The once-rip-roaring hemp-based CBD industry is continuing to struggle with soft sales in the U.S.
In quarterly earnings reports this month, three public companies posted year-over-year declines between 7% and 35%.
Charlotte’s Web Holdings Inc., which holds the leading market share position in the U.S., reported first-quarter revenues of $17 million, a 12.1% decrease from $19.4 million in the first quarter of 2022.
Like others in the U.S. market, Charlotte’s Web has adopted cost-cutting measures amid a challenging business environment and a lack of a federal regulatory framework that continues to hamper growth.
“In the first quarter, we maintained prudent cost controls to balance softness in the CBD category due to the unregulated environment,” Jessica Saxton, chief financial officer of Charlotte’s Web, said in a May 15 earning release. She added the company cut operating expenses by 14% on a year-over-year basis and ended the first quarter with $61 million in cash.
Other publicly held companies in the CBD market have significantly less cash on hand than Charlotte’s Web to manage their businesses. CV Sciences Inc., for example, ended the first quarter with $714,000, up from $611,000 at the end of December.
In the three-month period ending March 31, the company reported first-quarter revenues of $4.1 million, down 7% from the first quarter of 2022 ($4.4 million).
“We believe that a combination of factors, mainly consisting of the highly competitive…