Charlotte’s Web Positions to Enter US Cannabis health Market
Charlotte’s online secures choice to buy Stanley Brothers’ cannabis company
BOULDER, Colo., March 3, 2021 /PRNewswire/ – Charlotte’s online Holdings, Inc. (“Charlotte’s Web”, “CW” or the “Company”) (TSX: CWEB) (OTCQX: CWBHF), industry frontrunner in full-spectrum hemp CBD extract services and products, announces so it has entered into an alternative Purchase contract (the “Option”) with Stanley Brothers United States Of America Holdings, Inc. (“Stanley Brothers USA”), a Delaware that is privately-held company and the shareholders of Stanley Brothers USA. Stanley Brothers USA is a* that is( health incubator presently running in three states (Colorado, Ca, Florida) with expansion plans underway in eight extra states. The choice has a term that is five-yearextendable for an additional two years) and provides Charlotte’s Web the optionality to acquire Stanley Brothers USA on the earlier of three years from the effective date of the Option and federal legalization of cannabis in the United States, or such earlier time as Stanley Brothers USA and Charlotte’s Web may agree (the “Triggering Event”) potentially including when otherwise permitted by the policies of the stock exchange on which the Company’s securities are listed for trading. The common shares of Charlotte’s Web continue to trade on the TSX in Canada and OTCQX in the US.
Consumer attitudes, market trends, and laws surrounding cannabis and its role within the wellness category continue to trend positively. This option that is strategic Charlotte’s online optionality to enter the U.S. cannabis health market together with a seasoned and trusted team and brand name, positioning our company for prospective brand new development possibilities and shareholder value creation.
Deanie Elsner, CEO of Charlotte’s Web
The Stanley Brothers are innovating cannabis wellness because of the philosophy that is same 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 2.0 consumer that is wellness-focused combining full-spectrum cannabis extracts with practical botanical components. Marketed underneath the brand that is“ReCreate” the wellness formulations are lower in tetrahydrocannabinol (“THC”) for more precisely controllable benefits. Products include functional chocolates, gummies and oil tinctures, formulated with the wellness benefits of the entire* that is( plant including CBD and THC to aid attain a desired state of health.
Charlotte’s Internet may be the leader that is global the cultivation, production and distribution of hemp-derived CBD wellness products. Until the Option is exercised, both Charlotte’s Web and Stanley Brothers USA will continue to operate as standalone entities in the US. Internationally the companies are able to explore opportunities where* that is( is federally permissible.
Related-Party Transaction and Board Changes
Two founders of Stanley Brothers United States Of America are users associated with Charlotte’s online board of directors. To help offer the option that is strategic Charlotte’s Web co-founders Joel Stanley and Jared Stanley resigned as members of the Charlotte’s Web board of directors in order to transition to board positions with Stanley Brothers USA and oversee execution of that business with aligned values, business practices, and vision.
- Joel Stanley, a Charlotte’s Web co-founder and Board Member, is a Stanley Brothers USA co-founder and will 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 will assume a seat on the Board of Directors at Stanley Brothers USA.
A special committee (the “Special Committee”) of the board of directors of CW (the “Board”), comprised solely of independent and disinterested directors, and advised by its own independent legal advisors, unanimously recommended that the Board approve the Option. Acting upon the recommendation of the Special Committee, the known users associated with Board unanimously authorized the choice.
Additional Regards to the choice
The five-year choice (extendable to seven years upon repayment of extra consideration) with Stanley Brothers United States Of America investors had been bought for total consideration of US$8 million money. The Company may exercise the Option to acquire Stanley Brothers USA for a purchase price to be determined at the time of exercise of the Option upon the occurrence of the Triggering Event. The purchase price determination will involve weighted application of 3.5 times revenue and 13.5 times EBITDA multiples to Stanley Brothers USA’s financial statements at the time that is relevant or a base quantity and earn-out, in a few circumstances. The price would be susceptible to adjustments that are customary working capital, debt and cash at closing, and certain portions of the purchase price may be held back to cover post-closing adjustments and indemnification matters. Subject to compliance with applicable law and stock exchange approval, if required, Charlotte’s Web intends to satisfy the purchase price through the issuance of common shares of CW (“CW Shares”), to be issued at a price based on the volume that is 20-day normal trading cost of the CW Shares regarding the Toronto stock market during the appropriate time of issuance.
CW isn’t obligated to work out the choice.
In addition to your choice, Stanley Brothers United States Of America has granted CW a warrant (the “Warrant”) exercisable purchasing 10% associated with Stanley that is outstanding brothers shares and convertible securities that are considered in-the-money subject to certain conditions and exclusions. The Warrant is exercisable for a exercise that is nominal in the big event the organization elects not to ever work out the choice.
A content associated with choice plus the Warrant would be offered on CW’s SEDAR profile at www.sedar.com.
The Special Committee had been encouraged by separate appropriate advisors and a completely independent valuation that is national.
DLA Piper (Canada) LLP and DLA Piper (US) LLP acted as legal counsel to Charlotte’s Web. Akabas & Sproule acted as legal 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 leader in the production and distribution of innovative hemp-derived cannabidiol (“CBD”) wellness products under a family of brands which includes Charlotte’s Web™, CBD Medic™, CBD Clinic™, and Harmony Hemp. The Company’s premium quality products start with proprietary hemp genetics that are 100-percent farm that is american and manufactured into whole-plant hemp extracts containing the full spectral range of obviously occurring phytocannabinoids including CBD, CBC, CBG, terpenes, flavonoids along with other beneficial hemp substances. Charlotte’s online item categories include CBD oil tinctures (fluid items), CBD gummies (rest, anxiety, swelling data recovery), CBD capsules, CBD creams and creams, along with CBD animal services and products for dogs. Charlotte’s online may be the number 1 CBD brand name in the united states and distributed through significantly more than 22,000 locations that are retail select distributors and online through the Company’s website at www.CharlottesWeb.com.
Charlotte’s Web was founded by the Stanley Brothers with a mission to unleash the healing powers of botanicals through science and compassion, benefiting our planet and all sorts of whom reside upon it. Charlotte’s online is a socially and company that is environmentally conscious is committed to using business as a force for good and a catalyst for innovation. The Company weighs business that is sound with consideration for exactly how its efforts affect workers, clients, the environmental surroundings, and diverse communities. The price the organization covers agricultural services and products reflects a good and rate that is sustainable higher quality yield, encouraging regenerative farming practices, and supporting U.S. farming communities. Management believes that its socially oriented and environmentally responsible actions have a impact that is positive its clients, companies, workers and stakeholders. Charlotte’s online donates a percentage of its earnings that are pre-tax charitable organizations.
Original Press Release
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