After a Great Quarter, What’s Next for Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF)

After a Great Quarter, What’s Next for Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF)


Shares of CBD play Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) have been moving dead sideways over the past few weeks. During that time, the company has continued to show promise, recently hitting the wires with Q3 2018 quarterly numbers.

Specifically, the company announced 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.

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.

According to company materials, “Charlotte’s Web Holdings, Inc. is the market leader in the production and distribution of innovative hemp-based cannabidiol (“CBD”) 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.”

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As noted above, CWBHF just announced its Q3 data. Also, as noted, the stock has been plodding sideways. The numbers for the quarter certainly look good enough to justify some potential upside, particularly given the gawdy growth numbers so often cited for the CBD space in general.

“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.”

Currently trading at a market capitalization of $1.09B, CWBHF has a significant war chest ($14.2M) of cash on the books, which must be weighed relative to about $9.7M in total current liabilities. One should also note that debt has been growing over recent quarters. CWBHF is pulling in trailing 12-month revenues of $38.8M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 34.2%. This is an exciting story, and we look forward to a follow-up chapter as events transpire. Sign-up for continuing coverage on shares of $CWBHF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $CWBHF, either long or short, and we have not been compensated for this article.