Second Consecutive Quarter of Year-over-Year Revenue Growth Supported by New Product Innovations and Omnichannel Expansion

LOUISVILLE, Colo., Aug. 13, 2025 /PRNewswire/ - (TSX: CWEB) (OTC: CWBHF), Charlotte's Web Holdings, Inc. ("Charlotte's Web" or the "Company"), a botanical wellness innovation company and the market leader in cannabidiol $(CBD)$ hemp extract wellness products, today announced results for the quarter ended June 30, 2025, reporting its second consecutive year-over-year revenue increase since 2021, building on the sequential quarterly growth trend achieved in 2024. All amounts are expressed in U.S. dollars.

"Q2 marked another step forward in our turnaround as Charlotte's Web again delivered both sequential and year-over-year growth, demonstrating continued progress in revenue and strategic execution across omnichannel, innovation, and cost structure," said Bill Morachnick, Chief Executive Officer. "We successfully commenced in-house production of our new Brightside$(TM)$ gummies and extended our omnichannel reach while achieving early success with our new product categories. With operational momentum building and strong early traction across new product categories, we remain confident in our ability to execute and deliver on our 2025 outlook."

Operational improvements initiated in 2024 have continued to reduce costs year-over-year. In-house gummy production expanded in Q2, with Brightside(TM) fully internalized and additional gummy SKUs transitioning in the second half. The Company anticipates approximately $3 million in annualized cost savings from these internalization efforts and is evaluating further transitions in topical production for 2026.

Erika Lind, Chief Financial Officer, added, "Our revenue growth was accompanied by rigorous SG&A discipline that reduced second quarter expenses 31.7% year-over-year. Post-quarter, we've implemented additional measures to reduce our annualized run rate by more than $6 million in 2026. Combined with our transition to in-house manufacturing, which will benefit profit margins over time, this disciplined cost management and modest revenue growth positions us to approach positive cash flow."

Second Quarter Business Review

Omnichannel Growth and Digital Activation

Charlotte's Web's upgraded digital platform and expanded marketplace footprint -- including TikTok Shop, Amazon, Walmart.com, and Faire -- continue to contribute incremental sales and brand exposure. With mushroom wellness gummies now available across all major platforms, digital revenue contribution has diversified further, balancing direct-to-consumer and omnichannel exposure.

Brightside(TM) THC Gummies and Innovation Demand

Launched during the second quarter, Brightside(TM), the Company's hemp-derived THC gummy line using patented TiME INFUSION$(R)$ technology, demonstrated rapid uptake and product velocity. Multiple SKUs sold out over the Memorial Day weekend, exceeding internal forecasts and requiring expedited restocking. The Company now produces Brightside gummies entirely in-house, providing improved margins, accelerated new product timelines, and enhanced quality control.

Botanical Product Diversification

Charlotte's Web continued to expand its botanical wellness portfolio beyond traditional CBD offerings in the second quarter, advancing into adjacent high-growth categories. Building on the success of the Company's CBN Stay Sleep Gummies--now its second-best-selling gummy product--Charlotte's Web introduced CBG Focus & Attention Gummies, addressing the growing U.S. nootropics market with a plant-based alternative to synthetic nootropics. The U.S. CBG category has posted significant year-over-year growth, reflecting rising consumer demand for natural cognitive enhancement. The Company's CBG launch demonstrates the Company's ability to leverage its botanical expertise to capture share in high-growth cannabinoid wellness segments and extend its leadership beyond traditional CBD.

Extending this innovation momentum beyond cannabinoids, the Company's functional mushroom gummies portfolio--introduced in Q4 2024--features formulations for Focus, Stress Support, Energy, and Muscle Recovery. Crafted with premium botanical ingredients such as Lion's Mane, Reishi, Cordyceps, and Turkey Tail, these products are developed with the same commitment to quality and efficacy that defines Charlotte's Web's hemp portfolio. This expansion strengthens the Company's position in the high-growth functional mushroom category while further diversifying revenue streams beyond hemp wellness.

Regulatory Progress

Charlotte's Web continues to work closely with industry coalitions to advance comprehensive federal regulation of hemp-derived products. The Company believes the regulatory landscape is evolving more favorably with recent developments in Washington that signal renewed momentum for establishing clear regulatory pathways for CBD and other hemp extracts. With key Congressional hemp champions now in leadership positions, both House and Senate leaders have signaled their intention to introduce comprehensive legislation providing FDA authority to regulate CBD products as dietary supplements and food ingredients. The Company expects a regulated market will consolidate the industry in favor of established, quality-focused brands with proven track records. The U.S. CBD market has potential to accelerate under a clear federal framework. Charlotte's Web's history of compliance, quality standards, and brand trust positions the Company to capture disproportionate value as regulations emerge.

DeFloria Clinical Progress

DeFloria, Inc.--a collaboration between Charlotte's Web, Ajna BioSciences, and with initial funding from a division of British American Tobacco--has commenced FDA-cleared Phase 2 clinical trials for AJA001 Oral Solution to treat irritability associated with autism spectrum disorder ("ASD"). Charlotte's Web retains exclusive manufacturing rights for commercial supply of this botanical drug candidate, representing a potential long-term revenue opportunity in the multi-billion-dollar ASD treatment market.

Second Quarter 2025 Financial Review

The following table sets forth selected financial information for the periods indicated:

 
                                                     June 30 
U.S. $ millions, except per share 
data                                               2025                 2024 
-----------------------------------  ------------------  ------------------- 
Revenue                               $            12.8   $             12.3 
Cost of goods sold                                  6.8                  9.7 
                                     ------------------  ------------------- 
Gross profit                                        6.0                  2.6 
 
Selling, general, and 
 administrative expenses                           10.1                 14.7 
                                     ------------------  ------------------- 
Operating loss                                    (4.1)               (12.1) 
 
Change in fair value of financial 
 instruments                                      (1.5)                  1.1 
Other income (expense), net                       (0.7)                    - 
Net Loss                             $            (6.3)   $           (11.0) 
                                     ==================  =================== 
 
EPS basic and diluted                 $          (0.04)   $           (0.07) 
                                     ------------------  ------------------- 
Adjusted EBITDA (1)                  $            (3.6)  $             (5.2) 
                                     ------------------  ------------------- 
 
Assets: 
Cash and cash equivalents             $            15.3 
Total assets                          $            88.0 
                                     ------------------ 
Liabilities: 
Long-term liabilities                 $            62.7 
Total liabilities                     $            73.0 
                                     ------------------ 
 

Quarterly revenue trend:

 
                    Q1      Q2      Q3      Q4      Q1       Q2 
U.S. $ millions    2024    2024    2024    2024    2025     2025 
                  ------  ------  ------  ------  ------  ------- 
Total revenue     $ 12.1  $ 12.3  $ 12.6  $ 12.7  $ 12.3   $ 12.8 
----------------  ------  ------  ------  ------  ------  ------- 
 

Consolidated net revenue for Q2 2025 was $12.8 million, a year-over-year increase of 4.2% from $12.3 million in Q2 2024. Growth was underpinned by consumer demand for Charlotte's Web's diversified botanical wellness innovations, including the Company's expanding functional mushroom gummies portfolio, newly launched CBG Focus & Attention Gummies targeting the growing minor cannabinoid segment, and the new Brightside(TM) precision low-dose hemp THC gummy collection.

Gross profit was $6.0 million, or 46.8% of revenue in Q2 2025, compared to $2.6 million, or 21.0% of revenue in Q2 2024, which included a $3.8 million non-cash inventory provision related to a one-time wholesale hemp biomass transaction. Excluding inventory provisions, Q2 2024 Adjusted Gross Profit(1) was $6.4 million, or 52.2% of revenue. Current quarter margin performance reflected insourcing startup costs associated with gummy production, certain zero-margin DeFloria extract sales to support its Phase 2 clinical trials (reducing overall gross margin by approximately three percentage points) and promotional activities during the Memorial Day sales campaign.

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August 13, 2025 07:07 ET (11:07 GMT)