Why Charlotte’s Web Stock Fell by Almost 5% on Monday

What happened

Cannabidiol (CBD) specialist Charlotte’s Web Holdings (OTC:CWBHF) wasn’t a special stock on Monday. It closed nearly 5% lower on the day, despite announcing a new product targeted at frontline healthcare workers.

So what

The new product is a CBD oil tincture (a tincture is the result of infusing something in a liquid). It is available in 10- or 30-millimeter sizes, each containing 25 milligrams of CBD. Suggested retail prices are $24.99 and $59.99, respectively.

CBD purportedly has medicinal and restorative properties. In contrast to tetrahydrocannabinol (THC) from marijuana, it does not get a user high.

Image source: Getty Images.

“As the CBD industry pioneer of full spectrum hemp CBD wellness products, the Company is expanding its product offerings for consumers seeking a THC-Free option,” Charlotte’s Web wrote in the press release trumpeting the new line.

“For example, the hundreds of thousands of daily heroes — healthcare workers, fire fighters, police officers, civil service employees and many others — who want the benefits of hemp CBD extracts without THC,” it added.

Charlotte’s Web cited a 1,119-respondent survey conducted by Mental Health America indicating that 86% of healthcare workers are coping with anxiety, while 76% are exhausted and burned out from their work.

Now what

It’s indisputable that frontline workers need help dealing with the current stresses of their jobs. Yet CBD isn’t a sufficiently mainstream product to capture a big part of this customer demographic, in my view. Going by Charlotte’s Web’s slide on Monday, investors might feel the same.

This article represents the opinion of the writer, who may disagree with the “official” recommendation position of a Motley Fool premium advisory service. We’re motley! Questioning an investing thesis — even one of our own — helps us all think critically about investing and make decisions that help us become smarter, happier, and richer.

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