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Kush Bottles, Inc., a provider of packaging, supplies, accessories and branding solutions for the regulated cannabis industry, today announced it has acquired CMP Wellness, LLC (or "CMP"), a privately held distributor of vaporizers, cartridges and accessories based in Los Angeles, California. CMP Wellness has been in the business of selling standard and customized vaporizer products since 2013.
On May 1, 2017, Kush Bottles completed the acquisition of CMP for $1.5 million in cash and 7.8 million shares of stock. As part of the agreement, CMP's leadership team will have additional earn-out opportunities for achieving specified growth milestones.[1] CMP generated unaudited GAAP revenues of approximately $0.8 million and $3.1 million, respectively, for the twelve month periods ended August 31, 2015 and August 31, 2016. CMP generated unaudited GAAP revenues of approximately $1.1 million and $4.4 million, respectively, for the six month periods ended February 29, 2016 and February 28, 2017. [2]
"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."
Mr. Kovacevich continued, "The rapid growth of the cannabis market, coupled with the lack of access to traditional financial services, creates a unique opportunity for Kush Bottles. As a market leader, we are in a strong position to leverage our first-mover advantage to grow market share and scale our business through market consolidation. We have the necessary infrastructure to immediately support a larger customer base and benefit from operational synergies while maintaining Kush Bottles' high production standards."
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