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Is the Cannabis Industry Becoming More Mainstream?

By J.S. Haven

The cannabis industry has been crossing lines.

Four states – Colorado, Oregon, Washington and Alaska – and the District of Columbia, have legalized recreational and medical use marijuana for adults. Twenty more allow medical marijuana. Advocates believe at least eleven more states may legalize it soon.

Success is in Your Reach

By the end of 2016, the legal cannabis market could approach $9 billion, and an estimated $35 billion by 2020. With this explosive growth, the image of a marijuana business owner has evolved.

Instead of mainly hippy growers in Northern California, another reality has emerged – businessmen in suits gathering at conferences, discussing business strategies to help them succeed.

What spurred this transformation?

A key factor could be Kush Bottles, Inc, the largest distributor of marijuana packaging and supplies. Nick Kovacevich, its co-founder and CEO, is helping entrepreneurs enter and succeed in this rapidly growing industry.

Founded in 2010, Kush Bottles provides top quality, innovative packaging solutions. They’ve sold over 100 million certified, pharmaceutical grade, child-resistant bottles to the medical cannabis industry.

Kush’s team has worked as advisors to state regulatory agencies, including the Colorado MED and the Oregon State Liquor Control Commission. Publicly traded on the OTC stock exchange (OTCQB: KSHB), the company is fully compliant with the SEC.

Kush also provides marketing expertise, branding and high-quality packaging to current and new industry entrepreneurs that satisfy stringent legal requirements.

“The public categorizes people in the industry as stoners,” says Kovacevich. But that’s not the case anymore. “They’re operating as any other business would operate.”

Kush Bottles was an early player in a young legal cannabis industry. It was the first one to focus solely on packaging. They consider themselves “First Movers.”

“We have the ability to replicate that First Mover advantage in every market where cannabis is being regulated,” said Kovacevich.

“If other states legalize cannabis, we can get first boots on the ground and be there when these markets open up,” he said.

So why take the company public?

It just made sense, Kovacevich said. And the timing was right.

“There weren’t a lot of formidable cannabis-related companies available to the public. Looking at our business model, our reoccurring revenue and our rapid year-over-year growth, we felt we’d be one of the most qualified, legitimate and attractive companies on the public market,” he said.

“It’s a unique industry,” Kovacevich said.

Any other industry, folks get involved at different levels – private companies, investments, as entrepreneurs, etc. “With cannabis, a good portion of the country can’t participate in those ways. If you live in a state (without) a legal cannabis program, there’s no way to be involved,” he said.

Many states require that owners are legal residents.

With a good portion of the country having limited access to good cannabis companies, people can participate by buying public stock, he said.

Kush offers services that fill huge gaps for entrepreneurs.

Stigma is a huge hurdle in the cannabis industry.

Entrepreneurs face issues finding landlords who will lease to them, even if they don’t “touch” the product in their particular business. Kovacevich said in the past commercial buyers and big corporations have blacklisted them.

Banking institutions won’t bank with your company because of your affiliation with cannabis / the industry, he said. And Kush’s own customers have a tougher time because they “touch” the product, a federally illegal substance.

They have a lot of cash with no place to put it,” Kovacevich said.

Kush designed a business model adapting to those needs. Its truck makes deliveries and picks up cash in their delivery area. For folks outside that area, they’ve set up a cash payment option on their website. They’re one of the few companies in the country that offers that.

Within their service area, you can order with the cash option. Kush will fill the order and drive it to you, then collect your cash. Outside their delivery service range? You can deposit money into their account at a bank near you, then, when they receive the funds, they’ll ship the product to you.

Financing has been another obstacle to cannabis business owners. But that’s changing.

Kush recently launched a new, upgraded investor relations website, featuring live stock data feeds, charts, SEC filings, company news, live social media feeds, and access to company newsletters—all in a new interface that provides intuitive functionality.

Venture capital firms are stretching into this burgeoning industry.

Some venture funds in Silicon Valley have invested in tech companies focused on this industry, Leafly.com, a cannabis database for Century’s retail stores, is one recipient from Privateer Holdings.

Others firms – like Tuatara Venture Capital, which raised around $40 million to invest in the industry – focuses on investing directly into those who touch the plant.

For cannabis business owners today, Kovacevich says there’s more access to capital, with more available. The markets are getting bigger. And there are more entrepreneurs and CEO’s coming in.

Kush is a big resource for them, a tool towards their success. With locations in three states and over 5,000 returning customers across the U.S., they know what the packaging compliance requirements are, the regulations around packaging and labeling; can advise clients on various compliance issues, especially if they’ll be operating in different states, and they have a robust product portfolio.

They’re a one-stop shop for any business looking to get into and be successful in the legal cannabis trade.

J.S. Haven is a professional blogger who writes on a wide variety of topics for many online venues. Haven can be reached at jshaven3@gmail.com.

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