Replies to post #12715 on Charlotte's Web Holdings Inc (CWBHF)

[ANIA77]

I don't agree. I can guarantee there are going to be always promotions on particular products even after FDA regulations.. at least I hope so because it's just a sign of good marketing and knowledge how to run good healthy retail buisness imo
They maintain great over 70% gross margin, they can certainly effort to run promotions to get new customers hooked to their product.

[Trulio_217]

Competition is a constant. It isn't like competitive pressure will be alleviated if the FDA issues regs. Yes, many fly-by-night companies will go belly-up and will be gone. But there will still be a fight for shelf space. Those fly-by-night companies aren't selling at Kroger, CVS, etc. The press release today contained this key bit from the CEO:

"Topicals account for less than 15% of our sales at independent stores that carry both our topical and ingestible CBD product lines. This indicates the potential revenue catalyst of a broad adoption of ingestible products within the FDM channel. We are prudently investing in the expansion of our production and distribution capacities as planned, ahead of anticipated FDA regulatory clarity that could enable wider adoption of our product portfolio. We remain hopeful that broad political support will help drive quick regulatory resolutions in 2020."

https://s22.q4cdn.com/636117063/files/doc_financials/2019/q3/CW-Nov-13-2019-Q3-19-Earnings-Release-(3).pdf

The FDA regs prevent CW from selling at these national retailers where it has a footprint and access to many, many consumers at 1000's of locations. The lack of FDA regs directly prevent CW from selling at outlets where, if this figure is extrapolated, it could sell higher-margin ingestible products like hemp extract.

So you aren't wrong that FDA regs are a problem. I just wonder if it has less to do with competition then it has to do with a direct prohibition on selling. I don't think Acme Brand CBD is impacting CW, CVSI, or anyone else in a material way.

The only reason I see the sales as a negative is because you had to do that to maintain sales due to so many new brands who are selling CBD products at fire sale price points. This is 100% due to the lack of FDA regs.

Maybe I'm missing something.