Charlotte’s Web Stock: Bearish Downtrend Can’t Stop this Potential

Charlotte's Web Stock

Since February 5th, a bearish trend has hit Charlotte's Web stock. Shares have declined from $22.00 CAD to the current price of $19.64 CAD in two weeks.

Interestingly, there has been no news from headquarters to have caused the downtrend, but rather this seems to be a price correction after what was a booming January. Let's have a look.

Charlotte's Web Stock

In early 2019, Charlotte's Web stock gained roughly 50% after the updated US Farm Bill created major excitement over hemp stocks. By legalizing industrial hemp farming, America kickstarted a new multi-billion dollar industry.

But now, the hype seems to have subsided; now over the initial excitement, investors are ready to finetune their investments.

The question now is—does Charlotte's Web stock still give investors something to be excited over?

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Potential: The US Market

Looking at its potential, the answer should be yes. As a hemp-focused company true and true, Charlotte's Web Holdings (CSE:CWEB) (OTCQX:CWBHF) is not simply a brand jumping on the latest trend. In a sector that is seeing companies flocking to it by the boat-load, longevity stands for something, and Charlotte's Web has been around before hemp became 'cool'.

With a focus on the US market, Charlotte's Web stock is in a primed position to reap the benefits of what the Brightfield Group predicts to be a CBD industry worth "$22 billion by 2022." This is because the company develops CBD-infused hemp products and not marijuana products. As stated, industrial hemp-farming is now entirely legal in the US.

Charlotte's Web Stock: Hemp vs. Marijuana

Hemp is marijuana's cousin from the same cannabis family. However, unlike marijuana, it contains low levels of the psychoactive ingredient tetrahydrocannabinol (THC). But it does, importantly, contain high levels of cannabinoid (CBD) and this is the substance currently in high demand for wellness, medical, and relaxation purposes. 

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The size of this burgeoning industry is causing a lot of excitement in particular about hemp-based cannabidiol (CBD) products.

As it stands, Charlotte's Web Holdings claims the highest market share in the hemp CBD market in the US. The company boasts 3,680 retail locations selling its products and also has an e-commerce platform on its website. This should translate into Charlotte's Web stock performance.

Business is growing fast for Charlotte's Web Holdings; last year the company produced 675,000 pounds of hemp according to the Motley Fool. This was significantly greater than the year previous. The report states further:

"The legalization of hemp in the U.S. should open the doors for Charlotte's Web to expand its retail opportunities with national chains. The company also plans to launch new products and grow its international presence, especially in Europe, South America, and Asia."

The Takeaway

So while the current bearish trend has knocked some percentages off the Charlotte's Web stock value, it would be very surprising if the trend lasts much longer. The potential here is still very exciting even after all the hype.

Featured Image: Canva

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