Two weeks ago I published a 45-page Marijuana Stock Report that you can access for free here. I intentionally had a separate analyst create the report to give you a different view (other than mine) on marijuana companies.
Giving you different kinds of perspectives is one of my goals, as I think it’s important to hear from all sides. I know that when I read about different topics I like to hear from different people to ensure that I am not being misled.
With that in mind, there is one company in the report that I am particularly interested in, even though it was not specifically recommended in the report.
That company is Kush Bottles. I had the opportunity to take a visit of one of their facilities in Santa Ana, California and meet the CEO, Nick Kovacevich.In all fairness, I admit that it’s easy to get ‘wowed’ when you visit a company and talk to a CEO. They want you to like their company and they are going to do their best to show you a good time.
But… that’s not really what happened when I visited Nick. In fact, it was anti-climatic. He didn’t do anything to make my visit special. He didn’t have to. His business and facility spoke for themselves.
In addition, he took me on a quick tour of the company “BigRentz” who’s CEO was the co-founder of Kush Bottles and is still part owner. The working environment for both Kush Bottles and BigRentz was what immediately hit me. Organized, clean, and operating like a successful business should be.
For full transparency, I do not own any shares or equity in Kush Bottles. However, I do plan on investing in the near future as I believe this company has got all the right components set up.
Below is a short interview with Nick that you’ll enjoy:
Cody: Why did you get involved in the marijuana industry?
Nick: To make a long story short, my best friend from high school – Dallas Imbimbo – and I wanted to get into a market that had tremendous upside. The cannabis industry looked perfect because there was so much room for growth, regardless of the regulations that came along with it.
The fact that we wanted to start a company in the cannabis space really didn’t have anything to do with marijuana. We just saw the opportunity and wanted to capitalize on it.
C: You’ve taken a ‘picks and shovels’ approach in developing Kush Bottles. Why?
N: Well, if you look at any industry you’ll find that the companies that do the best are the ones who supply the ancillary needs for the industry. It’s really a simple and time-tested business model that’s easy to understand and can be very profitable.
However, because we wanted to do business in the marijuana industry, the picks and shovels approach seemed the best business to be in. That’s because we don’t actually do business with cannabis. We don’t grow, we don’t process, and we don’t sell actual marijuana. We just sell products that can be used with marijuana.
This allows us to not get wrapped up in the laws and regulations that apply to companies that are dealing directly with cannabis. We can ship product anywhere in the world legally because everything we sell is completely legal everywhere.
C: Your original partner, Dallas Imbimbo, left the company to pursue a different venture. What happened there? Does he still have any involvement?
N: So, when Dallas and I started Kush Bottles back in 2010 the industry was just starting out. Even though the company was doing alright, growth had stalled a bit because the marijuana industry wasn’t growing as fast as we had anticipated.
You could say we were way too early, but looking back we probably timed it just right.
Anyway, Dallas and I started a new company called “BigRentz” in 2012, which handles heavy-equipment rentals. Dallas is a serial entrepreneur who has started and sold several companies, so at the time when Kush Bottles was a little slow, we both wanted to do more things.
BigRentz really took off and it has since become a big company. Dallas had to focus full time on BigRentz, while I shifted my focus back to Kush Bottles. BigRentz was actually voted the best company to work for in Orange County last year, which is impressive considering all of the major companies located in the area.
Dallas still has partial ownership of Kush Bottles, and I have partial ownership in BigRentz. It’s a relationship that has worked very well because we can both help each other while being CEOs of our individual companies.
C: What separates you form the rest of the competition? What stops another company from stealing your market share?
N: We’ve been in business since 2010, so we have great relationships with our customers. Companies trust us to provide them with the products they need, and if we don’t have something they need, we’ll make it happen. It’s just easier for our customers to deal with us, rather than running around getting individual supplies for all of their needs from different suppliers. We’re a one-stop-shop.
Additionally, we are always looking to improve. We have an entire team of employees that just work with our clients – and these are real people in our warehouse in Santa Ana, California. We make ordering, shipping, and pretty much anything you can think of easy for our customer. That’s why we’ve had such good business – people want to do business with us because we treat them well.
Finally, we are experts in our field. Not only do we provide packaging and accessories for the marijuana world that complies with all laws and regulations, but we are also very forward looking. If we see some kind of new packing law that is going to take effect, then we proactively plan on integrating new products to our inventory in order to make life easy for our customers.
Any company that would like to compete with us will have a very hard time catching up.
C: Why are you different from other publicly traded marijuana companies?
N: I don’t want to speculate too much about other companies… but I can tell you that we are in business, with our doors open, and we are actually selling things. We have facilities in California, Washington, and Colorado. We have clients all across the US.
Dallas and I have also demonstrated that we’re able to grow businesses in other industries. The fact that Kush Bottles is in the cannabis space is just a coincidence.
C: Where do you see the marijuana industry moving and how do you fit into that picture?
N: I think we all know what’s eventually going to happen with cannabis, in terms of it’s legality here in the US. But, for now, we are just focused on what we have in front of us.
Of course we get excited for the future – and we’re planning to become an even bigger player in the cannabis world.
We have a business model that can expand with the growing marijuana market and we are ready to continue our growth when the market explodes.
C: What’s your longterm plan with Kush Bottles and where do you see yourself in the next ten years?
N: Like I said before, I want to make Kush Bottles a leading company in the cannabis industry. We’re doing everything the right way, from treating our employees with unique incentives to providing top notch service to our customers.
C: Thanks for your time, Nick. Is there anything you’d like to add that I haven’t addressed?
N: Cannabis is a really hot industry right now and if investors are looking to get into the space I would highly recommend doing your own due diligence and making sure the company you are investing in has a sound business model with real revenues and is building a defensible model that will make them a long term viable player.
If you’d like to check out Kush Bottles for yourself, you can search their ticker symbol (KSHB) and read about their financials and pertinent information.
If you are interested in investing in Kush Bottles yourself, I recommend you do your own research, as you may find something different than I did.
I’ll have more of these types of interviews in the future, to really give you information straight from the mouths of those who are actually involved in where we might be investing.