We’ve talked about Kush Bottles Inc (OTCMKTS:KSHB) quite a bit in the past here on Street Register. The last time, we were mentioning its push to explore new marketplaces, and its unique position in the cannabis business.
Kush Bottles has a leg up on the average cannabis sector company, because it doesn’t grow, sell, or otherwise deal with actual cannabis or cannabis products, it merely provides the packaging to people who do. Now, with the latest announcement, it will be adding a whole new facet to its cannabis industry support services business as well.
Kush Bottles Inc (OTCMKTS:KSHB) announced that it has entered into a merger agreement to acquire Summit Innovations, LLC, a leading distributor of hydrocarbons to the legal cannabis industry based in Denver, Colorado. Hydrocarbon gases are used to turn cannabis plants into oils, and this acquisition marks Kush Bottles’ entry into a new business vertical, supplying gas to cannabis extractors. The transaction is expected to close by May 1, 2018, subject to confirmatory due diligence and certain closing conditions, including approval of the transaction by the equity holders of Summit Innovations.
Summit Innovations serves the rapidly growing concentrates segment of the cannabis industry and operates seven distribution facilities located across the country. Its four core products are high purity butane, propane, iso-butane and blends. Summit Innovations works closely with legal cannabis manufacturers to ensure cleanliness, product quality, safety and compliance during the extraction process.
Nicholas Kovacevich, CEO and Chairman of Kush Bottles, commented, “Summit Innovations supplies hydrocarbon gases specific to various cannabis extraction processes. Integrating this broad gas portfolio into our large distribution platform will further diversify our business by offering another unique product line that is highly complementary to Kush Bottles’ existing product inventory. This transaction, once closed, will simplify the supply chain for future and existing customers of Kush Bottles and Summit Innovations, allowing customers to fulfill all their concentrate refining and packaging needs more efficiently from just one source. This acquisition agreement aligns with Kush Bottles’ company strategy, to both grow organically and through acquisitions, further demonstrating our commitment to achieving long-term growth and diversifying our business within the cannabis space.”
Kush Bottles built its initial client relationships by providing much-needed cannabis packaging solutions and has since expanded into several other verticals within the industry. To focus efforts towards the concentrates segment of the cannabis industry signals that Kush Bottles is no longer solely a packaging business, but a leading provider of a diversified suite of products and services that are integral to the proper functioning of the cannabis supply chain. The Company continues to evaluate new technologies and developments within the industry to determine how it can add the most value for its customers.
Under the terms of the merger agreement, Summit Innovations, LLC will merge into a wholly-owned subsidiary of Kush Bottles in exchange for 1,280,000 shares of Kush Bottles common stock and $3.2 million in cash, a portion of which will be held back to satisfy certain post-closing obligations. (Source: PR Newswire)
It’s exciting to see KSHB, previously only a package manufacturer, explore new avenues for growth, while still remaining degrees of separation from the actual handling and sale of cannabis and its byproducts. Supplying the gases used to make premium cannabis extracts is just another way for KSHB to support the business without assuming any of the legal risk. Stay locked to Street Register for updates, and we’ll deliver important developments on KSHB as they unfold. In the meantime, if you’ve yet to sign up for our 100% free newsletter, do so now! Just enter your active email address into the box below and submit!
Disclosure: No one at Street Register has been compensated in any way for the publishing of this article, nor do we hold any position in KSHB stock, short or long.