Shares of Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) have been the clear outperformer in the pure play CBD space, and one of our favorite stocks in the space. That favoritism has been rewarded with very strong performance in shares of the stock, which is up over 100% since December. To further flesh out the story, the company just announced financial results for the fourth quarter and year ended December 31, 2018.
According to the release, the company posted organic consolidated revenue growth of 71% to $21.5 million (up 21% QoQ); gross profit increased 63% to $16.3 million, or 76% of consolidated revenue; adjusted EBITDA decreased from 37% to 20% of consolidated revenue, due to extraordinary items; retail doors increased more than 80% to 3,680 at December 31, 2018; and 57% of revenue came from eCommerce.
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 posted strong financial results for the fourth quarter and year ended December 31, 2018.
Recent action has seen 37% added to share values of the name over the past month of action. In addition, the company has seen a growing influx of trading interest, with the stock’s recent average trading volume running 55% beyond what we have been seeing over the larger time frame. It pays to take note of this fact due to the tight float size in the stock (under 21M shares).
“We believe this important legislation will have a positive impact on consumer access to hemp-derived CBD products and for our valuable farming communities throughout the country,” said Hess Moallem, President and Chief Executive Officer.
“During the fourth quarter, we concentrated our efforts on completing the 2018 harvest and building product inventory to support growing consumer demand. Our 2018 harvest resulted in 675,000 pounds of raw hemp compared to 63,000 pounds in 2017. The record harvest benefited from excellent growing conditions and the unique expertise we’ve accumulated over the past five years of cultivating the complex hemp plant. This inventory build ensures we are able to meet growing demand and supply the large national retail chains that are beginning to carry our products.”
Now commanding a market cap of $1.84B, CWBHF has a significant war chest ($102.6M) of cash on the books, which stands against about $14.6M 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 $62M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 4.3%. This may be a very interesting story and we will look forward to updating it again soon. 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.