Is Charlotte’s Web Hot Marijuana Stock Still a Buy?

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Unlike high THC marijuana products that get a user high, products containing apparently medicinal cannabidiol (CBD) are largely legal in the United States. Charlotte Web Holdings (OTC: CWBHF), which has been a more popular investment than many of its peers.

Is the company’s optimism justified, however? Eric Volkman, longtime Motley Fool collaborator and Corinne Cardina, head of the health and cannabis office, are investigating this issue in this segment of Motley Fool Live, registered on February 5.

Corinne Cardine: OK. KA asks, “Any updates on Charlotte’s web?”

Eric Volkman: Charlotte’s canvas? There aren’t any recent events or big recent news that I have in mind for Charlotte’s Web. They are fine. Charlotte’s Web, for the uninitiated, it’s a CBD business. They focus exclusively on CBD products.

Right now, I don’t think I would be that excited. The history of CBD, it has sort of been exploited. CBD has been legal for a few years in the United States. It’s having a moment. You have celebrities coming in. I feel like the trend is fading a bit. There seems to be less hype.

I live in California. So a lot of these health and wellness trends, these cutting edge health and wellness things, tend to be predicted here first and they tend to fade earlier than in. other places. I have the impression that it is talked about less, less publicized. I don’t see a very big trail for CBD.

Plus, with Charlotte’s Web, I don’t see them straying too far from that core skill, it’s not a stock that excites me that much, to be honest.

Cardine: Yes, they don’t have a lot of optionality. It’s basically packaged CBD, sold in chain grocery stores. The stock has significantly outperformed the entire marijuana industry. That’s down almost 32% if you look at last year compared to what we talked about, Horizons [Marijuana Life Sciences] AND F (OTC: HMLSF), this is up 53%.

I understand why people want to know, if you own the stock should you leave it there. What do you think, Eric, would you buy, sell or keep?

Volkman: Honestly, I would be a seller. I think there are a lot more exciting games and more opportunities in more pure marijuana companies. Let’s also not forget that with CBD there are a lot of players in this game. There are a lot of companies fighting for storage space. You’re going to see a consolidation at some point, it’s going to be bigger companies rushing in and buying brands.

Cardine: It has become very commonplace no matter how you pronounce that word. [laughs] Nobody pays that for the brand name.

Volkman: Yes. A lot of people do, and also keep in mind that some of the larger, more pure -bred marijuana companies have taken the plunge. We were just talking about Canopy growth (NASDAQ: CGC) a moment ago. They have partnered with Martha Stewart to create a line of CBD products. Bless her heart, Martha, once she gets involved in a market, you know it settles, it matures.

Cardine: She’s got the Midas touch for sure, the Martha touch.

This article represents the opinion of the author, who may disagree with the “official” recommendation position of a premium Motley Fool consulting service. We are heterogeneous! Questioning an investment thesis – even one of our own – helps us all to think critically about investing and make decisions that help us become smarter, happier, and richer.


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