It would not be a complete surprise if many investors decided to avoid cannabis stocks due to the events of 2019. However, it is important to point out that even when a sector underperforms, there are some gems that are worth considering, and one of those could be Charlotte's Web stock.
Charlotte’s Web Holdings (TSX:CWEB) (OTCQX:CWBHF) is involved in the CBD niche, and over the course of the past few years, it has managed to become a leader in that particular space. In addition to that, CBD is a fast-growing industry, and Charlotte’s Web is currently well-positioned to take advantage of the expected hyper-growth.
The company has grown its capabilities significantly. In 2018, it planted 300 acres of hemp, but in 2019, the total area ballooned to 862 acres. This represents the sort of growth that is expected in the sector. Charlotte's Web is also building a facility in Colorado that is going to span over an area of 137,000 square feet, which is expected to be completed in 2021. However, it is far more important to add that Charlotte’s Web Holdings has expanded its retail presence significantly, and its products are now available at 10,000 locations, up from only 3,680 in 2018.
Charlotte's Web stock is trading lower by 1.90% at $7.65.
In the third quarter, the company made a loss of $1.3 million after having made a $2.2 million profit in the previous quarter. Charlotte’s Web’s expansion efforts could be the reason behind the reversal. While it is true that the CBD industry is growing, it should be noted that the United States Food and Drug Administration has issued a warning to customers about the dangers of consuming CBD.
Some companies also got warning letters for making claims about the health benefits of CBD. However, Charlotte’s Web Holdings has insisted that it is ready to navigate the regulatory environment. Experts believe that despite the troubles of 2019, Charlotte's Web stock remains one of the CBD stocks that could greatly benefit from the growth in the industry this year.
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