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Stone Fox Capital Advisors is a registered investment advisor founded in 2010. The firm offers portfolio management with a focus on opportunistic stocks providing secular growth trends at an affordable value. An emphasis is placed on fundamental analysis though charts are used for timing entry and exit points. Mark Holder graduated from the University of Tulsa with a double major in accounting & finance. Mark has his Series 65 and is also a CPA. Invest with Stone Fox Capital's model Net Payout Yields portfolio on IB Asset Management as he makes real time trades. The site allows followers to duplicate the model portfolio in their own brokerage accounts. You can find the portfolio and more details here: Follow Mark on twitter: @stonefoxcapital

Can Marijuana Stock Charlotte’s Web (CWBHF) Go Even Higher?

Charlotte’s Web Holdings (CWBHF) continued a flood of Q4 results for cannabis stocks in the last week. The company is generating substantial growth from a widely recognized CBD brand in the American market where hemp production is suddenly legal at the Federal level, pushing the stock to new highs near $21.

Excellent Results

While the Canadian cannabis companies rushed into legalized adult-use cannabis sales in the last quarter to boost sales, some American industry players have remained more focused on consistent growth in existing end markets. Companies like CWB have expansion plans based on additional states removing restrictions on selling cannabis to consumers.

For Q4, the Boulder, CO company generated 71% growth to reach $21.5 million in quarterly revenues and annualized revenues of $86.0 million. Gross margin was an impressive 76% of revenues as CWB is positioned for higher margin CBD products versus selling the basic hemp commodity.

CWB grew retail doors by 80% in 2018 to end the year with 3,680 retail doors for their CBD products. The company recently passed 4,000 doors and maybe more impressively, 57% of revenues came from the ecommerce channel removing the company from being reliant on retailers to sell their products.

CWB expanded hemp production 10 fold in 2018 to 675,000 pounds providing double the hemp output originally forecast. The company now has plenty of inventory for further growth in 2019 and into 2020. With an inventory balance of about $24.0 million at the end of 2018, CWB has the product for $100.0 million in sales based on Q4 gross margins.

Uplist To Major U.S. Exchange

A major catalyst for the stock will be an eventual uplisting of the stock to a major U.S exchange. The company had to list on the Canadian Stock Exchange due to original restrictions on hemp business in the U.S.

The recent passing of the 2018 Farm Bill that removed hemp from the Federal CSA list opens the door of a company like CWB to uplist to either the NYSE or Nasdaq. For now though, the company hasn’t announced any specific plans and the stock is already trading at the highs.

The stock has a $1.8 billion market cap so CWB isn’t completely under the radar to U.S. investors. The company expects revenues to reach $150 million in 2019. The stock isn’t cheap on traditional P/S multiples, but the market will provide CWB a higher multiple due to its sole focus on CBD wellness products that are likely to maintain higher margins than recreational weed.


The key investor takeaway is that Charlotte’s Web has already seen a big pop from the company generating strong results from high-margin CBD products. An uplisting of the stock to a major U.S. exchange is the next catalyst for the stock.  The stock isn’t cheap, but CWB likely heads even higher being a leader in a high-margin product that just became nationally legal.

To read more on the nitty gritty of what’s going on in the rising cannabis industry, click here.


Disclosure: No position.

Disclaimer: The information contained herein is for informational purposes only. Nothing in this article should be taken as a solicitation to purchase or sell securities. Before buying or selling any stock you should do your own research and reach your own conclusion or consult a financial advisor. Investing includes risks, including loss of principal.


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