Charlotte’s Web Announces Transaction with BAT: Debenture Conversion and US$10M Equity Investment to Strengthen Balance Sheet

Transaction Addresses Capital Structure and Supports Near-Term Operating Priorities, Including Anticipated CMMI Medicare Pilot Program Participation

LOUISVILLE, Colo., March 30, 2026 /PRNewswire/ – (TSX: CWEB) (OTCQB: CWBHF) Charlotte’s Web Holdings, Inc., a botanical wellness innovation company and the market leader in cannabidiol („CBD“) hemp extract wellness products, today announced a transaction with BT DE Investments, Inc. („BAT“), a subsidiary of British American Tobacco plc (LSE: BATS and NYSE: BTI), comprising two components: (i) amendment and conversion of BAT’s outstanding C$75.3 million principal amount (approximately US$54 million) of the convertible debenture, as well as all accrued interest, into common shares of Charlotte’s Web at a conversion price of C$0.94 (approximately US$0.67 at the Bank of Canada exchange rate on March 27, 2026 for estimation purposes); and (ii) a concurrent additional equity investment by BAT of US$10 million by way of a private placement at a price (the „Subscription Price“) equal to the greater of (a) C$0.94, or (b) a dollar amount equal to the maximum discount available pursuant to section 607 of the TSX Company Manual applied to the 5-day volume weighted average price of the Company’s common shares on the TSX prior to the closing date (collectively, the „Transaction“). Together, the Transaction results in the issuance of approximately 110 million common shares of Charlotte’s Web to BAT and represents a total equity commitment of approximately US$75 million. 

Upon completion of the Transaction, approximately US$65 million of total debt will be eliminated from the Company’s balance sheet, interest on the debenture will stop accruing, and liquidity will increase for near-term operations.  Charlotte’s Web would operate with no long-term debt and with a simplified equity structure.

The Company is preparing for anticipated participation in the Centers for Medicare & Medicaid Innovation (CMMI) Medicare pilot program.  In parallel, DeFloria continues to advance its FDA Phase 2 clinical trial program led by Ajna BioSciences. These initiatives require internal investment to optimize execution.

„In addition to this being an important balance sheet event, it also reflects support for Charlotte’s Web and its strategic direction,“ said Bill Morachnick, Chief Executive Officer of Charlotte’s Web. „BAT’s decision to convert its debenture to equity and invest additional capital removes our largest remaining liability and strengthens our shareholders‘ equity. The additional US$10 million in new capital reinforces our financial position and provides greater flexibility to participate in the upcoming CMMI Medicare pilot program, subject to receipt of all regulatory approvals. We look forward to seeking shareholder approval to complete this Transaction.“