Charlotte’s Web Holdings Inc: Top U.S. Cannabis Stock Soars 22% in July, Fueled by Kroeger Deal

Charlotte’s Web Holdings, Inc. Top U.S. Cannabis Stock Soars 22% in July, Fueled By Kroeger Deal
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Charlotte’s Web Holdings Inc Soars on New Developments

Charlotte’s Web Holdings Inc (OTCMKTS:CWBHF, TSE:CWEB) is one of those cannabis stocks that should be on every investor’s radar. A leader in the U.S. cannabidiol (CBD) industry, Charlotte’s Web continues to report strong financial results.

The expansion of the company’s U.S. retail network, its increased production, and a recent major deal helped send Charlotte’s Web stock up 22% in July, making it one of the top-performing marijuana stocks.

CWBHF Stock Overview

Charlotte’s Web is the world’s leading CBD brand by market share. You can find the company’s CBD oil tinctures, gummies, topicals, capsules, and pet products in 8,000 retail location across the United States, up from 3,700 at the end of 2018. (Source: “Overview,” Charlotte’s Web Holdings Inc, last accessed June 20, 2019.)

To meet the growing demand for its CBD products, Charlotte’s Web has been rapidly increasing its number of acres planted. The Denver-based company planted 70 acres of hemp (producing 63,000 pounds of hemp) in 2017 and 300 acres (producing 675,000 pounds) in 2018.

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The company surprised investors in June when it announced that, because of increased demand for its CBD products, it ramped up the number of hemp acres planted in 2019 to 862, from previous guidance of 700 acres. (Source: “Charlotte’s Web Announces 187% Increase in Hemp Acres Planted for 2019,” Charlotte’s Web Holdings, Inc, June 19, 2019.)

The company didn’t say how much hemp biomass would be produced from the planting season, but based on previous years, it should be more than a million pounds, with that number increasing over the coming years.

The 2019 harvest ensures that Charlotte’s Web has enough raw material to supply its production targets into 2021.

CWBHF Stock Information

Market Cap $917.9 Million
52-Week High $25.25
52-Week Low $8.13
Shares Outstanding: 25.4 Million
Float 39.6 Million
50-Day Moving Average: $16.42
200-Day Moving Average: $16.37

(Source: “Charlotte’s Web Holdings, Inc. (CWBHF),” Yahoo! Finance, last accessed August 8, 2019.)

Charlotte’s Web will also benefit from its CBD products now being sold at Kroger Co (NYSE:KR) grocery stores. The initial rollout started in a few states and will eventually expand to a total of 1,350 stores in 22 states. (Source: “Charlotte’s Web Hemp CBD Topical Products Expanding to 1,350 Kroger Stores Across 22 States,” Charlotte’s Web Holdings Inc, July 29, 2019.)

The only thing getting in the way of Charlotte’s Web’s success is the rest of the stock market. The company’s share price had been on a great upward trajectory this year, with strong support. That was until May, when the broader stock market sold off on fears of a trade war with Mexico and the ongoing trade war with China.

Those fears were temporarily assuaged in June, and save for the marijuana industry, the rest of the market rebounded. Curiously enough, however, CWBHF stock bucked the pot industry downtrend and headed back to its former glory.

The only thing preventing Charlotte’s Web stock from climbing even higher is, once again, the market-wide selloff. As a result, the company’s share price has retreated a little recently.

This is just a short-term blip, though. Charlotte’s Web was a great cannabis stock before the early-August Wall Street swoon, and it potentially continues to be.


Chart courtesy of StockCharts.com

In late May 28, Charlotte’s Web Holdings Inc announced that revenue for its first quarter, ended March 31, increased 66% year-over-year to $21.7 million. Net income was $2.3 million ($0.02 per share) while adjusted earnings before interest, taxes, depreciation, and amortization (EBITDA) was $4.5 million. (Source: “Charlotte’s Web Holdings Reports 2019 Q1 Earnings,” Charlotte’s Web Holdings Inc. May 28, 2019.)

The company will be announcing its financial results for the second quarter before the markets open on August 14.

Analyst Take

Charlotte’s Web stock only went public last September, but it has gone on to become one of the most compelling cannabis stocks out there. It continues to report strong revenue growth, and management expects that the demand for its products will increase significantly. That’s why the company has been heavily increasing its number of hemp acres planted.

Because of this rapid expansion, Charlotte’s Web Holdings Inc expects to report ongoing top-line financial growth during the second quarter and second half of the year.