Why Charlotte’s Web Holdings Jumped as Much as 13.1%Today

What happened

Shares of Charlotte’s Web Holdings( OTC: CWBHF) were trading 5%higher as of 3: 47 p.m. EDT on Monday after jumping as much as 13.1
lier in the day. The gain followed the business revealed that it was getting Abacus Health Products in an all-stock transaction valued at 99 million Canadian dollars, or around $68 million.

So what

Investors reacted favorably to Charlotte’s Web’s pending acquisition of Abacus for great factor. The offer will make Charlotte’s Web a lot more dominant in the hemp CBD products market with a market share of almost 35%– more than double that of the No. 2 player in the industry.

In particular, buying Abacus will place Charlotte’s Web to contend better in hemp CBD topicals. This market should quickly become the biggest, fastest-growing CBD section.

Charlotte’s Web need to also increase its overall retail presence. The business presently has its products on shelves in around 11,000 retail stores. The addition of Abacus will bump that number up by around 4,000 stores.

Now what

Both companies’ boards of directors have authorized the transaction, however it needs to now be put before a vote at an unique conference of Abacus investors. A vote by Charlotte’s Web shareholders won’t be needed.

In the meantime, cannabis stocks continue to be hammered by the coronavirus pandemic. Charlotte’s Web is no exception, with the business losing over half of its market cap so far this year. The Abacus acquisition is appealing, it’s not most likely to change the underlying difficulties that any business reliant upon retail sales faces right now.

Keith Speights has no position in any of the stocks mentioned. The Motley Fool recommends Charlotte’s Web. The Motley Fool has a disclosure policy.”> Keith Speights has no
position in any of the stocks pointed out. The Motley Fool advises Charlotte’s Web.

The Motley Fool has a disclosure policy“>.