Charlotte’s Web Holdings, Inc. (TSX:CWEB) (OTCQX:CWBHF) a producer of hemp-derived CBD and other botanical wellness products, reported its financial results on Thursday for the third quarter ended Sept. 30, 2024.  

“Our return to quarter-over-quarter growth in 2024 signals that our strategic direction is paying off,” said Bill Morachnick, CEO of Charlotte’s Web. “We’ve seen positive impacts from our e-commerce platform upgrades, recent product launches, and additional retailers, highlighted by our new partnership with Walmart that brings our CBD topicals to another 827 stores.”

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Q3 Financial Highlights

• Consolidated net revenue totaled $12.6 million, down from $14.3 million in the third quarter, reflecting challenges in the CBD industry such as ambiguity around regulatory advancements and consumer spending trends.
• Gross profit was $6.7 million – accounting for 53% of revenue – compared to $7.9 million in the prior year's quarter, due to lower revenue and price reductions on tinctures.
• Net loss was $5.8 million, representing an improvement from the net loss of $15.2 million in the prior year's quarter.
• Adjusted EBITDA came in negative at $3.9 million, improved from a $6 million adjusted EBITDA loss in the third quarter of 2023.
• Selling, general and administrative expenses were $12.7 million, representing a 36.2% decrease from $19.9 million in the third quarter of 2023, due to cost-cutting measures and streamlining operations.
• Net cash used in operations was $7.6 million, with $0.3 million in capital expenditures for manufacturing upgrades.
• On Sept. 30, 2024, the company’s cash and working capital were $24.6 million and $33.5 million, respectively, compared to $47.8 million and $54.5 million, respectively, at Dec. 31, 2023. 

Product Innovations And Expansions

The company recently launched:

• Soft Gel Capsules which are full-spectrum CBD capsules with positive consumer feedback.
• Functional Mushroom Gummies – a new line of gummies with three formulations following wellness trends.

In terms of the Walmart Partnership, the company expanded its CBD topicals to 827 Walmart (NYSE:WMT) stores.

Charlotte's Web launched CBD gummies in Canada, through a partnership with Tilray Brands, Inc.  (NASDAQ:TLRY), leveraging local production and distribution.

Outlook

Despite a challenging regulatory environment, the company is positioning itself for long-term growth with new product categories and international expansions.

CWBHF Price Action

Charlotte’s Web's shares traded 0.72% higher at 14 cents per share after the market close on Wednesday afternoon.

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