KushCo Holdings Inc (OTCMKTS: KSHB) is still an ideal long-term investment play, even on the upward momentum showing signs of exhaustion in recent weeks. The stock has struggled to power through a tight trading range of $6.30 and $5.40, in recent weeks.
KSHB Catalysts And Share Price Analysis
With the long-term bullish bias in place, it could be a matter of time before the stock powers through the tight trading range. One of the key drivers of price action activity, in the first quarter of the year, was the signing of a long-term supply agreement worth $75 million.The stock’s sentiments did receive a boost on the company delivering a 186% year-over-year increase in revenues in Q1. While the two developments are already priced in, the company might have to serve new catalysts to fuel further upside action.The announcement that KushCo Holdings is poised to offer certified biodegradable compostable and sustainable packaging solution is the latest development that should help shore the stock’s sentiments. The company has also strengthened its leadership hierarchy as it seeks to leverage top talent to accelerate growth in the cannabis sector.It awaits to be seen if recent developments have what it takes to strengthen the upward momentum and push the stock through the tight trading range. Bulls must breach the $6.30 resistance level, to have a chance of pushing the stock probably to 52-week highs of $7.10. KSHB Daily ChartConversely, a breach of the $5.50 support level could trigger a sell-off wave that would result in the stock plunging to the $4.7 level, the next support level.
What Does KushCo Holdings Do?
KushCo Holdings is engaged in the production and distribution of ancillary products and services in the cannabis and hemp industries. In addition, the company offers pop-top bottles as well as paper exit foil, barrier bags, and glass containers
Recent Development
While KushCo Holdings has found the going tough, in recent weeks, the unveiling of a new certified biodegradable, composite and sustainable packaging solution should strengthen investors’ confidence in the stock.The company has already signed a long-term development and distribution agreement with IEKO for the new packaging solution. The new packaging solution is designed for the unique demands of the cannabis sector, as it features proprietary biodegradable materials from renewable resources.
"It's our responsibility to reimagine our products today to ensure the viability of our planet tomorrow. Customers are demanding an environmentally conscious solution for their everyday packaging needs. [..]With a demonstrated ability to design and produce ground-breaking products, we are confident in the capabilities of the IEKO team and look forward partnering with one of California's top packaging engineers,” KushCo Holdings' Chief Executive Officer, Nick Kovacevich commented.
In addition to the unveiling of the new packaging solution, KushCo Holdings has confirmed the addition of Danny Mosses a private investor and entrepreneur, into the advisory board. CNBC’s Tim Seymour will also be part of the advisory board expected to provide valuable insight and knowledge on how to pursue opportunities in the sector.
“Danny is one of the most distinguished investors on Wall Street and will provide useful insights into our M&A and capital strategies. Tim, with his extensive background in international markets, will provide unique insight as we grow our footprint outside of the U.S. We look forward to leveraging both Danny and Tim as board advisors as we continue our record-breaking expansion,” said Mr. Kovacevich.
The unveiling of an advisory board, as well as a new packaging solution, comes at a time when KushCo Holdings is in the process of building on the success of Q1.In Q1, the company reported a 186% year-over-year increase in revenues that came in at $25.3 million.The company is on course for a record-breaking year on revenue generation having signed supply agreements worth more than $70 million in recent months.
Bottom Line
KushCo Holdings has struggled to power through a tight trading range. However, that does not dispute the fact that the stock is destined for an impressive ride, given the underlying fundamentals that continue to trigger renewed investor interest.The signing of multi-million-dollar supply agreements attests to a company set for robust revenue growth. The unveiling of a new packaging solution also affirms a company focused on innovation as a way of strengthening product line.The stock looks set to make a run for higher-highs especially on rising and stabilizing above the $6.30 resistance level.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.
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