Charlotte’s Web Holdings, Inc. CWEB CWBHF a producer of hemp-derived CBD and other botanical wellness products, reported its financial results on Thursday for the third quarter ended Sept. 30, 2024.  

“Our return to quarter-over-quarter growth in 2024 signals that our strategic direction is paying off,” said Bill Morachnick, CEO of Charlotte’s Web. “We’ve seen positive impacts from our e-commerce platform upgrades, recent product launches, and additional retailers, highlighted by our new partnership with Walmart that brings our CBD topicals to another 827 stores.”

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Q3 Financial Highlights

• Consolidated net revenue totaled $12.6 million, down from $14.3 million in the third quarter, reflecting challenges in the CBD industry such as ambiguity around regulatory advancements and consumer spending trends.
• Gross profit was $6.7 million – accounting for 53% of revenue – compared to $7.9 million in the prior year’s quarter, due to lower revenue and price reductions on tinctures.
• Net loss was $5.8 million, representing an improvement from the net loss of $15.2 million in the prior year’s quarter.
• Adjusted EBITDA came in negative at $3.9 million, improved from a $6 million adjusted EBITDA loss in the third quarter of 2023.
• Selling, general and administrative expenses were $12.7 million, representing a 36.2% decrease from $19.9 million in the third quarter of 2023, due to cost-cutting measures and streamlining operations.
• Net cash used in operations was $7.6 million, with $0.3 million in capital expenditures for manufacturing upgrades.
• On Sept. 30, 2024, the company’s cash and working capital were $24.6 million and $33.5 million, respectively, compared to $47.8 million and $54.5 million, respectively, at Dec. 31, 2023. 

Product Innovations And Expansions

The company recently launched:

• Soft Gel Capsules which are full-spectrum CBD capsules with positive consumer feedback.
• Functional Mushroom Gummies – a new line of gummies with three formulations following wellness trends.

In terms of the Walmart Partnership, the company expanded its CBD topicals to 827 Walmart WMT stores.

Charlotte’s Web launched CBD gummies in Canada, through a partnership with Tilray Brands, Inc.  TLRY, leveraging local production and distribution.

Outlook

Despite a challenging regulatory environment, the company is positioning itself for long-term growth with new product categories and international expansions.

CWBHF Price Action

Charlotte’s Web’s shares traded 0.72% higher at 14 cents per share after the market close on Wednesday afternoon.

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