Charlotte’s Web Holdings Inc OTCMKTS: CWBHF, Financial Highlights You Need to Know

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Charlotte’s Web Holdings Inc OTCMKTS: CWBHF Charlotte’s Web Holdings, Inc. is the market leader in the production and distribution of innovative hemp-derived cannabidiol (“CBD”) wellness products. Founded by the Stanley Brothers, the Company’s premium quality products start with proprietary hemp genetics that are responsibly manufactured into hemp-derived CBD extracts naturally containing a full spectrum of phytocannabinoids, including CBD, terpenes, flavonoids and other beneficial hemp compounds. Industrial hemp products are non-intoxicating. Charlotte’s Web product categories include CBD Oil tinctures (liquid products), CBD capsules, CBD topicals, as well as CBD pet products. Charlotte’s Web hemp-derived CBD extracts are sold through select distributors, brick and mortar retailers, and online through the Company’s website at www.CharlottesWeb.com. The rate the Company pays for agricultural products reflects a fair and sustainable rate driving higher quality yield, encouraging good farming practices, and supporting U.S. farming communities.
Charlotte’s Web is a socially conscious company and is committed to using business as a force for good and a catalyst for innovation. The Company weighs sound business decisions with consideration for how its efforts affect its employees, customers, the environment, and the communities where its employees live and where it does business, while maximizing profits and strengthening its brands. The Company’s management believes that socially oriented actions have a positive impact on the Company, its employees and its shareholders. Charlotte’s Web donates a portion of its pre-tax earnings to charitable organizations.
Shares of Charlotte’s Web trade on the Canadian Securities Exchange under the symbol “CWEB” and in the United States on the OTCQX under the symbol “CWBHF”. Charlotte’s Web has 24,095,294 Common Shares outstanding and 172,896.15 Proportionate Voting Shares convertible at 400:1, for an effective equivalent of 93,253,754 Common Shares outstanding.
On March 28th, 2019 Charlotte’s Web Holdings Inc reported financial results for the fourth quarter and year ended December 31, 2018. All amounts are expressed in United States dollars. Certain metrics, including those expressed on an adjusted basis, are non-IFRS measures.
Highlights of Fourth Quarter 2018 Results versus Fourth Quarter 2017 Results

Organic consolidated revenue growth of 71% to $21.5 million (up 21% QoQ)
Gross profit increased 63% to $16.3 million, or 76% of consolidated revenue
Adjusted EBITDA decreased from 37% to 20% of consolidated revenue, due to extraordinary items
Retail doors increased more than 80% to 3,680 at December 31, 2018
57% of revenue from eCommerce
2018 Farm Bill passed on December 20, 2018 removing hemp from the Federal CSA and designating it as an agricultural commodity governed by the USDA and FDA

Highlights of 2018 Full Year Results versus Full Year 2017 Results

Organic revenue growth of 74% to $69.5 million
Gross profit increased 75% to $52.3 million, or 75% of consolidated revenue
Adjusted EBITDA decreased from 36% to 30% of consolidated revenue 

Highlights Subsequent to December 31, 2018

Executive leadership expansion with COO and CGO additions
Record harvest of 675,000 pounds securing inventory to meet future demand
Hemp Authority Certification received
FDA commits to working with hemp industry on hemp product regulations
First product orders shipped to three national retail grocery and drug chains in select locations

At the end of the fourth quarter the 2018 Farm Bill was successfully passed by U.S. Congress, providing the needed clarity and catalyst for expansion of the hemp industry. “We believe this important legislation will have a positive impact on consumer access to hemp-derived CBD products and for our valuable farming communities throughout the country,” said Hess Moallem, President and Chief Executive Officer.
“During the fourth quarter we concentrated our efforts on completing the 2018 harvest and building product inventory to support growing consumer demand,” said Mr. Moallem. “Our 2018 harvest resulted in 675,000 pounds of raw hemp compared to 63,000 pounds in 2017. The record harvest benefited from excellent growing conditions and the unique expertise we’ve accumulated over the past five years of cultivating the complex hemp plant. This inventory build ensures we are able to meet growing demand and supply the large national retail chains that are beginning to carry our products.”
Product sales increased year-over-year with human nutrition products, topicals and animal nutrition products growing by 76%, 1085% and 189%, respectively. (The canine line is growing from a smaller base as it was launched in February of 2018.) “In general, broader consumer awareness of the benefits of cannabinoids, namely cannabidiol (CBD) from hemp extract, is driving increased uptake in all product categories in our retail channels and e-commerce platform,” added Mr. Moallem.
The Company has been actively adding additional retail distribution customers and locations. Initially available in natural health stores throughout the United States, increased education and understanding of hemp extract has been driving demand for Charlotte’s Web products through ever larger retail chains. The Company recently surpassed 4,000 locations after national retail chains began carrying Charlotte’s Web products. Today, Charlotte’s Web can be found on the shelves at a growing number of national brand grocery and drug chains in select stores and states.
Charlotte’s Web is the market leader in the rapidly expanding hemp-derived CBD wellness markets, dedicated to producing the highest quality products and efficacy. Several new products and formats are planned for 2019 in animal nutrition, wellness topicals and human consumables.

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