Kush Bottles, a leading packaging and supply provider in the legal cannabis industry, and one of the sectors most promising publicly traded companies, announced it has acquired CMP Wellness, LLC, a privately held distributor of vaporizers, cartridges and accessories based in Los Angeles, in a deal that could double the size of the company.
CMP Wellness has been in the business of selling standard and customized vaporizer products since 2013.
What we find most attractive about this acquisition is the growth reported by CMP over the last 24 months. For the 12 months to August 2015, CMP Reported revenues of $0.8 million. During the subsequent 12 months, this grew to $3.1 million. For the six months to February 28, 2017, the same figure hit $4.4 million. Based on current share price, the acquisition valued CMP at somewhere in the region of $20 million. In a growth industry like this, and with an established brand in place, that’s not bad.
The upside here is the potential for expansion through acquisition, which we first learned about as a core strategy for Kush the earlier this year, and which the company now seems to be executing on accordingly.
"We are extremely pleased to complete the acquisition of CMP Wellness, which we expect will diversify our product range, open new distribution channels and yield cross-selling opportunities for our existing product lines," commented Nicholas Kovacevich, Chief Executive Officer of Kush Bottles.
"CMP has established itself as a leader in the vaporizer product market, which is one of the fastest growing segments in the cannabis packaging industry. CMP is recognized for its high quality products and trusted for its superior product knowledge. This reputation as a distributor of best-in-breed products aligns with Kush Bottles' premium image and strengthens our market positioning. We are looking forward to working with CMP's team to leverage this acquisition to further establish Kush Bottles as the gold standard branding and packaging solutions provider in the industry."