CBD Archives - Green Market Report

Debra BorchardtNovember 23, 2022
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9min5440

On Monday, the FDA issued Warning Letters to five companies that produce products with CBD (cannabidiol) and specifically zeroed in on products that would appeal to children. The FDA noted in some of the letters that it was concerned about Delta-8 THC products that may be consumed by children, as some packaging and labeling may appeal to children.

11-11-11 Brands, Naturally Infused LLC, Newhere Inc., Infusionz LLC, and CBD American Shaman LLC were all issued letters.

The letters from the FDA stated, “There is no food additive regulation which authorizes the use of CBD. We know of no basis for general recognition of safety for CBD based either on scientific procedures or common use in food prior to January 1, 1958. Based on our review of published, scientific literature, existing data and information do not provide an adequate basis to conclude that the use of CBD in food meets the criteria for GRAS (generally recognized as safe) status.”

U.S. Hemp Roundtable General Counsel, Jonathan Miller, told Food-NavigatorUSA: “It’s become ever more apparent that Congress needs to act expeditiously to require FDA to establish a regulatory pathway to govern food and beverage products where CBD is an additive.”  The Hemp Roundtable issued a statement saying, “This recent action by the FDA indicates the agency’s lack of urgency and reluctance to regulate CBD products, making it clear that Congress must act on behalf of our industry.”

Lollipops & Gummies

Naturally Infused was cited for its candy and coffee products. Its letter said, “For example, your CBD Lollipops, CBD Gummies, and Delta-8 THC Gummies are in forms that would be attractive to children and could easily be mistaken for traditional foods that are commonly consumed by children. Furthermore, you market other products that consumers may confuse with traditional foods for humans, including CBD Infused Sugar and CBD and Delta-8 THC Infused coffees. Therefore, there is a risk that consumers of these products, including children, will unintentionally consume CBD or Delta-8 THC ingredients. Additionally, we note that the CBD coffee products appear to contain caffeine. Evidence suggests that CBD may affect caffeine metabolism and may increase and/or prolong caffeine’s effects.”

Newhere was also cited for its products having an appeal to children. That letter stated, “FDA is particularly concerned that some of your products are in forms that are appealing to children. For example, your CBDFx Mixed Berry Gummies 1500mg, CBD Cookies with Protein 20mg, including Chocolate Chip, Oatmeal Raisin, and Peanut Butter flavors, products are all in forms that would be attractive to children and could easily be mistaken for traditional foods that are commonly consumed by children.” Newhere was also called out for making medical claims about its CBD products on its websites and in blog posts.

Infusionz was also called out for its CBD gummies, CBD fruit snacks, CBD gum, CBD candy, CBD oil/tinctures, and CBD lollipops products. Its letter said, “The use of untested drugs can have unpredictable and unintended consequences, especially in vulnerable populations, such as children. For example, children may be at greater risk for adverse reactions associated with certain drug products due to differences in the ability of children to absorb, metabolize, distribute, or excrete such drug products or their metabolites.”

CBD American Shaman’s letter also stated, “Your CBD Suckers, CBD Hard Candies, various Cookies [with] 10mg CBD per Serving, and various CBD Gummies products are all in forms that would be attractive to children and could easily be mistaken for traditional foods that are commonly consumed by children. Furthermore, your products have not been evaluated by the Agency for safety, effectiveness, and quality.”

11-11 Brands wasn’t cited for having products that appealed to children, however, the FDA had determined that the company’s Mood33 Hemp Infused Herbal Tea products were “adulterated under section 402(a)(2)(C)(i) of the Federal Food, Drug, and Cosmetic Act (the FD&C Act), 21 U.S.C. 342(a)(2)(C)(i), because they bear or contain an unsafe food additive. Furthermore, it is a prohibited act to introduce your Mood33 Hemp Infused Herbal Tea products into interstate commerce under sections 301(ll) and 301(a) of the FD&C Act, 21 U.S.C. 331(ll) and 331(a).” FDA was particularly concerned that the products are in a form (herbal tea or beverage) that consumers may confuse with traditional foods.

Legislation

The Hemp Roundtable noted that there are currently two bills that would empower the FDA to regulate CBD as a food and beverage. H.R. 6134 would ensure foods and beverages containing CBD derived from hemp conform with the current FDA requirements for food additives or be generally recognized as safe “GRAS,” while S. 1698 permits hemp-derived CBD in both dietary supplements and foods.

Hemp food products that don’t advertise CBD content have been on the shelves for years. The Hemp Food Association recently wrote, “Hempseed, hempseed oil, and hemp protein powder are Generally Recognized As Safe (GRAS) to the U.S. FDA, exempt from Novel Food registration in the European Union, and hemp products, in general, are exempt from the U.N. Single Convention Treaty on Drugs. They need no further approvals or certifications from any government in the U.S., Canada, or E.U. In other words… legal!” However, when CBD gets pulled into the mix that’s when the FDA steps in with its warning letters.


Adam JacksonAugust 15, 2022
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4min1911

CV Sciences, Inc. (OTCQB: CVSI) sales fell in the quarter as demand for hemp-derived products continues to fade. The hemp operator announced its financial results for the quarter ending June 30, 2022.

CV Sciences delivered approximately $4.1 million in total revenue during the period, a loss of 19% versus the same period last year —  missing the Yahoo Finance Average analyst estimate for revenues of $4.88 million.

The company said that the decline is primarily due to lower sales in the retail channel. The total number of units sold during the second quarter also decreased 5% compared to the same time last year. Other reasons for the decline included higher discounts for new product placements and changes in our sales mix to lower priced products.

CV Sciences also reported a second-quarter net loss of $2.7 million versus a $3 million loss sequentially; and a net loss of $3.5 million in the same period last year. The earnings were for a loss of two cents per share, versus a loss of three cents per share in the previous quarter.

“Second quarter results met our expectations and we are encouraged by improvements in the retail channel and very positive consumer response to several new product launches,” said CEO Joseph Dowling.

CV Sciences posted a gross margin of 30.7% for the second quarter versus 44.7% for the second quarter last year.

The operating loss fell to $2.3 million in the second quarter of 2022 versus an operating loss of $3.5 million in the second quarter of last year — mostly due to reductions in its selling, general and administrative expenses. The company posted an adjusted EBITDA loss of $1.8 million versus an adjusted EBITDA loss of $2.4 million in the second quarter last year. Last quarter’s figure was $2.5 million.

The company said it had a total cash balance of $1.1 million at quarter end, versus $1.4 million at year-end.

Despite the revenue loss, CV Sciences reiterated its position as a top-selling hemp extract brand in the natural product retail sales channel, according to SPINS scan data.

The company said it will continue to evaluate strategic review of its business, “including consideration of inbound and outbound merger, sale, acquisition or other options for the Company as a whole or for any business segments.”

“Our new OTC products, along with our Reserve Collection and Wellness Line of products are evidence of our strong pipeline, and demonstrate our ability to develop innovative products that address the need states of our consumers,” Dowling said. “Our flagship PlusCBD brand continues to gain market share in the natural product channel, and, with our portfolio of high-quality, proven products, and favorable regulatory momentum, we believe the Company is positioned for future growth.”


StaffAugust 9, 2022
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10min1270

The Daily Hit is a recap of cannabis business news for August 9, 2022.

ON THE SITE

Cronos Makes Gains in The Second Quarter

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) reported its 2022 second-quarter earnings with net revenue of $23.1 million which jumped from last year’s $7.4 million for the same time period. However, total revenue before taxes was $28 million which just beat the Yahoo Finance average analyst estimates for revenues of $27 million. It was also better than the first quarter‘s revenue of $25 million. The stock was dropping by roughly 8% in early trading to lately sell at $3.26. Read more here.

Acreage Holdings Sees Revenues Climb, Pushes Eastward

Acreage Holdings, Inc. (CSE: ACRG.A.U, ACRG.B.U), (OTCQX: ACRHF, ACRDF) delivered positive results in the second quarter as the company moves away from established western markets in favor of emerging markets east of the Mississippi. The company reported its financial results for the first quarter ending June 30, 2022 after the market closed on Monday. Read more here.

Weedmaps Beats on Earnings, But Gives Cautious Outlook

WM Technology, Inc. (Nasdaq: MAPS) announced its financial results for the second quarter ending June 30, 2022. WeedMaps reported that its revenue increased 24% to $58.3 million over the second quarter of 2021. This slightly missed the Yahoo Finance average analyst estimate for revenues of $62 million. Net income was $19.8 million as compared to net income of $16.8 million from the prior year period. Read more here.

Hydrofarm Stock Craters as Sales Wither

Hydrofarm Holdings Group, Inc. (Nasdaq: HYFM) slumped in trading on Tuesday as it posted second-quarter results that missed expectations — showing that consumer demand for hydroponics remained flat as a lack of regulatory guidance and recessionary pressures facing the sector persist. The company released its financial results for the second quarter ending June 30, 2022. Read more here.

MariMed Edges Up in Second Quarter Earnings

After the close on Monday, MariMed, Inc.  (CSE: MRMD) (OTCQX: MRMD) delivered its financial results for the second quarter ended June 30, 2022. MariMed’s revenue of $33 million just barely edged out the previous year’s revenue of $32 million and was higher than the first quarter’s revenue of $31 million. However, it missed the Yahoo Finance average analyst estimate for revenues of $36 million. The company reported a net income of $1.9 million versus last year’s net income of $7.6 million. Read more here.

Village Farms Beats on Revenue, as Produce Stays Strong

Village Farms International, Inc. (NASDAQ: VFF) (TSX: VFF)  announced its financial results for the second quarter ended June 30, 2022. Total consolidated sales increased 18% year-over-year to $82.9 million from $70.4 million. This beat the Yahoo Finance average analyst estimate for revenues of $70 million. Read more here.

Charlotte’s Web Misses on Revenue, Finds Hope Beyond The U.S.

Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) missed expectations as the CBD company continues to struggle amid a patchwork regulatory landscape. The company reported its financial results for the second quarter ending June 30, 2022. Read more here.

Cannabis Operators Plan to Raise Prices, Blaming Inflation

The word “inflation” has dominated headlines and earnings calls this year, and a survey from a leading national cannabis accounting and advisory firm solicited feedback to gauge how such rising costs are affecting the sector. In a month-long survey this year asking operators a series of questions regarding the impacts of inflation on their cannabis operation, GreenGrowth CPAs found that one in four operators reported planning to raise prices in the near or immediate future to combat rising inflation costs. Read more here.

Psychedelics Plays a Role In Metamodernism

There are stories about how psychedelics changed the minds of entrepreneurs not only seeking enlightenment in the San Francisco Bay Area beginning in the late 60s and early 70s but incorporating their psychedelic visions into business models. Read more here.

IN OTHER NEWS

Curaleaf Holdings, Inc., Pharma GmbH

Curaleaf Holdings, Inc. (CSE: CURA) (OTCQX: CURLF), a U.S. provider of consumer products in cannabis, today announced that Curaleaf International Holdings Limited, the company’s European holding company, has signed a definitive agreement to acquire a 55% stake in Four 20 Pharma GmbH, a fully EU-GMP & GDP licensed German producer and distributor of medical cannabis with its own product line. Read more here.

Lowell Farms Inc.

Lowell Farms Inc. (CSE: LOWL; OTCQX: LOWLF), a California-born cannabis cultivation and maker of brand Lowell Smokes, announces unaudited revenue and operating results for the second quarter (ended June 30, 2022). All figures stated are in US Dollars. Read more here.

AFC Gamma, Inc.

AFC Gamma, Inc. (NASDAQ:AFCG) today announced its results for the second quarter of 2022. AFCG issued a presentation of its second quarter 2022 results, titled “Second Quarter 2022 Earnings Presentation,” which can be viewed at www.afcgamma.com under the Investor Resources section. AFCG also filed its Quarterly Report on Form 10-Q for the quarter ended June 30, 2022, with the Securities and Exchange Commission on August 9, 2022. Read more here.

Akanda Corp., Cansativa GmbH

International medical cannabis platform company Akanda Corp. (NASDAQ: AKAN) today announced it has signed a multi-year supply agreement with European medical cannabis leader Cansativa GmbH to supply EU-GMP quality THC dried flower strains cultivated from its Portuguese operations at Holigen. This new supply agreement marks one of the largest for medical cannabis to be exported from Portugal to serve the emerging European medical cannabis market. Read more here.

TRP, Cookies Florida, Inc.

TRP is bringing recognized cannabis brand Cookies to the Florida market through an exclusive partnership. The first Cookies dispensary in the state is opening at 8303 Bird Road in Miami, Florida on August 13, 2022. TRP looks forward to serving South Florida’s patients via its subsidiary and MMTC license holder Cookies Florida, Inc. Read more here.

22nd Century Group, Inc.

22nd Century Group, Inc. (Nasdaq: XXII), a leading agricultural biotechnology company dedicated to improving human health with reduced nicotine tobacco, hemp/cannabis, and hops advanced plant technologies, today reported results for the second quarter ended June 30, 2022, and provided an update on recent business highlights. Read more here.

MediPharm Labs Corp.

MediPharm Labs Corp. (TSX: LABS) (OTCQX: MEDIF) (FSE: MLZ), a pharmaceutical company specialized in precision-based cannabinoids, announced it has entered into a research support agreement with the Keck School of Medicine of University of Southern California (USC) to conduct a randomized double-blind placebo-controlled Phase 2 trial on the efficacy of THC and CBD to treat hospice-eligible patients diagnosed with dementia and experiencing agitation. Read more here.

Mindset Pharma Inc.

Mindset Pharma Inc. (CSE: MSET) (FSE: 9DF) (OTCQB: MSSTF), a drug discovery and development company focused on creating novel, optimized, next-generation psychedelic and non-psychedelic medications to treat neuropsychiatric and neurological disorders with unmet medical needs, today issued a letter to shareholders from James Lanthier, Chief Executive Officer of Mindset. Read more here.

Cybin Inc.

Cybin Inc. (NEO: CYBN) (NYSE American: CYBN), a biopharmaceutical company focused on progressing “Psychedelics to TherapeuticsTM”, announced that it has established an at-the-market equity program that allows Cybin to issue and sell up to USD $35,000,000 of common shares. Read more here.


Adam JacksonAugust 9, 2022
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8min3830

Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) missed expectations as the CBD company continues to struggle amid a patchwork regulatory landscape. The company reported its financial results for the second quarter ending June 30, 2022.

For the key metric of total revenue, Charlotte’s Web missed expectations as it delivered approximately $18.9 million during the period — missing the Yahoo Finance Average analyst estimate for revenues of $27.13 million. The revenue decreased 21.8% versus $24.2 million in the same period last year. The company said that the decrease was primarily due to lower comparable customer shipments, consumer shift to lower priced formats, a return reserve as well as lower comparable online traffic.

Charlotte’s Web also reported a second-quarter net loss of $7.9 million compared to a net loss of $5.9 million in the same period last year. The company said that the net result was primarily impacted by “lower net revenues, higher return reserves and increased inventory provisions, which were offset by significantly reduced operating expenses.” The earnings were for a loss of five cents per share, a cent below analysts’ loss estimates of four cents a share.

“While we are disappointed with the second quarter revenue, we achieved significant distribution and customer wins consistent with our growth priorities to expand our coverage in existing channels and enter new vertical,” CEO Jacques Tortoroli said. “We’re also focused on improving operating cash flow as we progress through the second half of the year. Operating expenses were down over 31.5% year-over-year in the second quarter. In July, we further lowered our staffing levels and administration expenses. In aggregate, our focus on right-sizing our business is bringing operating expenses below $70M on an annualized run rate.”

The company also saw a $2.4 million decline in the e-commerce platform versus $15.7 million at the same time last year. Charlotte’s Web maintains the largest e-commerce business in the CBD industry; and e-commerce represents the largest channel in the industry with an approximate 40% market share, according to the Brightfield Group.

Business-to-business net revenue was $5.6 million after a $0.9 million returns reserves — representing $2.9 million, or 33.9%, lower year-over-year “primarily due to lower comparable shipments to some of the company’s largest retail customers.”

“Charlotte’s Web holds the number one share position across major retail channels including food/drug/mass retail, natural grocery & vitamin retailers, and e-commerce, based on market share data from leading third-party analysts such as The Nielsen Company and Brightfield Group,” the release said.

Gross profit was $9.3M, or 49.4% of revenue versus $15.8 million and 65.5% of revenue respectively in same period last year. The company said the decrease was primarily related to lower net revenue “including a $0.9 million customer return reserve, and $1.9 million of inventory provisions.” Excluding the return reserve and inventory provisions, gross profit was 61.0% of revenue, it said.

Adjusted EBITDA fell to $5.4 million in the second quarter, versus a loss of $5.1 million in the same period last year.

Net cash used from operations during the first half of the current fiscal year was $4.3 million versus $16.2 million for the same period last year.  The company’s cash and working capital as of the second quarter were $14.8 million and $64.6 million, respectively, versus $19.5 million and $75.6 million in the latter half of the previous fiscal year.

Total selling, general and administrative expenses of $17.3 million improved 31.5% year-over-year due to a $7.9 million reduction versus the second quarter last year. The company said the improvement reflects lower staff levels and compensation as well as increased operating efficiencies “resulting from actions implemented year-to-date.”

New Pathways For CBD

As companies in the cannabis sector suffer from a lack of regulatory guidance from the federal government, new opportunities are opening up for CBD companies.

Overseas, the company’s original CBD oil formula has been placed on the Foods Standards Agency list of products allowed to be sold in the U.K — making Charlotte’s Web the only substantially vertically-integrated U.S. company with a full-spectrum hemp extract to have passed the validation phase and advance to the safety assessment phase in the United Kingdom, it said.

Also, the Scientific Advisory Committee for Health Canada unanimously agreed CBD is “safe and tolerable for short-term use” — recommended hemp CBD products should be considered for mainstream retail availability.

Cory Pala, Director of Investment Relations, told The Green Market Report at the time that the company is “particularly excited” about the recommendation.

The company cannot legally export its products to Canada under current law “which is sort of ironic” considering it is federally legal in both countries, he said, so it has partnered with cultivators in the country instead. The new recommendation presents a juncture for the company.

“In the US, we have 2,500 different competitors that have similar products,” Pala said. “But in Canada, we have maybe half a dozen, if that. And so it’s really, really compelling to us as a market opportunity. This is big for multiple reasons.”

The health board will take consultation with stakeholders and advocates to hash out regulation guidelines and figure out whether it actually wants to move in that direction before seeking approval from the Canadian government.


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The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


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