CV Sciences Inc (CVSI)

[SpacthatAsk]

As we analyzed in "Lack Of Ambition Poses Long-Term Hurdles", we think CVSI could be investing more in its business to position for the future. After reading the Q3 transcript, it seems that the company has no concrete solution other than hoping that the FDA will publish new regulations in 2020. There are two issues with that approach. First of all, hoping for new regulations is never a winning strategy given the uncertain timing and details of any future regulation. Secondly, we are not even sure if any FDA regulation could help alleviate market crowdedness as it simply eliminates illegal products, not all competitions. What investors want to hear is how the company plans to innovate and build a stronger brand in an increasingly busy market. The overall impression from the Q3 earnings call is CVSI is blaming the market and regulator for the recent stumble while offering no solutions other than the status quo. Its closest competitor, Charlotte's Web, also reported a poor quarter with flat revenue and falling profits due to investment in personnel and infrastructure. However, CWEB's shares have performed much better than CVSI likely due to its focus on investing in the future and its ambition of becoming a leading CPG company in the CBD category. We think the status quo is not enough and investors are demanding more from incumbents.


Soo true


https://www.google.com/amp/s/seekingalpha.com/amp/article/4309539-cv-sciences-best-defense-offense