cbdMD, Inc.
For the period ended Jun 30, 2026. Filed Aug 13, 2026.
View on SEC.govAbout this filing
A company's report for each of its first three quarters. The financial statements are not audited. It shows how the business has moved since the last annual report, and what management says changed.
Jun 30, 2026 · Filed Aug 13, 2026
YCBD$0.42+7.2%Stored close · as of Nov 6, 2026
What changed in Management’s Discussion and Analysis?
Read the current filingPrevious report: 10-Q
Period ended 2026-03-31; filed 2026-05-14.
0001437749-26-017042
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsCurrent report: 10-Q
Period ended 2026-06-30; filed 2026-08-13.
0001437749-26-027665
ITEM 2. Management’s Discussion and Analysis of Financial Condition and Results of OperationsThe baseline is this issuer’s latest earlier reporting period of the same form that was filed before the current report. A previous 10-Q is a different quarter, not a year-over-year comparison. Amendments are excluded.
Compared 68 previous paragraphs and 69 current paragraphs.
43 unchanged; 17 reworded; 9 added; 8 removed; 0 previous and 0 current paragraphs rearranged.
Tables are not compared: 12 previous and 11 current tables excluded. Dates, whitespace, punctuation and numbering changes are ignored; changes to financial figures remain significant.
A changed paragraph is not evidence that risk increased or decreased. An unchanged paragraph does not establish that risk stayed the same.
Added paragraphs (9)
Current report
Management continues to pursue other M&A activity and incurred over $100,000 in legal and due diligence expenses on pursuing other transactions that would further diversify the Company's revenue and mitigate certain regulatory risks facing the hemp industry.
Current report
Numerous bills in the 119th Congress would repeal, delay, or modify Section 781 of Public Law 119-37 or establish a federal framework for hemp-derived cannabinoid products, including H.R. 6209, H.R. 7024/S. 3686, S. 3474, H.R. 7212, and S. 4315, none of which has advanced beyond committee. Most prominently, on July 22, 2026, Representatives Andy Barr and Angie Craig introduced the bipartisan, White House-supported Lawful Hemp Protection Act (H.R. 9830), which would replace Section 781's restrictions with a permanent federal regulatory framework redefining hemp at up to 1% total THC on a dry-weight basis while banning synthetic cannabinoids, directing the FDA to set per-serving potency limits, restricting sales to consumers 21 and older, imposing federal excise taxes, and requiring permits, testing, and labeling standards. On April 30, 2026, the House passed the Farm, Food, and National Security Act of 2026 (H.R. 7567), which did not modify Section 781's restrictions on finished hemp-derived cannabinoid products; on August 6, 2026, the Senate Agriculture Committee's competing markup failed 10-11 and likewise left those restrictions unchanged. A Senate stopgap appropriations proposal released August 2, 2026 would, through December 11, 2026, temporarily exempt naturally occurring cannabinoids from the revised total-THC definition and the 0.4 mg per-container limit, while restrictions on synthetic cannabinoids would still take effect November 12, 2026. As of the date of this filing, none of these measures has been enacted, and the Company cannot predict the outcome, timing, or ultimate impact of any of them.
Current report
Management Priorities
Current report
We remain focused on positioning the Company for a changing regulatory landscape. During the second and third quarters, we made progress on the following key initiatives:
Current report
Our overall operating expenses increased approximately $0.4 million or 11.6% for the three months ended June 30, 2026 as compared to the three months ended June 30, 2025. Payroll costs are up year over year approximately $0.3 million in part due to the acquisition of Bluebird as well as efforts in new product development and additional warehouse staff tied to increased sales and state level product rework. Professional outside services increased approximately $0.2 million as we incurred approximately $30,000 to target the Medicare program, approximately $20,000 in residual accounting valuation expenses related to the acquisition of Bluebird, approximately $50,000 tied to several settlements, approximately $100,000 in professional fees tied to other mergers and acquisition efforts, and further professional fees related to the cbdMD GRAS report. Stock based compensation increased as certain grants vested during the third quarter of fiscal 2026. As previously mentioned, since the end of the third quarter of fiscal 2026, we have implemented changes designed to save over $100,000 in expenses by the end of the fourth quarter of fiscal 2026.
Current report
Our overall operating expenses increased approximately $0.8 million or 7.9% for the nine months ended June 30, 2026 as compared to the nine months ended June 30, 2025. The acquisition of Bluebird added approximately $746,000 in labor, marketing and acquisition related legal and transaction expenses during the nine months ended June 30, 2026. We also had approximately $134,000 in expenses related to other mergers and acquisitions activity. Stock based compensation increased as certain grants vested during the third quarter of fiscal 2026. These increases were partially offset by decreases in depreciation expense and property plant and equipment became fully depreciated, and other miscellaneous expenses.
Current report
Non-GAAP Financial Measure - Adjusted EBITDA (Unaudited)
Current report
(3) Represents additional inventory reserve in preparation for pending regulatory changes.
Current report
(4) Represents regulatory costs associated with pending legislation.
Removed paragraphs (8)
Previous report
Multiple legislative measures have been introduced in the 119th Congress that would repeal, delay, or modify Section 781 of Public Law 119-37, or that would establish a federal regulatory framework for hemp-derived cannabinoid products. These include H.R. 6209 (repeal of Section 781); H.R. 7024 and S. 3686 (the Hemp Planting Predictability Act, which would extend the effective date by two years); S. 3474 (the Cannabinoid Safety and Regulation Act); H.R. 7212 (the Hemp Enforcement, Modernization, and Protection Act); and S. 4315 (the Hemp Safety Enforcement Act, providing a state opt-out mechanism). On April 30, 2026, the U.S. House of Representatives passed the Farm, Food, and National Security Act of 2026 (H.R. 7567) by a vote of 224-200; the legislation as passed does not include provisions modifying Section 781's restrictions on finished hemp-derived cannabinoid products. The Senate Agriculture Committee is expected to consider its version of the Farm Bill in late May or early June 2026. In addition, in December 2025, the President issued Executive Order 14370 directing executive branch officials to work with Congress to update the statutory definition of finished hemp-derived cannabinoid products. None of the foregoing legislative measures have been enacted as of the date of this filing, and there can be no assurance that any such measure will be enacted or, if enacted, would modify Section 781 in a manner favorable to the Company. The Company is unable to predict the legislative outcome, the timing of any such developments, or the ultimate impact on the Company.
Previous report
On April 1, 2026, the Centers for Medicare & Medicaid Services (“CMS”) activated the Substance Access Beneficiary Engagement Incentive (“BEI”), under which approved participants in the ACO REACH Model and Enhancing Oncology Model may furnish eligible hemp-derived products to Medicare beneficiaries, subject to physician oversight, at up to $500 per beneficiary per year. Eligible products must contain no more than 0.3% delta-9 THC and no more than 3 mg of total THC per serving, and inhalable products are excluded. The Company has launched a clinical healthcare channel to support this pathway and believes its clinical research, safety data, and quality systems position us well to participate, although there can be no assurance regarding the timing or scale of provider adoption. We are engaging ACOs and investing in further patient science to enhance our readiness to participate in this emerging healthcare channel and our positioning as a trusted, evidence-based supplier within the federal healthcare-access framework as provider adoption develops. The BEI is the subject of pending litigation alleging procedural and statutory deficiencies; an adverse ruling could limit or eliminate this pathway.
Previous report
On April 23, 2026, the Acting Attorney General issued a final order, effective April 28, 2026, rescheduling certain narrow categories of marijuana — FDA-approved drug products and state-licensed medical marijuana — from Schedule I to Schedule III under the Controlled Substances Act. An expedited DEA administrative hearing on broader rescheduling is scheduled to conclude by July 15, 2026. The partial rescheduling does not modify the federal framework for hemp-derived cannabinoid products and does not legalize hemp-derived THC products, but the Company believes it signals a broader federal direction toward regulated access and clinical integration of cannabinoid products.
Previous report
We remain focused on growing the Company in a smart, profitable manner along with appropriate cost controls.
Previous report
Growth Strategies
Previous report
We continued to pursue many strategies to grow our revenues and expand the scope of our business through the second quarter of 2026 and beyond:
Previous report
Our overall operating expenses increased approximately $0.6 million or 17.3% for the three months ended March 31, 2026 as compared to the three months ended March 31, 2025. The acquisition of Bluebird added approximately $340,000 in labor, marketing and acquisition related legal and transaction expenses during the second quarter of fiscal 2026. Additionally, professional outside services increased as we made investments to target the Medicare program in addition to transaction costs related to the acquisition of Bluebird. Stock based compensation increased as certain grants vested during the second quarter of fiscal 2026. The increase in labor is tied to acquisition of Bluebird, some annual adjustments but also a number of projects during the quarter, notably regulatory related reworks, and offset by savings in rents, and other miscellaneous expenses.
Previous report
Adjusted EBITDA (Unaudited)
Reworded paragraphs (17)
Previous wording
The following discussion of our financial condition and results of operations for the three and six months ended March 31, 2026 and the three and six months ended March 31, 2025 should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties such as our plans, objectives, expectations and intentions.
Current wording
The following discussion of our financial condition and results of operations for the three and nine months ended June 30, 2026 and the three and nine months ended June 30, 2025 should be read in conjunction with the unaudited condensed consolidated financial statements and the notes to those statements that are included elsewhere in this report. Our discussion includes forward-looking statements based upon current expectations that involve risks and uncertainties such as our plans, objectives, expectations and intentions.
Previous wording
Herbal Oasis (“Oasis”) is a premium hemp-derived THC-infused social seltzer that blends cannabinoids and nootropic mushrooms to deliver a fast-acting, functional beverage made for presence and connection.
Current wording
Herbal Oasis (“Oasis”) is a premium hemp-derived THC-infused social seltzer that blends cannabinoids and nootropic mushrooms to deliver a fast-acting, functional beverage made for presence and connection. In addition, Oasis just expanded into other natural compounds including Kava.
Previous wording
Management continues to be very focused on our goal of delivering positive earnings through a combination of optimizing our product portfolio, right-sizing our cost structure and investing in marketing that will provide positive return on customer acquisition.
Current wording
Management continues to be very focused on our goal of delivering positive revenue growth and positive earnings through a combination of optimizing our product portfolio, right-sizing our cost structure and investing in marketing that will provide positive return on customer acquisition. During the quarter we continued to make gains year over year in revenue growth, but fell short on profitability.
Previous wording
Toward the end of the first quarter of 2026, the Company raised additional cash to bolster its balance sheet with the Series C Preferred Stock and structured an ELOC. Over the last few months, we have seen several instances where the stock price and volume has increased and in the future we believe the ELOC will allow us to prudently take advantage of these situations should they occur in the future.
Current wording
Toward the end of the first quarter of 2026, the Company raised additional cash to bolster its balance sheet with the Series C Preferred Stock and structured an ELOC. Over the last few months, we have seen several instances where the stock price and volume have increased and we believe the ELOC will allow us to prudently take advantage of these situations should they occur in the future.
Previous wording
The Company has continued to pursue several potential acquisitions since the conversion of the Series A Preferred Stock in 2025. In January 2026, the Company acquired the Bluebird brand. The Company believes Bluebird provides (i) a large existing customer base that we believe is underserved with their existing product portfolio (ii) a brand name not defined by CBD, allowing for natural expansion into other natural products, (iii) significant SG&A synergies, and (iv) intellectual property including self-GRAS status on their full spectrum product. During the second quarter of fiscal 2026, the acquisition cost and integration costs created a $75,000 drag on the P&L, however, we estimate Bluebird will contribute over $500,000 in revenue per quarter at healthy contribution margins in the forthcoming quarters.
Current wording
The Company has continued to pursue several potential acquisitions since the conversion of the Series A Preferred Stock in 2025. In January 2026, the Company acquired the Bluebird brand. The Company believes Bluebird provides (i) a large existing customer base that is underserved with its existing product portfolio (ii) a brand name not defined by CBD, allowing for natural expansion into other natural products, (iii) significant SG&A synergies, and (iv) intellectual property including self-GRAS status on their full spectrum product. During the second quarter of fiscal 2026, the acquisition cost and integration costs created a $75,000 drag on the P&L, and an additional $24,000 in costs in the third quarter related to the accounting valuation. Bluebird contributed over $550,000 in revenue for the third quarter of fiscal 2026.
Previous wording
While cbdMD was founded using THC-free broad spectrum formulations, a meaningful amount of our revenues is derived from products containing low-dose hemp-derived THC that complies with the original Farm Bill. The majority of the Company's revenue for the three and six months ended March 31, 2026 was derived from products that would comply with the Act's THC limitations; however, a meaningful amount of revenue could be impacted should no changes in legislation occur. The Act, if implemented as currently written, will in all likelihood have a material adverse impact on the Company's business, results of operations, and financial condition. Management continues to evaluate strategic alternatives to mitigate potential impacts, including product reformulation and channel diversification, but no assurance can be given that the Company will successfully adapt its portfolio or that alternative legislation will be enacted.
Current wording
While cbdMD was founded using THC-free broad spectrum formulations, a meaningful amount of our revenues is derived from products containing low-dose hemp-derived THC that complies with the original Farm Bill. The majority of the Company's revenue for the three and nine months ended June 30, 2026, 64% and 61%, respectively, was derived from products that would comply with the Act's THC limitations; however, a meaningful amount of revenue could be impacted should no changes in legislation occur. The Act, if implemented as currently written, will likely have a material adverse impact on the Company's business, results of operations, and financial condition. Management continues to evaluate strategic alternatives to mitigate potential impacts, including product reformulation and channel diversification, but no assurance can be given that the Company will successfully adapt its portfolio or that alternative legislation will be enacted.
Previous wording
Additionally, we continue to see changing rules and regulations at the state level, which is causing ongoing disruption and additional compliance costs. Given the pace and uncertainty of these developments, the ultimate impact on the Company's business, results of operations, and financial condition cannot be predicted with certainty.
Current wording
We continue to see changing rules and regulations at the state level, which is causing ongoing disruption and additional compliance costs. Given the pace and uncertainty of these developments, the ultimate impact on the Company's business, results of operations, and financial condition cannot be predicted with certainty.
Previous wording
We had total net sales of $5.6 million and $4.7 million for the three months ended March 31, 2026 and 2025, respectively, resulting in an increase in net sales of $0.9 million or 19% quarter over quarter and 12% sequentially. This increase is comprised of gains in both our direct to consumer and wholesale business. Direct to consumer included gains to the core business in addition to the revenue added from the acquisition of Bluebird. We anticipate Bluebird will add incremental revenue during the third quarter with the benefit of ownership for a full fiscal quarter as well as increased marketing by our in house marketing team. Our wholesale business continued to strengthen this quarter as we made progress with our Oasis brand and other cbdMD brand initiatives. We remain focused on growth and, as of this filing April’s orders remained strong. Despite the pervasive, industry-wide challenges which we are facing, we remain optimistic about our market positioning in fiscal 2026 and continue to seek to diversify revenue.
Current wording
We had total net sales of $5.6 million and $4.6 million for the three months ended June 30, 2026 and 2025, respectively, resulting in an increase in net sales of $0.9 million or 20% quarter over quarter. We had total net sales of $16.2 million and $14.5 million for the nine months ended June 30, 2026 and 2025, respectively, resulting in an increase in net sales of $1.7 million or 12% year over year. This increase is comprised of gains in both our direct to consumer and wholesale business. Direct to consumer included gains related to the revenue added from the acquisition of Bluebird. Our wholesale business continued to trend year over year due to gains with our Oasis brand and other cbdMD brand initiatives. Our team remains focused on being nimble and adjusting to combat revenue losses coming from state level regulatory changes. Despite the pervasive, industry-wide challenges which we are facing, we believe we are better positioned than many of our peers as we look toward the November rule changes.
Previous wording
Our cost of sales includes costs associated with distribution, fill and labor expense, components, manufacturing overhead, third party providers, and freight for our product sales. Our cost of sales as a percentage of net sales was 42% and 38% for the three months ended March 31, 2026 and 2025, respectively. This slight increase in cost of sales is mostly attributed to (i) a shift in our sales mix to more wholesale business which grew $0.7 million year over year, and (ii) increase in warehouse labor as we encountered several repacking projects in response to changes in state regulation.
Current wording
Our cost of sales includes costs associated with distribution, fill and labor expense, components, manufacturing overhead, third party providers, and freight for our product sales. Our cost of sales as a percentage of net sales was 45.3% and 38.5% for the three months ended June 30, 2026 and 2025, respectively, and was 42.7% and 36.5% for the nine month ended June 30,2026 and 2025, respectively. This slight increase in cost of sales is mostly attributed to (i) a shift in our sales mix to more wholesale business which grew $0.6 million year over year, (ii) increase in warehouse labor as we continue to incur repacking projects in response to changes in state regulation, and (iii) $187,437 increase in inventory reserves during the quarter as we prepare for pending regulatory changes.
Previous wording
The following tables provide information on our operating expenses for the three and six months ended March 31, 2026 and 2025:
Current wording
The following tables provide information on our operating expenses for the three and nine months ended June 30, 2026 and 2025:
Previous wording
We had cash and cash equivalents on hand of approximately $2.6 million, working capital of $5.4 million and an accumulated deficit of approximately $180.6 million at March 31, 2026. At September 30, 2025, we had cash and cash equivalents of $2.3 million, working capital of $3.4 million and an accumulated deficit of approximately $179.4 million.
Current wording
We had cash and cash equivalents on hand of approximately $2.1 million, working capital of $4.7 million and an accumulated deficit of approximately $181.8 million at June 30, 2026. At September 30, 2025, we had cash and cash equivalents of $2.3 million, working capital of $3.4 million and an accumulated deficit of approximately $179.4 million.
Previous wording
The Company has outstanding quarterly dividend payment obligations under its Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Series B Preferred Stock accrues dividends at a rate of 10% per annum, payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. The Series C Preferred Stock accrues dividends at the same rate of 10% per annum, also payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. If the Company fails to satisfy the applicable equity conditions, dividends on both series of preferred stock are payable in cash, which could adversely affect the Company’s liquidity position. As of March 31, 2026, approximately 591,207 shares of Series B Preferred Stock and 1 million shares of Series C Preferred Stock were outstanding. The aggregate quarterly dividend obligation, if paid in cash, would be approximately $70,000 based on stated values and the 10% per annum dividend rate.
Current wording
The Company has outstanding quarterly dividend payment obligations under its Series B Convertible Preferred Stock and Series C Convertible Preferred Stock. The Series B Preferred Stock accrues dividends at a rate of 10% per annum, payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. The Series C Preferred Stock accrues dividends at the same rate of 10% per annum, also payable quarterly in shares of common stock (subject to the satisfaction of certain equity conditions) or in cash. If the Company fails to satisfy the applicable equity conditions, dividends on both series of preferred stock are payable in cash, which could adversely affect the Company’s liquidity position. As of June 30, 2026, approximately 591,207 shares of Series B Preferred Stock and 1,000,000 shares of Series C Preferred Stock were outstanding. The aggregate quarterly dividend obligation, if paid in cash, would be approximately $70,000 based on stated values and the 10% per annum dividend rate.
Previous wording
During the six months ended March 31, 2026 and 2025, our sources and uses of cash were as follows:
Current wording
During the nine months ended June 30, 2026 and 2025, our sources and uses of cash were as follows:
Previous wording
During the six months ended March 31, 2026, net cash used by operating activities was $1.5 million compared to the cash flows used by operating activities of $0.5 million for the six months ended March 31, 2025. The primary components of the cash used by operating activities in the six months ended March 31, 2026 and 2025 are accounts receivable, inventory and prepaid and other operating expenses.
Current wording
During the nine months ended June 30, 2026, net cash used by operating activities was $1.9 million compared to the cash flows used by operating activities of $1.2 million for the nine months ended June 30, 2025. The primary components of the cash used by operating activities in the nine months ended June 30, 2026 and 2025 are accounts receivable, inventory and prepaid and other operating expenses.
Previous wording
Cash used in investing activities was $0.1 million for the six months ended March 31, 2026 and March 31, 2025, respectively, and were both related to fixed asset acquisitions.
Current wording
Cash used in investing activities was $0.1 million for the nine months ended June 30, 2026 and June 30, 2025, respectively, and were both related to fixed asset acquisitions.
Previous wording
Cash provided by (used in) financing activities during the six months ended March 31, 2026 and March 31, 2025 of approximately $2.0 million and $0, respectively. The cash provided by financing activities during the six months ended March 31, 2026 is attributable to the proceeds from the issuance of preferred stock.
Current wording
Cash provided by (used in) financing activities during the nine months ended June 30, 2026 and June 30, 2025 of approximately $1.9 million and $0, respectively. The cash provided by financing activities during the nine months ended June 30, 2026 is attributable to the proceeds from the issuance of preferred stock.
Previous wording
(3) Represents costs associated with the Bluebird acquisition.
Current wording
(5) Represents costs associated with the Bluebird acquisition, preferred stock offerings and review of additional potential acquisition opportunities.