Charlotte’s Web Stock Gains Momentum This Year: How to Play Now?

Charlotte's Web stock

The slowdown experienced by the cannabis sector seems to be a thing of the past as many of the stocks have roared back to life in 2020, and one of the notable gainers has been Charlotte’s Web Holdings (TSX:CWEB) (OTCQX:CWBHF). Since the beginning of the year, Charlotte’s Web stock has gained as much as 18% and has emerged as one of the stocks to watch in the cannabis sector.

The company is involved in the hemp-based CBD sector and has grown into the leading player in that ever-growing industry.

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The vertically integrated hemp-based CBD company has grown at a remarkable pace over the past few years, and that is reflected in the growth of its sales. In 2016, Charlotte’s Web Holdings generated total sales of only $14.7 million, but in 2018, sales had grown to $69.5 million. Its financials have proven to be strong as well, and in 2018, its gross margins rose by as much as 75%.

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Charlotte’s Web stock is up 6.64% at C$11.73.

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In the latest quarter, the company reported $25.1 million worth of sales, which reflects a year-on-year rise of 42%. The total area devoted to production has also expanded to 862 acres as of last year, from only 70 acres in 2017.

Charlotte’s Web has also grown its retail distribution network considerably, and much of the work was done in 2019. The sales growth witnessed in 2019 is a direct consequence of the company’s many retail partnerships.

The company’s products are now available in as many as 9,000 retail outlets, and it is likely that the number will touch 10,000 in Q4 2019. It is one of the few cannabis companies to have reported positive EBIDTA, and experts believe that it could hit as much as 26% in 2021. Moreover, it is also not in any danger from the black market since it works in the CBD sector, and it is believed that Charlotte’s Web Holdings is going to continue to grow.

Charlotte’s Web stock is down about 60% from its 52-week high of C$30.10.

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