- Charlotte’s Web (CWEB) has secured a US$56.8M investment from British American Tobacco (BAT)
- The seven-year debenture is convertible into a 19.9 per cent ownership stake and carries an annual interest rate of 5 per cent
- The company will use the proceeds to enhance its research and development capabilities
- Charlotte’s Web Holdings is a market leader in innovative hemp extract wellness products
- Charlotte’s Web (CWEB) is up by 10.34 per cent, trading at $0.96 per share
Charlotte’s Web (CWEB) has secured a US$56.8M investment from British American Tobacco.
The investment is part of BAT’s commitment to reducing the health impact of its business by offering a greater choice of less risky products for adult consumers. To this end, the company is transforming into a consumer-centric multi-category consumer products business.
BAT’s investment is in the form of a debenture, which is convertible into a non-controlling equity stake in Charlotte’s Web of 19.9 per cent.
The debenture is due November 14, 2029, and will bear interest at 5 per cent per annum, with a step down to 1.5 per cent following U.S. federal authorization of CBD in food products and dietary supplements.
A separate investor rights agreement between the companies allows BAT to nominate 10-20 per cent of Charlotte’s board, contingent on its ownership stake, as well as maintain its percentage ownership of the company upon share issuances.
“This investment will provide Charlotte’s Web with funding that we anticipate will help unlock deeper and broader research and development that is key to our continued innovation, global footprint, and the advancement of our intellectual property portfolio,” stated Jacques Tortoroli, CEO of Charlotte’s Web.
“The appeal of Charlotte’s Web is clear to us: a wide portfolio of high-quality products, strong brand equity, an extensive retail presence and a robust B2C e-commerce platform serving a loyal U.S. consumer base, and a track record of in-depth scientific research,” added Kingsley Wheaton, Chief Growth Officer at BAT.
Upon closing of the investment, Charlotte’s Web will have Pro-forma cash and short-term investments of approximately US$65M.
Charlotte’s Web Holdings is a market leader in innovative hemp extract wellness products.
Charlotte’s Web (CWEB) is up by 10.34 per cent, trading at $0.96 per share as of 9:35 am ET.
