- CV Sciences’ Q1 report shows loss from the same quarter in 2019.
- Their total reported revenue was down 45% from last year.
- The company is putting a heavy focus on their e-commerce sales, which account for roughly 24% of their total revenue.
- The CEO of CV Sciences blames this loss on increased competition, lack of regulations, and the coronavirus pandemic.
At the end of the first quarter that has endured the coronavirus pandemic, companies are beginning to release their Q1 revenue reports. One hemp CBD manufacturer in particular, San Diego-based CV Sciences, reported revenue of $8.3 million as of March 31st. This number puts them down 45% from Q1 of last year.
Overall, CV Sciences faced a loss of 5 cents per share with an additional $5.3 million lost due to operating costs.
According to the CEO of CV Sciences, Joseph Dowling, there are three main factors that are to blame for their loss.
- Increased competition on the market
- Lack of clear regulations for the industry
- Impact of COVID-19 pandemic
“Over the past months, we have taken quick action to right-size our operations for the near-term industry outlook and to adapt our operations for the ever-changing operating environment created by the current global health crisis,” Dowling stated.
CV Sciences increased its retail store count going into this year by over 2,000, going from 3,308 stores in 2019 to 5,799 in 2020. And although their reported revenue of $8.3 million was on the higher end of their projections for the first quarter, the increased competition on the market forced them to take a loss.
Due to COVID-19, CV Sciences began putting a lot of effort into their e-commerce sales. They reported that online sales accounted for roughly 24% of their total net revenue, which is up 15% from their Q1 report in 2019. In January, they launched an updated version of their +PlusCBD Oil website in an attempt to increase their revenue generated from online sales.
CV Sciences also runs a pharmaceutical development business and has received approval to be granted a patent from the U.S. Patent and Trade Office. The company is working on a formula that combines CBD and nicotine to provide consumers with a smokeless route to treating nicotine addiction.
The company received a loan from the Paycheck Protection Program last week despite being a publicly traded company. As a result, smaller businesses are pressuring them to return the money they received.
Despite CV Sciences facing a loss when compared to last year at this time, you can expect them to make a full recovery. After all, every business that is still in operation is currently facing the same obstacles as everyone else that are brought on by the continuing COVID-19 pandemic.
The most important thing is that businesses are actively making steps to adjust to the tumultuous economy. After all, the way that companies interact with their consumers during these times can greatly affect the way it will change the industry post-coronavirus.