Cannabis  May 8, 2024

Charlotte’s Web losses mount as CBD firm implements turnaround strategy

LOUISVILLE — Louisville-based CBD company Charlotte’s Web Holdings Inc. (TSX: CWEB) (OTCQX: CWBHF) saw its year-over-year sales slump and its losses grow in the first quarter of 2024 as CW begins to implement its “True North” turnaround strategy, which aims to reestablish solid financial footing. 

Sales for the most recent period were $12 million, down from $17 million in the first quarter last year.

Charlotte’s Web’s net loss in the first quarter of 2024 was $9.7 million, compared with a net loss of $2.9 million in the same period of 2023. 

The CBD-product maker experienced a top-level shakeup of the organization in 2023 that resulted from a shareholder revolt last summer led by CW founders Jesse Stanley and Joel Stanley, who were dissatisfied with the way the company was being run.

“The first quarter of 2024 started slowly in terms of sales volume. This is being addressed with solid progress in our ‘True North’ turnaround initiatives,” CW CEO Bill Morachnick said in a prepared statement. “For example, our legacy e-commerce platform limits our ability to be agile in executing marketing strategies and promotions quickly. In Q1, we pulled down spend on our paid media in order to evaluate each program and identify the highest performing campaigns. We are on schedule to launch our new e-commerce platform migration in Q2, enabling more effective tools and agility.”

In addition to rebuilding its e-commerce platform, the True North strategy involves reining in expenses, identifying efficiencies and emphasizing CW’s influential voice in the hemp industry. 

“Given our revenue challenges, we continue to act with agility to further optimize cost structures across the company, streamline operations, and eliminate inefficiencies,” CW chief financial officer Jessica Saxton said in a prepared statement. “We are optimistic about the impact of these initiatives and expect to see an improvement in our (selling, general, and administrative expenses) for the full year.”

Sign up for BizWest Daily Alerts