CBD-Focused Charlotte's Web Narrows Net Loss 75% YoY In Q4, Reports Drop In Revenue

Charlotte’s Web Holdings, Inc. CWEB CWBHF reported its financial results on Thursday for the fourth quarter and year ended Dec. 31, 2023.

The Colorado-based hemp extract wellness producer reported a 16% year-over-year decrease in fourth-quarter consolidated net revenue to $15.9 million. The company said both retail and e-commerce revenues lower year-over-year.

Charlotte’s Web said CBD product sales remain below expectations, attributing it to "ongoing headwinds in the overall CBD category, including regulatory ambiguities at the federal and state levels, associated consumer confusion, and competitive crowding and pricing pressures."

The company has joined a historic alliance of top CBD companies advocating for legislation and FDA regulation of hemp-derived CBD products as dietary supplements – ONE HEMP last year. Besides Charlotte's Web, the alliance includes some of the biggest names in the space like BayMedica, Brands, FSOil, Hemp Beverage Alliance, Kazmira, MAD TASTY, Open Book Extracts and Wyld.

Cannabis reform will no doubt be one of the hot topics at the upcoming Benzinga cannabis event next month. The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024.

See also: Regulatory Headwinds Harm CBD Sales For Charlotte’s Web: YoY Drop In Q3 Revenue, Gross Profit

Meanwhile, Charlotte's Web CEO Bill Morachnick, who joined the company in September, said on Thursday that "a company-wide turnaround initiative we call True North,” is in effect.

“True North’s objective is to enhance the overall consumer journey and drive sustainable growth," he said. "It combines an operational and data-driven emphasis with the integration of marketing, sales, innovation, technology, and education, all centered around our consumer and valued retail partners.”

Pro tip for Benzinga readers: Secure your tickets for the conference ASAP. Prices will increase very soon! You can get a 20% discount on tickets following this link right now.

Q4 2023 Financial Results

• Direct-to-consumer net revenue through the company’s web store was $11.2 million, a 10.4% decrease as compared to $12.5 million in the same quarter of last year.
• Business-to-business retail net revenue was $4.7 million, representing a 26.6% decrease year-over-year.
• Gross profit totaled $8.9 million, up from $10.5 million gross loss, or negative gross profit in the same period of 2022.
• Selling, general and administrative expenses amounted to $18.6 million, down from $21.4 million in the prior year's period.
• Operating loss was $10.3 million, down from $32 million in the fourth quarter of 2022.
• Net loss amounted to $8.5 million, down from $35.2 million in the corresponding quarter of last year, representing a  75% improvement.
• Adjusted EBITDA came in negative at $6.5 million, compared to an adjusted EBITDA loss of $5.3 million in the fourth quarter of 2022.

FY 2023 Financial Highlights

• Consolidated net revenue was $63.2 million, a decrease of 14.8% from $74.1 million in 2022, due to lower DTC and B2B sales.
• Gross profit was $35.6 million, compared to $19.4 million for the year ended Dec. 31, 2022.
• Total selling, general and administrative expenses for 2023 were $75.6 million, compared to $74.2 million, excluding a $4.1 million employee retention credit, in 2022.
• An operating loss of $40.6 million was an improvement of 22.6% from an operating loss of $52.5 million in 2022.
• Net loss for 2023 was $23.8 million, or $(0.16) per share, basic and diluted, an improvement from a net loss of $59.3 million, or $(0.40) per share, basic and diluted, in 2022.
• Adjusted EBITDA came in negative at $22.7 million, as compared to an adjusted EBITDA loss of $13.4 million, in the prior year.

CWBHF Price Action

Charlotte’s Web's shares traded 7.6923% lower at $0.18 per share at the time of writing on Thursday morning.

Now read: Charlotte’s Web And DeFloria Launch First Ever Hemp-Based Drug Into Human Trials

The Benzinga Cannabis Capital Conference is returning to Florida, in a new venue in Hollywood, on April 16 and 17, 2024. The two-day event at The Diplomat Beach Resort will be a chance for entrepreneurs, both large and small, to network, learn and grow. Renowned for its trendsetting abilities and influence on the future of cannabis, mark your calendars – this conference is the go-to event of the year for the cannabis world.

Get your tickets now on bzcannabis.com – Prices will increase very soon!