Charlotte's Web Reports Third Quarter 2026 Financial Results
Lower spending and improved margins narrowed quarterly losses, while pending federal restrictions threaten full-spectrum product availability.
Sentiment and the balance of points
Rhea-AI Sentiment reads the wording of the document, how positive or negative its language is on a 1 to 5 scale. The balance of points shown with the takes weighs what the document actually discloses, so the two can disagree, for example when a trial that missed its main goal is described in upbeat language.
Rhea-AI Summary
Charlotte's Web (CWBHF) reported third-quarter 2026 revenue of $9.4 million, as lower costs helped narrow its operating loss. Revenue fell 18.3% year over year and 13.5% sequentially. Gross margin rose to 46.9% from 38.9% a year earlier, while operating loss narrowed to $3.7 million from $5.3 million. Net loss was $3.5 million, versus $5.8 million.
Cash totaled $11.4 million at September 30, down from $14.0 million at June 30. Nine-month revenue declined 14.1% to $31.4 million, and net loss widened to $20.7 million from $18.3 million. California broad-spectrum sales have recovered approximately 40% of sales lost following July restrictions. Unless amended, federal restrictions effective December 11, 2026 would cover the company's full-spectrum products. The company targets approximately 50% gross margin, subject to inventory adjustments and federal rules.
How this balance works
Rhea-AI gives every point it takes from this document a weight. Minor counts 1, Moderate 3 and Major 9, so one Major point outweighs several Minor ones. The bar adds up the weights on each side, and when neither side holds more than 65% of the total the balance reads Mixed.
It reads the document as published, with the same rules for every company, and it does not look at what the market expected or at how the stock traded, so a point can be objectively good on a day the stock falls.
Rhea-AI Sentiment measures something else, the tone of the wording.
Hollow bars mark forward-looking points. How the balance works
Positive
- Major pointTotal liabilities fell to $19.4 million from $77.3 million at December 31, 2025.
- Moderate pointThird-quarter operating loss narrowed to $3.7 million, from $5.3 million a year earlier and $4.4 million sequentially.
- Moderate pointThird-quarter gross margin reached 46.9%, versus 38.9% a year earlier, but below 47.5% sequentially.
- Moderate pointThird-quarter net loss narrowed to $3.5 million, or $0.01 per share, versus $5.8 million, or $0.04.
- Moderate pointNine-month operating cash use improved to $6.3 million, versus $12.2 million in the prior-year period.
12 minor points
- Minor pointThird-quarter SG&A expenses fell 16.8% year over year to $8.1 million, down 14.9% sequentially.
- Minor pointThird-quarter adjusted EBITDA loss narrowed to $0.7 million from $2.2 million; this is a non-GAAP measure.
- Minor pointThird-quarter $0.1 million non-cash fair-value gain compared with a $1.2 million charge a year earlier.
- Minor pointCalifornia sales recovered approximately 40% of sales lost following July restrictions after broad-spectrum products returned.
- Minor pointShareholders' equity reached $53.1 million, versus a $2.0 million deficit at December 31, 2025.
- Minor pointWorking capital increased to $23.8 million from $21.7 million at December 31, 2025.
- Minor pointNine-month gross margin improved to 47.0% from 45.7% in the prior-year period.
- Minor pointNine-month SG&A expenses declined 13.5% to $27.1 million from $31.4 million.
- Minor pointNine-month operating loss narrowed 15.7% to $12.4 million from $14.7 million.
- Minor point. Forward-looking: it has not happened yet and may not happen.Gross margin remains targeted at approximately 50%, with quarterly variation from inventory adjustments and federal rules.
- Minor pointEdibles.com partnership adds online and Atlanta flagship-store distribution for a selection of Charlotte's Web products.
- Minor pointDeFloria's completed Phase 1 trial paper was accepted for publication in The Journal of Clinical Pharmacology.
Negative
- Moderate point. Forward-looking: it has not happened yet and may not happen.Federal restrictions effective December 11, 2026, unless amended, would cover the company's full-spectrum products.
- Moderate pointThird-quarter revenue fell 18.3% year over year to $9.4 million, down 13.5% sequentially.
- Moderate pointNine-month net loss widened to $20.7 million from $18.3 million; loss per share narrowed to $0.10 from $0.12.
- Moderate pointCash declined to $11.4 million at September 30 from $14.0 million at June 30.
- Moderate pointMay debenture conversion and private placement increased the share count, affecting per-share comparisons.
10 minor points
- Minor pointNine-month revenue declined 14.1% to $31.4 million from $36.6 million.
- Minor pointNine-month results included a $4.2 million non-cash debt-extinguishment loss on the May debenture conversion.
- Minor pointNine-month results included a $3.2 million net non-cash fair-value charge, mostly related to the debenture before conversion.
- Minor pointThird-quarter operations used $2.6 million in cash.
- Minor pointProduct-range simplification required a $1.4 million inventory-reserve addition, largely offset by one-time inventory valuation adjustments.
- Minor pointThird-quarter gross profit declined to $4.4 million from $4.5 million a year earlier.
- Minor point. Forward-looking: it has not happened yet and may not happen.Healthcare pilot remains under negotiation, with a potential 2027 start and no meaningful 2026 revenue anticipated.
- Minor pointMedicare Advantage implementation preparations remain restricted by lack of regulatory clarity.
- Minor point. Forward-looking: it has not happened yet and may not happen.DeFloria's Phase 2 initiation remains subject to securing funding resources.
- Minor point. Forward-looking: it has not happened yet and may not happen.Expected customer purchasing ahead of December 11 may shift sales between periods, rather than indicate ongoing demand.
AI-generated analysis. How Rhea-AI works. Not financial advice.
Operating loss narrows to its lowest level since 2019 despite lower revenue, as costs and margins improve
Louisville, Colorado--(Newsfile Corp. - November 12, 2026) - Charlotte's Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) ("Charlotte's Web" or the "Company"), a botanical wellness innovation company and a market leader in cannabidiol (CBD) hemp extract wellness products, today announced results for the quarter ended September 30, 2026. All amounts are expressed in U.S. dollars unless otherwise indicated.
"Third-quarter revenue primarily reflected the restrictions on the sale of full-spectrum hemp products in California that took effect in July. We have since reintroduced broad-spectrum products in California and sales have steadily begun to recover there. Nationally, we have sharply reduced deep discounting so that our pricing reflects the premium quality and reliable efficacy customers expect from Charlotte's Web. That lowered revenue in the near term, but it also improved margins and helped deliver our smallest operating loss since 2019," said Bill Morachnick, Chief Executive Officer of Charlotte's Web. "As we work to return to growth, we aim to build the business back on a more profitable footing through our refined customer acquisition and retention strategies. This includes focusing on channels including integrative healthcare and organizations participating in the CMS Innovation Center models."
FEDERAL POLICY
Federal hemp policy continues to evolve legislative approaches to distinguish naturally occurring, non-intoxicating full-spectrum hemp products from synthetic and intoxicating cannabinoid products.
On September 2, 2026, following House passage, the Continuing Appropriations and Extensions Act, 2027 (Public Law 119-103) was signed into law, delaying enactment of federal hemp restrictions contained in Section 781 of Public Law 119-37 as they apply to non-synthetic hemp products to December 11, 2026. Unless amended, on December 11, 2026 the law will restrict hemp products containing more than 0.4 milligrams of total THC per container. Under current law, the Company's full-spectrum products would fall within these restrictions, while its broad-spectrum and isolate products are expected to remain generally available. There are a number of members of Congress who wish to adjust Section 781 to protect full-spectrum hemp products, either through the process of passing government funding or by one of many bipartisan bills that have been introduced, including the HEMP Act and the Lawful Hemp Protection Act. Charlotte's Web continues to advocate, directly and through the ONE HEMP coalition, for a framework that distinguishes non-intoxicating full-spectrum products from synthetic and intoxicating products and preserves access for the consumers who have relied on full-spectrum products for years. The Company supports rigorous testing, accurate labeling, traceability, enforcement against bad actors and safeguards for minors, and favors science-based regulation over prohibition. Despite its advocacy, the Company cannot predict whether or when Congress will act.
HEALTHCARE CHANNEL
The national healthcare program pilot under the Substance Access Beneficiary Engagement Incentive ("BEI") allows participating Accountable Care Organizations ("ACOs") to provide eligible hemp-derived products to Medicare beneficiaries, funding up to
To make it easier for practitioners to recommend and supply its products, Charlotte's Web has launched a dedicated ordering portal for healthcare practitioners and a new affiliate program. Practitioners can now have products shipped directly to their patients or stock them in their clinics, giving patients immediate access.
The Company has spent several months laying the groundwork to participate in the Medicare Advantage channel, developing healthcare relationships, evaluating benefit pathways, and preparing the infrastructure needed to support potential program implementation, which to date has been restricted by the lack of regulatory clarity. As the regulatory framework for hemp-derived products gains clarity, the Company believes this preparation could position it to pursue opportunities with Medicare Advantage plans and other healthcare partners seeking compliant pathways to provide eligible hemp-derived products to their members.
COMMERCIAL AND OPERATIONS
Charlotte's Web has reintroduced broad-spectrum products in California, where revenue has begun to recover since the July restrictions, regaining approximately
The Company's Route CBD activation traveled 1,750 miles along the California-Nevada border, meeting and supporting families who had lost normal access to full-spectrum products under the California restrictions. The initiative drew strong consumer response and supportive trade coverage.
In August, the Company announced a partnership with online marketplace and retailer Edibles.com, which now carries a selection of Charlotte's Web products online and at its flagship store in Atlanta. The companies are also working together to advocate for federal standards that preserve access to non-intoxicating hemp products.
Since the end of the third quarter, as December 11 approaches, consumer concern has grown, with increased customer care calls, advocacy letters, and inquiries about the Company's Original Formula products as more families plan ahead. Consumers have sent more than 42,000 letters to Congress asking it to preserve access to full-spectrum hemp products. The Company expects some customers to purchase ahead of December 11, which may shift sales between periods. Some competitors have exited the market, and others may follow, which could affect the Company's share of a smaller category. The net effect on future sales cannot yet be determined, and the Company does not view near-term purchasing as indicative of ongoing demand.
DEFLORIA
DeFloria, Inc., in which Charlotte's Web owns approximately one-third, is developing AJA001 Oral Solution, an investigational full-spectrum botanical drug candidate. Charlotte's Web holds exclusive commercial manufacturing rights for AJA001 upon potential FDA approval. Charlotte's Web carries its investment in DeFloria at fair value of
THIRD QUARTER FINANCIAL REVIEW
"This was our first full quarter without the convertible debenture, and the balance sheet is in a very different place than it was at the start of the year," said Erika Lind, Chief Financial Officer. "Total liabilities are
The following table sets forth selected financial information for the periods indicated:
| U.S. $ millions, except per share data | Three Months Ended September 30, 2026 | Three Months Ended September 30, 2025 |
| Revenue | ||
| Cost of goods sold | 5.0 | 7.0 |
| Gross profit | 4.4 | 4.5 |
| Selling, general and administrative expenses | 8.1 | 9.7 |
| Operating loss | (3.7) | (5.3) |
| Change in fair value of financial instruments | 0.1 | (1.2) |
| Other income (expense), net | 0.2 | 0.6 |
| Net loss | ||
| EPS basic and diluted | ||
| Adjusted EBITDA1 | ||
| Cash and cash equivalents | ||
| Total assets | ||
| Total liabilities |
Revenue for the third quarter of 2026 was
Gross profit was
SG&A was
Operating loss was
Adjusted EBITDA1 was a loss of
Nine-Month Financial Review
For the nine months ended September 30, 2026, revenue was
Financial Position
Cash and cash equivalents were
Consolidated Financial Statements and Management's Discussion and Analysis
The Company's consolidated financial statements and accompanying notes for the three and nine months ended September 30, 2026 and 2025, and related management's discussion and analysis of financial condition and results of operations ("MD&A"), are reported in the Company's 10-Q filing on the Securities and Exchange Commission website at www.sec.gov and on SEDAR+ at www.sedarplus.ca and will be available on the Investor Relations section of the Company's website at https://investors.charlottesweb.com.
Conference Call
As announced on November 1, rather than hold a shareholder earnings call on November 12, the Company intends to host a single corporate update call and webcast in December, after December 11, 2026, when the revised federal definition of hemp is scheduled to take full effect under current law. Holding the call after that date is intended to allow management to provide an outlook based on actual plans rather than speculation. The call will review federal hemp policy developments and their implications for the industry and the Company, as well as other corporate developments. Dial-in and webcast details will be provided in a separate notice.
About Charlotte's Web Holdings, Inc.
Charlotte's Web Holdings, Inc., a Certified B Corporation headquartered in Louisville, Colorado, is a botanical wellness innovation company and a market leader in hemp extract wellness that includes Charlotte's Web whole-plant full-spectrum CBD (cannabidiol) extracts as well as broad-spectrum CBD and other naturally occurring cannabinoid isolates, terpenes, flavonoids, and other beneficial compounds. Charlotte's Web product categories include CBD oil tinctures (liquid products), CBD gummies (sleep, calming, exercise recovery, immunity), CBN gummies, functional mushroom gummies, CBD capsules, CBD topical creams, and lotions. Through its substantially vertically integrated business model, Charlotte's Web maintains stringent control over product quality and consistency with analytical testing from soil to shelf for quality assurance. Charlotte's Web products are distributed to retailers and healthcare practitioners throughout the U.S.A. and are available online through the Company's website at www.charlottesweb.com.
Shares of Charlotte's Web trade on the TSX under the symbol "CWEB" and are quoted in U.S. Dollars in the United States on the OTCQX under the symbol "CWBHF". Subscribe to Charlotte's Web investor news.
(1) Non-GAAP Measures: The press release contains non-GAAP measures, including EBITDA and Adjusted EBITDA. Please refer to the section in the tables captioned "Non-GAAP Measures" below for additional information and a reconciliation to GAAP for all non-GAAP metrics.
Forward-Looking Information
Certain information provided herein constitutes forward-looking statements or information (collectively, "forward-looking statements") within the meaning of applicable securities laws. Forward-looking statements are typically identified by words such as "may", "will", "should", "could", "anticipate", "expect", "project", "estimate", "forecast", "plan", "intend", "target", "believe" and similar words suggesting future outcomes or statements regarding an outlook. Forward-looking statements are not guarantees of future performance, and readers are cautioned against placing undue reliance on forward-looking statements. By their nature, these statements involve a variety of assumptions, known and unknown risks and uncertainties, and other factors which may cause actual results, levels of activity, and achievements to differ materially from those expressed or implied by such statements. The forward-looking statements contained in this press release are based on certain assumptions and analysis by management of the Company in light of its experience and perception of historical trends, current conditions, expected future development, and other factors that it believes are appropriate and reasonable.
Specifically, this press release contains forward-looking statements relating to, but not limited to: the timing, scope and effect of Section 781 of Public Law 119-37 as amended by Public Law 119-103, including the provisions scheduled to take full effect on December 11, 2026, the definitions to be issued by the U.S. Food and Drug Administration, and any further legislative action, including in connection with government funding expiring December 11, 2026, the Lawful Hemp Protection Act, the HEMP Act, and any other federal or state legislative or regulatory framework applicable to hemp-derived products; the effect of those provisions on the Company's products and revenue; the Company's ability to maintain product compliance, market access and distribution under evolving federal and state requirements; product eligibility under CMS Innovation Center models, including the ACO REACH, Enhancing Oncology and LEAD models, and the development of the Company's healthcare channel; the impact of California restrictions and the Company's broad-spectrum products for California customers; the Company's product line simplification; the Company's gross margin target; expected levels of SG&A and investment in growth; California revenue trends; the timing and outcomes of DeFloria's clinical programs, including Phase 2 initiation and the resources required to fund it, DeFloria's evaluation of additional indications for AJA001 and their potential eligibility for orphan drug designation, and potential commercial opportunities for Charlotte's Web.
The material factors and assumptions used to develop the forward-looking statements herein include, but are not limited to: expectations around cost reduction, run rate, and cash flow improvement; regulatory regime changes; expectations regarding regulatory and legislative updates and timing of same; anticipated product development and sales; the success of sales and marketing activities; product development and production expectations; outcomes from R&D activities; the availability of qualified and cost-effective human resources; compliance with contractual and regulatory obligations and requirements; availability of adequate liquidity and capital to support operations and business plans; continued product placement across channels; anticipated development of new products; anticipated consumer trends and corresponding product innovation; and expectations around consumer product demand. In addition, the forward-looking statements are subject to risks and uncertainties pertaining to, among other things: the full application of Section 781 on December 11, 2026 without further legislative relief, or relief on terms less favorable than anticipated; the content and timing of FDA definitions; the effect of federal THC limits on product eligibility under CMS programs; limited adoption of the incentive by participating healthcare organizations; restrictions affecting manufacturing, distribution or retail availability; changes in regulatory interpretations or enforcement practices; state restrictions, including in California; supply and distribution chains; the market for the Company's products; revenue fluctuations; regulatory changes; loss of customers and retail partners; retention and availability of talent; competing products; share price volatility; product acceptance; available capital to fund operations and business plans; crop risk; economic and political considerations; and including but not limited to those risks and uncertainties discussed under the heading "Risk Factors" in the Company's most recently filed Annual Report on Form 10-K, and other risk factors contained in other filings with the Securities and Exchange Commission available on www.sec.gov and filings with Canadian securities regulatory authorities available on www.sedarplus.ca. The impact of any one risk, uncertainty, or factor on a particular forward-looking statement is not determinable with certainty, as these are interdependent, and the Company's future course of action depends on management's assessment of all information available at the relevant time. Any forward-looking statement in this press release is based only on information currently available to the Company and speaks only as of the date on which it is made. Except as required by applicable law, the Company assumes no obligation to publicly update any forward-looking statement, whether as a result of new information, future events, or otherwise. All forward-looking statements, whether written or oral, attributable to the Company or persons acting on the Company's behalf, are expressly qualified in their entirety by these cautionary statements.
For further information, contact:
Erika Lind
Chief Financial Officer
Erika.Lind@CharlottesWeb.com
Cory Pala
Director of Investor Relations
(720) 484-8930
Cory.Pala@CharlottesWeb.com
CHARLOTTE’S WEB HOLDINGS, INC.
CONDENSED CONSOLIDATED BALANCE SHEETS
(in thousands of U.S. dollars, except share and per share amounts)
| September 30, | December 31, | ||||||
| 2026 (unaudited) | 2025 | ||||||
| ASSETS | |||||||
| Current assets: | |||||||
| Cash and cash equivalents | $ | 11,364 | $ | 8,035 | |||
| Accounts receivable, net | 1,428 | 811 | |||||
| Inventories, net | 15,260 | 18,022 | |||||
| Prepaid expenses and other current assets | 3,324 | 3,491 | |||||
| Total current assets | 31,376 | 30,359 | |||||
| Property and equipment, net | 19,565 | 22,679 | |||||
| Operating lease right-of-use assets, net | 10,696 | 11,297 | |||||
| Investment in unconsolidated entity | 8,400 | 8,800 | |||||
| Intangible assets, net | 713 | 785 | |||||
| Derivative and other long-term assets | 1,686 | 1,353 | |||||
| Total assets | $ | 72,436 | $ | 75,273 | |||
| LIABILITIES AND SHAREHOLDERS' EQUITY (DEFICIT) | |||||||
| Current liabilities: | |||||||
| Accounts payable | $ | 1,601 | $ | 2,186 | |||
| Accrued and other current liabilities | 4,638 | 5,053 | |||||
| Lease obligations — current | 1,303 | 1,420 | |||||
| Total current liabilities | 7,542 | 8,659 | |||||
| Convertible debenture | — | 50,849 | |||||
| Lease obligations | 11,384 | 12,186 | |||||
| Derivative and other long-term liabilities | 433 | 5,618 | |||||
| Total liabilities | 19,359 | 77,312 | |||||
| Commitments and contingencies | |||||||
| Shareholders' equity (deficit): | |||||||
| Common shares, nil par value; unlimited shares authorized; 271,291,529 and 159,420,141 shares issued and outstanding as of September 30, 2026 and December 31, 2025 | 1 | 1 | |||||
| Additional paid-in capital | 405,083 | 329,270 | |||||
| Accumulated deficit | (352,007 | ) | (331,310 | ) | |||
| Total shareholders' equity (deficit) | 53,077 | (2,039 | ) | ||||
| Total liabilities and shareholders' equity (deficit) | $ | 72,436 | $ | 75,273 | |||
CHARLOTTE’S WEB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF OPERATIONS
(in thousands of U.S. dollars, except share and per share amounts)
| Three Months Ended September 30, (unaudited) | Nine Months Ended September 30, (unaudited) | ||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||
| Revenue | $ | 9,393 | $ | 11,503 | $ | 31,407 | $ | 36,571 | |||||||
| Cost of goods sold | 4,990 | 7,026 | 16,643 | 19,874 | |||||||||||
| Gross profit | 4,403 | 4,477 | 14,764 | 16,697 | |||||||||||
| Selling, general and administrative expenses | 8,097 | 9,731 | 27,140 | 31,371 | |||||||||||
| Operating loss | (3,694 | ) | (5,254 | ) | (12,376 | ) | (14,674 | ) | |||||||
| Change in fair value of financial instruments | 100 | (1,200 | ) | (3,211 | ) | (2,869 | ) | ||||||||
| Loss from extinguishment of debt | — | — | (4,216 | ) | — | ||||||||||
| Other income (expense), net | 159 | 600 | (839 | ) | (813 | ) | |||||||||
| Loss before provision for income taxes | (3,435 | ) | (5,854 | ) | (20,642 | ) | (18,356 | ) | |||||||
| Income tax benefit (expense) | (23 | ) | 36 | (55 | ) | 38 | |||||||||
| Net loss | $ | (3,458 | ) | $ | (5,818 | ) | $ | (20,697 | ) | $ | (18,318 | ) | |||
| Per common share amounts | |||||||||||||||
| Net loss per common share, basic and diluted | $ | (0.01 | ) | $ | (0.04 | ) | $ | (0.10 | ) | $ | (0.12 | ) | |||
CHARLOTTE’S WEB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY (DEFICIT)
(in thousands of U.S. dollars, except share amounts
| Common Shares | Additional Paid-in Capital | Accumulated Deficit | Total Shareholders' Equity (Deficit) | ||||||||||||||||
| Shares | Amount | ||||||||||||||||||
| Balance—December 31, 2025 | 159,420,141 | $ | 1 | $ | 329,270 | $ | (331,310 | ) | $ | (2,039 | ) | ||||||||
| Common shares issued upon vesting of restricted share units, net of withholding | 263,812 | - | (41 | ) | - | (41 | ) | ||||||||||||
| Share-based compensation | - | - | 151 | - | 151 | ||||||||||||||
| Net loss | (13,112 | ) | (13,112 | ) | |||||||||||||||
| Balance—March 31, 2026 | 159,683,953 | $ | 1 | $ | 329,380 | $ | (344,422 | ) | $ | (15,041 | ) | ||||||||
| Common shares issued upon vesting of restricted share units, net of withholding | 854,335 | — | (278 | ) | — | (278 | ) | ||||||||||||
| Exercise of common shares options | 67,601 | — | 22 | — | 22 | ||||||||||||||
| Share-based compensation | — | — | 506 | — | 506 | ||||||||||||||
| Conversion of convertible debenture into common shares | 95,281,277 | — | 64,982 | — | 64,982 | ||||||||||||||
| Issuance of common shares by private investment | 14,662,765 | — | 10,000 | — | 10,000 | ||||||||||||||
| Net loss | (4,127 | ) | (4,127 | ) | |||||||||||||||
| Balance—June 30, 2026 | 270,549,931 | $ | 1 | $ | 404,612 | $ | (348,549 | ) | $ | 56,064 | |||||||||
| Common shares issued upon vesting of restricted share units, net of withholding | 741,598 | — | (51 | ) | — | (51 | ) | ||||||||||||
| Share-based compensation | — | — | 522 | — | 522 | ||||||||||||||
| Net loss | (3,458 | ) | (3,458 | ) | |||||||||||||||
| Balance—September 30, 2026 | 271,291,529 | $ | 1 | $ | 405,083 | $ | (352,007 | $ | 53,077 | ||||||||||
| Balance—December 31, 2024 | 158,009,541 | $ | 1 | $ | 328,655 | $ | (301,569 | ) | $ | 27,087 | |||||||||
| Common shares issued upon vesting of restricted share units, net of withholding | — | — | — | — | — | ||||||||||||||
| Share-based compensation | — | — | 187 | — | 187 | ||||||||||||||
| Net loss | (6,212 | ) | (6,212 | ) | |||||||||||||||
| Balance—March 31, 2025 | 158,009,541 | $ | 1 | $ | 328,842 | $ | (307,781 | ) | $ | 21,062 | |||||||||
| Common shares issued upon vesting of restricted share units, net of withholding | 608,226 | — | (25 | ) | — | (25 | ) | ||||||||||||
| Share-based compensation | — | — | 180 | — | 180 | ||||||||||||||
| Net loss | (6,288 | ) | (6,288 | ) | |||||||||||||||
| Balance—June 30, 2025 | 158,617,767 | $ | 1 | $ | 328,997 | $ | (314,069 | ) | $ | 14,929 | |||||||||
| Common shares issued upon vesting of restricted share units, net of withholding | 518,687 | — | (9 | ) | — | (9 | ) | ||||||||||||
| Share-based compensation | — | — | 145 | — | 145 | ||||||||||||||
| Net loss | (5,818 | ) | (5,818 | ) | |||||||||||||||
| Balance—September 30, 2025 | 159,136,454 | $ | 1 | $ | 329,133 | $ | (319,887 | ) | $ | 9,247 | |||||||||
CHARLOTTE’S WEB HOLDINGS, INC.
CONDENSED CONSOLIDATED STATEMENTS OF CASH FLOWS
(in thousands of U.S. dollars)
| Nine Months Ended September 30, (unaudited) | |||||||
| 2026 | 2025 | ||||||
| Cash flows from operating activities: | |||||||
| Net loss | $ | (20,697 | ) | $ | (18,318 | ) | |
| Adjustments to reconcile net loss to net cash used in operating activities: | |||||||
| Depreciation and amortization | 4,242 | 4,650 | |||||
| Loss on extinguishment of debt | 4,216 | — | |||||
| Change in fair value of financial instruments | 3,211 | 2,869 | |||||
| Inventory provision | 1,365 | 24 | |||||
| Convertible debenture and other accrued interest | 1,321 | 2,223 | |||||
| Share-based compensation | 1,179 | 512 | |||||
| Changes in right-of-use assets | 600 | 1,348 | |||||
| Other | (95 | ) | (914 | ) | |||
| Changes in operating assets and liabilities: | |||||||
| Accounts receivable, net | (694 | ) | 191 | ||||
| Inventories, net | 1,412 | (781 | ) | ||||
| Prepaid expenses and other current assets | 114 | (389 | ) | ||||
| Accounts payable, accrued and other liabilities | (562 | ) | (1,215 | ) | |||
| Operating lease obligations | (920 | ) | (1,751 | ) | |||
| Other operating assets and liabilities, net | (964 | ) | (695 | ) | |||
| Net cash used in operating activities | (6,272 | ) | (12,246 | ) | |||
| Cash flows from investing activities: | |||||||
| Purchases of property and equipment and intangible assets | (57 | ) | (650 | ) | |||
| Proceeds from sale of assets | 5 | 122 | |||||
| Net cash used in investing activities | (52 | ) | (528 | ) | |||
| Cash flows from financing activities: | |||||||
| Proceeds from issuance of common shares | 10,000 | — | |||||
| Other financing activities | (347 | ) | (34 | ) | |||
| Net cash provided by (used in) financing activities | 9,653 | (34 | ) | ||||
| Net increase (decrease) in cash and cash equivalents | 3,329 | (12,808 | ) | ||||
| Cash and cash equivalents -—beginning of period | 8,035 | 22,618 | |||||
| Cash and cash equivalents —end of period | $ | 11,364 | $ | 9,810 | |||
| Supplemental disclosures of non-cash investing and financing activities | |||||||
| Conversion of debt to equity | 52,942 | ||||||
| Extinguishment of embedded derivatives liability upon debt conversion | 8,062 | ||||||
| Extinguishment of embedded derivatives asset upon debt conversion | 214 | ||||||
(1) Non-GAAP Measures -EBITDA and Adjusted EBITDA
Earnings before interest, taxes, depreciation, and amortization ("EBITDA") is not a recognized performance measure under U.S. GAAP. The term EBITDA consists of net income (loss) and excludes interest, taxes, depreciation, and amortization. Adjusted EBITDA also excludes other non-cash items such as changes in fair value of financial instruments (Mark-to-Market), Share-based compensation, impairment of assets and, for the nine months ended September 30, 2026, the
(1) EBITDA and Adjusted EBITDA are non-GAAP financial measures with reconciliations provided in the tables below. Adjusted EBITDA for the three and nine months ended September 30, 2026, and 2025 is as follows:
| Charlotte's Web Holdings, Inc. | ||||||||||||||
| Statement of Adjusted EBITDA | ||||||||||||||
| (In Thousands) | ||||||||||||||
| Three Months Ended | Nine Months Ended | |||||||||||||
| September 30, | September 30, | |||||||||||||
| (unaudited) | (unaudited) | |||||||||||||
| U.S. $ Thousands | 2026 | 2025 | 2026 | 2025 | ||||||||||
| Net loss | $ | (3,458 | ) | $ | (5,818 | ) | $ | (20,697 | ) | $ | (18,318 | ) | ||
| Depreciation of property and equipment and amortization of intangibles | 1,070 | 1,689 | 4,242 | 4,650 | ||||||||||
| Interest (income) expense | (115 | ) | 630 | 1,092 | 1,765 | |||||||||
| Income tax expense (benefit) | 23 | (36 | ) | 55 | (38 | ) | ||||||||
| EBITDA | (2,480 | ) | (3,535 | ) | (15,308 | ) | (11,941 | ) | ||||||
| Share-based compensation | 522 | 145 | 1,179 | 512 | ||||||||||
| Loss on extinguishment of debt | - | - | 4,216 | - | ||||||||||
| Mark-to-market financial instruments | (100 | ) | 1,200 | 3,211 | 2,869 | |||||||||
| Inventory Provision | 1,365 | 28 | 1,365 | 24 | ||||||||||
| Adjusted EBITDA | (693 | ) | (2,162 | ) | (5,337 | ) | (8,536 | ) | ||||||
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FAQ
AI-generated questions and answers. How Rhea-AI works. Not financial advice.
What were Charlotte's Web's third-quarter 2026 financial results?
Charlotte's Web reported $9.4 million in revenue and a $3.5 million net loss for the quarter ended September 30, 2026. Revenue declined 18.3% year over year, while net loss narrowed from $5.8 million. Operating loss narrowed to $3.7 million from $5.3 million.
How would the December 11, 2026 federal hemp restrictions affect Charlotte's Web products?
Unless amended, the law would restrict Charlotte's Web's full-spectrum products because it limits hemp products containing more than 0.4 milligrams of total THC per container. The company expects its broad-spectrum and isolate products to remain generally available. It cannot predict whether or when Congress will change the law.
How would Charlotte's Web's potential healthcare pilot be funded?
Participating Accountable Care Organizations would fund eligible hemp-derived products themselves, up to $500 per beneficiary per year, rather than through Medicare reimbursement. Charlotte's Web is negotiating a potential pilot expected to begin in 2027. No revenue has been recognized from the program, and CMS will adjust product requirements to follow federal law.
What is Charlotte's Web's interest in DeFloria's AJA001 drug program?
Charlotte's Web owns approximately one-third of DeFloria and holds exclusive commercial manufacturing rights for AJA001 upon potential FDA approval. Its investment had a fair value of $8.4 million at September 30, 2026. The Phase 2 program addresses irritability associated with autism spectrum disorder, with initiation dependent on securing funding resources.