U.S.-based CBD maker CV Sciences lost $9.4 million in the first quarter of 2019, the company said in a report issued May 8, 2019.
The losses were “primarily related to additional stock-based compensation and payroll expense associated with the retirement of the company’s founder and former President and Chief Executive Officer,” Michael Mona, Jr., the company said.
Las Vegas, Nevada-based CV Sciences said revenues were $14.9 million for the first quarter of 2019, up 85% from the same period a year ago when the company’s net profits were $600,000.
Expansion of retail operations and higher payroll and compensation expenses also contributed to the negative results, CV reported.
CV also reported its retail distribution outlets increased to 3,308 stores as of March 31, up 48% from the end of 2018. CV said it is in talks to further expand its presence in big food and pharmacy chains as well as convenience stores.
Fraud case settled
Mona, who retired from the company Jan. 22, was barred from serving as an officer or director of any company whose shares are publicly traded as the result of the settlement of a 2017 fraud case brought against him by the U.S. Securities & Exchange Commission (SEC). Mona settled the case in June last year without admitting guilt, but also paid $40,000 as part of a resolution with the government.
The original charges were based on SEC claims that in 2013 while operating under the name CannaVest, the company inflated the valuation of its assets as a result of the acquisition of PhytoSphere, a research and consulting firm.
Mona’s son, Michael Mona III, also a co-founder, became Chief Operating Officer at the moment of the senior Mona’s retirement in January. He’d previously served as President, a position that was eliminated.