There is no doubt that CWEB stock is one of the biggest cannabis stock gainers in the past month despite a sharp fall in the cannabis sector.
Let's review the latest developments from Charlotte’s Web Holdings (TSX:CWEB) (OTCQX:CWBHF)
Key Player in the CBD Market
While marijuana is only legal in some parts of the United States, the US Farm Bill of 2018 changed the face of the hemp industry in the country. Until then, it was the Colorado-based Charlotte’s Web Holdings that had dominated the industry by cultivating hemp and producing highly profitable hemp-based CBD.
While legalization is a great development for Charlotte’s Web, it cannot be denied that it has now brought in heightened competition for the hemp CBD company in the United States. In order to stave off the competition, Charlotte’s Web has taken its operations to a whole new level altogether.
In around a year, the company managed to expand its retail presence in as many as 7,871 retail outlets, which reflects a staggering rise of 309%. Such an expansion has ensured that the heightened competition has been rendered ineffective thus far.
CWEB stock performance has been impressive as well, and over the past twelve months, it has gained as much as 51%. One of the biggest advantages for Charlotte’s Web Holdings has been the fact that it has not had to cut prices to a damaging degree in order to drive sales in an atmosphere of intense competition.
Although the company’s revenues rose by 45% year-on-year in Q2 2019, it was lower than analysts’ estimates, and that brought some pressure on CWEB stock last week. The profit for the quarter was also lower than analysts’ estimates.
Revenues came in at $25 million for the quarter, up from $17.2 million in the prior-year period. Profits, however, dropped from $3.7 million in the prior-year period to $2.2 million in Q2 2019. Analysts had estimated that the company’s revenues were going to hit $26.3 million for the quarter. Although the stock came under pressure, it needs to be remembered that Charlotte’s Web remains one of the biggest companies in its industry and also one of the few companies that have been consistently profitable.
At the time of writing, CWEB stock is down 1% at $25.72 CAD. The stock has gained almost 45% over the past four weeks.
Featured image: Canva