Let me come out of hibernation (am reading this board with a smile as the price moves as I would expect) and dispel some 'myths"
1. "Kush is a reseller of Alibaba" - Not surprisingly this is not factual at all. Kush does not buy (let me repeat, they do not buy a single product from Alibaba). Kush buys product directly from manufacturers, while Alibaba also may list inventory from manufacturers. Lets say you buy a Samsung TV on Amazon, does that make Walmart a reseller of Amazon? Of course not, Alibaba like Amazon is just a channel that manufacturers sell in and they may have similar products. But Kush does not buy ANYTHING from Alibaba. And if you were to buy a similar type packaging on Alibaba you would not get the ability to customize it for your dispensary, advance tracking, the ability to pay in cash (which BTW is huge for dispensary until it becomes legal federally), and if you have an issue you are dealing with Chinese customer service. Good luck with that. That is why Kush continues to expand it's customer base and not lose it.
2. Kush is as mentioned planning to move its production to the US. Not only will that dispel myth #1 above, but it will allow them to be even more cost effective but more importantly it will provide them a competitive advantage as they will not have to deal with long lead time for product arriving from Asia, have better control of quality, and not deal with custom hold up. Right now the demand is outpacing supply in this industry and its the supply chain / logistics that is hurting companies.
3. "Kush Management is going to screw shareholders" -The two co-founders of Kush own close to 50% of the stock. Therefore they are the largest shareholders. You better believe that every decision they make they are uber incentived to drive long term shareholder value. It makes no sense that they would want to do anything to hurt retail players through the stock price as it will wipe out far more wealth for them.
4. "Cowen is part of some scam to make Kush a small company to them increase" - Seriously, so a major respected investment bank wants to risk millions in fines and get Finra on them for what.... I have spoken with Cowen before - they are very bullish on the cannibis space and want to be the leaders. They see huge growth in the space and have the top respected analyst on the sector in Vivian. They like Kush because they are in packaging (not flower), are doubling revenues every year, have a clean cap structure, strong management team with great track record, etc. $3 target was put there because Wall street values high growth companies on forward expectations and they believe that Kush will double revenues every year for next few years. I agree 100% with them. For an OTC stock to be covered by a major I-bank, is a sign of respect for the company and its future.
5. "There is a pump and dump going" - Pump and dumps are when a stock price moves a huge % in a few days max on massive volume. Kush has moved steadily up over weeks, with consistent volume each day. The volume on a daily basis is way too low for me to say a pump was happening - would need to see almost 1 million shares like when they released earnings. I see the other side. I see a steady movement with volume slowly trending to a higher base consistent level as more institutional like folks take positions. With limited liquidity it would make no sense for a pump and dump to even work here as you couldnt be ensured of trading in and out.
6. "There will be Massive dilution Coming" - Every company that is an emerging ventures protects themselves by saying in 10Qs they may need to raise additional capital. Kush has had no problems attracting private placement $s like myself for example. They are reinvesting profits and raising dollars to support growth. I doubt we will see a large raise unless they decide to take an investment from an institutional investor and that would be welcome by the market as it shows serious capital interested in the, brings further awaremess, etc. And the $30K in profit was just last quarter. The fact that they are growing so quickly and using capital to support, yet cash flow positive is awesome! As revenues continue to double each year, their product economics only get better and their fixed costs lower on a unit basis. So I would expect as in prior years they have continued to raise capital along the way in private placements as they should. Again the founders have the most shares so you can expect they will optimize / balance capital, growth, and dilution. Their track record has been excellent so far and I have invested with them before they were public as an angel investo
