Charlotte-based cbdMD, Inc. posted $5.6 million in net sales for the third quarter of fiscal year 2026 ended June 30, 2026, a 20% year-over-year increase, with wholesale net sales leading the charge at 61% growth. For the nine months ended June 30, net sales reached $16.2 million, up 12% from $14.5 million in the prior-year period. The results mark the company's second consecutive quarter of accelerating top-line growth, driven by expanding distribution of its Oasis hemp-derived THC beverage brand and the first full quarter of contribution from the recently acquired Bluebird Botanicals.

Oasis Momentum on the Floor

For operators and distributors tracking the functional and hemp-derived beverage segment, Oasis is the headline story. The brand expanded retail access in South Carolina and switched to a new Texas distribution partner that more than quadrupled the number of stores carrying the product. Distributor depletions grew 25% in the fiscal third quarter, with July depletions running more than 34% above the Q3 average. The company also introduced a zero-proof kava beverage under the Oasis brand alongside the existing Oasis Mixer, adding a non-THC functional option ahead of what it expects to be a regulated hemp-beverage market. For on-premise buyers and beverage industry professionals tracking the functional drink category, the kava launch signals that multi-compound portfolios — combining hemp-THC, kava, and functional mushrooms — are becoming a credible on-shelf and back-bar strategy.

Direct-to-consumer e-commerce accounted for 70% of net sales at $3.9 million, a roughly 9% increase year-over-year driven largely by the addition of Bluebird Botanicals, which contributed more than $0.5 million in revenue during the quarter. Wholesale net sales reached $1.7 million, or 30% of total net sales. Gross margin compressed to 54.7% from 61.5% in the prior-year quarter, reflecting the mix shift toward lower-margin wholesale, incremental warehousing and repacking costs tied to evolving state-level compliance requirements, and higher inventory reserves set aside in anticipation of federal regulatory changes.

The Regulatory Overhang

The near-term financial picture carries a meaningful regulatory footnote that every operator considering hemp beverages should understand. Section 781 of H.R. 5371, signed into law in November 2025, imposes a 0.4 milligram per-container THC limit and a revised total-THC definition, with a November 12, 2026 effective date. A Senate stopgap appropriations proposal, H.R. 6500, would temporarily exempt naturally occurring cannabinoids from those restrictions through December 11, 2026, buying additional time for a permanent legislative fix. Separately, the bipartisan Beverage Regulatory Parity Act, introduced August 10, 2026, would establish an alcohol-style regulatory framework specifically for hemp-derived beverages — a development with direct implications for how these products might eventually be licensed, distributed, and served on-premise.

CEO and CFO Ronan Kennedy characterized the regulatory environment as moving "in a more constructive direction," and noted that well-capitalized, compliance-focused operators with documented safety and quality data are best positioned to benefit once a durable framework emerges. The company absorbed more than $100,000 in M&A due-diligence and legal costs during the quarter and recorded a GAAP operating loss of approximately $1.13 million. Non-GAAP Adjusted EBITDA loss narrowed to approximately $508,000 from approximately $624,000 in the same quarter last year. Beginning in fiscal Q4 2026, cost-reduction initiatives targeting $100,000 to $150,000 in monthly savings — approximately $1.2 million to $1.8 million annualized — are expected to improve the bottom line. At June 30, 2026, the company held approximately $2.1 million in cash and working capital of approximately $4.7 million.

For restaurant and hospitality operators navigating the growing functional and hemp beverage category, the cbdMD results illustrate both the commercial opportunity and the compliance complexity that come with stocking hemp-derived products. Distribution deals, state-by-state eligibility, and pending federal rule-making will continue to shape what brands can realistically be sold, served, or featured on menus in the months ahead.

Written by Michael Politz, Author of Guide to Restaurant Success: The Proven Process for Starting Any Restaurant Business From Scratch to Success (ISBN: 978-1-119-66896-1), Founder of Food & Beverage Magazine, the leading online magazine and resource in the industry. Designer of the Bluetooth logo and recognized in Entrepreneur Magazine's "Top 40 Under 40" for founding American Wholesale Floral, Politz is also the Co-founder of the Proof Awards and the CPG Awards and a partner in numerous consumer brands across the food and beverage sector.