 2016 and provided a positive outlook for the balance of the fiscal year and 2017. Revenues for the three months ended May 31, 2016 jumped to $2,322,638, a 94% increase over revenues of $1,198,083 in the year-ago quarter, and were 29% higher sequentially than revenues of $1,798,539 for the second quarter ended February 29, 2016. The revenue growth was primarily attributable to the Company's continued sales growth across California, Oregon, Washington, and Colorado as well as modest but early sales from the launch of a new product line and the implementation of a new custom packaging website.The Company achieved record net income of $23,284, or $0.00 per share, compared with a net loss of ($76,393), or ($0.00) per share, in the year-ago quarter. For the third quarter ended May 31, 2016, cost of goods sold increased to $1,588,302 from $779,652 a year earlier due to substantially higher revenues. Gross profit for the third quarter ended May 31, 2016 rose to $734,336, for a 32% gross margin compared with $418,431 and a 35% gross margin in the year-ago quarter. The substantial increase in gross profits was primarily due to the Company's continued penetration of the California, Oregon, Washington and Colorado markets.Kush is also in a strong financial position compared to other cannabis names. As of the end of the third quarter ended May 31, 2016, Kush Bottles reported $354,247 in cash and total current assets of $2,150,833, compared with $201,259 and $1,163,408, respectively, at the beginning of the current fiscal year. Current liabilities decreased from $955,927 in the first quarter to $898,401 at the end of the third quarter of 2016. The Company ended the third quarter with a working capital surplus of $1,252,432.Kush's nine month figures were also impressive. For the nine months ended May 31, 2016, revenues increased by more than 136% to $5,841,168 from $2,477,702 in the year-earlier period. Gross profit for the nine months ended May 31, 2016 rose to $1,899,979 for a 33% gross margin, compared with $892,532 for a 36% gross margin in the year-ago nine month period.Kush Bottles launched their new product line BudGloves in April 2016. These premium quality gloves, created by Kush Bottles, meet the specific requirements of the cannabis industry and provides customers with an affordable and effective solution for handling cannabis plants, extracts and other products. They are powderless, non-stick, food-safe, and manufactured to meet industrial-grade standards.Currently trading with a market cap of $76 million, KSHB is an exciting story among cannabis names. The company just delivered a solid earnings report and the company looks set to capitalize on the coming Green Rush. As Co-Founder and CEO Nicholas Kovacevich said:

"Looking ahead, our mastery of the regulatory landscape across 25 states and Washington D.C. provides Kush Bottles with a major competitive advantage as we continue to expand our business across the United States. We are extremely well positioned to leverage the cannabis industry's organic growth, increasing legalization in additional states, as well as expanded legalization within states where cannabis is already legal in some form. We believe our current aggressive expansion strategy and proven business model in a rapidly-growing cannabis industry has set the ideal framework for our employees, customers and shareholders to thrive in the coming quarters."

We will be updating Insider Financial as soon as we know more. For continuing coverage on KSHB, sign up for our free newsletter today and get our next hot stock pick as well a free ebook!Disclosure: We have no position in KSHB and have not been compensated for this article.