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by Stockwatch Business Reporter
The Canadian Securities Exchange Composite Index slipped 3.07 points to 401.76 Wednesday. United States-based CBD producer Charlotte's Web Holdings Inc. (CWEB) fell $1.00 to $12.28 on 1.22 million shares after releasing its third quarter results. The drop continues a painful two weeks for the company; it has now fallen to $12.28 from $18.18 in just over two weeks. The hemp-based CBD producer lost $1.3-million (U.S.) on revenue of $25.1-million (U.S.). That compares unfavourably with the second quarter, in which Charlotte's Web earned $2.1-million (U.S.) on revenue of $25-million (U.S.). In fact, Charlotte's Web was one of the few cannabis companies that seemed able to consistently turn a profit. In 2018, it earned $11.8-million (U.S.). Charlotte's Web was again profitable in Q1 of 2019, earning $2.3-million (U.S.), before the above-mentioned $2.1-million (U.S.) profit in Q2.
One reason Charlotte's Web lost money in the third quarter is its increased spending; the CBD producer spent $13-million (U.S.) on general and administrative (G&A) expenses in Q3, up from $9-million (U.S.) in Q2 (over half of Charlotte's Web's G&A expenses are made up of wages). Indeed, the company paid $7.2-million (U.S.) to its staff in Q3, $1.7-million (U.S.) more than it paid in Q2. The company's revenue, of course, did not expand at a similar rate.
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