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Friday, December 4, 2020

What’s Next for Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF)

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Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF) just announced that it has entered into an agreement with Canaccord Genuity Corp, pursuant to which the Lead Underwriter, together with a syndicate of underwriters have agreed to purchase, on an underwritten basis, 5,000,000 units of the Company, at a price of C$13.25 per Unit, for aggregate gross proceeds to the Company of C$66,250,000.

According to the release, net proceeds from the Offering will be used primarily to fund the Company’s business development and for general working capital purposes.

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 that it has entered into an agreement with Canaccord Genuity Corp, pursuant to which the Lead Underwriter, together with a syndicate of underwriters have agreed to purchase, on an underwritten basis, 5,000,000 units of the Company, at a price of C$13.25 per Unit, for aggregate gross proceeds to the Company of C$66,250,000.

The stock has suffered a bit of late, with shares of CWBHF taking a hit in recent action, down about -3% over the past week. In addition, the stock has seen a growing influx of trading interest, with the stock’s recent average trading volume running 37% above the average volume levels in play in this stock over the longer term.

According to the release, “The Units will be offered in each of the provinces of Canada, other than Québec, pursuant to the Company’s base shelf prospectus dated April 8, 2019 (the “Base Prospectus”) and may also be offered by way of private placement in the United States to “qualified institutional buyers”. The terms of the Offering will be described in a prospectus supplement (the “Supplement”) to be filed with the securities regulators in each of the provinces of Canada, except Québec.”

Earning a current market cap value of $350M, CWBHF has a significant war chest ($46.3M) of cash on the books, which stands against about $31.2M 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 $123.7M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 42.7%. As more color becomes clear on the name, we will review the situation and update our take. 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.

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