Charlotte’s Web Holdings, Inc. (TSX:CWEB) said on Monday it struck a deal with U.S. retail giant The Kroger Co. to sell the company’s CBD products in multiple states with a plan to roll out to a total of 1,350 store locations in 22 states.
In Charlotte’s Web’s most recent quarterly earnings report, the Colorado-based company said it had a presence in more than 6,000 U.S. retail stores. But after its distribution deal with Kroger, the company said its CBD products will be sold in more than 8,000 locations.
Charlotte’s Web said this is its largest ever distribution tie-up with a single retailer to date and the company’s hemp CBD topical products will be carried in Kroger’s vast portfolio of stores, including Fred Meyer, Mariano’s, Dillons and QFC, among others.
While landing another key national retailer is a big win for Charlotte’s Web, the company will likely continue to pursue its big growth plans and expand its shipments into more than the 22 states it currently distributes to.
Since its founding, Charlotte’s Web has been on a mission to make CBD products available for as many people as possible. This distribution reach through Kroger’s market leading network of grocery stores is an enormous contributor to our mission.
Legal hemp market gives company major growth
Focusing on the U.S. hemp CBD market has allowed Charlotte’s Web to take advantage of the one segment of the cannabis industry that’s legal in the country. By doing so, the company has been able to grow at a much quicker pace than if it sold federally illegal THC products.
While U.S. pot companies that focus on THC products have been able to grow, they’ve often had to acquire smaller cannabis firms in states they’ve wanted to expand operations in. Meanwhile, Charlotte’s Web can simply ship products nationwide and not worry about acquisitions.
CBD products have become wildly popular in the U.S. since industrial hemp operations became legal late last year. And since then, Charlotte’s Web now has five distribution deals with major retailers with Kroger in the fold.
Although a number of Canadian cannabis companies are looking to get into the U.S. hemp market, they will have to compete with Charlotte’s Web that has enjoyed a first-mover advantage. Considering the Colorado CBD company has been able to take up a large chunk of the limited space on store shelves, it gives it a great opportunity for success over the long term.
The company is marketing itself as the biggest and most trusted CBD company not only in the country, but around the world. In its press release Charlotte’s Web said its global CBD brand is “The World’s Most Trusted Hemp Extract.”
The company said it offers the highest quality CBD products available, with more than 20 tests performed on its products beginning with pre-planting soil evaluation and extending to the entire production process. The branding might prove to be effective while many cannabis investors have lost trust in the industry rocked by several scandals this summer.
By teaming up with leading national retailers, Charlotte’s Web can make a case for its CBD brand being a trusted one. Its large presence in the U.S. should help Charlotte’s Web not only secure more major retail contracts but help it become a preferred hemp brand among consumers as well.
Shares of Charlotte’s Web jumped over 10 per cent on Monday on the Toronto Stock Exchange.
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