Charlotte’s Web Positions to Enter US Cannabis health Market
Charlotte’s online secures choice to purchase Stanley Brothers’ cannabis business
BOULDER, Colo., March 3, 2021 /PRNewswire/ – Charlotte’s online Holdings, Inc. (“Charlotte’s Web”, “CW” or the “Company”) (TSX: CWEB) (OTCQX: CWBHF), the marketplace frontrunner in full-spectrum hemp CBD extract items, announces so it has entered into a choice 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 cannabis wellness incubator currently operating in three states (Colorado, California, Florida) with expansion plans underway in eight states that are additional. 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 cannabis that are surrounding its part in the health category continue steadily to trend ina positive manner This option that is strategic 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.
Deanie Elsner, CEO of Charlotte’s Web
The Stanley Brothers are innovating cannabis wellness with the philosophy that is same vision that drove their success as founders associated with the Charlotte’s online brand name. With this particular provided history, we’re able to maybe not become 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 functional botanical ingredients. Marketed under the brand that is“ReCreate” the health formulations are low in tetrahydrocannabinol (“THC”) for lots more exactly controllable advantages. Goods consist of practical chocolates, gummies and oil tinctures, developed using the health great things about the complete cannabis plant CBD that is including and to help achieve a desired state of wellbeing.
Charlotte’s Web is the leader that is global the cultivation, production and distribution of hemp-derived CBD health items. Before the choice is exercised, both Charlotte’s online and Stanley Brothers United States Of America continues to run as standalone entities in america. Internationally the ongoing companies are able to explore opportunities where cannabis is federally permissible.
Related-Party Transaction and Board Changes
Two founders of Stanley Brothers USA are members of the Charlotte’s Web board of directors. To further support the option that is strategic Charlotte’s online co-founders Joel Stanley and Jared Stanley resigned as people associated with the Charlotte’s online board of directors to be able to change to board roles with Stanley Brothers United States Of America and oversee execution of this company with aligned values, company techniques, and eyesight.
- Joel Stanley, a Charlotte’s online co-founder and Board Member, is a Stanley Brothers USA co-founder and certainly will assume a seat regarding the Board of Directors at Stanley Brothers USA.
- Jared Stanley, a Charlotte’s online co-founder, Board Member, and its own Chief Cultivation Officer, is a Stanley Brothers USA co-founder and certainly will assume a seat regarding the Board of Directors at Stanley Brothers United States Of America.
A special committee (the “Special Committee”) associated with the board of directors of CW (the “Board”), comprised entirely of separate and disinterested directors, and encouraged by a unique separate appropriate advisors, unanimously suggested that the Board accept the choice. Acting upon the suggestion associated with the Special Committee, the known members of the Board unanimously approved the Option.
Additional Terms of the Option
The five-year Option (extendable to seven years upon payment of additional consideration) with Stanley Brothers USA shareholders was purchased for total consideration of US$8 million cash. 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 price dedication calls for weighted application of 3.5 times income and 13.5 times EBITDA multiples to Stanley Brothers USA’s monetary statements during the time that is relevant or a base amount and earn-out, in certain circumstances. The purchase price will be subject to adjustments that are customary working money, financial obligation and money at closing, and particular portions associated with the price might be held back once again to cover post-closing alterations and indemnification issues. Susceptible to compliance with relevant legislation and stock market approval, if needed, Charlotte’s online promises to fulfill the price through the issuance of typical stocks of CW (“CW Shares”), to be given at a high price on the basis of the volume that is 20-day average trading price of the CW Shares on the Toronto Stock Exchange at the relevant time of issuance.
CW is not obligated to exercise the Option.
In addition to the Option, Stanley Brothers USA has issued CW a warrant (the “Warrant”) exercisable to purchase 10% of the Stanley that is outstanding brothers stocks and convertible securities which can be considered in-the-money subject to particular conditions and exclusions. The Warrant is exercisable for a exercise that is nominal in the event the Company elects not to exercise the Option.
A copy of the Option and the Warrant will be made available on CW’s SEDAR profile at www.sedar.com.
The Special Committee was advised by independent legal advisors and an independent valuation that is national.
DLA Piper (Canada) LLP and DLA Piper (US) LLP acted as lawyer to Charlotte’s online. Akabas & Sproule acted as lawyer to Stanley Brothers USA.
About Charlotte’s online Holdings, Inc.
Charlotte’s online Holdings, Inc., a professional B Corporation headquartered in Boulder, Colorado, could be the market frontrunner within the manufacturing and circulation of innovative hemp-derived “CBD” that is cannabidiol 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 useful hemp substances. Charlotte’s online item groups consist of CBD oil tinctures (liquid items), CBD gummies (rest, anxiety, infection data recovery), CBD capsules, CBD skin medications and creams, in addition to CBD animal items for dogs. Charlotte’s online could be the number 1 CBD brand name in america 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 surroundings, and diverse communities. The price the business will pay for agricultural items reflects a reasonable 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, vendors, 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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