Latest acquisition deepens the Company’s branding capabilities and is expected to expand its client base in the cannabis market as well as other sectors
SANTA ANA, Calif., July 11, 2018 – Kush Bottles, Inc. (OTCQB: KSHB) (“Kush Bottles” or the “Company”), a leading provider of packaging, supplies, vaporizers, hydrocarbon gases, solvents, accessories and branding solutions for the regulated cannabis industry, today announced it has acquired Zack Darling Creative Associates, LLC (“ZDCA”) along with its wholly-owned subsidiary, The Hybrid Creative, LLC (“Hybrid”), a specialist design agency based in Santa Rosa, California.
ZDCA is a full-spectrum digital creative agency, founded in 2009 and based in Santa Rosa, California, considered the gateway to The Emerald Triangle. It serves both traditional industry accounts as well as cannabis companies and currently works with clients across the U.S., Canada and Europe. Its services include brand strategy, design and marketing, web application development and e-commerce solutions. In 2015, ZDCA brought all of its cannabis and hydroponics projects into a single portfolio under the banner of The Hybrid Creative. Since then, the agency has experienced significant growth within the cannabis industry and has become one of the top cannabis branding agencies in the U.S. It continues to serve its clients in traditional industries, including some of the world’s biggest solar brands, through the ZDCA parent company.
Kush Bottles acquired ZDCA for a total purchase price of $1.45 million in cash and 360,000 shares of Kush common stock. Following the acquisition, ZDCA will operate as a wholly-owned subsidiary of Kush Bottles, with The Hybrid Creative continuing to operate as a wholly-owned subsidiary of ZDCA. The agency’s full portfolio of cannabis and non-cannabis projects will be operated through The Hybrid Creative subsidiary. Kush Bottles will also issue earn-out payments of up to $1.75 million, through a combination of cash and stock payments, based on Hybrid achieving certain milestones.
Nick Kovacevich, Kush Bottles’ Chief Executive Officer said, “As cannabis products become increasingly commoditized, more and more producers are focusing on brand development as a means of differentiating their products to ensure customer loyalty and improve their profit margins. Acquiring The Hybrid Creative complements our existing offering and we expect it will generate additional cross-selling opportunities by deepening our branding capabilities so that we can help our cannabis clients develop unique brands at the earliest stages of their development. Furthermore, ZDCA’s book of business includes a significant portion of companies involved in a vast array of business verticals that are not in the cannabis industry, providing us with stronger insight into marketing trends in other industries and further diversifying our business.”
This latest acquisition follows Kush Bottles’ acquisition of Summit Innovations LLC, a hydrocarbon and solvent distributor to the legal cannabis industry, in May 2018, and demonstrates the continued advancement of the Company’s M&A strategy, which seeks to make strategic investments in fast-growing suppliers to the cannabis industry. Incorporating The Hybrid Creative under the Kush Bottles umbrella further entrenches the Company’s position as a “one stop shop” to the cannabis industry and provides additional cross-sales opportunities for both cannabis and non-cannabis clients in a wide variety of focus areas ZDCA services such as technology, security, solar and more.
“By leveraging this new knowledge base of branding experts, in particular, being able to extract and disseminate best practices from other businesses not within the cannabis industry, we now can confidently share these insights with our customers when we enter into the exploratory phase of their branding needs,” continued Mr. Kovacevich. “This furthers our value-added approach as a true partner to our current and future customers.”
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