Charlotte's Web Archives - Green Market Report

Debra BorchardtDebra BorchardtNovember 13, 2019
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4min2900

Charlotte’s Web Holdings, Inc. (TSX: CWEB)(OTCQX: CWBHF)  reported that its revenue rose 41.8% to $25.1 million in the third quarter that ended September 30, 2019, versus $17.7 million for the same period in 2018. Still, the company delivered a net loss of $1.3 million versus last year’s net income of $1.8 million.

Rising Expenses

The operating expenses soared to $19.6 million over last year’s $9.8 million for the same time period. The company said in a statement that its “third-quarter operating expenses were $4.7 million”, but that isn’t the number that appeared in the financial table. The company did say that the rising expenses were “to support the Company’s growth and transition to a consumer-packaged goods operating company.

During the quarter Charlotte’s Web moved into larger office facilities in Boulder and added senior CPG management to the leadership team along with related personnel.  “Employee headcount was 307 on September 30, 2019, a 35.8% increase from 226 at September 30, 2018.”

“In an increasingly crowded, noisy and confusing CBD market, brands matter, and Charlotte’s Web is the most trusted hemp extract in the world,” said Deanie Elsner, Chief Executive Officer of Charlotte’s Web. “Consumer education is increasing and a 68% year-over-year increase in traffic through our online store drove Q3 B2C sales to new highs. As the CBD category’s flagship brand, we saw a similar 66% increase in sales pull into our B2B segment which includes the food/drug/mass (“FDM”) and natural health retail channels. This helped drive Q3 growth to 42% year-over-year.”

The revenue breakdown was as follows: Human consumables, topicals, and pet products grew by 43.6%, 156.7%, and 57.5%, respectively. On a year-over-year basis for the quarter ended September 30, 2019, B2C sales grew by 38.7% and accounted for 51.2% of total revenue in the quarter as online traffic increased 68% through expanded marketing and social media programs. B2B sales grew by 66.4% year-over-year and accounted for 48.8% of total revenue in the quarter as mass retailers including Kroger Co., Vitamin Shoppe and CVS Pharmacy locations entered the market in 2019.

Pets Performing

The company said that early sales traction for the new 12 SKU pet line from Charlotte’s Web has been encouraging with a 57% year-over-year increase in revenue with notable success in the independent retail channel.

Lowering Guidance

Ms. Elsner updated the Company’s revenue guidance: “We’re pleased with our growth of 42% for Q3 and 49.6% year-to-date. We expect full-year revenue for 2019 to be in the range of $95 to $100 million and to maintain growth rates for 2020 in the 40% to 50% range or until clear regulations are set.” In the last quarterly report, Rich Mohr, Chief Financial Officer said, “Our previously communicated revenue guidance for 2019 of between $120 million and $170 million remains in place.”

Elsner added, “We are prudently investing in the expansion of our production and distribution capacities as planned, ahead of anticipated FDA regulatory clarity that could enable wider adoption of our product portfolio. We remain hopeful that broad political support will help drive quick regulatory resolutions in 2020.”


William SumnerWilliam SumnerOctober 9, 2019
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3min5021

Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) announced today that it is partnering with the data and measurement firm Nielsen (NYSE: NSLN) to provide analytical coverage of the U.S. hemp-CBD retail market.

Recently, Nielsen has been dipping its toes into the hemp and cannabis space by entering into strategic partnerships with cannabis-focused data and analytics firms like Headset and by developing a suite of cannabis measurement capabilities

“We are thrilled to be entering a long-term partnership with Charlotte’s Web, a clear pioneer in the CBD industry,” said Susan Dunn, President, U.S. Sales at Nielsen. “Our mission is to work with the outstanding team at Charlotte’s Web to support and accelerate their growth by applying our breadth of data, insights, tools, and analytic assets.”

Charlotte’s Web has been aggressively moving to establish itself as a thought leader in the hemp industry. Recently the company became the first hemp brand to be granted a patent by the U.S. Patent and Trademark Office for a hemp plant.

The company hopes to leverage Nielsen’s data capabilities to gain insight into consumer attitudes, product preferences, use occasions, and to discern consumer’s future intent tied to consumer interaction points within CPG categories.

“This is a game changer for hemp CBD retail analytics,” said Deanie Elsner, CEO of Charlotte’s Web. “As the market leader in CBD, we have an obligation to advance objective data, purchase dynamics and insights that can be levered by our retailers in the Food, Drug and Mass channels. Nielsen is a trusted industry leader who was an obvious choice as our analytics partner. They provide unbeatable data and insights which will set the stage for one source of truth for the CBD Category.”

News of the partnership with Nielsen briefly gave the company’s stock a boost, rising from C$17.80 to C$18.44, but has since leveled off slightly and is currently trading at or around C$18.36 per share.


Debra BorchardtDebra BorchardtAugust 14, 2019
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7min6760

Charlotte’s Web Holdings, Inc. (TSX: CWEB)(OTCQX: CWBHF), a producer of whole-plant CBD hemp extract products, reported its financial results for the second quarter ending June 30, 2019. The company’s revenue grew 45% to $25 million over last year’s $17.2 million for the same time period. The net income fell to $2.2 million from last year’s $3.7 million.

Charlotte’s Web noted that 53% of its revenue came from retail outlets and that its gross margin was a whopping 75% producing gross profits of $18.8 million. Operating expenses doubled from $8.2 million last year in the second quarter to this year’s $16.2 million. The company attributed the increasing expenses to adding more personnel to address the company’s growth. Employee headcount increased by 41% over the past year.

“We have been experiencing increased sales through both our e-commerce and retail sales channels,” said Deanie Elsner, Charlotte’s Web Chief Executive Officer.  “Top tier mass retailers are entering the market as several national grocery and drugstore brands have announced their CBD plans. The majority of these are now carrying Charlotte’s Web products. This is a significant development for the hemp CBD category. To effectively service projected growth, we have been building our executive leadership with experienced consumer-packaged-goods (CPG) executives in sales, marketing, finance, data, and operations. Similarly, we are expanding our capabilities in cultivation, R&D, production, and distribution.” The company’ products are now available for sale in 8,000 locations.

In order to fund this expansion, Charlotte’s Web used $15.2 million of cash in operations during the first six months of 2019 compared to $6.1 million of cash provided from operations during the same period in 2018. The company said it reflects the investment in inventory required to supply increasing retail and consumer demand. Cash was also used for the 2019 hemp crop that was increased to 862 acres from 300 acres planted in 2018.

“We are experiencing increased momentum with large retailers as consumer awareness and interest in CBD grows,” said Deanie Elsner. “We believe we’ll continue to see additional large retailers coming onboard and expect an increase in the number of states and locations with our existing retail partners throughout the year. Kroger is the most recent example as they added four new states to their distribution in July, including Texas, which is the latest state to approve hemp CBD products.”

New Products

Charlotte’s Web introduced new products including new hemp extract infused CBD gummies in three flavors, and a new twelve SKU pet product line including functionally focused chews with synergistic ingredients to support specific health functions – Calming, Hips & Joints and Cognition. Subsequent to the second quarter, the Company signed two distribution partners for its pet line; Pacific Pet in California, one of the largest distributors of pet food and pet products on the west coast, servicing 1,000 independent pet stores in California, Arizona, Nevada, and Hawaii; and “Pet Food Experts”, servicing over 4,000 retailers in 33 states out of five distribution centers located in Rhode Island, Pennsylvania, Illinois, Washington, and Colorado.

Looking Ahead

“We forecast revenue growing at a faster pace than operating expenses in the back half of the year,” stated Rich Mohr, Chief Financial Officer of Charlotte’s Web. “This supports our financial forecast for increases in adjusted EBITDA percentages in future periods. As product volumes shipped continue to increase on a quarterly basis, we’re expecting continued top-line revenue growth during the last half of the year. Our previously communicated revenue guidance for 2019 of between $120 million and $170 million remains in place. Where we fall within this range will substantially be determined by future developments with the FDA, associated retailer response, and the timeline of these events.”  Russ Hammer has been named as the company’s new Chief Financial Officer.

 

 

 


Anne-Marie FischerAnne-Marie FischerJuly 31, 2019
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8min49150

According to Brightfield Group, the CBD market in the U.S. has grown over 700% in 2019.

The CBD industry is becoming much more saturated than it was before the passing of the U.S. Farm Bill late last year, with new products entering the market, threatening to take a slice of the CBD pie that the early producers of CBD have enjoyed until this time.

Nevertheless, the top 20 CBD companies still hold a majority of the even bigger pie that is CBD in the cannabis industry. 

Brightfield Group listed the Top 5 CBD Companies that the research group says “continue to make a name for themselves” within the growing CBD market. Here’s what we know about these various companies:

 

  • CW Hemp (Charlotte’s Web)

 

Earlier this summer, Charlotte’s Web Holdings (TSX:CWEB)(OTCQX:CWBHF) announced that their total acres of hemp planted for the 2019 growing season had increased 187% due to interest and demand for the products. Prior to that, the company reported its earnings for the first quarter with revenue growing 66% to $21.7 million. 

“Interest and demand for our products has been exceptional and growing rapidly. Our 2019 planting strategy ensures we will have the required raw materials to deliver on production targets for Charlotte’s Web products through 2020 and into 2021,” stated Deanie Elsner, CEO of Charlotte’s Web. “Our leading CBD hemp varieties under cultivation today are the foundation of our 2020 production plan.”

Brightfield Group remarked of the company: “By deeply understanding who they are as a brand and identifying the consumers that resonate with their messaging, they have built the foundation for potentially life-long customers and advocates.”

  1. PlusCBD Oil (CV Sciences)

PlusCBD Oil by CV Sciences (OTCMKTS: CVSI) has found success largely due to their low-dose capsule and softgel formats that Brightfield Group referred to as “a safe bet for more conservative users”. Green Market Report has been watching the steady increase in CV Science’s company value following last year’s impressive sales jump of 203% in the second quarter. 

The company is expected to announce its second-quarter results for 2019 on August 6. 

        3. Green Roads World

Green Roads offers unique, high-dose products, and have built their success on effective social strategies. With a growing employee base of over 100 the company had an estimated value of $45 million in 2018, according to co-founder Arby Boroso. 

The company sells CBD-infused products such as tinctures and balms, online and in 6,000 stores and 2,000 doctors’ offices across the country. Brightfield attributes their “values-based marketing” to their success and prominence in the CBD industry. 

  1. Medterra

Medterra’s growth is largely due to its effective SEO strategy and marketing. With a site that is full of engaging content that manages to get past the limitations of search engines, Medterra gets itself in front of the eyes of consumers.

The company recently announced a foray into the sports, fitness and golf communities, by partnering with Worldwide Golf Shops, the parent company to Edwin Watts, Roger Dunn, and some of the most well-known and established golf retail stores in the United States. 

  1. Irwin Naturals

Irwin Naturals turned heads when Klee Irwin, the founder of the company announced the company would be giving away $1M worth of CBD products to honor the passing of the Farm Bill. 

The company is concerned with making the cost of CBD products affordable, saying “Our mission is to spread health to the world through plant medicine. Our nation is on the edge. And I am worried about the future of our children. If we can make CBD affordable and accessible to the masses, it just might help our country avoid a meltdown.”

Groups of Competitors in the CBD Market

Brightfield Group laid out the different types of companies and brands that are continuing to lead the pack when it comes to innovative marketing, advanced products, and ways to stick out in the market. These companies are those who are:

  • CBD-only companies that have established brand loyalty, improved marketing strategies, and grow larger and more diverse customer bases
  • Cannabis companies including multi-state operators that leverage networks and infrastructure to build brand recognition and raise capital to expand CBD lines
  • Supplement brands existing in the natural food store and retail chain space
  • Disruptor brands that were little-known prior to this year and have risen up in the ranks as they’ve been picked up by large retail chains

As it is only still summer, it remains anyone’s game as to who will end up at the finish line in the CBD brand race by the end of the year.  


Debra BorchardtDebra BorchardtJune 19, 2019
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3min8460

Charlotte’s Web Holdings, Inc.  (TSX:CWEB)(OTCQX:CWBHF) reported its final hemp planting for its 2019 growing season. The company said that in order to meet growing demand the total acres planted for 2019 has been increased to 862, an 187% increase from 300 acres planted in 2018.

“Interest and demand for our products has been exceptional and growing rapidly. Our 2019 planting strategy ensures we will have the required raw materials to deliver on production targets for Charlotte’s Web products through 2020 and into 2021,” stated Deanie Elsner, CEO of Charlotte’s Web. “Our leading CBD hemp varieties under cultivation today are the foundation of our 2020 production plan.”

Charlotte’s Web said it uses an inventory model where it grows more hemp than it needs for the subsequent year to minimize the impact of farming risks and product shortfalls against forecasted rapid market growth. Dried hemp can be stored for years, with even more longevity in its extracted form. In 2016, 2017 and 2018, the company produced 41,000 lbs., 63,000 lbs. and 675,000 lbs., respectively, of dried hemp biomass.

A few weeks ago the company reported its earnings for the first quarter with revenue growing 66% to $21.7 million. The net income though dropped to $2.3 million from last year’s $3.1 million. The company delivered earnings per share that fell to $0.03 and diluted EPS of $0.02 versus last year’s $0.04. Operating expenses doubled from last year’s $6.4 million to this year’s $13.2 million.

Charlotte’s Web cultivates hemp outdoors in various regions across the United States to hedge against potential weather risks and other crop-related impacts. Of the 862 acres planted, 166 (19%) are in Colorado, 325 (38%) are in Kentucky, and 371 (43%) are in Oregon. The Colorado farms are operated by the company’s cultivation team while farms in Kentucky and Oregon employ family-owned contract farmers, supporting the important American agricultural economy through hemp farming.

All acres are cultivated using natural farming methods. An active supporter of organic farming, up to 457 acres, or 53% of the total acres planted for 2019 are designated for USDA organic certification, with additional organic expansion planned in subsequent years.

The company said it grows several hemp varieties, all of which contain high levels of CBD content but only trace THC amounts of less than 0.3%. Hemp varieties with high CBD potency reduce the amount of biomass required for CBD extracts, allowing for responsible farming practices by maximizing the production of cannabinoids, terpenes, and other beneficial botanical compounds.

 


StaffStaffMay 28, 2019
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4min7280

Charlotte’s Web Holdings, Inc. (CSE:CWEB) (OTCQX:CWBHF) reported financial results for the first quarter ended March 31, 2019 with revenue growing 66% to $21.7 million. The net income dropped to $2.3 million from last year’s $3.1 million. The company delivered earnings per share that fell to $0.03 and diluted EPS of $0.02 versus last year’s $0.04. 

Operating expenses doubled from last year’s $6.4 million to this year’s $13.2 million.

Just a couple of weeks ago the company named Deanie Elsner as the new Chief Executive Officer. Elsner is from Kellogg’s where she was President of the $3B dollar U.S. Snacks division – the largest business unit in the Kellogg Global portfolio and prior to that served more than 20 years in various leadership roles at the Kraft Foods Company including Chief Marketing Officer.

“Charlotte’s Web has established itself as the market leader in sales, and more importantly as a trusted brand with an impeccable reputation,” said Ms. Elsner. “As someone with an extensive career in the CPG industry-leading global brands, I see a tremendous opportunity to further influence, shape and grow the CBD category while turning Charlotte’s Web into a household product name that consumers can rely on around the world. My priority is to raise the Company’s level of operational effectiveness and accelerate growth opportunities acting with urgency and decisiveness.”

Looking Ahead

Following the end of the quarter, shipments began to a fourth national retailer and the company has over 6,000 retail locations now receiving shipments of its leading hemp CBD products. The company said that more than 2,300 new retail doors were added since the start of the year – more than all of 2018 – significantly expanding the company’s physical brick and mortar retail reach.

As of May 28, 2019, Charlotte’s Web reported that it is shipping product to four national retailer locations covering 18 states combined. The company said it expects additional states and stores to be added by these retailers throughout 2019. A major grocery retailer is also carrying all categories of Charlotte’s Web product portfolio including oils, capsules and topicals, while the remaining national retailers have begun their Charlotte’s Web product introduction with topical products only.

“We are forecasting revenue to grow at a faster pace than operating expenses, particularly in the back half of the year,” stated Rich Mohr, Chief Financial Officer of Charlotte’s Web. “This supports our adjusted EBITDA guidance in the 30%-35% range on an annualized basis, in line with our historical norms. Our sales volumes continue to increase on a quarterly basis and we’re expecting continued top-line growth during the second quarter and during the last half of the year. We reiterate our revenue guidance for 2019 of between $120 million and $170 million.”

 

 


StaffStaffJanuary 15, 2019
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9min4480

It’s time for your Daily Hit of cannabis financial news on January 15, 2019.

On The Site

Tilray. Inc. (NASDAQ: TLRY) has signed a long-term revenue-sharing agreement to market and distribute cannabis products with  Authentic Brands Group (ABG).

ABG houses more than 50 brands including well-known names like Airwalk and Frye shoes, Juicy Couture, Nautica, Nine West, Vince Camuto, and Spyder sportswear. It has a global retail footprint of over 100,000 points of sale and more than 4,500 branded freestanding stores and shop-in-shops. The company noted that ABG generates approximately $9 billion in retail sales annually.

In Other News

CANNAMERICA BRANDS CORP. (CSE: CANA) (OTCQB: CNNXF) has granted an aggregate of 2,450,000 incentive stock options to purchase common shares to certain officers, directors, and other eligible persons of the Company.  The options are exercisable, subject to vesting provisions, over a period of five years at a price of $0.60 per share, the closing price of the Company’s first tranche of its brokered private placement announced on January 10, 2019.

WeedMD Inc. (TSX-V:WMD) (OTCQX:WDDMF) and BLOCKSTRAIN TECHNOLOGY CORP.  (TSXV: DNAX.V) (OTC: DNAXF) has completed the ‘first-of-its-kind’ cannabis strain validation registration program – a testing and verification process that will confirm cannabis strains as purchased. BLOCKStrain, which developed a Master Genome Strain Registration and Clone Strain Registration program is focused on providing transparency and actionable quality assurance to cannabis consumers. Licensed producers completing the registration can in turn provide assurance to their own customers that the cannabis strains they purchase are the ones they receive.

Charlotte’s Web Holdings, Inc. (CSE: CWEB; OTCQX: CWBHF)  reported its 2018 harvested hemp results. The company reported more than a 10 times growth in harvested hemp compared to its 2017 grow season. The high-quality 100% U.S.-grown hemp will be processed through proprietary extraction methods to create whole plant hemp extract that will be used in Charlotte’s Web products for sale in 2019 and 2020.

Grown Rogue International Inc. (CSE: GRIN | OTC: NVSIF) announced the signing of a Memorandum of Understanding to expand its brand and products into Michigan through a strategic partnership with established local cannabis operators and investors. The expansion is anticipated to initially include two retail dispensaries, referred to as provisional centers in Michigan, a 19,000 sq ft indoor cultivation and processing center in Detroit, and an interest in a 28 acre parcel located in the northern portion of the lower peninsula which can be used for cultivation. Grown Rogue will make a further announcement relating to the definitive terms of the partnership which are currently being negotiated between the parties.

Flower One Holdings Inc. (CSE: FONE) (OTCQB: FLOOF) announced its first brand partnership for cannabis product fulfillment in Nevada. Flower One and Rapid Dose Therapeutics Inc. (CSE: DOSE) entered into a definitive agreement on January 10, 2019, pursuant to which Flower One has been granted a license to manufacture, distribute and sell RDT’s QuickStrip™, an innovative, proprietary delivery technology for the cannabis market in Nevada.

Medicine Man Technologies (MDCL), a leading consulting, IP licensing and products company in the cannabis industry, has signed binding term sheets and conditions for acquisition of MedPharm Holdings, LLC, intellectual property development and holding company focused on cannabis research and product/brand development.

Nouveau Life Pharmaceuticals, Inc. (USOTC: NOUV) (“NOUV”) and Puration, Inc. (USOTC: PURA) announced that Brian Shibley, the current CEO PURA has been appointed as the interim CEO of NOUV.  On October 4, 2018, PURA sold its cannabis cultivation business to NOUV in exchange for a $1.2 million convertible note with a commitment that the note would promptly be converted into shares of NOUV and that those converted shares would be distributed in a stock dividend to the shareholders of PURA.  The process of updating NOUV’s public filings in order to proceed with the dividend has taken longer than originally anticipated.  Brian Shibley’s appointment as CEO is anticipated to reaccelerate the update of NOUV public filings and in so doing, speed up the anticipated dividend of NOUV shares to PURA shareholders.

Leafly, the world’s leading cannabis information resource, and Flowhub, the award-winning cannabis compliance and point of sale provider, are today announcing their new, real-time integration to help cannabis dispensaries drive visibility and automate online menus. With the new Leafly and Flowhub integration, dispensaries can now automatically update their online menus on Leafly to match their live inventory in Flowhub’s industry-leading POS system. The Flowhub solution allows retailers and managers to save time on manual data entry, while providing accurate information and a seamless shopping experience for their potential customers on Leafly.


Debra BorchardtDebra BorchardtNovember 28, 2018
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6min7510

 

MJardin Group

MJardin Group, Inc. (CSE: MJAR), reported financial results for its third quarter ended September 30, 2018. The company’s revenue increased 65.1% to $7.0 million versus last year’s $4.3 million. The company said that the revenue growth was driven primarily by facility design and build-out fees earned from GrowForce for cultivation centers, interest on notes receivable and rent income earned from Buddy Boy Brands.

Still, MJardin delivered a net loss of $0.4 million versus last year’s net income of $0.6 million. The company attributed the loss to higher interest expense, compensation and benefits, and higher legal and consulting fees related to recent acquisitions, equity and RTO transactions.

“We are pleased to report our first quarterly results as a publicly traded company, continuing our strong growth trends and positive EBITDA,” said Rishi Gautam, Chairman of MJardin. “This is a very exciting time for MJardin with this month’s public listing of MJardin shares and the announcement of the proposed acquisition of GrowForce. We believe we are well positioned as one of the largest and most experienced cannabis operators in North America and as the largest multi-national operator.”

At the end of the third quarter, MJardin was managing 37 total facilities/operations. The company’s total operating expenses jumped by 58.9% to $5.8 million over last year’s $3.6 million. MJardin said that the increase reflects increased compensation and benefits to support that growth, including increased grow facility personnel at operator facilities and the continued expansion of the company’s executive team and corporate office personnel.

Subsequent to the quarter ending, MJardin completed an equity capital raise for approximately C$26 million. On November 13, 2018, MJardin completed the reverse take-over of Sumtra Holdings. On November 15, 2018, the company began trading on the Canadian Securities Exchange and the $26 million of subscription receipt proceeds were released from escrow and available to the Company.

iAnthus

Following the market close on Tuesday, iAnthus Capital Holdings (CSE: IAN, OTCQB: ITHUF) reported its earnings for the third quarter of 2018 ending in September. The sales for the quarter were $939,098 with a gross profit of $2.6 million. The net loss for the three months ending September 30, 2018, was approximately $10.0 million.

“iAnthus continues to execute,” said CEO Hadley Ford. “The company has expanded its footprint and added to its industry leading-team while maintaining a prudent balance sheet throughout the process. We are now generating revenue in five of the six markets in which we operate, with a significant number of dispensaries expected to open within the next few months. Assets are up 344% year-over-year as we grow the iAnthus platform across the United States. This performance, combined with the outlook for our Massachusetts, New York and Florida operations and the pending acquisition of MPX, position us very well for 2019.”

iAnthus reported that its consolidated revenues for the company increased 101% quarter-over-quarter, increasing to $1,074,398 in Q3 from $533,545 in Q2, yet these figures didn’t appear in the company’s filing. The company also said in its press release that system-wide revenues, including the revenues from iAnthus’ investments in New Mexico and Colorado, were $5,139,769 in Q3, up 16% quarter-over-quarter from $4,415,368 in Q2. These figures are unaudited and are not consolidated by the company at present due to certain regulatory restrictions.

In a statement, the company reported that its cash balance is currently $24.3 million. As of November 26, 2018, the Company had 20,933,995 warrants outstanding, all of which are currently in the money. iAnthus would receive approximately $54.5 million if all outstanding warrants were exercised.

Charlotte’s Web

Charlotte’s Web Holdings, Inc. (CSE: CWEB, OTCQX: CWBHF) reported financial results for the third quarter ending September 30, 2018. Organic revenue growth of 57% to $17.7 million versus last year’s $11.3 million for the same time period. Net income fell to $1.8 million from last year’s $2 million for the same time period.

Gross profits increased 54% to $13.8 million over last year’s $9 million for the same time period. Earnings per diluted share fell to two cents from last year’s three cents for the same quarter.

“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.”

The company’s statement said that on a year-over-year basis for the third quarter, e-commerce revenue grew by 37% and wholesale, distributor and retail revenue grew by 118%. Revenue from human nutrition products and animal nutrition products grew by 42% and 153%, respectively (canine products were introduced in February of 2017).


Anne-Marie FischerAnne-Marie FischerAugust 27, 2018
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5min71988

Charlotte’s Web, the cannabis company responsible for turning CNN’s Dr. Sanjay Gupta into a medical marijuana believer filed for an IPO worth C$100 million. Priced at C$7.00 a share, shares began trading on Thursday and closed that day at C$9.70 under the symbol CWEB. The company and the selling shareholders will be receiving gross proceeds of $93,185,050 and $6,914,950, respectively.

Late last week, Charlottes’ Web Holdings, Inc., announced an offering for an aggregate of 14,300,000 common shares, which consisted of a treasure issuance by the company of 13,312,150 shares, and a secondary offering of 987,850 common shares. The common shares are being offered for sale by Canaccord Genuity Corp, acting as lead underwriter. 

15 Canadian shareholders have entered into an underwriting agreement with Charlotte’s Web Holdings, Inc, following a public offering of common shares within Canada in the company.

Charlotte’s Web Holdings Inc is the exclusive provider of Charlotte’s Web. The high-quality hemp CBD extract was created by Stanley Brothers (now SEDAR), and gained infamy as little Charlotte Figi, turned to the CBD extract for relief from daily seizures. Charlotte has gone on to live a healthy, happy, and active life, and Charlotte’s Web has become one of the most noted CBD-rich cannabis strains in the cannabis market. The products of the company include tinctures, capsules, and topical products.

The company had $40 million in revenue for 2017 for a 35% EBITDA margin. This is a 172% growth over 2016’s revenue of $14.7 million. E-commerce sales have grown by 60% from 2016 to 2017 and it is sold in 2,700 retail locations. The product has 14% of the market share and is the number one brans by market share.

With regards to the legality of hemp, the company said in its filing, “The Company’s position is that its activities fall within the relief from federal interference (e.g. by the DEA) provided by Section 7606 of the 2014 Farm Bill. However, the statute does not explicitly state that private businesses, such as the Company, may cultivate or conduct commercial sales of Industrial Hemp or products derived therefrom. Rather, Section 7606 specifically allows for the ‘‘growing or cultivation of Industrial Hemp’’ for the ‘‘purposes of research’’ pursuant to state ‘‘pilot programs’’ conducted by ‘‘institutions of higher education and State departments of agriculture’’.”

CWB grows its proprietary hemp on farms leased in northeastern Colorado and sources high-quality hemp
through contract farming operations in Kentucky and Oregon. CWB has cultivation plans for approximately 300 acres of irrigated farmland from ten farms in three states for the 2018 growing season, of which, 165 acres are expected to be planted with CWB’s proprietary hemp genetics during the 2018 calendar year. Management believes these 300 acres will produce an estimated 250,000 to 350,000 pounds of Industrial Hemp during the 2018 harvest period (dependent on the regional yield variables associated with growing Industrial Hemp).

Selling shareholders have allowed Canaccord Genuity Corp an over-allotment option to purchase up to an aggregate of 2,145,000 common shares at the offering price. This is exercisable in whole or in part for a period of 30 days of the closing of the offering, expected to occur on or about August 30, 2018.

Following closing, common shares will commence trading on the Canadian Securities Exchange under the symbol “CWEB”. The CSE has conditionally approved the listing of common shares, subject to fulfilling requirements.

Aiko Trust, CK&J Irrevocable Trust, Master and A Hound Irrevocable Trust, Paulina Irrevocable Trust, Tristan 2 Arlo Irrevocable Trust, Blue Water Irrevocable Trust, J. Austin Stanley, Arvesa Corp., Kristi Fontenot, Little Sis Trust, Lynn Kehler, Proverbs 31 Woman Irrevocable Trust, M, C and C Special Needs Trust, Graham Carlson and Old Faithful Trust are among the shareholders that have gone into an agreement with the underwriting company.

A copy of the Prospectus can be found on SEDAR at www.sedar.com

 



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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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