Charlotte's Web stock is recovering this week on a sudden short covering in the broader cannabis sector. Let's find out if Charlotte's Web Holdings (TSX:CWEB) (OTCQX:CWBHF) is poised to sustain the recent rally.
Focus on the CBD Market
The past few months have been utterly chaotic for the cannabis sector, and that has been reflected in the stock prices of some of the biggest companies in the industry. The majority of these stocks have tanked by 70% or more during this period, but there is one cannabis stock that experts believe has the capability of beating the wider market. The company in question is Charlotte’s Web Holdings, and there are market watchers who believe that Charlotte's Web stock has the potential to emerge as an unsung winner amidst the overall wreckage in the market.
The adult-use recreational market is the main focus of many cannabis companies at this point, but Charlotte’s Web Holdings is instead concentrating on hemp and CBD. It is not involved in either recreational or medical cannabis but is focused on hemp-based health products. Charlotte's Web has managed to take its hemp-based CBD products to as many as 9,000 retail outlets. At the same time, other cannabis companies are struggling with the slow rollout of retail outlets.
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Charlotte's Web has concentrated hard on making its products the best in the market and has emerged as one of the biggest CBD players in the industry.
At the time of writing, Charlotte's Web stock is down 6.50% at $14.51.
The company has stated that its CBD products are tested as many as twenty times through the different stages of production. Moreover, the FDA and the cGMP have also approved its production facilities. The company's sales grew to $69.5 million last year, from $14.7 million back in 2016. Analysts believe that next year, its sales could hit $148 million and $274 million a year after that.
Additionally, Charlotte’s Web Holdings has also managed to boost its gross margins to 75% this year from 65% three years ago.
Charlotte's Web stock is up about 10% so far this week.
What do you think about the company?
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