Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) just announced financial results for the third quarter and nine months ended September 30, 2018. This is one of the most interesting names in the booming CBD market segment, so you can bet investors will be keying on how the company did, as well as how its shares responded to the data. These results come at an important time given statements made by US Speaker for the House Paul Ryan noting that the US Farm Bill appears to have few if any speedbumps left in front of it – which is a strong catalyst for this space.
According to the release, the company saw organic revenue growth of 57% to $17.7 million, gross profit (before biological asset adjustments) increased 54% to $13.8 million, or 78% of consolidated revenue, adjusted EBITDA increased 23% to $5.4 million, or 31% of consolidated revenue, significant marketing investment made in brand relaunch to be leveraged throughout 2019, and the completion of its Initial Public Offering generating net proceeds of $71.5 million. Not a bad quarter, indeed. Shares caught a sharp boost on Wednesday in response.
Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) bills itself as a company that develops and distributes hemp-based cannabidiol (CBD) wellness products. Its products include CBD hemp oils, capsules, topicals, and pet products that feature CBD hemp oil extracts.
Charlotte’s Web Holdings, Inc. sells its products online as well as through distributors, and brick and mortar retailers.
The company was formerly known as Stanley Brothers Holdings Inc. and changed its name to Charlotte’s Web Holdings, Inc. in July 2018. The company was incorporated in 2018 and is headquartered in Boulder, Colorado.
Charlotte’s Web Holdings, Inc. is the market leader in the production and distribution of innovative hemp-based cannabidiol wellness products. Founded by the Stanley Brothers, the Company’s premium quality products start with proprietary hemp genetics that are responsibly manufactured into whole plant hemp extracts naturally containing a full spectrum of phytocannabinoids, including CBD, terpenes, flavonoids and other beneficial hemp compounds. Industrial hemp products are non-intoxicating.
Charlotte’s Web current product categories include tinctures (liquid products), capsules, topical, as well as pet products. Charlotte’s Web hemp-based whole plant extracts are sold through select distributors, brick and mortar retailers, and online through the Company’s website.
We started off by noting that CWBHF just hit the wires with its new quarterly data. This announcement has popped the stock higher, which certainly isn’t surprising. CWBHF shareholders are now sitting on about 11% in gains over the past week.
“During the third quarter we completed a successful initial public offering and private placement that generated significant capital for the Company that is being deployed to accelerate our growth in the hemp-derived CBD sector,” said Hess Moallem, President and Chief Executive Officer.
“This capital is being used primarily to expand the Company’s cultivation and production capacities to meet the increasing demand for our industry leading Charlotte’s Web products, both domestically and internationally. Charlotte’s Web is the market leader in the rapidly expanding hemp-derived CBD wellness markets, and we are committed to the highest quality products and efficacy. Our future product expansion plans will continue to support the stringent demands and expectations of our valuable customers.”
Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) has a strong balance sheet, with cash levels far exceeding current liabilities ($14.2M against $9.7M). As we noted above, the stock has a bead on becoming a sort of pure play weather gauge for the CBD theme, so the action here tomorrow will likely be telling.
Mr. Moallem added, “a successful passing of the forthcoming 2018 Farm Bill by the US Congress will be a catalyst for the growth in our industry adding further momentum to the evolving market sector. We have contributed to and supported this important legislation from the beginning for the positive impact it will have on consumer access for both hemp-based CBD products and for our valuable farming communities throughout the country.”
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