Prominent CBD maker Charlotte’s Web Holdings is pointing to market saturation, legal uncertainty and rising expenses as it reported a loss of $11.5 million last quarter.
A year ago, the Boulder, Colorado, company reported a profit of $2.5 million.
Charlotte’s Web reported revenue last quarter of $21.5 million, down about 1% from the same period last year, when revenue was $21.7 million. The slight downtick came despite adding more than 1,000 brick-and-mortar stores carrying the brand, now in more than 11,000 retail locations.
The company reported that sales through retailers dropped 32% from the first quarter of 2019 — down 31% in natural channels and down 33% in food, drug and mass-merchandise channels.
Company executives told investors that the company is putting greater focus on selling directly to consumers online, as are many manufacturers seeing retail sales plunge because of coronavirus lockdowns.
The company also reported a big rise in company operating expenses, up nearly 77% from the first quarter of 2019. Total operating expenses came in at $23.3 million.
Chief Financial Officer Russell Hammer told investors that expenses rose because of investments in customer capabilities and selling directly to consumers, along with legal fees to defend intellectual property. He said operating expenses would go down through the rest of 2020.
Charlotte’s Web trades on the Toronto Stock Exchange as CWEB.