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Agree....great market share, and the ability to leverage relatively unique retail outlets.
CW also has something that Abacus doesn't have - a commanding E-Comm presence. It will be exciting to see the topical category growth after CW ramps up CBD Medic and other Abacus-inspired topicals on CW's E-Comm platform.
Rough day to drop the Abacus PR....the broad market and Canadian cannabis sector is pulling back big time....
I just saw the Abacus press release - that's great news. Thanks for posting, Darth.
A tasty bit from the press release:
I thought I heard Russ Hammer, CFO, mention on the earnings call that he expects a shift to positive EBITDA in late 2020. That might be a lofty goal - they have the gross margins, but they need to slim down SG&A spending. Hammer mentioned that they should be able to leverage these investments once the FDA issues guidance on CBD in ingestible products. If they have built a solid base of fixed costs and semi-fixed costs in their SG&A structure, a significant portion of future gross profit should drop straight to the bottom line (earnings and EBITDA). That's the hope anyway.
I think CWEB did a good job on top line revenue. They were able to shift the reduction in B2B sales (due to COVID-19 issues) to their D2C (E-Comm) revenue. They need to work on SG&A spending, but management is aware of this.
New CW topical SKUs....
https://www.charlottesweb.com/all-charlottes-web-hemp-cbd-supplements/hemp-infused-creams-balms
I wonder if any of these were developed in collaboration with Abacus?
This is good info. Although these were oral comments, it at least indicates that the future guidance from the FDA won't be bad news for the CBD sector. I suspect that the FDA will ultimately impose strict quality/testing standards, and perhaps limit CBD content for consumer use (vs. medical-level dosage).
I agree. While there have been positive announcements (Kroger, etc.), it will take time for this to show up in the numbers. Meanwhile, Q2 earnings could be impacted by internal investments required to support this future growth. All good for longer term investors.
Crazy run-up in CWEB volume and share price. No news, no apparent reason. I'm surprised that the TSX hasn't halted trading. Think we'll see an announcement after the close?
Yep, and I bet the sellers' net proceeds were a good bit lower after transaction fees and costs. I wouldn't be surprised if those were another 3-5%,
One potential headwind to accelerated revenue growth (not just CW, all CBD companies) is that major retailers are only carrying topical products. To my knowledge, few of the larger retailers have been willing to take on tinctures and capsules (CWBHF's bread and butter) due to regulatory risk with the FDA.
Possibly....might be doing some early end-of-quarter rebalancing, shooting of the dogs, etc.
That is bogus and counterfeit. There is no way that CWBHF is selling its genetics on "Weedseeds Express." Not meaning to be argumentative, but those cannot be genuine CW seeds. Plus, I suspect that Weedseeds is infringing on CW's trademarks.
That is not correct....if the THC content was greater than .3%, it would not qualify as hemp.
I'm with you. I'm no dietician, but that ingredient list looks pretty solid.
,,,,double post...
Industrial hemp is "Cannabis Sativa L" with less than .3% THC. Technically under US law, cannabis with more than .3% THC is not hemp - it is "marijuana."
Yeah, Bill Alpert always seems to be high on the CA THC operators vs. pure hemp plays.
I agree....this was probably the only way for some of the founders and early participants to sell shares without REALLY disrupting the market. I suspect some of these people have worked for years without realizing any liquidity for their efforts.
I agree with you. I wouldn't be surprised to see a TSX listing in the next few weeks/months. I think NASDAQ will be next (maybe NYSE, but fees are much higher). US listing could very well be in 2020, since CWBHF will have to do SEC filings and new (GAAP) financial statements.
I don’t think the new CEO officially starts with CWBHF until this week.
I wonder how our friends at the FDA are going to respond to this?
Yes, I agree with you.
If CWEB is like several other US cannabis companies (MedMen, etc.), it can be difficult for US stockholders to trade stock due to severe restrictions on marketability. You can't just open up an E-Trade account and move your shares to the US and start trading. Also, if a stockholder happens to qualify as an insider, things get even more restrictive. This offering might be the only way for some of the pre-IPO stockholders to monetize a portion of their holdings. I would guess that when CWEB lists on a US exchange and becomes an SEC reporting company, this wet blanket will be lifted.
Yeah, a lot of people are not taking the time to interpret the press release on the 7 million share offering. This is not a capital raise. Rather, I bet this is a private trade by some of the pre-IPO founders and investors to monetize some of their holdings. To me, this is a smart move by CWEB - they are getting more shares into the public float without a fresh issuance.
And, due to the nature of CWEB’s products and their intended use, people will search out a brand that they TRUST. That’s where CWEB’s vertical integration and quality oversight come into play.
Yes, it's C$20. Keep in mind that this appears to be an arranged private deal with certain existing shareholders. I don't believe the company is issuing new shares. The stock will probably open low, but hopefully, this will be the near term bottom. If the stock opens around C$20, the smart institutionals should be buying/adding.
RE: Plexus - It looks like the product will be a special formulation that carries the Plexus brand. I suspect there will be a dual brand or a co-brand with CW, but we will have to wait and see how this unfolds.
I still have seen nothing in the way of a formal CW-Plexus announcement - which leads me to believe that there is no announcement.
All I have seen is some (potentially rogue) speculation on Facebook by some Plexus reps.
I have not seen any formal PR on this. At this point, do we know if this is a leak, or “fake news?“
I saw this earlier today - that’s great news!
The prospectus specifies C$500 million.
I agree. In addition, in March, CWBHF filed an up to CAD$500 million prospectus to raise additional funds. Some of this will apparently be designated for "selling shareholders" (I can't remember the actual term used). That will probably leave a pretty large warchest for growth initiatives, be they organic or M&A activity. The prospectus can be found on SEDAR.
I wish I had enough sense to figure out how to see this level of detail. I upgraded my account for real time CSE trading activity, but I'm still trying to figure this site out....it's confusion to a n00b.
Is there any breaking news? Wondering what's driving demand today....
Some encouraging and positive remarks in that FDA statement. Sounds like the FDA will explore pathways for companies like CWBHF to incorporate CBD and other minor cannabinoids in foods, beverages, supplements, and like products.
CWEB is not an SEC reporting company....hence, no 10-K.
There is no US S-1 filing. There WAS a recent filing in Canada to raise up to C$500M. This could hypothetically come from a new share issuance and/or sales of stock by existing stockholders.
My guess is that CWBHF will come in within revenue guidance. I would not be surprised if they had some after-IPO operating expenses that have a one time impact on profits. With a CEO switch, I hope that everything gets a fresh look.
Looks like those shelves are pretty cleaned out!