LOUISVILLE, Colo. – Charlotte’s Web Holdings Inc., a botanical wellness innovation company and the market leader in cannabidiol (CBD) hemp extract wellness products, reported results for the quarter ended June 30, 2025.
“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 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 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.
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
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 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 Profit1 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.
Total selling, general, and administrative (“SG&A”) expenses were $10.1 million for the quarter, a 31.7% improvement from $14.7 million in Q2 2024. The 31.7% decrease was primarily attributable to a decrease in amortization expense of $1.9 million related to the termination of the MLB Promotional Rights Agreement and a decrease in personnel costs between the comparable periods. This performance demonstrates the effectiveness of the comprehensive cost optimization strategy initiated in 2024 to better align operating expenses with revenue. As part of the ongoing commitment to disciplined cost management and operational efficiency, subsequent to the close of the second quarter of 2025, the Company has implemented additional expense reduction measures. Including cost savings from in-house manufacturing, these initiatives are expected to reduce the Company’s annualized costs by approximately $9 million in 2026, supporting Charlotte’s Web’s trajectory toward positive cash flow.
Total net loss for Q2 2025 was $6.3 million, or $(0.04) per share, compared to a net loss of $11.1 million, or $(0.07) per share, in Q2 2024. Adjusted EBITDA1 for the quarter was $(3.6) million, a 30.8% improvement versus $(5.2) million in Q2 2024, supporting continued progress toward profitability.
Cash and working capital as of June 30, 2025, were $15.3 million and $29.4 million, respectively.
“Q2 demonstrated continued year-over-year progress in our financial transformation,” said Ms. Lind. “For the first half of 2025, we’ve reduced our cash burn by 52.0% year-over-year while returning to growth. Our cash and working capital has us well-positioned to complete our return to positive cash flow. The combination of our dramatically lower operating expense base, expanding gross margins as we scale in-house production, and modest revenue growth requirements creates multiple paths to positive cash flow.”
About Charlotte’s Web Holdings Inc.
Charlotte’s Web Holdings Inc., a Certified B Corporation headquartered in Louisville, Colorado, is a botanical wellness innovation company and a market leader in hemp extract wellness that includes Charlotte’s Web whole-plant full-spectrum CBD extracts as well as broad-spectrum CBD and cannabinoid isolates. The Company’s hemp extracts have naturally occurring botanical compounds including cannabidiol (“CBD”), CBN, CBC, CBG, THC, terpenes, flavonoids, and other beneficial compounds. Charlotte’s Web product categories include CBD oil tinctures (liquid products), CBD gummies (sleep, calming, exercise recovery, immunity), CBN gummies, hemp-derived THC microdose gummies, functional mushroom gummies, CBD capsules, CBD topical creams, and lotions, as well as CBD pet products for dogs. Through its substantially vertically integrated business model, Charlotte’s Web maintains stringent control over product quality and consistency with analytic testing from soil to shelf for quality assurance. Charlotte’s Web products are distributed to retailers and healthcare practitioners throughout the U.S.A. and are available online through the Company’s website. Shares of Charlotte’s Web trade on the Toronto Stock Exchange (TSX) under the symbol “CWEB” and are quoted in U.S. Dollars in the United States on the OTC under the symbol “CWBHF”.
