Hemp giants are blaming the Food and Drug Administration for lower than expected profits this quarter. The CBD products they sell are facing even more retail competition and still face supply chain problems. They believe that regulation will calm the waters and make it more clear what companies are and aren’t allowed to do. They are also calling for the FDA to actually enforce their rules as they currently allow many products that are technically illegal to stay on the shelves.
CV Sciences, a San Diego CBD Manufacturer, is facing more competition as a result of this. The natural product retail market is having more and more competition because the FDA’s silence leaves them open season.
The company posted revenues of $12.6 million for the third quarter, which ended September 30. That number is 7% lower than it was for the same period last year.
Profits were reported of $8.4 million, a 15% downward bump from the year before.
These numbers are disappointing considering a rise in retailers selling their products. They also claim that national retailers are slow to embrace CBD because of the lack of FDA regulation. They are remiss in developing supply chains that could be wiped out once the FDA makes up its mind.
Charlotte’s Web has the same feelings when it comes to this regulatory ambiguity. They are frustrated that their growth is being slowed down by the FDA.
While Charlotte’s Web posted $25.1 million in profits last quarter, a 42% increase from the $17.7 million from the third quarter 2018, they still believe their hands are being tied.
They estimate that the 9,000 retail outlets that sell their products should have brought in revenues of $31.9 million.
They saw their earnings per store suffer. In natural grocery stores, it was only down 1%, while online sales were down 64%.