A US$10 million private placement accompanies the debenture conversion, with proceeds aimed at a Medicare pilot for CBD access.

June 2, 2026

Charlotte’s Web Holdings, Inc. has completed a major restructuring of its relationship with British American Tobacco, converting a long-standing convertible debenture into equity and securing a fresh cash injection, the botanical wellness company announced on May 28, 2026, from its Louisville, Colorado headquarters.

The closing followed a vote held the same day at the company’s annual general and special meeting, where shareholders endorsed the arrangement by a wide margin.

Shareholders Endorse the Deal

Of the roughly 96.5 million votes cast — representing about 60 percent of outstanding voting shares — approximately 94 percent supported the resolution authorizing the issuance of new common shares tied to the transaction. All six director nominees were also re-elected, with support ranging from the low 70s to the mid-90s in percentage terms.

Chief Executive Officer Bill Morachnick called shareholder approval a meaningful milestone, saying the deal would strengthen the company’s balance sheet, simplify its capital structure, and create greater flexibility to pursue strategic goals. He highlighted continued innovation in botanical wellness and broader product access as central priorities, and thanked British American Tobacco for its ongoing commitment.

How the Transaction Is Structured

The deal centered on a convertible debenture that BT DE Investments Inc., a subsidiary of British American Tobacco, had held since November 2022, with an original principal amount of roughly C$75.3 million. Under the closing terms:

• The full principal, plus about C$14.2 million in accrued interest, was converted into common shares at C$0.94 per share.
• The combined converted amount of roughly C$89.6 million (about US$65 million) produced approximately 95.3 million shares, fully settling the debenture.
• In a concurrent non-brokered private placement, British American Tobacco subscribed for nearly 14.7 million additional shares at the same C$0.94 price, raising US$10 million in gross proceeds (about C$13.8 million).

Charlotte’s Web said the net cash from the placement would help fund its participation in an anticipated CMMI Medicare pilot program and related medical-channel efforts. That program is designed to create a pathway for eligible Medicare beneficiaries to obtain CBD products through consultation with a physician, subject to regulatory approvals and program requirements.

A Larger Stake for the Tobacco Group

Together, the two components substantially expand British American Tobacco’s holding. Following completion, the transaction was expected to result in the issuance of close to 110 million shares to the investor, giving it roughly 40.6 percent of the approximately 270.5 million shares outstanding afterward. The closing remained subject to final approval from the Toronto Stock Exchange.

About the Company

Charlotte’s Web describes itself as a Certified B Corporation and a leader in hemp extract wellness, offering full-spectrum and broad-spectrum CBD products along with cannabinoid isolates. Its lineup spans oil tinctures, gummies targeting sleep, calm, recovery and immunity, capsules, topical creams, and pet products, supported by a largely vertically integrated model with testing from soil to shelf. The company’s shares trade on the Toronto Stock Exchange under the symbol CWEB and are quoted in the United States on the OTCQX under CWBHF.

Both press releases accompanying the announcement noted that the materials do not constitute an offer to sell or solicit securities, and that forward-looking statements about the transaction’s benefits, the use of proceeds, regulatory approval, and broader strategy carry inherent risks and uncertainties. Further detail was provided in the company’s proxy statement dated April 16, 2026, and in an earlier news release issued March 30, 2026.