3 Keys to KushCo’s Colossal Q2 Revenue Growth

KushCo Holdings (NASDAQOTH:KSHB) just reported a quarter for the record books. The supplier of packaging solutions for the cannabis industry provided an update on its fiscal 2019 second-quarter performance after the market closed on Thursday. The big news from that update was KushCo’s all-time high revenue of $35.2 million — up a whopping 240% year over year and 38% higher than what analysts expected.

How did KushCo deliver such colossal Q2 revenue growth? CEO Nick Kovacevich mentioned three keys to the sales success in the company’s earnings conference call Thursday night.

1. California

California claims the biggest legal marijuana market in the U.S. It’s not surprising, therefore, that the state is a primary driver of KushCo’s revenue growth.

Kovacevich stated that 58% of KushCo’s Q2 revenue was made in California. The company’s sales in the state soared 273% year over year and 46% quarter over quarter. This growth is especially impressive in light of some nagging issues in the Golden State.

One of those issues is the strength of California’s black market. Kovacevich said that a lack of licensed retailers is contributing to the black market and negatively impacting the state’s legal cannabis industry. Another issue is the low supply of high-quality flower, which he suggested is hurting cannabis flower sales.

2. Demand for vape products

KushCo continues to enjoy strong demand for its…

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