Business-to-business focused cannabis company KushCo Holdings, Inc. (OTCQB: KSHB) today announced a major fundraising effort with a private placement brokered by Canaccord Genuity LLC.
KushCo just signed a definitive agreement with an investor for a senior unsecured note worth $21,300,000. That note is due to mature on Oct. 30, 2020 unless redeemed at an earlier date and includes an original issue discount with no additional interest.
CEO Nick Kovacevich stated that proceeds from the placement will be utilized for general corporate purposes, and also made this comment about the deal:
While dealing primarily with cannabis and CBD entities, the company itself doesn’t currently handle or sell marijuana or hemp products but instead provides products to other companies.
KushCo operates through a variety of subsidiaries, such as Kush Supply Co. to provide vaporizers, product packaging, and cannabis accessories to retailers. Kushco Holdings is additionally the parent company to Kush Energy, which produces hydrocarbons for the legalized cannabis industry, as well as research and development brand Koleto Innovations.
Finding new ways to improve the customer experience has become a crucial element to the legalized cannabis industry in both the U.S. and Canada as licensed producers struggle to overcome an entrenched black market.
Earlier this month, KushCo made a move toward tackling the problem of excessive product waste required by legalized regulations by teaming up with SunGrown Packaging, LLC to produce biodegradable packaging for cannabis retailers.
The new packaging type currently under development through that partnership maintains child tampering requirements to stay out of the hands of minors, while still meeting ASTM International protocols for biodegradability.
Late last year, the company also announced a partnership with JSP Portinox to provide gases and solvents to the wider cannabis industry for extracting oils. A recent rundown of KushCo Holdings’ early year financial info can be found at here.