Charlottes Web Holdings Inc - CWBHF stock

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OTC Symbol: CWBHF | OTC Tier: OTCQX International | Related ticker symbols: TSX:CWEB

Company Profile

Charlotte's Web Holdings, Inc., [OTCQX: CWBHF] is a certified Denver-based B corporation that engages in the cultivation, manufacturing, distribution, and sale of hemp-derived cannabidiol (CBD) wellness products. The company advances its products under a portfolio of brands, including Charlotte’s Web, CBD Clinic, CBD Medic, and Harmony Hemp. The company’s product categories include full spectrum hemp extract oil tinctures (liquid products), gummies (exercise recovery, immunity, sleep, stress), capsules, CBD topical creams, lotions, and pet products. It offers the broad-spectrum CBD-certified NSF for Sport, the world’s only official CBD of Major League Baseball. Its products are distributed online through www.charlottesweb.com., its official website, and physically to over 15,000 retailers and over 8,000 healthcare practitioners nationwide. The seven Stanley Brothers founded the company in 2013. It was formerly known as Stanley Brothers Holdings Inc. before changing its name to Charlotte's Web Holdings Inc. in July 2018. It is headquartered in Louisville, Colorado. Charlotte's Web’s shares are listed on the TSX under the symbol "CWEB" and on OTCQX under the CWBHF stock symbol.

Business Overview

Charlotte’s Web Holdings, Inc. is a certified B corporation that conducts most of its business in the United States. It carries out its production, distribution, and quality control operations at its new cGMP facility in Louisville. The company has also expanded its Research and Development activities since it moved into the facility in the second quarter of 2020. The firm established CW Labs to maximize research around the scope of Hemp-derived compounds. The lab currently engages in clinical trials on the safety of Hemp-based health remedies. Most of the firm's revenue is generated from selling branded products to consumers through its DTC e-commerce website and distributors, retail, and wholesale B2B customers. Charlotte's Web whole-plant CBD extracts are offered in full-spectrum and broad-spectrum (THC-free) varieties. Charlotte's Web-branded premium products incorporate American farm-grown proprietary hemp genetics as input. These hemp species are cultivated using organic and regenerative cultivation procedures. The extracts contain naturally occurring phytocannabinoids such as CBC, CBD, cannabigerol (CBG), flavonoids, and terpenes, amongst other significant compounds. It believes that synergistically integrating multiple compounds maximizes superior effects compared to a single compound.

On October 12, 2022, the company established a partnership with Major League Baseball (MLB) and launched Charlotte's Web SPORT, the first THC-free hemp-derived tincture to be certified for Sport by NSF. The company neither produces nor sells recreational or medicinal marijuana or products generated from high-THC cannabis plants. On March 2, 2021, the firm executed a purchase option acquisition deal for Stanley Brothers USA, a Cannabis wellness incubator. The company has also expanded its research to explore new market opportunities, with an eye on the botanical wellness products industry, which is swiftly growing. It aims to capture the botanical wellness products market by accelerating customer acquisition and retention, propelling national retail expansion, and increasing its global market penetration.

Corporate Origin

It started with Charlotte Figi, a girl diagnosed with a rare form of epilepsy. Paige, her mother, began extensive research on health alternatives, leading her to the cannabidiol (CBD) compound. Coincidentally, the Stanley Brothers were also working to develop high THC and low CBD proprietary hemp genetics. Paige contacted the Stanley brothers in 2012 for a non-psychoactive natural option for her seven-year-old daughter. The Stanley brothers were motivated to share the extracts with others after Charlotte’s response to the extract. News spread after this, leading many people and families to Colorado to search for CBD products between 2013 and 2015. After meeting the girl and other families, Dr. Sanjay Gupta (CNN) echoed the products with other media platforms following suit. The Stanley Brothers established the company Charlotte's Web to unleash the healing powers of botanicals bridged with compassion and science.

Critical Corporate and Industry Developments

On January 27, 2023, the company announced a boost in its course after the FDA agreed that Congress should push for the regulation of hemp-derived cannabidiol. The CBD industry has significantly developed without a clear regulatory framework for CBD products, distributed across 50 states and consumed by millions of Americans, including professional athletes, daily wellness seekers, and veterans. The firm also agreed with FDA on the vitality of testing the quality and safety of these products before distribution.

Charlotte’s Web announced a US$56.8 million investment in the company from a subsidiary of BAT on November 15, 2022. The investment provided the company with additional funds for growth initiatives, including plans to expand its botanical wellness products portfolio. The investment was made via a debenture, which is currently convertible into approximately 19.9% of a non-controlling equity stake in Charlotte's Web in BAT's direction. Charlotte's Web CEO Jacques Tortoroli added that underlying funds from the investment would help the firm unlock more profound and extensive research vital for its progressive innovation, intellectual property portfolio advancement, and global footprint.

Charlotte’s Web released its Q3 results for the period ending September 30, 2022, on November 14. The company recorded a total revenue of $17,037, a 28.1% decrease compared to the same quarter in 2021. DTC e-commerce revenue decreased by 22.5%, and B2B revenue reduced by 38.1%. The decreases were attributed to low online traffic; fewer paid media advertisements, and an unfavorable product mix, among other drivers. Its gross profit was $ 8,945, which decreased by 40% compared to $ 14,915 in Q3 2021.

Leadership

Management Team

Jacques Tortoroli, Chief Executive Officer

• Joined the company as the CFO in January 2022
• Has served in senior finance positions in several leading companies in America, including Anheuser-Busch InBev, Owens Corning, and General Motors
• Throughout her career, she has supported financial planning, performance management, treasury, and M&A, among other significant strategic initiatives for publicly traded global companies.
• She has a Bachelor of Business Administration from the University of Toledo with a Finance and International Business major.

Jared Stanley, Chief Operating Officer

• He is the company's co-founder and has served in several positions since its inception.
• Has over 14 years of experience in the cannabis and hemp industry
• He has been instrumental in developing the company’s cultivation divisions, creating first-of-its-kind consistent, and scalable hemp raw material supply chains across Canada and three states
• He plays a paramount role in the firm’s state and ‎federal-level legislative activities
• Mr. Stanley is a Colorado State University graduate with a degree in Applied Human ‎Sciences.

Summarizing the management team list, Marcel Bonn-Miller, Chief Scientific Officer; Stephen Rogers, Senior Vice President, General Counsel, and Corporate Secretary.