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Charlotte's Web Holdings (CWEB) AI Stock Analysis

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TSE:CWEB

Charlotte's Web Holdings

(TSX:CWEB)

Select Model
Rating:32Underperform
Price Target:CAD 0.22â–¼(-14.51% Downside)
Action:downgraded
Date:11/11/26

The overall score is very low, driven primarily by extremely weak financial performance, including declining revenues and significant cash burn. This is compounded by a persistently bearish technical trend, with the stock price below all major moving averages. The lack of earnings makes traditional valuation metrics negative. The company's only strength is a recently recapitalized, low-debt balance sheet, but this is insufficient to offset the severe operational challenges.

Positive Factors
Low leverageManageable leverage gives Charlotte's Web greater financial flexibility than a highly indebted business. The relatively modest debt burden can reduce balance-sheet pressure and leave more capacity to support operations while management works toward improving profitability and cash generation.
Negative Factors
Declining revenueFalling revenue and a multi-year pattern of shrinking sales indicate that demand and commercial momentum remain unresolved. Continued top-line contraction can reduce operating leverage, limit reinvestment capacity, and make it harder for the company to reach sustainable profitability.

Charlotte's Web Holdings (CWEB) vs. iShares MSCI Canada ETF (EWC)

-200%0%200%400%600%800%1000%TSE:CWEB+88.89%EWC+20.47%Dec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
Market Cap
CAD 48.81M
Dividend Yield
―
Average Volume (3M)
52.55K
Price to Earnings (P/E)
-0.8
Beta (1Y)
1.18
Revenue Growth
-7.77%
EPS Growth
-52.56%
Country
Canada
Employees
112
Sector
Healthcare
Sector Strength
51
Industry
Drug Manufacturers - Specialty & Generic

Charlotte's Web Holdings Business Overview & Revenue Model

Company Description

Charlotte's Web Holdings, Inc. operates comprehensively in the hemp-derived cannabidiol (CBD) wellness market, covering cultivation, manufacturing, marketing, and sales. The company's extensive product line features liquid hemp extract oil tinctures,...

Charlotte's Web Holdings Earnings Call Summary

Earnings Call Date:Mar 31, 2026(Q4-2025)|% Change Since:-71.35%|Next Earnings Date:May 13, 2026
Earnings Call SentimentPositive

The call emphasized several transformative, strategic positives — a balance-sheet‑clearing BAT transaction with fresh capital, federal Medicare pilot eligibility (Substance Access BEI) allowing full‑spectrum CBD access into accountable care channels, meaningful clinical progress via DeFloria's Phase II clearance, substantial cost reductions (SG&A down ~21% YoY and ~44.5% over two years), and improved operating loss and margin runways. These positives are tempered by ongoing regulatory uncertainty (including a potential November 2026 hemp provision that could severely constrain the market), persistent net losses (Q4 net loss $11.4M; full‑year net loss ~$29.7M), a nonrecurring $1.3M inventory charge that depressed reported margins, and liquidity dependence on shareholder approval of the BAT transaction. On balance, the call conveyed constructive momentum and multiple high‑impact catalysts that materially improve the company’s strategic position, while acknowledging meaningful near‑term risks and the gradual timing of revenue realization from Medicare pilots.

Positive Updates

BAT Transaction: Balance Sheet Cleanup and Fresh Capital
British American Tobacco conversion of a $55M convertible debenture plus ~$10M accrued interest into common shares at CAD 0.94 and a new $10M private placement (total BAT commitment ~ $75M). Eliminates largest liability, removes ~5% annual interest (~$3M avoided per year for next ~3.5 years) and prevents an estimated additional ~$12M in aggregate interest to maturity; expected pro forma BAT ownership ~40% (49% cap in agreement). Adds $10M in fresh working capital and materially simplifies capital structure.

Negative Updates

Continued Net Losses and Q4 Worsening of Net Loss
Q4 net loss was $11.4M ($0.07 per share) vs. a net loss of $3.4M ($0.02 per share) in Q4 2024. Full year net loss was $29.7M ($0.19) vs. $29.8M ($0.19) in 2024. Company remains loss-making despite operating loss improvement.

Company Guidance

The company guided that it is positioned for gradual, scalable profitability supported by specific financial and operational metrics: Q4 revenue was $13.3M (up 15.8% sequentially and 4.7% YoY from $12.7M) with $5.0M gross profit and a 37.5% gross margin (impacted by a nonrecurring $1.3M inventory charge that reduced margin by ~10 ppt; in‑house manufacturing added ~400 bps), and management expects gross margin to normalize toward the historical ~50% range; Q4 SG&A was $10.6M, full‑year SG&A was $42.0M (down 21.2% YoY and down ~$33.6M or 44.5% over two years) with normalized quarterly SG&A expected to be ~$10–11M (excluding Medicare launch spend); net loss was $11.4M ($0.07/sh) in Q4 and $29.7M ($0.19/sh) for the year while operating loss improved >36% to $20.3M (from $32M); cash used in operations improved to $1.9M in Q4 (vs. $5.5M prior quarter), cash and working capital were $8.0M and $21.7M at year‑end (not reflecting a $10M BAT private placement), and the BAT transaction converts a $55M debenture plus ~$10M accrued interest at CAD $0.94/sh, eliminates ~ $3M/year interest for ~3.5 years (avoiding up to ~$12M to maturity), adds $10M fresh capital (≈5% post‑conversion dilution), brings BAT’s commitment to ≈$75M and ~40% ownership (with a 49% cap), while strategic program guidance includes CMMI pilot eligibility (products with up to 3 mg THC/serving) with an initial ~2M beneficiary cohort and up to $500/beneficiary/year available to ACOs, and DeFloria (≈1/3 owned) expected to begin Phase II midyear.

Charlotte's Web Holdings Financial Statement Overview

Summary

Financial performance is weak. Revenue is declining (TTM -4.6%) and the company is deeply unprofitable with a net margin of -73.4%. Operating and free cash flows are persistently negative, indicating a critical inability to self-fund. The only positive is a recently strengthened balance sheet with minimal debt, but this is overshadowed by the ongoing cash burn.

Income Statement

15Very Negative

Balance Sheet

45Neutral

Cash Flow

18Very Negative
Financial statement breakdown
BreakdownTTMMar 2026Dec 2024Dec 2023Dec 2022Dec 2021
Income Statement
Total Revenue46.38M49.90M49.67M63.16M74.14M96.09M
Gross Profit18.40M21.70M21.26M35.57M19.41M48.59M
EBITDA-12.88M-13.95M-22.01M-24.90M-41.68M-38.03M
Net Income-34.16M-29.74M-29.85M-23.80M-59.31M-137.72M
Balance Sheet
Total Assets76.26M75.27M113.44M152.55M187.64M171.51M
Cash, Cash Equivalents and Short-Term Investments13.97M8.04M22.62M48.99M69.28M20.42M
Total Debt13.03M64.45M59.34M60.44M57.63M22.60M
Total Liabilities20.29M77.31M86.36M96.99M110.14M41.07M
Stockholders Equity55.97M-2.04M27.09M55.56M77.50M130.45M
Cash Flow
Free Cash Flow-10.92M-14.67M-25.11M-19.08M-5.58M-34.48M
Operating Cash Flow-10.98M-14.12M-21.26M-15.39M-5.32M-29.56M
Investing Cash Flow83.06K-412.00K-3.80M-3.51M395.00K-11.79M
Financing Cash Flow9.38M-50.00K-145.00K-251.00K52.39M8.04M

Charlotte's Web Holdings Technical Analysis

Technical Analysis SentimentNegative
Last Price0.26

Price Trends

50DMA0.37Negative
100DMA0.38Negative
200DMA0.59Negative

Market Momentum

MACD-0.03Positive
RSI35.22Neutral
STOCH23.28Neutral

Evaluating momentum and price trends is crucial in stock analysis to make informed investment decisions. For TSE:CWEB, the sentiment is Negative. The current price of 0.26 is below the 20-day moving average (MA) of 0.31, below the 50-day MA of 0.37, and below the 200-day MA of 0.59, indicating a bearish trend. The MACD of -0.03 indicates Positive momentum. The RSI at 35.22 is Neutral, neither overbought nor oversold. The STOCH value of 23.28 is Neutral, not indicating any strong overbought or oversold conditions. Overall, these indicators collectively point to a Negative sentiment for TSE:CWEB.

Charlotte's Web Holdings Risk Analysis

Charlotte's Web Holdings disclosed 86 risk factors in its most recent earnings report. Charlotte's Web Holdings reported the most risks in the "Finance & Corporate" category.

Higher RiskSector Avg.Lower RiskFinance & CorporateTech & InnovationLegal & RegulatoryProductionAbility to SellMacro & Political
Finance & Corporate - Financial and accounting risks. Risks related to the execution of corporate activity and strategy

Latest Risks Added

0 New Risks

Charlotte's Web Holdings Peers Comparison

Overall Rating

UnderperformOutperform
Sector (51)

Financial Indicators

TSE:CWEB against its peers
NameOverall RatingMarket CapP/E RatioROEDividend YieldRevenue GrowthEPS Growth
TSE:LABSTSE:LABS53NeutralCAD 25.63M-5.60-13.79%―-6.74%43.54%
TSE:CURATSE:CURA52NeutralCAD 3.37B-245.71-1.47%―5.01%92.12%
Sector *51Neutral$7.86B-0.30-43.30%2.27%22.53%-2.21%
TSE:WEEDTSE:WEED46NeutralCAD 377.68M-1.32-29.85%―10.67%74.14%
TSE:LEEFTSE:LEEF45NeutralCAD 76.39M-1.77206.83%―――
TSE:AVCNTSE:AVCN44NeutralCAD 13.44M-2.62-108.44%―-0.23%-142.54%
TSE:CWEBTSE:CWEB32UnderperformCAD 65.11M-0.85-285.96%―-7.77%-52.56%

* Healthcare Sector Average

Performance Comparison

0%250%500%750%TSE:CWEBTSE:WEEDTSE:LEEFTSE:CURATSE:LABSTSE:AVCNDec '25Jan '26Feb '26Mar '26Apr '26May '26Jun '26Jul '26Aug '26Sep '26Oct '26Nov '26
TSE:CWEB and its peers over the selected period
Show on chartTickerCompany NamePriceChange% Change
TSE:CWEBCharlotte's Web Holdings (OTC)0.260.13104.00%
TSE:WEEDCanopy Growth0.88-0.63-41.72%
TSE:LEEFLeef Brands Inc0.250.012.04%
TSE:CURACuraleaf Holdings (Otc)12.694.0246.37%
TSE:LABSMedipharm Labs (Otc)0.07-0.01-7.14%
TSE:AVCNAvicanna Inc0.09-0.17-66.67%

Charlotte's Web Holdings Corporate Events

Business Operations and StrategyRegulatory Filings and Compliance

Charlotte’s Web and Edibles.com Forge Partnership as U.S. Weighs Hemp Ban

Positive
Aug 25, 2026

Charlotte’s Web Holdings has entered a strategic partnership with hemp retailer and marketplace Edibles.com to expand consumer access to its best‑selling non‑intoxicating hemp wellness products through Edibles.com’s online platform and flagship Atlan...

Business Operations and StrategyProduct-Related Announcements

Charlotte’s Web Launches Route CBD Tour to Aid Californians Cut Off From Full-Spectrum Hemp

Positive
Aug 19, 2026

Charlotte’s Web Holdings, Inc., a leading hemp extract wellness company, has built its reputation around full-spectrum hemp CBD products and a mission-driven approach that blends scientific research, consumer education, and policy advocacy. The firm...

Business Operations and StrategyFinancial DisclosuresRegulatory Filings and Compliance

Charlotte’s Web Strengthens Balance Sheet as U.S. Hemp Policy Shifts Toward Full-Spectrum CBD

Positive
Aug 13, 2026

Charlotte’s Web reported that its second quarter of 2026 marked a fundamental strengthening of its finances, as it completed a recapitalization, converted debentures to eliminate its largest liability, restored positive shareholders’ equity, and expa...

Glossary
BuyA stock rated as a "Buy" is expected to perform better than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock is likely to deliver higher returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
HoldA stock rated as a "Hold" is expected to perform in line with the overall market or a specific benchmark. This rating indicates that the stock is neither particularly compelling nor unfavorable for investment. Note: This is not investment advice; please consult a financial advisor before making investment decisions.
SellA stock rated as a "Sell" is expected to perform worse than the overall market or a specific benchmark over the near-to-medium term. This rating suggests the stock may deliver lower returns compared to other stocks in the same sector or market index. Note: This is not investment advice; please consult a financial advisor before making investment decisions.

Disclaimer

This AI Analyst Stock Report is automatically generated by our AI systems using advanced algorithms and publicly available financial, technical, and market data. While the information provided aims to be accurate and insightful, it is intended for informational purposes only and should not be considered financial advice. Any content created by an AI (Artificial Intelligence) system may contain inaccuracies and/or contain errors. Investing in stocks carries inherent risks, and past performance is not indicative of future results. This report does not account for your personal financial circumstances, objectives, or risk tolerance. Always conduct your own research or consult with a qualified financial advisor before making investment decisions. The analysis and recommendations provided are based on historical and current data and may not fully reflect future market conditions or unexpected developments. Neither the creators of this report nor its affiliated entities guarantee the accuracy, completeness, or reliability of the information presented. Use this report at your own discretion and risk.

Date of analysis: Nov 11, 2026