When the Stanley Brothers first developed the cultivar that would soon become known the world over as Charlotte’s Web, it was referred to in local slang as “Hippie’s Disappointment” because the low THC content resulted in almost zero “high.”
Today, that cultivar — a crossbreed of marijuana and hemp — is one of the most well-known in the world. Made famous in Dr. Sanjay Gupta’s landmark CNN “Weed” special in 2013, it is the basis of Charlotte’s Web original formula, a high-CBD oil named for the young girl whose seizures it aided.
“It’s the hippie’s disappointment but the consumers’ and the investors’ delight,” says Cory Pala, the company’s investor relations officer. “Every quarter is record revenue.”
Last year, the company Charlotte’s Web saw its revenue grow to $69.5 million with a gross profit of $52.3 million, up 75% from the year before. And that was before the signing of the 2018 Farm Bill paved the way for the company’s products to be sold in traditional retailers all across the country.
Before “Weed,” the company that would become Charlotte’s Web was a medical marijuana company in Colorado. After the special, its wait list jumped to 15,000 clients and things changed forever. Following the passage of the 2014 Farm Bill, which reduced the federal restrictions regarding growing industrial hemp, the company planted what Jared Stanley, the director of cultivation, believes to be the first hemp crop on U.S. soil that was grown under modern, center-point irrigation.
“In the first three years, we weren’t able to keep up,” he says.
This year, Charlotte’s Web has 300 acres of hemp growing in Colorado, Oregon and Kentucky, including 120 acres of the original “CW1A” varietal and 180 acres of other, proprietary cultivars developed through the company’s fully integrated breeding division.
It’s all part of a focus on innovation aimed at remaining the market leader in the fast-growing CBD sector. Charlotte’s Web now sells oils, tinctures, topicals and this year launched its Paws brand aimed at providing pets with the same relief.
“We’re never staying stagnant,” Stanley says. “Every single year we’re changing.”
Stanley says the company always expected the market to explode, simply because of the seemingly endless uses for CBD and the benefits it provides. Now that CBD products — including Charlotte’s Web — are being sold in national food and drug stores, the market is finally starting to reach its potential.
“We don’t see it slowing down any time soon,” he says.
Along with one of the most recognizable brand names in the space, Stanley says Charlotte’s Web separates itself from the pack because its vertically integrated supply chain allows it to maintain consistency and quality in every bottle.
The focus begins in cultivation. Charlotte’s Web contracts with hemp farms and then provides the seed, pays for cost of goods and pays the farmer to be able to dictate the methods used in farming, harvesting and processing to better maintain control over the quality. Stanley says this not only builds long-term relationships by putting “skin in the game,” but helps ensure that the plant material the company gets back is all the same.
“We first start by defining what we can control and we close our risk on every other area,” Stanley says. “We can’t control Mother Nature, but we can control how we harvest, how we dry and how we test.”
All the company’s hemp is grown outdoors using clean, sustainable methods. Starting with clones and feminized seed provided by the breeding division have helped the company scale up that side of the business, but Stanley says harvesting remains the biggest challenge.
Because the company cannot control the environment, the vegetation and blooming cycles are not an exact science. Stanley says there is a two- to three-week window during the harvest season in which the plants reach peak potency.
“We get one shot a year,” he says, adding that the plants are tested weekly to determine potency so the company knows when to harvest.
Stanley says the company is still in touch with the young woman whose name graces their product and that she still uses the original formula to control her seizures, but the company has no intention of resting on its laurels or allowing any of its increasing number of competitors to catch up.
“We are the market leader and we intend to maintain that market leadership and grow our market leadership as well,” Pala says.
Currently the product is available in three national chains, though the company declined to say which, with the goal of getting into even more stores all across the country and the world.
“We’re going to continue to innovate and try to understand this plant far greater than we currently do,” he says. “And I believe we just scratched the surface of understanding this plant.”