Charlotte’s Web Holdings said it secured a $56.8 million investment from a British American Tobacco subsidiary, a deal that gives the multinational tobacco giant a 19.9% stake in the Colorado-based CBD and hemp company.
Charlotte’s Web said in a news release the investment was made in the form of a convertible debenture that is convertible at BAT’s discretion.
Charlotte’s Web also noted it will have pro-forma cash and short-term investments of about $65 million once the deal closes.
“This investment will provide Charlotte’s Web with funding that we anticipate will help unlock deeper and broader research and development that is key to our continued innovation, global footprint, and the advancement of our intellectual property portfolio,” Charlotte’s Web CEO Jacques Tortoroli said in a statement.
Kingsley Wheaton, chief growth officer at BAT, said in a statement that Charlotte’s Web had “strong brand equity, an extensive retail presence … and a track record of in-depth scientific research.”
It’s not the first time BAT has invested in a cannabis company.
In September, BAT secured a minority stake in German cannabis company Sanity Group for an undisclosed sum.
Germany is in the early stages of legalizing recreational cannabis.
In Canada, BAT spent roughly $175 million to take a 19.9% stake in licensed cannabis producer Organigram Holdings in 2021.
BAT invested another $5.1 million in Organigram this year.
In the case of Charlotte’s Web, the BAT investment comes on the heels of a string of other recent notable deals:
- Earlier this month, the CBD and hemp company signed a distribution deal with Stark Foods International, an importer and distributor of European specialty foods and beauty products.
- In October, Charlotte’s Web became the first CBD sponsor of Major League Baseball.
- In September, the company signed a distribution agreement with liquor giant Southern Glazer’s Wine & Spirits.