Charlotte’s Web Announces Key Shareholder Approvals and Strategic Investment from British American Tobacco

Louisville, CO, June 1, 2026 – Charlotte’s Web Holdings, Inc. (“Charlotte’s Web” or the “Company”), a leader in innovative hemp extract wellness products, has released the results from its annual general and special meeting of shareholders held virtually on May 28, 2026. This meeting included several significant votes and corporate actions that could have meaningful implications for shareholders and the Company’s future direction.

Key Points and Shareholder Approvals

• Strong Shareholder Participation:
  • Total votes cast: 96,513,512, representing 60.1% of outstanding voting shares – indicating robust shareholder engagement.
• Number of Directors Set at Six:
  • Shareholders ratified the number of board seats at six, ensuring a stable and manageable governance structure.
• Election of Directors:
  • All proposed directors were elected to serve until the next annual meeting. Among those elected, Matthew McCarthy received 49,512,385 votes in favor.
• Appointment of Auditor:
  • PKF O’Connor Davies LLP was re-appointed as auditor for the fiscal year ending December 31, 2026, with authorization for the board to set their remuneration – a move supporting continuity in financial oversight.
• Landmark Transaction with British American Tobacco (BAT):
  • Shareholders Approved the Amendment and Conversion of Convertible Debenture:
    • The ordinary resolution authorized and approved the amendment of a C\$75.3 million principal amount convertible debenture held by BT DE Investments Inc. (“BAT”), a subsidiary of British American Tobacco p.l.c.
    • The resolution also approves the issuance of common shares to BAT upon conversion of the debenture and a concurrent equity investment by BAT.
  • Potential Change in Control and Significant Dilution:
    • The transaction may result in BAT becoming a “Control Person” under the Toronto Stock Exchange (TSX) rules and the British Columbia Securities Act, as BAT could receive more than 25% of the Company’s outstanding shares post-transaction.
    • Upon closing, BAT is expected to own 109,944,042 common shares, representing approximately 40.6% of the combined total of 270,549,931 common shares issued and outstanding following the transaction.
  • Shareholder Approval Results:
    • Votes for the Transaction: 48,498,268
    • Votes against: 3,048,280
    • Broker non-votes: 0
    • This overwhelming support (over 93% in favor) signals strong shareholder backing for the partnership with BAT and the associated capital infusion.

Why This Is Important for Shareholders and Market Value

• Price-Sensitive Developments:
  • Strategic Partnership and Capital Injection:
    • The investment from BAT and the conversion of its debenture significantly strengthen Charlotte’s Web’s balance sheet, providing increased financial flexibility to execute growth strategies, expand market access, and potentially accelerate product development.
    • BAT’s increased ownership interest and potential status as a control person may fundamentally shift the Company’s governance and strategic direction.
    • The infusion of capital comes at a pivotal time for the hemp and CBD industry, and Charlotte’s Web is now better positioned to capitalize on future regulatory changes or market expansion opportunities.
  • Possible Impact on Share Price:
    • The creation of a new control person and the significant dilution to existing shareholders (over 25% new shares issued) are material events that may affect the share price, either by attracting new investors seeking exposure to a stronger capital base and BAT’s strategic backing, or by prompting concerns around dilution and control.
• Other Notable Items:
  • All actions are subject to final TSX approval and satisfaction of other customary closing conditions. The transaction is anticipated to close on or around May 28, 2026.
  • Charlotte’s Web stock trades on the TSX under “CWEB” and on the OTCQX under “CWBHF”.

Management Commentary

Bill Morachnick, Chief Executive Officer of Charlotte’s Web, commented:
“This transaction meaningfully strengthens our balance sheet and enhances our capital position. With increased financial flexibility and a streamlined capital structure, we are better positioned to execute our growth strategy, expand access, and deliver long-term value for our shareholders. We are grateful to British American Tobacco for their continued investment.”

Looking Forward

• The Company will continue to focus on growth initiatives, product development, and participation in market pilot programs.
• Management has outlined expectations for cost reductions, improved cash flow, and readiness for potential regulatory shifts in the hemp industry.
• Risks remain, including regulatory approval, market acceptance, and integration of the new capital structure.

Contact Information

Cory Pala
Director of Investor Relations
[email protected]
(720) 484-8930

Disclaimer

This article is based on the Company’s public filings and press releases. Forward-looking statements in this article involve risks and uncertainties, including but not limited to the receipt of regulatory approvals, satisfaction of closing conditions, market and regulatory changes, and other factors disclosed in the Company’s SEC and SEDAR+ filings. Shareholders and investors are urged to review the original filings and consult their investment advisors before making investment decisions. This article does not constitute an offer to sell or the solicitation of an offer to buy any securities.

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