cbdMD, Inc. has reported its third consecutive year of operating improvement, closing fiscal 2025 with narrower losses, a stronger balance sheet, and restored compliance with the NYSE American continued listing standards.
For investors tracking the cannabis and hemp-derived wellness sector, the update signals a company that remains unprofitable but is increasingly focused on financial discipline, capital structure repair, and regulatory positioning.
The Charlotte-based CBD and cannabinoid product company released its full-year results for the fiscal period ended September 30, 2025, alongside announcements detailing new preferred equity financing and access to a sizable equity line of credit.
Taken together, the developments point to a business that has spent the last several years prioritizing survival and stabilization in a challenging public cannabis market.
Financial performance shows steady operational progress
For fiscal 2025, cbdMD reported net sales of $19.1 million, slightly below the $19.5 million recorded in fiscal 2024. While top-line growth remained elusive, the company managed to hold its gross margin steady at 62%, reflecting continued control over production and sourcing costs amid competitive pricing.
The most notable progress came on the operating side. Loss from operations narrowed to $2.1 million, improving by $1.2 million year over year from a $3.3 million operating loss in fiscal 2024.
Non-GAAP adjusted EBITDA losses also improved, declining to approximately $0.9 million compared to roughly $1.6 million in the prior year. Net loss attributable to common shareholders was approximately $4.3 million, a substantial reduction from the $7.7 million reported in fiscal 2024.
Management attributed the improvement primarily to ongoing cost controls, tighter capital allocation, and changes made to sales and marketing execution.
For investors accustomed to persistent deterioration across small-cap cannabis names, the year-over-year consistency of improvement stands out, even as the company remains loss-making.
Balance sheet repair becomes a central theme
Beyond operating results, fiscal 2025 was marked by significant balance sheet restructuring. During the year, cbdMD completed actions that materially improved its net book value, including the conversion of Series A preferred equity. Net book value rose from under $2 million at the end of fiscal 2024 to approximately $7.2 million at the close of fiscal 2025.
Liquidity metrics also improved. As of September 30, 2025, the company reported $2.3 million in cash and approximately $3.4 million in working capital. This compares with $2.4 million in cash and negative working capital of roughly $2.2 million one year earlier, a figure that had included $4.7 million in accrued Series A dividend payments.
Subsequent to year-end, cbdMD further bolstered its balance sheet through additional preferred equity financing. In December 2025, the company closed a $2.25 million Series C Convertible Preferred Stock offering, generating approximately $2.2 million in net proceeds. The Series C shares carry a 10% annual dividend and are initially convertible into common stock at $2.25 per share, with terms broadly aligned with the company’s existing Series B preferred stock.
Earlier in the quarter, cbdMD had also completed a $1.7 million Series B financing, producing $1.5 million in net proceeds. These transactions underscore management’s reliance on structured equity instruments rather than traditional debt, a strategy commonly used by smaller cannabis-adjacent companies seeking flexibility without near-term repayment pressure.
NYSE American compliance removes a significant overhang
One of the most consequential updates for shareholders came in early December, when the NYSE American formally confirmed that cbdMD had resolved all deficiencies related to Sections 1003(a)(i) and (ii) of the exchange’s Company Guide. The letter confirmed that the company had regained full compliance with the continued listing requirements.
For public cannabis investors, exchange compliance issues often pose a significant risk, as delistings can severely restrict liquidity and institutional participation. The resolution of these deficiencies removes a material overhang and restores some credibility in the public markets, even as the company continues to operate under financial constraints.
Equity line of credit adds future capital flexibility
In mid-December, cbdMD also entered into a $20 million equity line of credit (ELOC), providing an additional mechanism to raise capital opportunistically. The ELOC is subject to the filing of an S-1 registration statement and review by the Securities and Exchange Commission.
While equity lines can be dilutive if heavily utilized, they are often viewed as a backstop for companies navigating uncertain capital markets. For cbdMD, the ELOC offers optionality rather than an immediate funding event, allowing management to access capital under more favorable market conditions if needed.
Brand performance and distribution expansion
Operationally, cbdMD continues to rely heavily on its direct-to-consumer channel. DTC sales totaled $14.7 million in fiscal 2025, accounting for 77% of total revenue. This represented a 6% decline from the prior year, highlighting ongoing pressure in online wellness retail despite the company’s strong brand recognition.
At the same time, the company has been investing in distribution expansion for its hemp-derived THC beverage brand, Herbal Oasis. During fiscal 2025, Herbal Oasis entered Texas through a distribution partnership with Morales Beverage Group, adding to its existing distribution in North Carolina, Florida, Alabama, Tennessee, and Minnesota. The brand can also ship directly to additional states where regulations permit.
Management noted consistent month-over-month improvement in case sell-through as distribution expanded across the Southeast, suggesting early traction for the beverage line in a segment attracting increasing investor interest.
Regulatory positioning and policy tailwinds
Federal cannabinoid policy remains one of the largest variables affecting long-term valuations across the sector. cbdMD emphasized its longstanding focus on operating within strict safety, quality, and compliance standards, including investment in GMP manufacturing, testing protocols, and regulatory systems.
The company also pointed to evolving federal discussions around cannabinoids and hemp-derived products as a potential catalyst for increased research activity and institutional investment. While regulatory uncertainty persists, management believes that greater clarity could unlock new consumer segments and reimbursement pathways, particularly among older demographics.
For investors, cbdMD’s emphasis on THC-free, broad-spectrum CBD formulations alongside its experience in hemp-derived THC beverages positions it to adjust as frameworks mature, rather than pivot abruptly in response to policy shifts.
Going concern language remains a risk factor
Despite the progress outlined, cbdMD’s fiscal 2025 Form 10-K includes an audit opinion with an explanatory paragraph related to the company’s ability to continue as a going concern. The company emphasized that this disclosure does not constitute a change or amendment to its financial statements. Still, its presence underscores the ongoing risks to liquidity, profitability, and capital access.
For cannabis-focused investors, such disclosures are not uncommon among small-cap operators, but they remain an important consideration when assessing risk tolerance and time horizons.
Outlook heading into 2026
As calendar 2026 approaches, cbdMD enters the year in a materially different position than it occupied several years ago. Operating losses have narrowed for three consecutive years; the balance sheet has been repaired through equity conversions and financings; exchange compliance has been restored; and additional capital access mechanisms are in place.
The company is still navigating a challenging consumer environment and remains dependent on external financing. However, for investors seeking exposure to the hemp-derived wellness segment rather than plant-touching cannabis operators, cbdMD’s incremental progress and regulatory-first approach may warrant closer attention.
Rita Ferreira
Rita is a seasoned writer with over five years of experience, having worked with globally renowned platforms, including Forbes and Miister CBD. Her deep knowledge of hemp-related businesses and passion for delivering accurate and concise information distinguish her in the industry. Rita's contributions empower individuals and companies to navigate the complexities of the cannabis world, and her work remains a valuable resource for those seeking a deeper understanding of its potential.
