Charlotte’s Web Holdings Inc (TSX:CWEB) has been falling hard recently. In just three months, the stock has lost nearly half of its value and hasn’t been trading this low since late in 2018.
While cannabis stocks as a whole have struggled badly this year, Charlotte’s Web arguably doesn’t belong to be lumped into that category.
The company is in the hemp business and can ship and sell their products to more than 40 states in the U.S. that have hemp programs in place. Marijuana stocks don’t have that same luxury and are only able to sell in states where they actually have operations as their products can’t cross borders.
Another important difference between Charlotte’s Web and many marijuana stocks is that the company’s also profitable – consistently. In each of the past four quarters, the company has finished in the black.
And while it fell short of expectations last quarter, the company has a strong business model that can benefit from economies of scale, such as shipping its products all over the country, which could continue to improve its bottom line as it sells more products.
With more than 8,000 locations carrying Charlotte’s Web products, the company has done a terrific job of growing throughout the country. The company has earnings coming up later this month and a good performance could quickly send the stock back up in value.
For investors, Charlotte’s Web is one of the safer cannabis investments that can be made today and given how cheap the stock is, it could prove to be a bargain buy.
