Is the TSX pot stock that’s a known proponent of medical marijuana NYSE-bound? While there’s no word yet, it’s fair to assume that Charlotte’s Web (TSX:CWEB) will eventually list on a major U.S. exchange. Should that happen, the pot stock could skyrocket.
The shares of the Colorado-based cannabidiol company debuted on the Canadian Securities Exchange (CSE) on August 30, 2018. On May 31, 2019, CWEB was trading on the TSX. The company’s Wall Street debut could take no longer than nine months from today.
Eye of the needle
In the U.S., Charlotte’s Web is trading over-the-counter (OTC). But it could attract institutional investors by up-listing from the OTC exchange to the main stage.
Several cannabis companies want to list on the NYSE or NASDAQ. However, it’s like passing through the proverbial eye of the needle. Applicants need to fulfill a long list of criteria. But unlike most that are uncertain of meeting the rigid requirements, Charlotte’s Web is a shoo-in when it comes to gaining acceptance.
Ripe for the spotlight
Charlotte’s Web is already the market leader in the production and distribution of innovative hemp-derived cannabidiol (CBD) wellness products. The company became popular after its CBD-containing oil was able to reduce the severe epileptic seizures of a little girl named Charlotte Figi some years back.
The report proves that Charlotte’s Web oil can improve the quality of life of children suffering from illness. Besides, there are no more roadblocks to up-listing. The industrial production of hemp and hemp-derived derivatives is perfectly legal in the U.S. after the Farm Bill became law last December.
Projected revenue growth
The market cap of Charlotte’s Web currently stands at $1.01 billion, and the shares are trading at $21.37. The company’s 2018 full-year sales grew to $69.5 million, which represents a 74% organic revenue growth. Charlotte’s Web was able to produce a record 306,818 kilograms of hemp.
This year, the company estimates sales to grow by 119% to $152 million and another 106% come 2020, which would bring total sales to $313.3 million. With over 8,000 retail locations in the U.S. and high-margin business model, you can expect CWEB to post operating profits in the coming years.
Matchless retail distribution footprint
Charlotte’s Web has the head start in a market projected to be worth US$24 billion by 2023 in America alone. The company’s partnerships with five mass retailers and other specialty retailers give it an unbeatable retail distribution footprint. Kroger, the iconic U.S. retailer, is one of CWEB’s partners.
The deal with the American retailer with a market-leading network of grocery stores is Charlotte’s Web largest distribution agreement through one retailer. Last July 30, 2019, 1,350 Kroger stores began selling Charlotte’s Web CBD products.
Whether or not the company delays its NYSE debut, growth would still accelerate. According to company CEO Deanie Elsner, there’s more to come after the successful transition to a publicly listed company and gaining market leadership in hemp CBD products.
You might consider taking a position on CWEB today before it evolves into a global consumer packaged goods (CPG) brand. The pot stock would be selling at a premium by then.
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Fool contributor Christopher Liew has no position in any of the stocks mentioned. The Motley Fool owns shares of Charlotte's Web Holdings.