Charlotte’s Web Holdings, Inc. stock is under pressure today in light of Q2 earnings which reported a lower than estimated revenue and profit for the second quarter. Profits for the period stood at $2.2 million, which reflected a significant drop from the $3.7 million that the company generated in the second quarter last year.

Charlotte’s Web Holdings, Inc. (OTCQX: CWBHF), the market share leader in whole-plant CBD hemp extract wellness products, has reported financial results for the second quarter ended June 30, 2019: (All comparable figures are for the second quarter ended June 30, 2018)

• Organic consolidated year-over-year revenue of $25M
• Growth in year-over-year revenue of 45%
• Total retail channel revenue accounted for approximately 53% of total revenue
• Number of retail outlets increased from 1,926 to 7,871
• Gross profit of $18.8M
• Gross margin increased to 75.3%, from 76.7% 
• Adjusted EBITDA of $3.9M (16% of consolidated revenue) compared to $6.1M (35% of consolidated revenue) reflecting continued investment in infrastructure and personnel as the Company builds its internal capabilities to support expected revenue growth for the remainder of 2019 and beyond.
• Net income of $2.2M which was down 40.5%
• Earnings per share of $0.02 basic and diluted
• Operating expenses increased 98% year-over-year to support its expansion
• Employee headcount increased by 41.6% to 320 
• Expected revenue guidance for 2019 of between $120M and $170M remains in place.

During the quarter, Charlotte’s Web:

• Commenced trading on the Toronto Stock Exchange (TSX)
• Introduced new products including new hemp extract infused CBD gummies in three flavors, and a new twelve SKU pet product line including functionally focused chews with synergistic ingredients to support specific health functions and
• Increased the total acres planted for 2019 by 187%.

Subsequent to the second quarter, the Company:

• Signed two distribution partners for its pet line that will service 5,000 independent pet store retailers in all 33 states where the sale of such products is legal
• Created and filled the executive positions of Chief Customer Officer, Chief Information Officer, and Chief Financial Officer.

In spite of the above financial results:

• the company has emerge as the market leader in hemp-based CBD helped in large part with the passing in 2018 of The Farm Bill that legalized hemp in the United States and
• the CBD market is expected to grow at a breakneck pace over the next few years and the company is building towards cornering a major chunk of that market.