In the 52 weeks ending July 16, sales dropped 12.7% from approximately $101 million to $88 million, according to retail data from SPINS. The year prior showed a decline of 16.4% from about $121 million to $101 million.
This figure only tells part of the story, however, since it includes all categories touched by CBD, from dietary supplements to food and beverage, personal care and beauty, and pets. For dietary supplement products only*, the total figures show a decline in sales from approximately $52.3 million in mid-2022 to just under $42.6 million 12 months later.
That said, not all loss is created equally. cbdMD did report on its earnings report a decline of $1.7 million on net sales of $6.1 million for its third quarter, a dramatic improvement compared to a $31.6 million loss on sales of $8.6 million in the third quarter of 2022.
Ronan Kennedy, cbdMD’s interim CEO and CFO, said he’s enthused by the dedication of the company’s team.
“We have had a dynamic and eventful quarter, marked by significant capital markets activity, a strategic re-platforming of our website, and dedicated efforts in new product innovation,” Kennedy said. “I am tremendously proud of our team's unwavering focus, which allowed us to sustain our revenue base, achieve progress in our adjusted EBITDA, and establish a foundation for future enhancements. We remain highly optimistic about some of the exciting opportunities in our pipeline.”
However, the company still described its net sales as “essentially flat.” Also, gross profit was down approximately $2 million between June 2022 and June 2023.
The company recently changed its e-commerce platform to Shopify with hopes the platform would make cbdMD nimbler and lower its operating costs.
E-commerce proved a challenge for Charlotte’s Web, as that company reported those sales in its second quarter were negatively impacted by aggressive competitive online pricing and lower traffic to the company’s webstore. The company said it holds the number one market share position across e-commerce within the CBD industry. Net revenue through the webstore was $10.7 million. Gross profit was $8.9 million, or 55.7% of revenue, as compared to gross profit of $9.3 million, or 49.4% of revenue, in the second quarter of 2022.
CV Sciences told a different story for e-commerce sales as the company experienced continued progress in that channel with an 8% increase in online subscription revenue during its second quarter. CV Sciences gross profit was up by essentially half a million dollars for Q2 2023, compared to Q2 2022. Compared to the first six months of 2022, gross profit was up over $1 million.
"We continue to increase our distribution network in the natural product retail channel. Our flagship PlusCBD brand continues to improve its number one position and gain market share in the natural product channel, and, with our portfolio of high-quality and proven products, we believe the company is positioned for future growth," said Joseph Dowling, CEO of CV Sciences.
"Our second quarter gross margins exceeded our expectations, and we are encouraged by improvements we have made to reduce operating expenses.”
Officials at top CBD companies are hoping recent legislative steps will increase consumer confidence, and ultimately sales.
The U.S. Food and Drug Administration committed to work quickly with Congress to resolve a regulatory pathway for hemp-derived CBD. The Hemp Derived Consumer Protection and Market Stabilization Act of 2023 (bill H.R. 1629) aims to regulate hemp extract products under the dietary supplement regulatory framework.
"Charlotte's Web is pleased to be a part of the influential collaboration among consumers and industry stakeholders under a united strategy that is proactively engaged with Congress to support the regulation of hemp CBD as a dietary supplement," said Jared Stanley, the company’s COO.
Charlotte's Web, cbdMD, and industry peers have compiled and shared safety and toxicology data with Congress to address concerns raised by the FDA.
In a recent interview with NutraIngredients-USA, Dr Sibyl Swift, cbdMD’s Chief Science Officer and VP of Regulatory Affairs, said that the recent congressional hearing about CBD and subsequent ‘historic’ bicameral Request for Information (RFI) shows that hemp-derived CBD for use in dietary supplements has finally got the attention of Congress.
* Includes CBD supplements and therapeutic oils, antioxidant supplements, protein supplements and meal replacements, condition specific supplement formulas, vitamins and minerals, and performance nutrition.