cbdMD (NYSEAMERICAN:YCBD) reported higher sales for the quarter ended June 30, 2026, driven by wholesale expansion, the contribution from Bluebird Botanicals and growth in its Oasis hemp-derived THC brand. The company also outlined cost-cutting measures and efforts to diversify its product lineup amid changing federal and state regulations for hemp-derived products.
Net sales rose 20% year over year to $5.6 million, while revenue for the first nine months of fiscal 2026 increased 12% to $16.2 million. Excluding Bluebird, which contributed more than $500,000 in quarterly revenue during its first full quarter under cbdMD, the company said its business grew approximately 10% from the prior-year period.
Wholesale Growth Leads Revenue Increase
Chief Executive Officer and Chief Financial Officer Ronan Kennedy said the gains reflected momentum for Oasis, the company’s hemp-derived THC brand, as well as execution in cbdMD’s core brand and Bluebird Botanicals. Oasis added distribution in South Carolina and changed distribution partners in Texas, a transition Kennedy said expanded the number of Texas stores accessible to the brand by more than four times.
Kennedy said Oasis distributor depletions, or unit sales from distributors, reached a record in July, rising 35% over the third-quarter average. He said August was on pace to more than double that level, though the company continued to monitor inventory, ordering patterns and shelf space.
The company also announced the launch of a zero-proof Kava Oasis beverage. Kennedy said cbdMD sees an opportunity to add compliant, non-THC products to retailer shelves as uncertainty surrounding THC rules causes some retailers to pull back on THC beverages. He said the company has one or two additional botanical formulations in development and expects potential announcements before the end of the year.
Margins Decline as Costs Rise
Gross margin declined to 54.7% from 61.5% in the prior-year quarter. For the first nine months, gross margin was 57.3%, compared with 63.5% a year earlier. Chief Accounting Officer Brad Whitford attributed the decline principally to a greater wholesale mix, which typically carries lower margins, along with warehouse labor and product repacking required by changing state-level rules.
cbdMD also recorded an additional $187,000 increase in inventory reserves during the quarter in preparation for potential regulatory changes.
Operating expenses rose 12%, or approximately $432,000, to about $4.2 million. Whitford said the increase included investments in new product development, additional warehouse staff, and roughly $200,000 in professional fees tied to the company’s Medicare initiative, Bluebird valuation work, settlements, other merger-and-acquisition activity, and a generally recognized as safe, or GRAS, report.
Loss from operations widened to approximately $1.1 million from about $905,000 in the prior-year quarter. Net loss attributable to common shareholders was approximately $1.2 million, or $0.11 per share, compared with a net loss of about $1.2 million, or $0.21 per share, a year earlier.
Adjusted non-GAAP EBITDA loss narrowed to approximately $507,000 from $624,000 in the prior-year quarter. Whitford said the quarter included additional inventory-reserve expense, regulatory and legal costs, M&A and financing expenses, and employee and director stock compensation.
Cost Reduction Program Targets Monthly Savings
Beginning in the fourth fiscal quarter, cbdMD implemented a cost-reduction and rightsizing program targeting $100,000 to $150,000 in monthly savings, or $1.2 million to $1.8 million on an annualized basis. The planned savings include payroll reductions, warehouse-lease renegotiation, vendor contract renegotiations or exits, and supply-chain initiatives.
In response to analyst questions, Kennedy said the savings targets were cash-related and that the company was working to realize as much of the savings as possible by the end of August. A warehouse lease amendment is expected to take effect in October, though Kennedy said that component represents about $10,000 per month.
At June 30, cbdMD had approximately $2.1 million in cash and $4.7 million in working capital, compared with $2.3 million in cash and $3.4 million in working capital at Sept. 30, 2025. Cash used in operating activities totaled approximately $2 million during the first nine months, versus $1.2 million in the prior-year period, primarily reflecting increases in accounts receivable and inventory.
Regulatory Uncertainty Remains a Key Factor
Kennedy said state shipping restrictions, labeling changes and other requirements affected both wholesale and direct-to-consumer operations. During the quarter, restrictions on shipping certain products to additional states affected approximately $150,000 of direct-to-consumer revenue, Whitford said.
The company is monitoring Section 781 of H.R. 5371, which Kennedy said is scheduled to take effect Nov. 12 and would revise the federal definition of hemp and impose THC limits per container. He said a Senate stopgap appropriations proposal would temporarily exempt naturally occurring cannabinoids from the revised restrictions through Dec. 11, 2026, if enacted.
Kennedy said cbdMD is pursuing product reformulation, channel diversification and new categories to address potential regulatory effects. The company also continues to evaluate acquisitions that can broaden its revenue base, expand customer and retail relationships, and reduce exposure to a single product category. Kennedy said management is seeking transactions that can generate short-term cash flow and be accretive regardless of regulatory developments.
About cbdMD (NYSEAMERICAN:YCBD)
cbdMD, Inc (NYSEAMERICAN: YCBD) is a Charlotte, North Carolina–based producer and distributor of hemp-derived cannabidiol (CBD) products. Since its founding in 2018, the company has focused on developing a diverse portfolio of wellness offerings designed for human and pet use. Its product range includes tinctures, capsules, gummies, topicals, and pet-specific formulations, each developed to comply with U.S. Food and Drug Administration (FDA) guidelines for hemp-derived substances.
The company operates a vertically integrated business model, sourcing U.S.-grown hemp and overseeing manufacturing processes in cGMP-certified facilities.
