The CBD market is one niche in the cannabis industry that has grown at an impressive pace in recent times, and the biggest player in that market is Charlotte’s Web Holdings (TSX:CWEB) (OTCQX:CWBHF).
Sell-off After a Solid Jump
However, it was a terrible day for the CWH stock on Wednesday, as it tanked by as much as 9%. It was especially surprising considering the fact that the stock had actually rallied by more than 50% last week. It seems that the stock declined yesterday since many investors decided to cash in on their profits from last week. Last week, CWH had enjoyed a remarkable rally after it announced that it had managed to win a United States patent related to an improved variant of hemp.
In this regard, it is important to note that a decline after such massive gains is not a rarity. It is quite common for investors to book profits, and that often brings about a decline. That being said, the United States patent with regards to hemp genetics is a major win for the company.
It is especially so considering the fact that such patents are not handed out regularly by the United States Patent and Trademark. Additionally, this patent will also help the company in protecting its intellectual property in the hemp space.
While the latest developments can be classed as positives, it should be noted that the company posted a loss in the first fiscal quarter of the year. CWH announced its quarterly results on May 14 and reported a net loss of $11.5 million, which works out to 11 cents per share. In the prior-year period, the company had generated profits of $2.3 million, and hence, the latest performance must not have impressed investors.
That being said, it is also important to note that analysts had projected loss of 6 cents a share, but CWH eventually posted losses of 2 cents a share. The company revealed that the situation was not brought about by the coronavirus pandemic but higher expenses. CWH’s expenses for the period rose by as much as 76.5% year on year to hit $23.3 million.