CBD giant Charlotte’s Web said slow action by federal health regulators is causing disappointing growth in mass-market retail channels.
The Boulder, Colorado, company told investors Wednesday that “a lack of regulatory direction” from the U.S. Food and Drug Administration (FDA) is slowing growth in food, drug and mass (FDM) sales channels.
Charlotte’s Web saw net revenue increase 42% from the same period in 2018, from $17.7 million to $25.1 million. But analysts had estimated the company’s revenue would be $31.9 million for a quarter in which the company crossed 9,000 retail outlets.
The earnings report came a week after FDA regulator Lowell Schiller told a group of nutritionists that the agency remains concerned about CBD safety and won’t be rushed by political pressure to allow its use without a prescription.
Elsner assured investors that Charlotte’s Web expects the FDA to allow over-the-counter, ingestible CBD sales in 2020 and that the company will focus on its topical CBD products in the meantime.
Topical CBD products invite less scrutiny from the FDA because cosmetic products and ingredients are not subject to premarket approval.
“The significant revenue inflection point will be the FDA setting guidelines for dietary supplements,” Elsner said.
Charlotte’s Web trades on the Toronto Stock Exchange as CWEB.