Please ensure Javascript is enabled for purposes of website accessibility

Why Charlotte's Web Stock Fell by Almost 5% on Monday

By Eric Volkman - Updated Mar 8, 2021 at 6:07PM

You’re reading a free article with opinions that may differ from The Motley Fool’s Premium Investing Services. Become a Motley Fool member today to get instant access to our top analyst recommendations, in-depth research, investing resources, and more. Learn More

A new product rollout leaves investors cold.

What happened

Cannabidiol (CBD) specialist Charlotte's Web Holdings (CWBHF -5.24%) wasn't a special stock on Monday. It closed nearly 5% lower on the day, despite announcing a new product targeted at frontline healthcare workers.

So what

The new product is a CBD oil tincture (a tincture is the result of infusing something in a liquid). It is available in 10- or 30-millimeter sizes, each containing 25 milligrams of CBD. Suggested retail prices are $24.99 and $59.99, respectively.

CBD purportedly has medicinal and restorative properties. In contrast to tetrahydrocannabinol (THC) from marijuana, it does not get a user high.

Marijuana leaves and bottles of derivative product.

Image source: Getty Images.

"As the CBD industry pioneer of full spectrum hemp CBD wellness products, the Company is expanding its product offerings for consumers seeking a THC-Free option," Charlotte's Web wrote in the press release trumpeting the new line.

"For example, the hundreds of thousands of daily heroes -- healthcare workers, fire fighters, police officers, civil service employees and many others -- who want the benefits of hemp CBD extracts without THC," it added.

Charlotte's Web cited a 1,119-respondent survey conducted by Mental Health America indicating that 86% of healthcare workers are coping with anxiety, while 76% are exhausted and burned out from their work.

Now what

It's indisputable that frontline workers need help dealing with the current stresses of their jobs. Yet CBD isn't a sufficiently mainstream product to capture a big part of this customer demographic, in my view. Going by Charlotte's Web's slide on Monday, investors might feel the same.

Invest Smarter with The Motley Fool

Join Over 1 Million Premium Members Receiving…

  • New Stock Picks Each Month
  • Detailed Analysis of Companies
  • Model Portfolios
  • Live Streaming During Market Hours
  • And Much More
Get Started Now

Stocks Mentioned

Charlotte's Web Holdings, Inc. Stock Quote
Charlotte's Web Holdings, Inc.
CWBHF
$0.41 (-5.24%) $0.02

*Average returns of all recommendations since inception. Cost basis and return based on previous market day close.

Related Articles

Motley Fool Returns

Motley Fool Stock Advisor

Market-beating stocks from our award-winning service.

Stock Advisor Returns
331%
 
S&P 500 Returns
115%

Calculated by average return of all stock recommendations since inception of the Stock Advisor service in February of 2002. Returns as of 05/21/2022.

Discounted offers are only available to new members. Stock Advisor list price is $199 per year.

Premium Investing Services

Invest better with The Motley Fool. Get stock recommendations, portfolio guidance, and more from The Motley Fool's premium services.