Declining CBD product sales continued in the third quarter of this year, based on available financial results from publicly traded companies analyzed by Hemp Benchmarks. They were joined in Q3 by a sharp sequential downturn in revenues reported by a public company that sells various intoxicating hemp-THC products. Prior to Q2 of this year, the company in question, LFTD Partners, had seen meteoric sales growth, which appears to have been cooled by a combination of heightened competition and falling prices.
While cbdMD, one of the companies tracked by Hemp Benchmarks, did not report their Q3 2022 results in time for publication, filings from Charlotte’s Web and CV Sciences both indicate that the slowdown in CBD product sales that commenced in 2021 is intensifying. As detailed just below, both companies reported proportionally similar declines in revenue, including year-on-year drops of nearly 30%.
Charlotte’s Web (CW) reported $17 million in revenue for Q3 2022, down 28% year-on-year and down 10% from the previous quarter. The company’s press release notes, “The decrease was primarily due to lower comparable customer shipments, ongoing consumer shifts from tinctures to lower-priced gummies and formats, and lower relative traffic to the Company’s e-commerce store.”
Both retail and wholesale sales declined for CW in Q3. The press statement provides the following details: “Direct-to-consumer e-commerce net revenue was $11.8 million, a decrease of $3.4 million or 22.5% due to lower year-over-year traffic.” Meanwhile, “Business-to-business net revenue was $5.3 million, a decrease of $3.3 million, or 38.1%, lower year-over-year primarily due to lower comparable shipments to some of the Company’s largest retail customers.”
CV Sciences saw a 27% year-on-year decrease in sales in Q3, when revenue of $3.75 million was also down over 8% from the prior period. The company’s most recent earnings report echoed its Q2 press release in stating, “The decline is primarily due to lower sales in the retail channel.” Additionally, unit sales were down 37% year-on-year, with the downturn “partially offset by increases in average sales price per unit.”
In Hemp Benchmarks’ most recent coverage of LFTD Partners Inc., a publicly-traded company that manufactures and sells hemp-derived THC and other products, we noted that Q2 2022 saw the company report its first sequential decline in revenue. This despite developments occurring in the same period that made the legality of hemp-derived THC products appear increasingly secure.
Q3 2022 saw LFTD report its second consecutive sequential revenue decrease. Q3 sales of $11.24 million were down 33% from the prior quarter, but up 27% year-on-year. Still, Q3 2022’s revenues represent the lowest quarterly sales total since Q3 2021. We pointed out previously that increased competition, spurred by the lack of substantive enforcement against makers and sellers of hemp-THC products, is likely taking a bite out of LFTD’s sales.
Furthermore, Hemp Benchmarks has over the course of the past year reported on the consistent decline in wholesale prices for delta-8 and delta-10 THC distillate. Lower wholesale prices have likely translated into lower retail prices as well, contributing to the downturn in sales revenue.