Charlotte’s Web Holdings stock suffered along with most marijuana equities as it lost about half of its value in April and May. It regained more than half that loss in June before falling back again over the last two weeks. It now trades at around $15.50 per share at the time of this writing, more than 35% below its April high.

However, investors should also remember its market lead in cannabidiol (CBD) has raised the company’s profile. With the interest in CBD and the massive growth taking place, CWEB stock appears well-positioned for long-term growth.

Hemp Legalization Has Supercharged Expansion

Unlike other cannabis firms, Charlotte’s Web can operate across state boundaries and access the credit system that is not available to much of the industry since it focuses exclusively on hemp-based products.

Unlike most marijuana stocks, this company focuses exclusively on hemp-based products, primarily working in the CBD market. This focus gives the Boulder, Colorado-based company a crucial advantage — it dodges the Schedule I designation that burdens the U.S.-based companies producing psychoactive strains of marijuana. Unlike other cannabis firms, it can operate across state boundaries and access the credit system that is not available to much of the industry.

When the Farm Bill legalized hemp in December, Charlotte’s Web products had already reached about 3,680 retail outlets. By the end of March, that number grew to over 6,000. This makes Charlotte’s Web the largest CBD company in the U.S.

Both its significant presence and hemp legalization have helped to raise the profile of the company. As a result, the company made changes to the C-suite, bringing in executives from the food and healthcare industries.

Deanie Elsner took over as CEO in May. Elsner previously served as an executive at Kellogg (NYSE: K). Also, just this month, the company announced that Tony True would become the Chief Customer Officer. He also once worked at Kellogg and previously headed sales at Pharmavite LLC.

Look for Profit, Production Growth

Also, CWEB stock looks reasonably priced, at least for a cannabis stock. Yes, the current price-to-earnings (P/E) ratio stands at almost 159. However, against 2020 forward earnings that multiple falls to just 21.7. Moreover, the fact that it has a P/E ratio at all speaks to its profits and stability. Even mainstream names such as Canopy Growth (NYSE: CGC) and Aurora Cannabis (NYSE: ACB) have not reached that milestone. Analysts forecast profit growth of 133.3% this year and 164.3% in fiscal 2020.

Like other marijuana equities, production growth moves higher almost exponentially. In 2017, the company produced 63,000 pounds of hemp on 70 acres. Production had risen to 675,000 on 300 acres in 2018. In June of this year, the company had 862 acres in production. That should take its yield well above one million pounds.

Moving to a Mainstream Index Could Help CWBHF

Investors may also have an opportunity based on CWBHF stock itself. Many investors mistrust stocks on the OTC market, and some funds can only buy equities that trade on the main exchanges. As of the beginning of June, Charlotte’s Web also starting trading on the TSE under the ticker CWEB.

However, given the built-in lead Charlotte’s Web has in this industry, the pressure will probably mount to move to the NYSE or NASDAQ. This would bring more attention to the company from both traders and fund investors. It also could lead to stock gains willing to buy CWBHF stock on the OTC markets.

Final Thoughts

Despite a mixed performance, CWBHF stock should move higher long-term. CWBHF has struggled over the last few months. However, with triple-digit production and profit growth, the stock should move higher from its 21.7 forward P/E ratio. For those willing to take a chance on an OTC stock, Charlotte’s Web stock allows investors to profit from CBD without the higher multiples of Canadian cannabis equities.

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