CENTR Brands ceases funding for CBD business

Company cited lack of federal hemp oversight, reduced consumer spending for decision.

Functional beverage company CENTR Brands Corp. has ceased funding its United States subsidiary, CENTR Brands USA LLC, and has terminated all U.S. and Canadian employees except CEO Arjan Chima.

The company said its decision to stop funding its CBD business was taken after considering available alternatives, its cash position, forecasted revenue and expenses (including in relation to its subsidiaries), and scheduled trade payables. CENTR Brands reported that its subsidiary will likely default on several material debtor obligations due to liquidity constraints stemming from operational challenges, inflationary pressures significantly impacting costs and market instabilities.

"We are taking the necessary steps to ensure the long-term success of CENTR," Chima said. "We are confident that this decision will help us to focus our resources on our other non-CBD business and create a more efficient and profitable organization."

CENTR Brands produces CENTR CBD, a family of sparkling, low-calorie CBD beverages; CENTR Instant, a family of on-the-go, adaptogen-based CBD powders; and CENTR Enhanced, a family of non-CBD, nootropic and adaptogen sparkling waters.

The company said the financial condition of its CBD business is in “a precarious state, with decreasing revenues and difficulties raising additional capital in a time of market instability and reduced consumer spending in the hemp drinks category.” CENTR Brands cited the lack of federal oversight of hemp products has made it difficult to scale operations, leading to increased operational costs in a post-COVID environment.

CENTR Brands is in the process of evaluating strategic alternatives to simplify its business, cut costs and provide for future growth. This also involves exploring ways to enhance the management of its U.S. non-CBD subsidiary, CENTR Enhanced USA LLC, and eventual expansion into Canada with its core product, CENTR Enhanced. CENTR will continue to provide nootropic and adaptogen drinks in the United States.

"We are committed to providing our customers with the highest quality products and services," Chima said. "We are confident that this decision will help us to focus our resources on our core business and create a more efficient and profitable organization."

Alyse Thompson-Richards has held many positions with BNP Media, first serving as an intern at Candy Industry Magazine in summer 2012. She joined Candy Industry's staff full time as associate editor in August 2016 after a few years at newspapers in West-Central Illinois, becoming managing editor in March 2019. Alyse has also served on Cannabis Products Insider since March 2019. She has bachelor’s degrees in journalism and Spanish from Western Illinois University.