By Timothy S. Donahue
Top Takeaways:
- Deal closed: Charlotte’s Web has completed its previously announced debt conversion and equity investment transaction with BAT.
- Debt-free: The transaction eliminates approximately $65 million in debt and accrued interest from Charlotte’s Web’s balance sheet.
- Growth capital: BAT also invested an additional $10 million to support future growth initiatives.
Charlotte’s Web Holdings has finalized its previously announced restructuring transaction with British American Tobacco, completing a deal that eliminates approximately $65 million in debt and further strengthens BAT’s position as the company’s largest shareholder.
The transaction, first announced in March, included the conversion of BAT’s outstanding convertible debenture and accrued interest into Charlotte’s Web common shares, along with an additional $10 million equity investment from BAT.
“This transaction meaningfully strengthens our balance sheet and enhances our capital position,” said Bill Morachnick. “With increased financial flexibility and a streamlined capital structure, we are better positioned to execute our growth strategy, expand access, and deliver long-term value for our shareholders.”
Charlotte’s Web said the conversion included approximately C$75.3 million in principal and C$14.2 million in accrued interest, resulting in the issuance of more than 95 million shares to BAT. The tobacco company also purchased an additional 14.7 million shares through a private placement.
The company said proceeds from the new investment will help support participation in an anticipated Centers for Medicare & Medicaid Innovation pilot program and other medical-channel initiatives.
The transaction remains subject to final approval from the Toronto Stock Exchange. For BAT, the closing further expands its investment in cannabinoids and wellness products as part of its broader strategy beyond traditional tobacco and nicotine categories.
