CV Sciences (OTCMKTS:CVSI) reported a sequential increase in third-quarter revenue and positive adjusted earnings before interest, taxes, depreciation and amortization, as cost reductions and higher margins helped offset a year-over-year sales decline.
The health and wellness company generated $3 million in revenue for the quarter ended September 30, 2026, up 1.4% from the previous quarter but down 7% from a year earlier. Management said it is expanding its non-cannabinoid product offerings while preparing for potential federal restrictions on hemp-derived products.
“We remain focused on building a stronger, more efficient business by maintaining solid margins, optimizing our cost structure, and advancing our path toward sustainable profitability and positive cash flow,” Chief Executive Officer Joseph Dowling said on the earnings call.
Margins and cash flow improve
Chief Financial Officer Joerg Grasser said the sequential revenue increase was driven primarily by a 4% rise in unit sales, partly offset by lower average selling prices. Additional retail placements of non-cannabinoid products accounted for much of the unit growth. Direct-to-consumer sales represented 45.6% of quarterly revenue and increased slightly from the prior quarter.
Gross margin rose to 50% from 48.6% in the second quarter and 48.5% a year earlier. Grasser attributed the year-over-year improvement primarily to increased contract manufacturing revenue, lower product costs and changes in product and channel mix.
Selling, general and administrative expenses fell 11.6% year over year to $1.6 million, reflecting lower legal and professional fees, reduced marketing spending and administrative efficiencies. Grasser said management believes a meaningful portion of the reductions is structural.
CV Sciences reported operating income of $0.4 million, compared with an operating loss of $0.3 million a year earlier. The latest result benefited from a legal settlement with the company’s former legal counsel, in addition to the margin improvement and lower expenses.
Adjusted EBITDA was positive $32,000, compared with a loss of $118,000 in the prior-year quarter and a loss of $132,000 in the second quarter of 2026. The GAAP net loss narrowed to $0.1 million from $0.4 million a year earlier. Operating cash flow was approximately $64,000 for the quarter and $0.2 million for the year to date.
Expansion beyond cannabinoids
Dowling said the company launched plushlth.com during the quarter as a dedicated direct-to-consumer site for its non-cannabinoid +PlusHLTH supplements. Its existing pluscbdoil.com site remains focused on hemp-derived CBD products.
The company plans to introduce multiple non-cannabinoid products over the next 12 to 24 months, with new formulations and delivery formats. Dowling said the products are expected to support organic growth and help offset revenue pressure from regulatory challenges.
CV Sciences also intends to continue developing cannabinoid products under its +PlusCBD brand. Dowling cited a proprietary broad-spectrum CBD oil that he said would comply with the strictest market standards that could form part of a new regulatory framework. He said the company expected to provide more information within 30 days.
The company also plans to expand into select international markets through its European subsidiary, Cultured Foods. Dowling said the subsidiary provides regional production and distribution capabilities and will play a greater role in product launches and future revenue growth.
Regulatory uncertainty and liquidity
Dowling said 2025 federal legislation changed the definition of hemp and could materially restrict sales and distribution of certain hemp-derived cannabinoid products. Subsequent congressional action extended the implementation date for most of the changes from November 12 to December 11, 2026, he said.
Several proposals would further delay implementation, modify the definition of hemp or establish alternative regulatory approaches, Dowling said, while noting that the outcome remains uncertain. He said the expansion into non-cannabinoid products should not be viewed as a departure from the hemp industry.
CV Sciences ended the quarter with approximately $0.3 million in cash, $30,000 more than at year-end. Working capital increased to $0.7 million from $0.1 million, supported by note conversions and the legal settlement, Grasser said. Conversions during the quarter reduced the outstanding convertible note balance by approximately $0.7 million; its fair value at quarter-end was also $0.7 million.
Dowling said management believes selling of converted shares by the company’s convertible note holder has contributed to pressure on the stock price. He added that long-term valuation should be driven by the strength of the business and the consistency of its financial results.
About CV Sciences (OTCMKTS:CVSI)
CV Sciences, Inc. is a life sciences company focused on hemp-derived cannabidiol (CBD) and other plant-based wellness products. The company markets its consumer products under the PlusCBD brand, which is designed to provide consumers with a range of CBD formats for everyday wellness. PlusCBD products have included CBD oil drops, softgels, gummies, capsules, topical creams and balms, and products intended for pets. The company has sold its products through e-commerce channels and retail distribution, primarily serving customers in the United States.
