Charlotte’s Web Holdings

It has been a busy, yet quiet week for the hemp-based CBD oil producer Charlotte’s Web Holdings, Inc. On August 30, 2018, the company reported the successful closing of its previously announced initial public offering (IPO), as well as a secondary offering of its common shares.

Charlotte’s Web Holdings is the company behind the CBD oil brand, CW Hemp. Named after Charlotte Figi, a young girl who suffered hundreds of grand mal seizures every day before being treated with CBD oil, the brand became world famous after being featured on the CNN Special “Weed,” hosted by Dr. Sanjay Gupta.

Charlotte’s Web sold 13,312,150 common shares of the company for a total of C$93,185,050. Additionally, shareholders sold 3,132,850 commons shares of the company as part of a secondary offering and an over-allotment option, for a total of C$21,929,950; although the company did not receive any of the proceeds from the secondary offering or the over-allotment option. Taking charge of the IPO was a syndicate of underwriters led by Canaccord Genuity Corp.

The company also plans on going through with a previously announced non-brokered private placement of up to 875,137 shares, at a price of C$7.00 per share, which will be subject to a four month hold period in keeping with Canadian securities laws.

On the same day that Charlotte’s Web closed their IPO, the company began trading on the Canadian Securities Exchange (CSE) under the symbol “CWEB.” Despite being one of the largest hemp companies in the world, there has been little fanfare in response to closing the largest IPO in the history of hemp.

Nevertheless, investors quickly warmed up to the newly public company; attracting investment from large financial firms such as Barclays as well as buy-sell trading from the IPO’s lead underwriter, Canaccord. Shares of Charlotte’s Web Holdings were initially offered at C$7.00 per share, but by the end of its first day of trading the company’s stock price soared to C$9.70 per share.

At present, the stock is currently trading at C$11.56 per share.

Although other companies in the hemp and cannabis industry have raised significant sums of money through public offerings, what distinguishes this IPO from others is Charlotte Web’s strong revenues compared to others in the hemp industry.

Over the last several years, the company has experienced solid sales growth every quarter, and in 2017, reported $40 million in revenue. Hemp Business Journal projects that the company’s revenue will grow to approximately $72.3 million in 2018.

The company’s stock is trading on the Canadian Securities Exchange (CSE). As such, investors are not able to buy shares of Charlotte’s Web through American brokerage firms such as TDAmeritrade, Etrade or Fidelity. However, there are plenty of Canadian firms through which interested investors can purchase shares.

With strong sales, Charlotte’s Web is already a powerful force in the hemp industry; and now that the company has just secured nearly C$100 million, that dominance only looks to be getting even stronger.

IPO proceeds are expected to be used on international expansion, distribution and acquisition of strategic and complimentary companies, as reported by the company.

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