Charlotte’s Web Moves to Convert BAT Debenture and Raise $10 Million

Overview

• Charlotte’s Web outlined a two‑part deal with a British American Tobacco unit to convert a C$75.3 million debenture at C$0.94 per share and add a US$10 million private placement.
• Management said the combined deal would issue about 110 million new shares to BAT for roughly 40% ownership, with completion still requiring Toronto Stock Exchange and shareholder approvals.
• The company said the conversion would erase about US$65 million of debt, halt further interest accrual, and avoid up to roughly US$12 million of future interest through the debenture’s original term.
• Governance terms include BAT’s right to nominate directors in line with its stake and what executives described as a hard 49% ownership cap, while day‑to‑day control remains with current management.
• CMS guidance now allows certain hemp‑derived CBD in a Medicare pilot using Beneficiary Engagement Incentives, and Charlotte’s Web is positioning as a launch partner as it reports 2025 revenue of $49.9 million, a $29.7 million net loss, and $8.0 million in cash.