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Cannabis daily: CWEB disappoints, so does iAnthus, and Mitch McConnell will too

By Brandon A. Dorfman
Nov 28, 2018

CBD distributor and media darling Charlotte's Web Holdings, Inc. (CSE:CWEB) (OTCQX:CWBHF) posted a middling, if not mediocre third quarter financial report on Tuesday, bringing in only $500,000 more in revenue quarter-over-quarter. For the year, that puts Dr. Sanjat Gupta’s favorite CBD company at around $48 million in revenue, far short of the expected $80 million touted by the company during their IPO early this year. And while some investors and experts argue that the consistency can be seen as a good marker of the company’s success, others wonder where the promise went in what’s supposed to be the industry’s number one CBD company.

In truth, the numbers weren’t all bad, as the lack of significant growth was attributed to a rebranding effort, with the company having high expectations for the holiday season. They did see organic revenue growth of 57 percent and adjusted EBITDA increased 23 percent to $5.4 million, or, as they said in a statement, 31 percent of consolidated revenue.

[Cannabis stock report: Marijuana stocks plummet as House GOP attempts to derail farm bill]

Charlotte’s Web is placing a lot of faith in the upcoming farm bill, although recent news suggests turmoil in the Senate that may push back or delay the legislation.

"[A] successful passing of the forthcoming 2018 Farm Bill by the [U.S.] Congress will be a catalyst for the growth in our industry adding further momentum to the evolving market sector,” said Hess Moallem, President and Chief Executive Officer of the company in a statement. “We have contributed to and supported this important legislation from the beginning for the positive impact it will have on consumer access for both hemp-based CBD products and for our valuable farming communities throughout the country."

CWEB was up CA$0.52 ($0.39) per share on Tuesday, closing out the day at CA$15.49 ($11.64), an increase of 3.47 percent.

iAnthus announces third-quarter results to room full of crickets

iAnthus Capital Holdings, Inc. (CSE:IAN) (OTCQB:ITHUF) put out a rather mild financial report on Tuesday as well, where the highlights were growth in assets to $137.3 million and some fuzzy revenue numbers, with Consolidated revenues for the company increasing 101 percent quarter-over-quarter. The truth is the company had little revenue to show this quarter, as they have been slow to open planned dispensaries in both Florida and New York. Still, investors continue to have faith, though if this slow pace continues, the faithful may not last much longer.

[Cannabis daily: MarketWatch took down IGC (and wants you to know about it), wholesale prices continue to fall, and everything else you need to know about marijuana this morning]

"iAnthus continues to execute,” said Hadley Ford, CEO of iAnthus in a statement. “The Company has expanded its footprint and added to its industry leading-team while maintaining a prudent balance sheet throughout the process. We are now generating revenue in five of the six markets in which we operate, with a significant number of dispensaries expected to open within the next few months.”

One more time for everyone: Mitch McConnell won’t pass the STATES Act

Business Insider has a story out quoting various asset managers as saying they want to invest in U.S. cannabis as soon as the issue of federal prohibition is solved. The article quotes BlackRock, the world's biggest asset manager, as saying they will definitely invest.

"We will be investing, but right now, because of issues with states and the federal government in the [U.S.], some of the custodians will not clear cannabis stocks, and we will have to wait until that happens," BlackRock's president, Rob Kapito, said at an investor conference in Toronto, according to Business Insider.

[Harvest One Cannabis acquires Israeli-based Phytotech Therapeutics]

The article goes on to state that many executives believe legislation known as the STATES Act will be passed this year, which would protect the cannabis industry from federal interference. It’s a curious thing, however, because even though Democrats took back the House in this years’ elections, Republicans gained seats in the Senate. And Senate Majority Leader Mitch McConnell has made it clear he has no plans to help legalize marijuana.

Quick hits

The Democrat & Chronicle has an interesting look at Constellation Brands dive into the cannabis industry… Beacon Securities analyst Russell Stanley writes that a NYSE listing would help CannTrust Holdings (TSX:TRST) — a real Nobel-prize worthy insight… North Carolina may be hopping on the legalization train.

And finally…

The Mass. Cannabis Control Commission posted how much money was brought in from recreational sales (hint: it was a lot). See the charts below for the full details:

Source: Twitter

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