Shares of Beckham-backed CBD firm Cellular Goods plunge as losses surge 80% following poor sales
- Cellular Goods revealed losses rose to £6million in the year to August
- Cannabinoids can treat a range of conditions, including multiple sclerosis
A cannabinoid company backed by soccer legend David Beckham saw its shares fall nearly a quarter on Friday after reporting mounting annual losses.
Cellular Goods shares fell 23.7% to 0.73p as they revealed losses rose to £6m in the 12 months to August from £3.33m the previous year.
The cannabis-based skincare company attributed the result to investments in new products, a brand building and marketing campaign and lower than expected orders.
Celebrity endorsement: Former footballer David Beckham (pictured) acquired a 5% stake in Cellular Goods through his business DB Ventures last year
He said sales were negatively affected by the owner of Facebook, Meta, Google and other social media platforms banning direct-to-consumer advertising of CBD products.
The London-based company also blamed a Food Standards Agency decision in March that caused it to pull all of its CBD ingestibles from the market.
As a result, the group only attracted £28,900 in revenue throughout the period, much slower than expected, and its losses increased by around 80%.
In response to the additional financial pressures, the company said costs have been reduced by reducing management and personnel expenses, consulting fees and media expenses.
Chairman Darcy Taylor said the additional investment ‘did not translate to our revenue growth forecast due to a challenging market and regulatory environment that is affecting industry and company growth.
“In response, we have halved our annual cost base and continue to seek further cost optimization as we invest in the business to position it for a significant turnaround when business conditions normalize.
“We are also in negotiations for an acquisition to provide greater scale in a highly fragmented market, accelerate growth and generate long-term shareholder value.”
Created four years ago, Cellular Goods manufactures products containing cannabinoids, a set of substances found in the cannabis plant.
THC and CBD are two of the best-found chemicals in cannabinoids, which can help treat a range of conditions, including multiple sclerosis and cancer, but are now increasingly used in cosmetics.
In early December last year, Cellular Goods launched its first two ranges: a cannabigerol skincare offering including a serum, face oil and aftershave moisturiser, and a collection of ingestibles.
It came nine months after the company went on a high-profile and successful listing when its total value topped £100m after its shares were thirteen times oversubscribed.
Much of the hype surrounding the initial public offering was due to the fact that former England footballer David Beckham held a 5% stake in the company through his firm DB Ventures.
Investors may also have been looking to capitalize on the rapidly expanding CBD market, which is worth around £690m a year in the UK alone and is expected to top £1bn by 2025.