A strategy shift from Louisville-based CBD company Charlotte’s Web Holdings Inc. (TSX: CWEB) is beginning to pay dividends, CW leaders said Thursday when the company reported its third-quarter earnings.

“Our return to quarter-over-quarter growth in 2024 signals that our strategic direction is paying off,” CW CEO Bill Morachnick said in a prepared statement.

“We’ve seen positive impacts from our e-commerce platform upgrades, recent product launches, and additional retailers, highlighted by our new partnership with Walmart that brings our CBD topicals to another 827 stores. The gummies category remains healthy, with notable demand for our CBN ‘Stay Asleep’ gummy supporting volume growth. Our omni-channel focus across direct-to-consumer, retail, and healthcare channels aims to provide a seamless brand experience that resonates with our consumers.”

Morachnick was hired during a top-level shakeup of the organization in 2023 that resulted from a shareholder revolt last summer led by CW founders Jesse Stanley and Joel Stanley, who were dissatisfied with the way the company was being run.

CW’s year-over-year sales were down slightly from $14.3 million to $12.6 million in the most-recent period.

“Overall, CBD industry growth in 2024 has been hindered by ongoing headwinds in the category, including regulatory ambiguities at the federal and state levels and associated competitive alternatives causing retailer and consumer confusion,” the company said.

But CW’s net loss shrank $15.2 million in the third quarter of 2023 to $5.8 million in the most recent quarter.

“Expense and cash flow management have been our top priorities this year. The cost reduction initiatives in the first half of the year to reorganize and streamline our operations have delivered a leaner overhead structure, reducing cash burn moving forward,” CW chief financial officer Erika Lind said in a prepared statement.

“We will commence initial commercial in-house production for our gummy lines this quarter, improving capacity utilization and fixed cost absorption that will strengthen gross margins over the long term. Gummies are our largest revenue product segment, and this transition will also support innovation and speed to market, aligning with our broader operational goals.”

As of 10 a.m. Thursday, CW’s stock price was up nearly 15% over the past five days.

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