Charlie’s Holdings announced the opening of its first U.S. manufacturing plant in Huntington Beach, California, and the start of shipping its Pachamama 25K flavored vapor line to 300 Texas retail stores. The move satisfies Texas’s September 1, 2025 law that bars the sale of vape products manufactured or marketed from China or other “adversary” countries, allowing the company to tap the state’s largest vaping market while keeping production domestic.
In the third quarter of 2025, the company reported a net income of $0.624 million, a turnaround from a $1.02 million loss in the same quarter of 2024. Revenue for the quarter surged 336% to $7.10 million, driven largely by the SBX zero‑nicotine product line, while gross margin contracted to 24.9% from 38.8% in Q3 2024. For the nine‑month period ended September 30, 2025, net income was $4.37 million versus a $3.03 million loss in the prior year. Management noted a “substantial doubt” about the company’s ability to continue as a going concern, underscoring the financial headwinds that accompany the expansion.
The Texas facility is a strategic lever for growth. Henry Sicignano, president, said the company plans to devote 100% of its U.S. manufacturing capacity to Texas and believes the state could double sales forecasts for 2026 if capacity is expanded. Ryan Stump, co‑founder and COO, highlighted that Pachamama is the only vapor brand that has been on the market for more than a decade and is now fully compliant with Texas’s domestic‑manufacturing requirements, positioning Charlie’s to capture a larger share of the state’s vaping market.
Charlie’s product strategy extends beyond Pachamama. The company is expanding its SBX zero‑nicotine line, which is not subject to FDA review, and developing alternative alkaloid products to hedge against regulatory uncertainty. The company has also discontinued all hemp/CBD sales and closed its Don Polly division in preparation for a national securities exchange uplist, further concentrating resources on its core vapor and zero‑nicotine businesses.
Despite the operational gains, margin compression remains a concern. The drop in gross margin reflects higher raw‑material costs and the investment required to build the new facility. The company secured a $2 million credit facility from an independent board member to fund growth, but the going‑concern warning signals that cash burn and debt servicing will continue to pressure profitability in the near term.
Overall, the opening of the Huntington Beach plant and the launch of Pachamama 25K shipments to Texas represent a significant milestone for Charlie’s Holdings. The move satisfies a critical regulatory hurdle, expands the company’s domestic footprint, and positions it to capture a high‑growth market, while the accompanying financial data and management commentary highlight both the opportunities and the risks that will shape the company’s trajectory in the coming quarters.
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