KushCo just released its latest earnings report, covering the fiscal second quarter of 2021, last week. The cannabis ancillary products company has continued to witness growth over the last year and this latest quarter was no different. Overall, KushCo saw quarter-over-quarter revenue growth of 23% in the latest period as it reached revenue of $32.9 million.
KushCo saw an uptick in sales in the last quarter, which ended on February 28, as it continued to increase its relationship with multi-state operators, licensed producers and other wholesalers. Its performance led to a gross profit of 20%, substantially higher than it was a year earlier, and a year-on-year increase in net revenue of 9%. Part of the increase in performance was due to the company’s restructuring efforts.
KushCo co-founder, Chairman and CEO Nick Kovacevich explained during the company’s earnings call, “We are thrilled to have not only achieved meaningful sequential revenue growth in fiscal Q2 2021, but more importantly, to return to generating robust year-over-year revenue growth, as we make further progress on our strategy of aligning deeper with the top MSOs, LPs, and leading brands. In fact, our top 25 customers together made up 77% of our total revenue for the quarter, up from 61% in the prior-year period, demonstrating our success in deepening our relationships with these elite customers who are continuing to rapidly scale and consolidate the industry.
In addition to the company restructuring, KushCo is also in discussions with Greenlane Holdings about a potential merger. It paid off certain senior unsecured term debt after raising $40 million in equity capital and is now well-positioned for expansion across the US. Kovacevich added, “Looking ahead, we remain encouraged by the rapid pace of new states legalizing cannabis, as seen earlier this year by Virginia, and more recently, New York. These catalysts, along with meaningful momentum for cannabis reform at the federal level, coincide nicely with our anticipated strategic merger with Greenlane, which, once closed, will position us well to capitalize on macro tailwinds through our enhanced scale, differentiated customer offering, and significant cross-selling opportunities. Due to the pending merger, which we expect to close in late second quarter or early third quarter of calendar 2021, we are retracting our net revenue and adjusted EBITDA guidance for fiscal 2021. That being said, we could not be more excited for the attractive opportunities that lie ahead, as we join forces with another industry pioneer to create the leading ancillary cannabis products and services company.”