CWBHF

MKT CAP $70.5MP/E —DIV YIELD —FCF YIELD -15.58%REV TTM $46.8M −6.9%NET INCOME −$34.5MNET CASH —52W 0.09 – 0.92SEC XBRL · TTM TO Invalid Date

How CWBHF rewrote its risk factors

10-K ITEM 1A · FY2024 → FY2025

Text kept

80%

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new sentences

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Length

+704

words, now 24,277

New in FY2025

The Continuing Appropriations, Agriculture, Legislative Branch, Military Construction and Veterans Affairs, and Extensions Act, 2026 (H.R. 5371), enacted on November 12, 2025, ended a government shutdown but included a significant, controversial provision affecting the hemp industry.
This act (Section 781) revised the federal definition of hemp with an effective date of November 12, 2026, giving the industry a one-year transition period to comply.
Changes to the definition of hemp include limiting hemp and intermediate hemp-derived cannabinoid product to 0.3% total THC (including THCA) on dry weight basis, and limiting final hemp products intended for human or animal use (ingestion, inhalation, topical use) to no more than 0.4 milligrams of total THC per container, regardless of the container size.
This would negatively impact a large percentage of existing full-spectrum hemp products in the market.
Several legislative efforts are underway to repeal or amend these provisions before they take effect in November 2026.
If these efforts are unsuccessful and the revised definition goes into effect in November 2026, it would have a have a material adverse impact on the Company’s business, financial condition and results of operations.
In previous years, the FTC has initiated numerous investigations of dietary and nutritional supplement products and companies based on allegedly deceptive or misleading claims, and also released guidance aimed at strengthening its substantiation requirements for health-related claims.
Such laws, regulations and other constraints may exist at the federal, state, or local levels.
The interplay of these federal, state, and local regulatory frameworks creates a dynamic and often uncertain regulatory environment.
The Company expects continued evolution in the laws governing hemp-derived cannabinoids, including potential congressional action, FDA rulemaking, state legislation, and state agency rulemaking.
At the state level, the regulatory environment for hemp-derived products is highly fragmented.
States have adopted different definitions of allowable cannabinoids, potency limits, serving sizes, packaging and labeling requirements, testing mandates, age restrictions, and sales channel limitations.
Several states have enacted specific rules governing hemp-derived Delta-9 THC products, including potency caps and restrictions on intoxicating formulations.
Others have banned certain forms of hemp-derived cannabinoids altogether, citing public health concerns.
These divergent laws may require reformulation, labeling adjustments, packaging updates, and market-specific strategies.
Certain products may not be legal for sale in particular states, and the Company’s distribution decisions must account for these differences.
Failure by the Company to comply with the current or evolving regulatory framework at the federal, state, and local level could have a material adverse impact on the Company’s business, financial condition and results of operations.
For instance, on July 23, 2021, the Company was advised by the FDA of its objection to a NDIN submitted by the Company earlier in 2021.
On March 22, 2021, the agency issued warning letters to two companies for selling OTC products labeled as containing CBD, alleging the products were illegally marketed unapproved drugs and misbranded due to prominent featuring of CBD on the labeling, followed by additional warning letters issued in 2021 and 2022.
On December 20, 2022, the FTC released a Health Products Compliance Guidance that covers all health-related product advertising and to substantiate health-related claims that emphasizes the need to support health-related claims with high quality randomized, placebo-controlled human clinical trials, which may signal the FTC is preparing to more closely scrutinize such claims compared to previous years.
The Company may be required to obtain and maintain certain permits, licenses, product registrations and approvals in the jurisdictions where its products are sold.
There can be no assurance that the Company will be able to obtain or maintain any necessary licenses, product registrations or approvals.
Regulatory uncertainty with respect to anti-money laundering laws and regulations impact on the CBD and cannabis related businesses, if revised or resolved unfavorably to the Company’s interests, may have an adverse effect on the Company’s business.
Department of the Treasury issued a memorandum providing instructions to banks seeking to provide services to cannabis related businesses (the "FinCEN Memo").
The FinCEN Memo states that in some circumstances, it may not be appropriate to prosecute banks that provide services to cannabis related businesses for violations of federal money laundering laws.
As a cannabis-related business, the Company may have difficulty accessing banking services due to the illegality of marijuana under federal law.
As of December 31, 2025 and 2024, the Company had total current liabilities of $8,659 and $15,936 respectively, and cash and cash equivalents of $8,035 and $22,618, respectively, to meet its current obligations.
The Company’s products have a stated shelf life and product inventory may reach its expiration prior to sale.
The Company holds goods in inventory and its products have a stated shelf life.
The production of some of the Company’s products relies on the availability and use of live plant material, which is grown in Arizona, Colorado, Kentucky, New Mexico, and Canada.
The Company may be unable to obtain or maintain farming contracts sufficient for its hemp cultivation needs.
The Company may be unable to maintain or obtain farming contracts in sufficient acreage to support production levels or sustained accelerated growth.
Climate change could also disrupt the Company’s operations by impacting the availability and costs of materials needed for production and could increase insurance and other operating costs.
Because a PTA added to the term of patents covering biological or pharmaceutical products and methods of their use have particular value, the Company's business may be adversely affected if a third party successfully challenges the PTA, and its ability to exclude competitors is reduced or eliminated.
If the Company is unable to protect the confidentiality of its trade secrets, the value of its technology could be materially adversely affected and the business would be harmed.
The Company seeks to protect its confidential proprietary information, in part, by confidentiality agreements and invention assignment agreements with its employees, consultants, scientific advisors, contractors and collaborators.
These agreements are designed to protect the Company's proprietary information.
However, the Company cannot be certain that such agreements have been entered into with all relevant parties, and cannot be certain that its trade secrets and other confidential proprietary information will not be disclosed, or that competitors will not otherwise gain access to its trade secrets, or independently develop substantially equivalent information and techniques.
For example, any of these parties may breach the agreements and disclose the Company's proprietary information, including its trade secrets, and the Company may not be able to obtain adequate remedies for such breaches.
The Company also seeks to preserve the integrity and confidentiality of its confidential proprietary information by maintaining physical security of its premises and physical and electronic security of its information technology systems, but it is possible that these security measures could be breached.

and 57 more.

Gone since FY2024

In recent years, the FTC has initiated numerous investigations of dietary and nutritional supplement products and companies based on allegedly deceptive or misleading claims, and also released guidance aimed at strengthening its substantiation requirements for health-related claims.
Such laws, regulations and other constraints may exist at the federal, state, provincial or local levels.
There is currently no uniform regulation applicable to natural health products nationally or worldwide.
There can be no assurance that the Company is in compliance with all of these laws, regulations and other constraints, and changes to such laws, regulations and other constraints may have a material adverse effect on the Company’s operations.
Through December 31, 2024, several states have adopted new regulations that may impact the Company's ability to sell certain of its products as currently formulated or packaged in these states.
There is substantial uncertainty and different interpretations among federal, state and local regulatory agencies, legislators, academics and businesses as to the importation of derivatives from exempted portions of the cannabis plant and the emerging regulation of cannabinoids.
These different opinions include, but are not limited to, the regulation of cannabinoids by the FDA and the extent to which manufacturers of products containing imported raw materials and/or 2018 Farm Bill compliant cultivators and processors may engage in interstate commerce.
The uncertainties cannot be resolved without further federal, and potentially state-level, legislation, regulation or a definitive judicial interpretation of existing legislation and rules.
If these uncertainties continue, they may have an adverse effect on the Company's business, financial condition, operating results, cash flows or growth prospects, and the introduction of its products in different markets.
For instance, on July 23, 2021, the Company was advised by the FDA of its objection to a New Dietary Ingredient Notification ("NDIN") submitted by the Company earlier in 2021.
The FDA also issued a consumer update reaffirming its position that CBD cannot lawfully be added to a food or marketed as a dietary supplement due to existing provisions of the FD&C Act, and outlining the data and potential safety issues it is considering as part of its ongoing evaluation of potential regulatory frameworks for CBD.
Notably, the FDA states that it could not conclude based on available data that CBD is "generally recognized as safe" for use in human or animal food.
While this is broad and may not be applicable in all instances, it nevertheless could materially and adversely impact the Company’s business and financial condition.
Further, the FDA has recently stated that it will continue to police the market and enforce against CBD products, and on March 22, 2021, the agency issued warning letters to two companies for selling OTC products labeled as containing CBD, alleging the products were illegally marketed unapproved drugs and misbranded due to prominent featuring of CBD on the labeling, followed by additional warning letters issued in 2021 and 2022.
While historically, the FTC enforcement actions related to CBD have been limited to warning letters, in December 2020, the FTC initiated its first law enforcement administrative action against six companies selling CBD products.
These companies were alleged to have violated the FTC Act by allegedly making unsupported health claims.
The FTC entered into settlement agreements with these companies, which required, among other things, that the companies stop making such unsupported health claims and pay a monetary judgment to the FTC.
The FTC’s enforcement was publicized by the agency as part of its ongoing effort to protect consumers from false, deceptive, and misleading health claims made in advertisements on websites and through social media companies.
An additional enforcement action against a CBD company was announced in May 2021.
Further, on December 20, 2022, the FTC released a Health Products Compliance Guidance that covers all health-related product advertising and to substantiate health-related claims that emphasizes the need to support health-related claims with high quality randomized, placebo-controlled human clinical trials, which may signal the FTC is preparing to more closely scrutinize such claims compared to previous years.
The Company may be required to obtain and maintain certain permits, licenses and approvals in the jurisdictions where its products are sold.
There can be no assurance that the Company will be able to obtain or maintain any necessary licenses, permits or approvals.
Regulatory uncertainty with respect to anti-money laundering laws and regulations impact on the CBD and marijuana-related businesses, if revised or resolved unfavorably to the Company’s interests, may have an adverse effect on the Company’s business.
Department of the Treasury issued a memorandum providing instructions to banks seeking to provide services to marijuana related businesses (the "FinCEN Memo").
The FinCEN Memo states that in some circumstances, it may not be appropriate to prosecute banks that provide services to marijuana-related businesses for violations of federal money laundering laws.
As a marijuana/cannabis related business, the Company may have difficulty accessing banking services due to the illegality of marijuana under federal law.
As of December 31, 2024 and 2023, the Company had total current liabilities of $15,936 and $23,646 respectively, and cash and cash equivalents of $22,618 and $47,820, respectively, to meet its current obligations.
The Company’s products have a limited shelf life and product inventory may reach its expiration prior to sale.
The Company holds goods in inventory and its products have a limited shelf life.
The production of some of the Company’s products relies on the availability and use of live plant material, which is grown in Arizona, Colorado, Kentucky and Canada.
The Company may be unable to obtain adequate crop insurance.
The Company may not be able to obtain crop insurance at economically feasible rates, on acceptable terms, or at all.
As a result, the Company may have limited or no recourse in the event of a failed crop or other event that standard crop insurance would typically insure against.
Such inability may adversely impact the Company’s business and operating results.
The Company may be unable to obtain or maintain high quality farmland sufficient for its hemp cultivation needs.
The Company may be unable to maintain or obtain high quality farmland in sufficient acreage to support production levels or sustained accelerated growth.
Climate changes could also disrupt the Company’s operations by impacting the availability and costs of materials needed for production and could increase insurance and other operating costs.
The Company’s retail customers may not adequately support its products or its relationships with such retailers may deteriorate.
The Company relies significantly on retailers to display, present and sell its products to consumers in their brick-and-mortar stores and through their online e-commerce sites.
The Company’s retailers stock and display its products, and, in certain health food and other specialty stores, also explain the attributes and health benefits of its products.

and 34 more.

Sentence-level comparison of Item 1A in the two most recent 10-Ks (FY2024 ↗, FY2025 ↗). A reworded sentence counts as one dropped and one added, so heavy edits read as low “kept”. Headings and page furniture are stripped; nothing is summarised by a model.

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