British American Tobacco to Invest $10M, Convert $54M Debenture for 40% Charlotte’s Web Stake
British American Tobacco’s BT DE Investments will convert a $54 million debenture, invest $10 million and acquire about 40% of Charlotte’s Web for a $75 million equity commitment. The transaction removes the largest liability, cuts roughly $3 million of annual interest costs and strengthens Charlotte’s Web’s balance sheet for CMS healthcare access.
1. Debenture Conversion and Equity Investment
BT DE Investments, a subsidiary of British American Tobacco, will convert a $54 million convertible debenture plus accrued interest into equity and complete a concurrent $10 million private placement, resulting in a 40% non-diluted stake and a total $75 million equity commitment in Charlotte’s Web.
2. Financial Impact
The deal will eliminate Charlotte’s Web’s largest balance-sheet liability, reduce annual interest expenses by approximately $3 million and inject fresh capital to support the company’s emerging CMS healthcare channel initiatives.
3. Strategic Rationale for British American Tobacco
The investment secures a significant position in a market-leading cannabidiol wellness company, aligns with BTI’s botanical innovation strategy and offers exposure to potential upside from Charlotte’s Web’s DeFloria botanical drug development and CMS pilot program participation.
4. Approval Process and Timeline
Completion of the transaction requires TSX approval and shareholder ratification at Charlotte’s Web’s Annual General and Special Meeting on May 28, 2026, with closing expected shortly thereafter upon receiving all necessary approvals.