CVS Health Corp. is selling products with a derivative of marijuana, the drugstore chain said Wednesday evening, despite continuing questions about legality.
U.S. cannabis retailer Curaleaf Holdings Inc. CURLF, +3.44% disclosed the move late Wednesday, saying that CVS CVS, -1.63% will carry its line of CBD products. CVS — the largest drugstore chain by total sales in the U.S. — said in an emailed statement that it has already started to sell CBD products in eight states as of last week, including creams, sprays, roll-ons, lotions and salves.
“We have partnered with CBD product manufacturers that are complying with applicable laws and that meet CVS’s high standards for quality,” a spokesman said in the email.
The U.S. Food and Drug Administration has said that CBD remains a drug ingredient and as a result is illegal to add to food and health products. CBD, which is derived from the cannabis plant, is considered by many to be non-psychoactive, unlike its fellow cannabinoid, tetrahydrocannabinol, or THC.
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A Curaleaf spokeswoman could not immediately respond to questions MarketWatch had about the FDA’s position and Curaleaf’s product line. CVS said that it is selling CBD products in Alabama, California, Colorado, Illinois, Indiana, Kentucky, Maryland and Tennessee. Recreational marijuana is legal in California and Colorado, medical marijuana is legal in Illinois and Maryland, but marijuana has not been made legal for recreational nor medicinal uses in the other states.
Executives on Curaleaf’s earnings conference call said CVS would begin to carry its Curaleaf Hemp lotions and transdermal patches — which include items with cannabidiol, commonly known as CBD — in about 800 stores across 10 U.S. states. Chief Executive Joe Lusardi said Wednesday that the products would be available in stores by Friday and through the CVS website “soon.”
Curaleaf shares ended Wednesday’s session at $6.86, giving it a market capitalization of more than $3 billion; the company’s shares do not trade after hours. CVSshares were down less than 0.1% in extended trading after the announcement.
Curaleaf on Wednesday reported widening net losses, while growing revenue more than 400%. The company reported fourth-quarter net losses of $16.5 million, or 4 cents a share, compared with profits of $624,000, or zero cents a share in the year-ago quarter. Revenue rose to $32 million from $6.3 million in the year-ago period, excluding revenue from managed entities.
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Curaleaf said insiders and investors agreed to voluntarily lock up their shares until April 29, representing roughly 3% of shares and about an additional 80% of outstanding shares will voluntarily be locked up until Oct. 20. The company reiterated its full-year revenue guidance of $400 million.
Curaleaf stock has gained 50% in the past three months, as the S&P 500 index SPX, -0.29% has increased 15%.
