Charlotte’s Web Hemp (CNQ: CWEB) is on a roll. It has continued to outperform while many cannabis companies suffer, reaching new heights in revenue and exposure. Its most recent financial report may not have been as attractive as some would have liked to have seen, but this is only the calm before the storm. Thanks to an increased retail presence and federal cannabis reform on the horizon, CWH is uniquely positioned to lead the hemp and cannabidiol (CBD) products market above all of the competition.
CWH is concentrating on product quality more than quantity, which is helping to drive its success. It reports that all products are submitted to multiple tests, sometimes up to 20 times, and results of the tests are available for inspection. Its facilities are approved by the Food & Drug Administration and are cGMP (current Good Manufacturing Practices) certified, and the company has developed long-lasting relationships with top universities, including Harvard and John Hopkins.
2019 has not seen the level of growth in the cannabis industry that some had hoped, but this isn’t detrimental to CWH’s operations. While other companies have suffered, CWH has been able to soar. As one industry analyst, Aditya Raghunath, explained, “[Since] CWEB is targeting the CBD-hemp segment, these factors do not impact the stock as much. Its products are available across 9,000 retail locations. In the third quarter, Kroger expanded distribution of CWEB products to five new states. Kroger has CWEB products available across 22 states and in 1,350 stores.”
Retail sales for the hemp industry will cover about 64% of the business by 2022. CWH has increased its gross margins and it is one of the few companies that can report having a positive EBITDA (earnings before interest, taxes, depreciation and amortization). Raghunath adds, “The company’s focus on a niche market coupled with operational efficiency and increasing market share make CWEB stock a solid pick in a segment that has been riddled with volatility.”