Charlotte's Web Reports 2025 Fourth Quarter and Full Year Financial Results

Anticipated CMMI Medicare Pilot Program Participation, Regulatory Momentum, and Cost Structure Improvements Position Company for Growth and Pathway to Profitability

Mar. 31, 2026 at 11:29am

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Charlotte's Web Holdings, Inc., a botanical wellness innovation company and the market leader in cannabidiol (CBD) hemp extract wellness products, today announced results for the quarter and year ended December 31, 2025. The company reported revenue growth, improved gross margins, and a significantly reduced operating expense base, positioning it to capitalize on emerging federal healthcare opportunities for hemp-derived wellness products.

Why it matters

Charlotte's Web's participation in the anticipated CMMI Medicare pilot program marks a landmark breakthrough, bringing physician-authorized CBD access into the healthcare system for seniors. This represents an early model for potential integration across additional segments of Medicare's 67 million beneficiaries. Alongside growing bipartisan momentum for a rational federal framework, the company believes the industry is at a pivotal inflection point.

The details

Key highlights include the company's successful BAT transaction to eliminate its largest balance sheet liability, the advancement of its DeFloria pharmaceutical collaboration, and the execution of operational efficiency initiatives that reduced the company's cost structure by over 40% in the past two years. Charlotte's Web also expanded its product portfolio into adjacent wellness categories like low-dose hemp THC, sleep support, and functional mushrooms.

  • The BAT transaction was announced prior to this earnings release.
  • The CMMI Medicare pilot program was announced on December 18, 2025.
  • The CMS Beneficiary Engagement Incentive (BEI) guidance was issued on March 20, 2026.
  • The HEMP Act was introduced by Congressman Morgan Griffith in 2025.
  • Congress passed the Agriculture, Rural Development, FDA, and Related Agencies Appropriations Act in November 2025.

The players

Charlotte's Web Holdings, Inc.

A botanical wellness innovation company and the market leader in cannabidiol (CBD) hemp extract wellness products, headquartered in Louisville, Colorado.

BT DE Investments Inc. (BAT)

A subsidiary of British American Tobacco p.l.c., which completed a transaction to convert its outstanding convertible debenture and make an additional equity investment in Charlotte's Web.

Centers for Medicare & Medicaid Services (CMS)

The federal agency that issued guidance establishing the Beneficiary Engagement Incentive (BEI) program, which allows participating healthcare organizations to provide eligible hemp-derived CBD products to Medicare beneficiaries.

Congressman Morgan Griffith

The Chairman of the House Energy and Commerce Subcommittee on Health, who introduced the Hemp Enforcement, Modernization, and Protection Act (HEMP Act).

Bill Morachnick

The Chief Executive Officer of Charlotte's Web.

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What they’re saying

“2025 was a defining year for Charlotte's Web. Our participation as a launch partner for the CMMI Medicare pilot marks a landmark breakthrough, bringing physician-authorized CBD access into the healthcare system for seniors, with Charlotte's Web at the forefront.”

— Bill Morachnick, Chief Executive Officer

“The new BAT Transaction will be transformational for our balance sheet, eliminating material liabilities and adding $10 million in additional capital. As we progress with this strengthened financial foundation to support the anticipated Medicare pilot launch, Charlotte's Web will be well-positioned to convert strategic catalysts into sustainable long-term performance.”

— Erika Lind, Chief Financial Officer

What’s next

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The takeaway

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