Charlotte’s Internet Positions to Enter US Cannabis Health Marketplace

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Charlotte’s internet secures choice to buy Stanley Brothers’ cannabis company

BOULDER, Colo., March 3, 2021 /PRNewswire/ – Charlotte’s Web Holdings, Inc. (“Charlottes 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 USA Holdings, Inc. (“Stanley Brothers USA“), a privately-held Delaware business, together with investors of Stanley Brothers USA. Stanley Brothers USA is a cannabis health incubator presently running in three states (Colorado, California, Florida) with expansion plans underway in eight extra states. The Option 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 internet optionality to enter the U.S. cannabis health market together with an experienced and trusted team and brand name, positioning our company for possible brand new growth possibilities and shareholder value creation,” explained Deanie Elsner, CEO of Charlotte’s internet. “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 beneath the “ReCreate” brand name, the health formulations are reduced in tetrahydrocannabinol (“THC“) to get more properly controllable advantages. Goods consist of practical chocolates, gummies and oil tinctures, developed using the health great things about the entire* that is( plant including CBD and THC to help achieve a desired state of wellbeing.

Charlotte’s Web is the leader that is global the cultivation, manufacturing and circulation of hemp-derived CBD health items. Before the choice is exercised, both Charlotte’s internet and Stanley Brothers USA continues to run as standalone entities in america. Internationally the businesses have the ability to explore possibilities where* that is( 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 internet co-founders Joel Stanley and Jared Stanley resigned as people associated with Charlotte’s internet board of directors to be able to change to board roles with Stanley Brothers USA and oversee execution of this company with aligned values, company techniques, and eyesight.

  • Joel Stanley, a Charlotte’s internet co-founder and Board Member, is a Stanley Brothers USA co-founder and can assume a seat regarding the Board of Directors at Stanley Brothers USA.
  • Jared Stanley, a Charlotte’s internet co-founder, Board Member, and its own Chief Cultivation Officer, is a Stanley Brothers USA co-founder and can assume a seat regarding the Board of Directors at Stanley Brothers USA.

A unique committee (the “Special Committee()” that is* 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 people associated with Board unanimously authorized the possibility.Additional Regards to the possibility

The five-year choice (extendable to seven years upon repayment of extra consideration) with Stanley Brothers

USA investors ended up being 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 some circumstances. The cost will likely be at the mercy of 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 20-day volume weighted 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 outstanding Stanley Brothers USA

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 business elects to not work out the possibility.

A content associated with choice as well as the Warrant will likely be offered on CW’s SEDAR profile at www.sedar.com.

Advisors

The Special Committee ended up being encouraged by separate appropriate advisors and an unbiased 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, Coloradohemp, is the market leader in the production and distribution of innovative CBD-derived cannabidiol (““) wellness products under a family of brands which includes Charlotte’sCBD Web™, CBD Medic™, Clinic™, and Harmony Hemphemp. The Company’s premium quality products start with proprietary hemp genetics that are 100-percent farm that is american and manufactured into whole-plant CBD extracts containing the full spectral range of obviously occurring phytocannabinoids including hemp, CBC, CBG, terpenes, flavonoids as well as other beneficial substances. Charlotte’sCBD internet item categories include CBD oil tinctures (fluid items), CBD gummies (rest, anxiety, irritation data recovery), CBD capsules, CBD skin medications and creams, along with animal items for dogs. Charlotte’sCBD internet may be the number 1 brand name within the USA

and distributed through significantly more than 22,000 retail places, choose distributors and on the web through the business’s internet site at www.CharlottesWeb.com. Charlotte’s internet ended up being established by the Stanley Brothers with a mission to unleash the healing abilities of botanicals through compassion and technology, benefiting our planet and all sorts of whom reside upon it. Charlotte’s internet 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 just how its efforts affect workers, clients, the surroundings, and diverse communities. The price the business will pay for agricultural items 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, vendors, workers and stakeholders. Charlotte’s

online donates a percentage of its earnings that are pre-tax charitable organizations.Subscribe to Charlotte’s

Web investor news.

Forward-Looking InformationThis news release contains statements that are forward-looking information inside the meaning of relevant securities legislation. Frequently, although not constantly, forward-looking statements and information is identified by way of terms such as for example “plans”, “expects” or “does perhaps not expect”, “is expected”, “estimates”, “intends”, “anticipates” or “does perhaps not anticipate”, or “believes”, or variants of these content or suggest that specific actions, occasions or outcomes “may”, “could”, “would”, “might” or “will” be taken, happen or be performed. Forward-looking statements or information incorporate known and risks that are unknown uncertainties and other factors which may cause the actual results, performance or achievements of Charlotte’s

Web to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements or information contained in this news release.Risks, uncertainties and other factors involved with forward-looking information could cause actual events, results, performance, prospects and opportunities to differ materially from those expressed or implied by such information that is forward-looking including presumptions as to CW’s company; Stanley Brothers USA’s company; the effectiveness and link between research; the unfavorable effect for the COVID-19 pandemic to the Company’s operations; and such risks contained in Charlotte’s internet’s yearly information kind dated March 27, 2020 and filed with Canadian securities regulators available on Charlotte’s

Internet’s issuer pages on SEDAR at www.sedar.com. Visitors are cautioned that the list that is foregoing of is not exhaustive.

There can be no assurance that the Triggering Event or the exercise of the Option or Warrant will occur, or that such events will occur on the terms and conditions contemplated in this news release. Charlotte’s

Web Holdings, Inc.

CisionTHE WORLD’S MOST TRUSTED HEMP EXTRACT™cannabis view content that is original download multimedia:http://www.prnewswire.com/news-releases/charlottes-web-positions-to-enter-us-

-wellness-market-301239203.htmlSOURCE Charlotte’s

Internet Holdings, Inc.

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