An earlier version of this article stated KushCo's fiscal 2017 losses would widen, when its 2017 net income would increase. The article has been updated.

KushCo Holdings Inc. KSHB, -5.03% said late Tuesday that it would have to restate its annual financial statements for fiscal 2018 and 2017 due to an accounting error. KushCo said it expects net losses for fiscal 2018 to more than double to $24.3 million from $10.2 million. It also expects fiscal 2017 net income to increase to $1.7 million from net income of $100,000. KushCo, which sells cannabis packaging, among other products and services related to pot, said that it recorded milestone payouts related to its acquisition of CMP Wellness and Hybrid Creative as equity when they should have been recorded as liabilities. Such liabilities would need to be adjusted for their fair value in the company's consolidated statements of operations. KushCo said it plans to file amended reports "as soon as practicable." KushCo said separately that as a result of the re-statements it would not be able to file a quarterly form 10-Q for the fiscal second quarter 2019 within the required timeline by the Securities and Exchange Commission. KushCo is traded over the counter and does not do so in the extended session. Shares dropped 3.8% in the regular session Tuesday, as the ETFMG Alternative Harvest ETF MJ, -6.32% dropped 1.7%.