Charlotte’s Web secures Option to buy Stanley Brothers’ hashish enterprise
BOULDER, Colo., March 3, 2021 /CNW/ – Charlotte’s Web Holdings, Inc. (“Charlotte‘s Web“, “CW” or the “Company“) (TSX: CWEB) (OTCQX: CWBHF), the market leader in full-spectrum hemp CBD extract products, announces that it has entered into an Option Purchase Agreement (the “Option“) with Stanley Brothers USA Holdings, Inc. (“Stanley Brothers USA“), a privately-held Delaware company, and the shareholders of Stanley Brothers USA. Stanley Brothers USA is a cannabis wellness incubator currently operating in three states (Colorado, California, Florida) with expansion plans underway in eight additional states. The Option has a five-year term (extendable for an additional two years) and provides Charlotte’s Web the optionality to accumulate Stanley Brothers USA on the sooner of three years from the efficient date of the Option and federal legalization of hashish within the United States, or such earlier time as Stanley Brothers USA and Charlotte’s Web could agree (the “Triggering Event“) probably together with when in any other case permitted by the insurance policies of the inventory alternate on which the Company’s securities are listed for buying and selling. The widespread shares of Charlotte’s Web proceed to commerce on the TSX in Canada and OTCQX within the US.
“Consumer attitudes, market trends, and laws surrounding cannabis and its role within the wellness category continue to trend positively. This strategic Option provides Charlotte’s Web optionality to enter the U.S. cannabis wellness market in partnership with an experienced and trusted team and brand, positioning our business for potential new growth opportunities and shareholder value creation,” defined Deanie Elsner, CEO of Charlotte’s Web. “The Stanley Brothers are innovating cannabis wellness with the same philosophy and vision that drove their success as founders of the Charlotte’s Web brand. With this shared heritage, we could not be more aligned.”
Stanley Brothers USA is evolving botanical formulations for the Cannabis 2.zero wellness-focused shopper, combining full-spectrum hashish extracts with purposeful botanical substances. Marketed below the “ReCreate” model, the wellness formulations are decrease in tetrahydrocannabinol (“THC“) for extra exactly controllable advantages. Products embrace purposeful candies, gummies and oil tinctures, formulated with the wellness advantages of the complete hashish plant together with CBD and THC to assist obtain a desired state of wellbeing.
Charlotte’s Web is the worldwide chief within the cultivation, manufacturing and distribution of hemp-derived CBD wellness merchandise. Until the Option is exercised, each Charlotte’s Web and Stanley Brothers USA will proceed to function as standalone entities within the US. Internationally the businesses are in a position to discover alternatives the place hashish is federally permissible.
Related-Party Transaction and Board Changes
Two founders of Stanley Brothers USA are members of the Charlotte’s Web board of administrators. To additional assist the strategic Option, Charlotte’s Web co-founders Joel Stanley and Jared Stanley resigned as members of the Charlotte’s Web board of administrators to be able to transition to board positions with Stanley Brothers USA and oversee execution of that enterprise with aligned values, enterprise practices, and imaginative and prescient.
- Joel Stanley, a Charlotte’s Web co-founder and Board Member, is a Stanley Brothers USA co-founder and can assume a seat on the Board of Directors at Stanley Brothers USA.
- Jared Stanley, a Charlotte’s Web co-founder, Board Member, and its Chief Cultivation Officer, is a Stanley Brothers USA co-founder and can assume a seat on the Board of Directors at Stanley Brothers USA.
A particular committee (the “Special Committee“) of the board of administrators of CW (the “Board“), comprised solely of impartial and disinterested administrators, and suggested by its personal impartial authorized advisors, unanimously really helpful that the Board approve the Option. Acting upon the advice of the Special Committee, the members of the Board unanimously permitted the Option.
Additional Terms of the Option
The five-year Option (extendable to seven years upon fee of extra consideration) with Stanley Brothers USA shareholders was bought for whole consideration of US$eight million money. Upon the incidence of the Triggering Event, the Company could train the Option to accumulate Stanley Brothers USA for a purchase order worth to be decided on the time of train of the Option. The buy worth willpower will contain weighted utility of three.5 instances income and 13.5 instances EBITDA multiples to Stanley Brothers USA’s monetary statements on the related time, or a base quantity and earn-out, in sure circumstances. The buy worth will probably be topic to customary changes for working capital, debt and money at closing, and sure parts of the acquisition worth could also be held again to cowl post-closing changes and indemnification issues. Subject to compliance with relevant regulation and inventory alternate approval, if required, Charlotte’s Web intends to fulfill the acquisition worth by means of the issuance of widespread shares of CW (“CW Shares“), to be issued at a worth based mostly on the 20-day quantity weighted common buying and selling worth of the CW Shares on the Toronto Stock Exchange on the related time of issuance.
CW just isn’t obligated to train the Option.
In addition to the Option, Stanley Brothers USA has issued CW a warrant (the “Warrant“) exercisable to buy 10% of the excellent Stanley Brothers USA shares and convertible securities which can be thought of in-the-money topic to sure circumstances and exclusions. The Warrant is exercisable for a nominal train worth within the occasion the Company elects to not train the Option.
A replica of the Option and the Warrant will probably be made accessible on CW’s SEDAR profile at www.sedar.com.
The Special Committee was suggested by impartial authorized advisors and an impartial nationwide valuation agency.
DLA Piper (Canada) LLP and DLA Piper (US) LLP acted as authorized counsel to Charlotte’s Web. Akabas & Sproule acted as authorized counsel to Stanley Brothers USA.
About Charlotte’s Web Holdings, Inc.
Charlotte’s Web Holdings, Inc., a Certified B Corporation headquartered in Boulder, Colorado, is the market chief within the manufacturing and distribution of progressive hemp-derived cannabidiol (“CBD”) wellness merchandise below a household of manufacturers which incorporates Charlotte’s Web™, CBD Medic™, CBD Clinic™, and Harmony Hemp. The Company’s premium high quality merchandise begin with proprietary hemp genetics which can be 100-percent American farm grown and manufactured into whole-plant hemp extracts containing a full spectrum of naturally occurring phytocannabinoids together with CBD, CBC, CBG, terpenes, flavonoids and different useful hemp compounds. Charlotte’s Web product classes embrace CBD oil tinctures (liquid merchandise), CBD gummies (sleep, stress, irritation restoration), CBD capsules, CBD topical creams and lotions, in addition to CBD pet products for dogs. Charlotte’s Web is the primary CBD model within the USA and distributed by means of greater than 22,000 retail areas, choose distributors and on-line by means of the Company’s web site at www.CharlottesWeb.com.
Charlotte’s Web was based by the Stanley Brothers with a mission to unleash the therapeutic powers of botanicals by means of compassion and science, benefiting the planet and all who reside upon it. Charlotte’s Web is a socially and environmentally acutely aware firm and is dedicated to utilizing enterprise as a power for good and a catalyst for innovation. The Company weighs sound enterprise selections with consideration for a way its efforts have an effect on staff, clients, the setting, and numerous communities. The charge the Company pays for agricultural merchandise displays a good and sustainable charge driving increased high quality yield, encouraging regenerative farming practices, and supporting U.S. farming communities. Management believes that its socially oriented and environmentally accountable actions have a optimistic influence on its clients, suppliers, staff and stakeholders. Charlotte’s Web donates a portion of its pre-tax earnings to charitable organizations.
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This information launch comprises forward-looking statements and knowledge inside the which means of relevant securities laws. Often, however not all the time, forward-looking statements and knowledge will be recognized by means of phrases similar to “plans”, “expects” or “does not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does not anticipate”, or “believes”, or variations of such phrases and phrases or state that sure actions, occasions or outcomes “may”, “could”, “would”, “might” or “will” be taken, happen or be achieved. Forward-looking statements or data contain identified and unknown dangers, uncertainties and different elements which can trigger the precise outcomes, efficiency or achievements of Charlotte’s Web to be materially totally different from any future outcomes, efficiency or achievements expressed or implied by the forward-looking statements or data contained on this information launch.
Risks, uncertainties and different elements concerned with forward-looking data might trigger precise occasions, outcomes, efficiency, prospects and alternatives to vary materially from these expressed or implied by such forward-looking data, together with assumptions as to CW’s enterprise; Stanley Brothers USA’s enterprise; the efficacy and outcomes of analysis; the hostile influence of the COVID-19 pandemic to the Company’s operations; and such dangers contained in Charlotte’s Web’s annual data type dated March 27, 2020 and filed with Canadian securities regulators accessible on Charlotte’s Web’s issuer profiles on SEDAR at www.sedar.com. Readers are cautioned that the foregoing listing of things just isn’t exhaustive.
There will be no assurance that the Triggering Event or the train of the Option or Warrant will happen, or that such occasions will happen on the phrases and circumstances contemplated on this information launch.
Charlotte’s Web Holdings, Inc.
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