Charlotte’s Web Holdings (CAN:CWEB / US:CWBHF) has been one of the few bright spots in the cannabis sector this summer.
As of last week, shares of the leading U.S. CBD company were up nearly 40% for the year.
Most major marijuana indices, meanwhile, are right back where they were at the start of the year.
The strength of Charlotte’s Web shares continued this week too after the company announced a major distribution deal with U.S. grocery giant Kroger (KR).
The deal will put Charlotte’s Web topical CBD cream in as many as 1350 of Kroger’s grocery stores across the United States.
It’s a pretty big deal. The market likes it too. Charlotte’s Web shares were up 10% shortly after the announcement and continued to run up a total of 15% so far this week.
But this deal is part of a much larger trend all cannabis investors should be looking at right now.
The Seed Investor has long predicted the increasing importance of retail distribution in the legal cannabis industries (and cannabis-related price like CBD even if its derived from hemp) as the industry matures.
We’ve reached a new point in the cannabis investment sector where real growth in revenues and market share will be essential to attracting more investors and capital.
No longer will all the companies who merely have a cultivation license and can legally grow cannabis will be big winners.
Going forward, only those cannabis companies who can successfully get it in the hands of end consumers and generate the revenues and earnings will be the big winners.
Investors who note this change now and adjust their strategies will do far better than the cannabis stock indices in the short and long runs.