Charlotte’s Web Holdings, Inc. (OTCQX: CWBHF) reported financial results for the first quarter ended March 31, 2021, as revenue increased 9.1% to $23.4 million. This missed the average analyst estimate for $27 million from Yahoo Finance. Charlotte’s Web said DTC eCommerce net sales increased 14.5% reflecting increased marketing, targeted promotions as well as incremental demand for the company’s new topical and THC-free ingestible products.

The net losses increased to $13.9 million over last year’s $11.5 million for the same time period. The net loss per share was $0.10, which was also higher than the average analyst estimate for an et loss per share of $0.05).

“Despite reduced retail activity due to the pandemic, our directly comparable B2B retail sales showed year-over-year growth. Our B2B retail sales and velocities further strengthened in March and April as US vaccination programs support reopening of the economy, and our DTC sales continued to grow demonstrating long-term secular strength for our products in the e-commerce channel,” said Deanie Elsner, CEO of Charlotte’s Web. “We continued to expand our leading market position with quarterly market share gains across all of our channels. Internationally we have made our first moves into Israel and Canada with initial product sales planned for early 2022. We are pleased with our progress and believe that Charlotte’s Web is well-positioned to drive continued growth in the US and new growth in key international markets as we expand outside of the US.”

Expenses Rise

The company also reported its operating expenses rose 2.9% to $24.0 million over last year’s $23.3 million. the company said that in response to lower B2B retail sales during the pandemic, management took actions in the fourth quarter to better align operating expenses through an expense optimization program targeting reductions of more than 10% of the Q3-2020 consolidated expense run rate. First-quarter operating expenses were 15.2% lower compared to the third quarter of 2020, ahead of plan, and were achieved despite the additional expenses in the quarter from the CW Labs R&D division and the acquisition of Abacus Health, which were not present for the full quarter in Q1-2020.

Adjusted EBITDA for the quarter was negative $4.7 million, or (19.9)% of consolidated revenue, compared to negative EBITDA of $5.7 million, or (26.5)% of revenue, for the first quarter of 2020.

Cash Burn

Charlotte’s Web cash and working capital at the end of the quarter was $35.0 million down from last year’s $52.8 million for the same time period. The company said it used $7.7 million of cash in operations during the first quarter of 2021 compared to $14.9 million of cash used in operations during the first quarter of 2020. So it spent less and still has a cushion of cash.  During the quarter the company paid total consideration of $8.0 million cash for an Option Purchase Agreement with Stanley Brothers USA Holdings, Inc. providing the optionality to acquire or own warrants Stanley Brothers USA upon federal legalization of cannabis in the United States.