KushCo Holdings Inc (OTC: KSHB), a provider of ancillary products and services to the cannabis industry, reported Q1 results after the close Tuesday. Although the company's revenue almost tripled over the year, its bottom line turned negative.

What Happened

KushCo posted a revenue $25.3 million for the quarter ending Nov. 30, a year-over-year increase of 186 percent.

The company also reported a GAAP net loss of $8.2 million versus net income of $100,000 a year earlier. The loss per share was 10 cents versus a flat EPS in the first quarter of fiscal 2018.

The GAAP results were affected by short-term supply chain capacity issues and non-recurring vendor control quality control initiatives, according to KushCo.

The supply chain capacity issues forced KushCo to import products by air, which increased costs, the company said.

Why It's Important

KushCo is one of the largest providers of products and services to the cannabis industry.

The businesses under its umbrella include Kush Energy, a provider of hydrocarbon gases and solvents; Hybrid Creative, a design agency; Kush Supply Co., a distributor of vaporizer products, packaging and accessories; and others.

KushCo Holdings is attending the Benzinga Cannabis Conference in Miami next week. Ahead of the conference, Benzinga sat down with KushCo CEO Nick Kovacevich to talk about the company and its plans for the future.

What's Next

In fiscal 2019, KushCo said it intends to focus on improving its gross margins to 30 percent through scaling the business, fortifying the supply chain and improving operational processes, Kovacevich said in the earnings release. The company expects to see improvements in margins from its efforts in the second half of the fiscal year.

KushCo is also expecting growth in its CBD-focused segment following the legalization of the drug in the recently adopted Farm Bill.

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