Charlotte's Web Holdings, Inc. · TSX:CWEB
Charlotte's Web — Q1 2019 Earnings Presentation
22 slides from Charlotte's Web's earnings presentation, 2019
Slide 1: Crafted in Nature. Perfected by Science. Trusted by Families.
CRAFTED IN NATURE. PERFEC TED BY SCIENCE. TRUSTED BY FAMILIES. Q1 2019
Slide 2: Disclaimers: Forward-Looking Statements
DISCLAIMERS FO RWA R D LO O K I N G STAT E M E N T S Forward-Looking Information Certain statements contained in this presentation constitute forward-looking statements and forward-looking information (collectively, “forward-looking statements”). Such forward-looking statements relate to possible ev
Slide 3: Brand Power, Product Quality, Financial Strength
BRAND P RO D U C T FINANCIAL P OW E R Q UA L I T Y ST R E N G T H 4
Slide 4: Charlotte Is Our Inspiration
CHARLOT TE IS OUR INSPIRATION In August 2013, CNN aired a documentary featuring Charlotte Figi, whose well- being had significantly improved after the use of the Stanley brothers’ customized extract 5
Slide 5: The Future of Hemp
Over the last decade, the Stanley Brothers and the THE FUTURE Company have evolved from the proprietary OF HEMP* development of a single industrial hemp strain, to a market leader in the production and distribution of Founded in 2013 innovative hemp-based, cannabidiol (CBD) wellness Based in Boulder
Slide 6: Charlotte's Web: Improving Life Naturally
CHARLOT TE'S W EB IMPROVING LIFE NATURALLY A market leader in the production and distribution of 12 Liquid products 4 Capsule products 4 Topical Products 2 Canine Products New CBD Isolate innovative hemp-based, CBD wellness products BEST-IN-CLASS INDUSTRIAL HEMP- Strives to improve customers’ lives
Slide 7: Federal Legalization of Hemp
FEDERAL LEGALIZATION O F HEMP HEMP-DERIVED CBD UNDER FEDERAL LAW COMPLIANCE AND CERTIFICATIONS December 20, 2018 January 2019 2018 Farm Bill Signed into Law U.S. Hemp Authority™ Certification • Hemp de-scheduled and permanently removed from • Charlotte's Web certified by the U.S. Hemp Authority™ Con
Slide 8: Investment Highlights
INVESTMENT HI GHL I GHTS LEADING MARKET POSITION in a rapidly growing segment ESTABLISHED AND TRUSTED Charlotte’s Web brand POSITIVE INDUSTRY TRENDS support continued growth CONTINUED INNOVATION to expand market leading product portfolio SCALABLE CULTIVATION AND PRODUCTION platforms STRONG FINANCIAL
Slide 9: Charlotte's Web Is the #1 Brand in Hemp-Derived CBD Market
CHARLOT TE’S WEB IS CBD MARKET FO RECASTS TH E # 1 BRAND IN THE INCREASING H EM P - DERIVED CBD 1 M A R KET Annual U.S. Hemp-Derived CBD Retail Sales Estimates: 2019-2023 $7B $6.1B - $7.5B $6B $5B Total Estimated Retail Sales $4.0B - $4.8B OUTPACING THE INDUSTRY $4B WITH REVENUE GROWTH OF $3B $2.5B
Slide 10: Vertically integrated business model ensures high quality, efficacy and consistency
Vertically integrated business model ensures high-quality, efficacy and consistency DISTRIBUTION MANUFACTURING CULTIVATION 11
Slide 11: Cultivation: Hemp Production
Hemp Production CULTIVATION: All figures shown in lbs Advanced technology and customized process 675,000 Acres of Hemp Planted 2016 2017 2018 45 70 300 Significant Cultivation Operations • Over 5 years of experience in hemp plant cultivation • Company operated farms in Colorado and partner farming i
Slide 12: Manufacturing
M ANUFAC TUR I N G: Current Good Manufacturing Practices (cGMP) Certified In-House Production • Current: 40,000 ft2 manufacturing and R&D facility • Future: 130,000 ft2 manufacturing and R&D facility • Proprietary Extraction and Isolation Processes1 • CO2 Extraction and Alcohol Extraction capability
Slide 13: Distribution
D ISTRIBUTION: Sold across the United States Direct to consumer via cwhemp.com • E-commerce sales 55% of revenue first 9-months FY2018 Sold through 3,680 retail locations • Active discussions with national retail and distribution accounts • 2018 Farm Bill removed risk for retail distribution Expandi
Slide 14: Commitment to Continuous Product Innovation
COM M ITM ENT TO CONTINUOUS PROD UC T INNOVATION Our future includes: • Improved liquid delivery system to enhance efficacy, convenience and frequency of use (i.e. single serve applications, precise dosing mechanisms) • Botanical blends targeting consumer need states (i.e. sleep and cognitive functi
Slide 15: Strong Financial Performance
STRONG FINANCIAL PERFORMANCE All figures shown in millions, US$ Revenue and Growth Gross Profit and Margin Adjusted EBITDA and Margin1 75% 77% 65% 35% 34% 37.1 29.9 14% 48.0 16.2 40.0 14.1 14.7 9.6 2.0 2016 2017 2018 2016 2017 2018 2016 2017 2018 Nine Months Nine Months Nine Months Ended Sep 30 Ende
Slide 16: Growth Plan
GROWTH PLAN Building Brand Awareness Through media events, social platforms, subject experts, legislative participation, public speaking and endorsements Growth from the Existing Product Portfolio Through Marketing Initiatives Introducing integrated marketing efforts that are informed by customer da
Slide 17: Select Balance Sheet Information
SELEC T BALANCE SHEET INFORMATION All figures shown in millions, US$ SEPTEMBER 3O 2018 CASH $79.4 WORKING CAPITAL $90.2 TOTAL ASSETS $110.4 TOTAL LIABILITIES $14.2 SHAREHOLDER’S EQUITY $96.2 18
Slide 18: Leadership Team
LEADERSHIP T EAM Mark Kuspa Bo Becker VP Sales VP Marketing Hess Moallem Rich Mohr Eugenio Mendez CEO CFO CGO Jared Stanley Nathan Gerhardt • Previously, General • Over 25 years of • Previously, VP Global VP Cultivation VP Regulatory Counsel for Onnit Labs leadership in public and Marketing - Water,
Slide 19: Board of Directors
BOARD OF DIREC TORS Joel Stanley, Chairman Former CEO of CWB Holdings, Inc. (“CWB”) and Chairman of Charlotte’s Web Holdings, Inc. since 2013 Co-founded CWB with his six brothers, which was incorporated in December 2013 Leading professional in the cannabis industry, actively educating decision maker
Slide 20: Capitalization and Ownership
CAPITALIZAT ION AND OW NERSHIP SHARE OWNERSHIP IPO CAPITALIZATION December 31, 2018 Shareholders 19% Stanley Basic Common Shares 21,756,801 Brothers Outstanding 32% Proportional Voting Shares1 178,540.55 (400:1) (400:1 = 71,416,220) Effective Basic Common Shares 93,173,021 Outstanding Options & Warr
Slide 21: Investment Highlights
INVESTMENT HI GHL I GHTS LEADING MARKET POSITION in a rapidly growing segment ESTABLISHED AND TRUSTED Charlotte’s Web brand POSITIVE INDUSTRY TRENDS support continued growth CONTINUED INNOVATION to expand market leading product portfolio SCALABLE CULTIVATION AND PRODUCTION platforms STRONG FINANCIAL
Slide 22: Charlotte's Web Holdings, Inc.
CSE:CWEB Charlotte’s Web Holdings, Inc. 2425 55th Street Boulder, Colorado USA www.cwhemp.com Cory Pala Director of Investor Relations (416) 594-3849 [email protected] 23
Charlotte's Web Holdings — Q1 2019 Earnings Presentation on 6ix