Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
Register for free to join our community of investors and share your ideas. You will also get access to streaming quotes, interactive charts, trades, portfolio, live options flow and more tools.
BOOM! Love me some IP.
Assuming reasonable market penetration of 5% on an extremely high profit margin product, CVSI is now an acquisition candidate.
I love the hemp CBD consumer product business, but it may have just become a lagniappe.
Solid post, Motorcity; fair and balanced. I own both stocks about equally.
I think there is general consensus about CW's "best of breed" position, but there are other real world variables that transcend the rabid territorialism.
They are not permitted to reverse split without shareholder approval. If you are a shareholder, you will get a proxy and a chance to vote - through your broker, if you are a "non-objecting beneficial owner" (NOBO), or via snail mail.
Absent a rational explanation from management that shareholder interests would be better served, I will also be voting "no."
It's in the proxy that was just filed:
(2)
To approve an amendment to the Company's Certificate of Incorporation, as amended, to effect, at the discretion of the Company's Board of Directors, a reverse stock split of all outstanding shares of the Company's common stock, par value $0.0001 per share, at a ratio of not less than 1-for-2 and not greater than 1-for-20, such ratio to be determined by the Company's Board of Directors at any time before March 31, 2021, without further approval or authorization of our stockholders;
31 regular days to avoid the wash sale.
Now is the time for CVSI to hit the gas on targeted digital marketing for new and existing anti-anxiety users. This segment of purported benefits is a big slice of the pie. Do not be timid - go out there and capture market share!
What is happening in the world is dreadful. But the current reality is a massive population of potential new consumers are being forced to operate virtually, online. And they're looking for some relief. I cannot/will not posit on the science as to WHY - but I would swear an oath that the full spectrum hemp CBD product I take reduces anxiety and helps me sleep.
This digital marketing can be ramped and accomplished in a way that isn't skeezy profiteering during a time of crisis. It can also be done in a way that doesn't run afoul of FDA regulations regarding unfounded medical claims.
Here is a caption from the link below:
"...Interestingly, much of the spike is CBD-based, indicating that people may be trying to treat their anxiety rather than get high. “We are seeing [non-THC] CBD rolls grow fast,” Connor said, “as opposed to sativa [products], which were only up 25 percent.”
https://www.forbes.com/sites/joanoleck/2020/03/19/its-not-just-toilet-paper-and-sanitizer-consumers-are-also-stocking-up-on-cannabis/
Correct, it's a restatement of stock options.
I support Dowling, but he should definitely be putting some skin in the game in the open market. Remind shareholders that we're all fighting out of the same corner.
This calculus would be easier with the 10-K, but here's a guesstimate:
1) 500 acres of US hemp production commitment per the July 2019 press release;
2) 2000 pounds of 5% cannabinoid potency biomass/flower per acre (high CBD);
3) 1 million pounds x 5% x 70% extraction efficiency = 15,680,000 grams of hemp extract;
4) If an average CVSI product contains 12 grams of extract (CVSI's products are not this strong - I'm using my 100ml CW Max Strength product for comparison purposes), then CVSI can manufacture ~1.3 million individual products.
Does anyone know CVSI's average product price across all the SKUs? If it's $75, then CVSI could do ~$98 million in revenue at max capacity.
Obviously lots of variables here, but if they harvested anything approaching 500 acres of US grown hemp, domestic raw material supply will not be the problem.
Alright, back to selective nibbling on the quality bellwethers into the close. It's the red sea on my screens.
GLTA
Agree equation #1 would be a bit better. THC measurement should occur from an amalgam of flower and biomass. Measuring the top two inches of flower is ridiculous - again, for hemp products not intended as smoke-able flower.
Institutionalized botanical bias is the reason for some of these wacky, unrealistic hemp rules.
When the world eventually gets to the other side of this current cataclysm, things should start to become more reasonable.
The total THC rule is the most sinister part of the Interim Final Rule (IFR) published October 31, 2019 by USDA in the Federal Register. Absolute nonsense to include THCa in the calculation for any product that isn't/wasn't smoke-able flower.
MANY hemp farmers in states such as Colorado, operating in good faith under the state program, brought in harvests last year that made them de facto drug dealers of a Schedule 1 controlled substance.
I saw a COA with 0.35% total THC (THC not detected, THCa # x 87% post-decarb). This particular excellent organic crop was out of compliance per the IFR rule because the range of measurement uncertainty from the testing lab was +/-10%. Hence, total THC was barely over 0.3% on the lower end of the range.
Colorado Department of Ag gave the growers considerable headaches post October 31, but happily did not insist on destruction.
In a world of 25% potent MJ flower, the USDA got the total THC rule for raw hemp very wrong.
More clarity and rational requirements from USDA and FDA would be excellent for the entire space, especially for a quality player such as CW.
"Today, we have extra downward pressure because cvsi had a bad report. The people interested in this sector still have a hard time letting the two companies trade on their own merits.
I can't wait for next report, so we can finalize the drawn out decoupling process."
CWBHF and CVSI are (or were) reportedly "the top two" public hemp CBD companies, and CVSI's negative report probably did have an impact. However, wouldn't a decoupling from MJ stocks help as much or more? If you draw a comparison chart between CWBHF and the big MJ names, all of the graphs are black double diamonds over the past year - pretty much in lock step.
Which, imo, is flat wrong. Vertical hemp CBD players should have their own defined space. Particularly the undisputed leader.
CWBHF, which I own, is being unduly punished because institutional money flow from Canaccord and friends has cross-pollinated between the big MJ names. They suffer, we suffer.
Nothing that continued growth and earnings won't fix.
Just my two pennies.
Tough day. CVSI richly deserved this spanking. I re-calibrated my investment thesis to include the new lay of the land and attendant risk. And then I waded back in on the buy side and provided some liquidity. Average is now mid $0.40s.
5000+ stores, new products in the pipeline, and ~$7M run rate for Q1 is good enough for me in this bizarre retail environment.
Happy St. Pattys all - hoping you also have some green on your screens.
This too shall pass. Black Monday, the Asian Contagion (sounds racist now, apologies), the bursting of the tech bubble, the Great Recession. I was neck deep in the market for all of it. Some of it felt like a near-death experience. I was loading the boat as CNBC and Larry Kudlow said "buy the dips" in 2008 (idiots, both of us).
My point is that we always manage to get to the other side. Just like with CVSI.
I agree with Lady, and hope management didn't pay out another huge pile to end the Mona era. But whatever happened in Q4, I don't really care about the paper loss. $20M? Whatever, get it over with. I have full faith and confidence in CEO Dowling.
This morning I bought more stock at 1x trailing twelve month revenue. Unheard of in the hemp CBD or cannabis space. My bet is that CVSI returns to 20%+ EBITDA margin in Q2 or Q3 2020. If so, then 20-40 p/e serves up $2-$4 per share.
We shall see.
Not that the market cares at the moment, but this is a great press release:
Charlotte's Web Expands R&D with Launch of CW Labs Sciences Division
CNW Group CNW Group•March 13, 2020
Tim Orr Joins Charlotte's Web to Lead Experienced Team on Science, Safety and Innovation in Hemp Phytocannabinoid Research
BOULDER, CO , March 13, 2020 /CNW/ - Charlotte's Web Holdings, Inc. (" Charlotte's Web" or the "Company") (TSX:CWEB, OTCQX:CWBHF), the market leader in hemp-derived CBD extract products, announces the establishment of Charlotte's Web Labs (CW Labs) an internal division for research & development substantially expanding on the Company's efforts around the science of hemp derived phytocannabinoids, terpenes and flavonoid compounds. The Company is placing its existing R&D team under the leadership of recently hired Senior Vice President of Innovation, Tim Orr , who will lead CW Labs' expanded team of a dozen external and internal research specialists based in Buffalo, New York and Boulder, Colorado . Mr. Orr is a global healthcare executive with more than three decades of commercial and product development experience in the diagnostics, life sciences, and medical device industries. Mr. Orr has held top executive and management positions at Johnson & Johnson and Abbott Laboratories.
Charlotte's Web by Stanley Brothers. Market share leader in whole-plant hemp extract products with naturally occurring CBD. (CNW Group/Charlotte's Web Holdings, Inc.)
Charlotte's Web by Stanley Brothers. Market share leader in whole-plant hemp extract products with naturally occurring CBD. (CNW Group/Charlotte's Web Holdings, Inc.)
"I am proud to lead CW Labs in support of Charlotte's Web's innovation and scientific discovery," stated Mr. Orr. "With science driving new formulation development and product efficacy, CW Labs acts as an engine of innovation to create new high-quality products and innovative delivery systems to customers who have come to trust and rely on Charlotte's Web."
Charlotte's Web, manufacturer of "the world's most trusted hemp extract™," is advancing the science of full spectrum extracts from hemp bred to express cannabinoids including cannabidiol (CBD), cannabidiolic acid (CBDA), cannabigerol (CBG), cannabinol (CBN), cannabichromine (CBC), and other naturally occurring hemp derived compounds. CW Labs aims to provide a boost to the Company's product portfolio with science-based innovation (including studies on safety and effectiveness) while advancing clinical trials. CW Labs is currently engaged in double-blinded, placebo-controlled human clinical trials addressing hemp-based solutions for several need states.
"The launch of CW Labs formalizes our reach into the science, efficacy and safety of hemp plant compounds," said Deanie Elsner , CEO of Charlotte's Web. "CW Labs demonstrates our commitment to innovation and our cutting-edge position with consumer wellness products derived from our proprietary hemp. We want to thank Governor Cuomo for his leadership in this space and we are looking forward to being even a bigger part of things in New York through our partnership with SUNY in the great city of Buffalo ."
Headquartered on the Buffalo Niagara Medical Campus, CW Labs will be located in the Hauptmann Woodward Research Institute on the campus of the University at Buffalo's Jacobs School of Medicine and The Center for Integrated Global Biomedical Sciences through which it will foster collaborations throughout the State University of New York ( SUNY ) network of 64 national and international research and medical institutions. This builds upon Charlotte's Web's existing collaborations with prestigious institutions such as Johns Hopkins , Cornell and University at Buffalo .
About Charlotte's Web Holdings, Inc.
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. 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 ADA compliant website at www.CharlottesWeb.com.
Forward-Looking Information
Certain information in this news release constitutes forward-looking statements and forward-looking information (collectively, "forward-looking information"). Statements containing forward-looking information are not historical facts but instead represent management's expectations, estimates and projections regarding future events. Forward-looking information is necessarily based on a number of opinions, assumptions and estimates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertainties, assumptions and other factors that may cause the actual results, level of activity, performance or achievements to be materially different from those expressed or implied by such forward-looking information, including but not limited to the factors described in greater detail in the public documents of the Company available at www.sedar.com.
Cision
Cision
View original content to download multimedia:http://www.prnewswire.com/news-releases/charlottes-web-expands-rd-with-launch-of-cw-labs-sciences-division-301022613.html
SOURCE Charlotte's Web Holdings, Inc.
Thank you for a reasonable post. I generally agree that American grown sounds better.
Earlier this week, CVSI confirmed that the plan is for American hemp to constitute the majority of raw supply. How long it takes is an open question. PRs as a publicity tool are generally overused, imo. A harvest PR in Oct/Nov would have largely fallen on deaf ears - except perhaps to the "Euro-paste" bashers.
I imagine the 10-K, scheduled to file in three days, will show some detail about the 2019 harvest and raw material mix. Although I don't really care as long as top line revenue continues to ramp and CVSI returns to profitability by Q2 2020.
I own both stocks. Here's to both charts repairing themselves.
Digital marketing is probably targeting a meaningful subset of the total addressable market with this approach. If CVSI is driving traffic to their e-commerce platform with this sort of quirky click bait, then more power to them.
That said, it's not my cup of tea either. Though it's still better than the Stanleys on horseback "riding in out of the West" with their hemp CBD products. Not throwing shade, but that video was totally cornball! "Trust the Earth" isn't much better.
Advertising is still in its infancy in the space. There is definite room for improvement all around.
That's a lot of hate. Considering the current state of world affairs, there is already enough pain to go around these days, don't you think?
Anyway, here's the link to the July 10, 2019 press release on the 500 acre hemp supply commitment from the European countries of Kentucky, Wisconsin, Illinois and Indiana:
https://ir.cvsciences.com/press-releases/detail/119/cv-sciences-inc-announces-commitment-to-more-than-500
Bought more CVSI (and CWBHF) today.
Best to all.
I hope management writes down and takes a loss on everything they possibly can in Q4. Clean things up and use the tax loss carry forward for positive 2020 earnings.
Bought more this morning before the circuit breaker tripped.
GLTA
If everything had gone perfectly, the stock wouldn't be trading below a dollar. My bet is simple:
Starting in 2016, revenue has grown from $11M, to $20M, to $48M, to (E)$55-$60M in 2019. They maintain ~70% gross margin. Prior to 2019 (an outlier for the reasons discussed), they have a demonstrated history of 20%+ pretax profit margin. They have invested heavily in the future. They have a 3-1 current ratio and $13M in cash.
I think CVSI will drop a dime+ to the bottom line in 2020. If it does, perhaps it will trade 80-100x p/e like CW. Would be ecstatic with half that. I own both, and fail to understand the invective between the message boards. There is room for both in a rapidly expanding, multi-billion $ market.
Besides, in a world where less anxiety and better sleep are becoming increasingly important, maybe not a bad place to park some money. Time will tell.
Wrong. The loss you refer to was for the nine month period, not the quarter. The nine month loss is attributable to the $10M Mona parachute settlement in Q1, 2019. It had nothing to do with operations. Q2 2019 was a $1.3M profit, Q3 2019 was a $1.7M loss - after significant investment in facilities, digital marketing and the e-commerce platform.
Which is why I'm a buyer. Betting on CVSI's investment in sustainable growth and a return to 20% EBITDA margin.
Best value proposition in the hemp CBD space at close to 1X revenue versus CW's 4X revenue. Though I own both names.
I like the stock. Traded the 2018 run prior to the Citroen/Andrew Left bomb, then started accumulating last year (a little early) below $1.50. Average is now under a buck.
Management shouldn't be unduly chastised for the earnings postponement. Much disruption in the world. Income tax treatment is the domain of Deloitte & Touche working with the CVSI audit committee. The issue could easily be with D&T.
In this current climate, everyone should get a temporary hall pass, imho.