CV Sciences (OTCMKTS:CVSI) reported first-quarter 2026 revenue of $3.2 million as management said the company continues to focus on margin stability, lower expenses and a path toward sustainable profitability amid a challenging CBD market and unsettled regulatory environment.
Chief Executive Officer Joseph Dowling said the company’s first-quarter results reflected progress against its core priorities of maintaining margins, reducing costs and moving toward positive cash flow. Revenue was slightly below the $3.3 million reported in the fourth quarter of 2025, while gross margin was 48.9%, compared with 50.5% in the prior quarter.
Revenue Declines, But Margins Improve Year Over Year
Chief Financial Officer Joerg Grasser said first-quarter revenue declined 3% sequentially and 11% year over year, primarily due to a 12% decline in unit sales. He said the broader CBD category remains under pressure, but the company is concentrating on cost structure, margins and operating leverage.
Gross margin improved to 48.9% from 46.0% in the prior-year period. Grasser attributed the increase mainly to lower product costs and continued progress in insourcing manufacturing for certain soft gel and tincture products.
CV Sciences reported selling, general and administrative expense of $1.9 million in the quarter, compared with $2.1 million in the prior-year period. Management said the reduction was driven by lower legal and professional fees, reduced marketing spending and broader administrative efficiencies.
Operating expenses were also down 13.3% from the first quarter of 2025, according to Dowling, who said the company continues to look for additional ways to streamline operations.
Adjusted EBITDA loss was $0.1 million in the first quarter, improving from a $0.3 million loss in the same period last year. On a GAAP basis, net loss was $0.6 million, compared with a net loss of $0.1 million in the prior-year quarter. Grasser said the prior-year period benefited from a reversal of a payroll tax accrual totaling approximately $0.5 million.
Cash Flow and Balance Sheet Remain Key Focus Areas
CV Sciences ended the quarter with approximately $0.3 million in cash, slightly higher than its cash balance at the end of 2025. Grasser said the company generated positive operating cash flow of approximately $0.1 million during the quarter, compared with operating cash usage of approximately $0.1 million in the prior-year period.
The company also amended an existing note payable with an institutional investor, converting it into a convertible note structure. Grasser said the transaction improves financial flexibility and supports the company’s strategic objectives as it works toward long-term cash flow profitability.
Inventory was $3.9 million at the end of the first quarter, down from $4.1 million at year-end. Management said it continues to manage liquidity through accounts receivable collections, inventory management and oversight of vendor payables.
Grasser said CV Sciences may see modest cash usage in the near term but expects continued improvement as it realizes synergies from recent acquisitions and works toward generating positive cash flow during the second half of 2026.
Product Expansion Targets Health and Wellness Beyond CBD
Dowling said the company is continuing its transition into a global health and wellness company while maintaining its presence in hemp-derived products. He said CV Sciences remains the number-one selling hemp extract brand in the natural product retail sales channel and continues to gain market share, citing SPINS data.
The company is expanding its +PlusHLTH line of cannabinoid-free supplements and food products. During the first quarter, CV Sciences launched +PlusHLTH Empower, a functional nutrition product containing 20 grams of protein, 5 grams of creatine and active probiotics. Dowling said the product is designed to support strength, recovery, mental clarity and gut health.
“Early feedback from consumers and retailers has been very encouraging,” Dowling said.
Management said additional non-cannabinoid products are planned for launch throughout 2026. Dowling said these products are expected to help drive organic growth, use the company’s existing infrastructure and offset revenue pressure from regulatory challenges.
The company also plans to expand into select international markets through its European subsidiary, Cultured Foods. Dowling said Cultured Foods remains important to the company’s innovation strategy because it provides in-region production capabilities for European and global markets.
Acquisitions and Manufacturing Integration Continue
Dowling said strategic mergers and acquisitions remain an important part of CV Sciences’ growth strategy. Over the past two years, the company completed the acquisitions of Cultured Foods and Elevated Softgels, which management said are contributing to scale, efficiency, diversification and a more flexible supply chain.
The company expects to begin realizing meaningful operational synergies from integrating Cultured Foods and Elevated Softgels during the second half of 2026. Dowling said insourcing manufacturing is a key driver of future margin expansion because it can reduce costs, improve speed to market and provide greater control over production.
CV Sciences is also building momentum in its pet category through the PlusCBD Pet line. Dowling said the Hip and Joint Health and Calming Care chews remain strong performers and that the company continues to expand its relationship with Chewy.
Regulatory Environment Remains Complicated
Dowling described the regulatory environment as “very complicated” and said CV Sciences is working with advocacy organizations to support clear, science-based regulations. He said inconsistent federal guidance has created increased costs and uneven state regulations.
The company is monitoring the November 2025 Appropriations Act, which Dowling said could have mixed implications for the industry. If unchanged, he said the act would require CV Sciences to modify its product offering away from certain products, and the company is prepared to do so if necessary.
Dowling also pointed to recent federal developments, including an April 1, 2026, Centers for Medicare & Medicaid Services program called the Substance Access Beneficiary Engagement Incentive. He said the program allows approved participants, subject to CMS requirements and oversight, to provide eligible beneficiaries with up to $500 annually in qualifying hemp-derived products.
According to Dowling, CMS guidance says eligible products include non-intoxicating full-spectrum CBD products with up to 3 milligrams of naturally occurring THC per serving. He also said the FDA issued a limited enforcement discretion letter covering eligible orally administered hemp-derived CBD products provided under certain healthcare program conditions.
No analysts asked questions during the call. In closing remarks, Dowling said CV Sciences is aligning itself with current industry conditions while preserving flexibility to pursue opportunities in in-house manufacturing and non-cannabinoid health and wellness products.
About CV Sciences (OTCMKTS:CVSI)
CV Sciences, Inc is a developer, manufacturer and marketer of hemp-derived products, with a focus on cannabidiol (CBD) formulations for both consumer and industrial applications. The company’s consumer segment offers a range of dietary supplements, topical creams, personal care items and pet products under its flagship PlusCBD™ Oil brand, while its industrial segment provides hemp-derived ingredients for use in wellness, pharmaceutical and cosmetic formulations.
Headquartered in San Diego, California, CV Sciences operates a manufacturing facility in El Cajon that oversees cultivation partnerships, extraction, refinement and product formulation.
