One of the leading providers of hemp-extracted cannabidiol (CBD), Charlotte’s Web Hemp (CNQ: CWEB, just presented a report on its latest financial results for the previous quarter with mixed results. According to the company, the COVID-19 pandemic caused retail sales to slow down, and, at the same time, the operating expenses increased enormously – 82% – compared to the same period one year ago. This situation took Charlotte’s Web to a loss of $14.4 million during its last quarter, and, without elaborating much, the company committed to reducing its operating expenses by 10% before 2020 comes to an end.
“The pandemic has had a larger and longer impact than we anticipated on retail and health practitioners,” CFO Russ Hammer said in a statement. The fact that the company reported such a loss represents a whopping 6,000% decrease, considering that, during the same period last year, the company made a $2.2-million profit. The jump in the operating expenses is related to moving its headquarters to another location, as well as closing an acquisition deal that was pending with Abacus Health Products Inc., which, for the company, is a purchase that “greatly extends Charlotte’s Web’s product offerings and reach and solidifies a commanding position in the U.S. hemp CBD topicals category.”
On a positive note, Charlotte’s Web pointed out that its sales jumped more than a third in the second quarter of 2020 compared to direct-to-consumer sales from a year ago. What helped was booming online sales through the company’s online shop that compensated for the major drop in sales through other retail channels. This segment dropped 55% between the second quarter of 2019 to the second quarter of 2020, from $13.4 million to $6.1 million. Additionally, earlier this year, the company ran a share offering where it collected $57.3 million so it could have new equity to face the pandemic.