Charlotte's Web Holdings (TSX:CWEB) (OTCQX:CWBHF) stock lost over 4% last week, even though the entire index gained. It was a continuation of May's disastrous month where CWEB stock lost 30%; shares fell from $15.93 approximately to lows of $12.37 in little over a week.
Nothing from head office caused the sell-off; rather, the entire market was hit amid escalations in the US-China trade war. But where others rebounded, Charlotte's Web Holdings stayed down, and it's worrisome because "the stock is now down almost 50% from its 52-week high."
CWEB Stock On the Radar
However, as a leader in the US hemp CBD industry, Charlotte’s Web has bags of potential; the current downtrend may, in fact, be offering investors a potential buy-in opportunity.
First off, hemp stocks offer investors the chance to get into the cannabis market without investing in a pure cannabis stock. The latter can be hindered by varied legalizations and diverse opinions on the subject of marijuana.
Secondly, with a focus on hemp CBD infused products, Charlotte's business model sees it offering everything from straight-up CBD oils capsules and extracts, to CBD pet products and gummies. Demand for its products is high; Charlotte's Web is one of the few companies to post positive net income in Q1, 2019—most cannabis plays posted net income losses. This has boosted CWEB stock throughout 2019.
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Acreage
Last year the company planted 300 acres and harvested 675,000 pounds of raw hemp. And now, thanks to the surge in demand for CBD products, CWEB is aiming to double its planted acres to 700 this year.
Charlotte’s Web also has an impressive distribution network with its products now available in more than 6,000 US retail locations. This has now grown to include a potential deal with Amazon (NASDAQ:AMZN) to supply the e-commerce giant with its products.
CWEB Stock Takeaway
Currently, CWEB stock has a mean consensus price target of $32.27 CAD, which represents a potential upside of 88%. Of course, the current lull might scare investors—Charlotte's Web stock looked infallible in 2019. If CWEB stock can suddenly drop 30% in May, despite all the positives attested to this company, it's a sure sign that no company is immune to the volatility of the cannabis market.
What are your thoughts?
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