Charlotte's Web forms a joint venture with BAT and AJNA BioSciences to seek FDA approval for a patented full-spectrum botanical hemp extract drug (2023)

BAT takes a 20% stake10 million dollars, with Charlotte's Web and AJNA each taking 40%

Renowned neurologist Dr.Orrin Devinski, AJNA Chief Medical Advisor to lead the project

DENVER,April 6, 2023/CNW/ -(TSX:WEBSITE) (OTCQX: CWBHF), Charlotte's Web Holdings, Inc. ("Charlotte's Web," "CW" or the "Company"), a leader in full-spectrum hemp extract wellness products, today announced that it has formed a joint venture (the "JV") with AJNA BioSciences PBC ("AJNA"), a botanical medicine development company focused on mental health and neurological disorders, and a subsidiary of British American Tobacco PLC (LSE: BATS and NYSE: BTI) ("BAT") that makes a contribution10 million dollarsas the initial investor in the JV. AJNA is partially owned and co-founded by its president,joel stanley, the former CEO and Chairman of Charlotte's Web, along with several other founding members of The CW.

The JV was formed to seek FDA approval for a new herbal drug targeting a neurological condition identified by the JV leadership team, which will be comprised of representatives from CW, AJNA, and BAT. This new botanical drug is developed from certain CW patented hemp genetics. The JV plans to work with the FDA to file an Investigational New Drug (“IND”) application and begin Phase I clinical development in 2023.

BAT holds a 20% stake in the form of preferred shares after its10 million dollarsinvestment and has the right to participate in future share offerings to maintain its proportionate capital position. Charlotte's Web and AJNA each own 40% of the joint JV voting entities. This is in consideration of CW's contribution to a license allowing JV to use certain proprietary hemp intellectual property, including clinical and consumer data, and AJNA laboratory and regulatory services, clinical expertise, and clinical service delivery. The JV plans to use the initial investment10 million dollarsInvestment for the clinical development of a new hemp botanical IND.

Orrin Devinski, M.D., Ph.D., a renowned neurologist and AJNA senior medical advisor and investigator, will lead the JV's clinical and regulatory strategy. Devinsky, M.D., is an early adopter of AJNA and director ofnew york university(new york university) Langone Comprehensive Epilepsy Center and Professor of Neurology, Neurosurgery, and Psychiatry at NYU Grossman School of Medicine. He was one of the principal investigators for the development of the FDA-approved cannabis-based drug Epidiolex.®. Epidolex was approved in 2018 for the treatment of seizure disorders, Dravet syndrome, and Lennox-Gastaut syndrome, which are rare and severe forms of pediatric epilepsy.

“As one of the first physicians to research new cannabinoids, I am very excited to be working on this project. I think the properties of cannabis and hemp are well-suited to the FDA's new path of botanical drug development," said Dr. Devinsky.

Jaques Tortoroli, CEO of Charlotte's Web, said, "This joint venture is a capital efficient way for Charlotte's Web to unlock the value of its intellectual property to advance the development of effective botanical alternatives to current neurological medications."

james barett, BAT's Business Director of Wellness and Arousal, said: "Our investment in the joint venture strengthens our commitment to Charlotte's Web and represents another step for BAT in our exploration beyond tobacco and nicotine. We continue to transform our business through investments strategic investments in innovative consumers, science and technology start-ups, as part of our goal to create a better tomorrow.

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Transaction between related parties

As the owner of a$56.8 millionConvertible Bond of the Company (the “obligation’) convertible into 19.9% ​​of the common shares of the Company (the “Common Shares”) at a conversion price of$ 2,00per common share, BAT is considered a "related party" of the Company under applicable securities laws. Therefore, the formation of the JV (the "transaction") constitutes a "transaction with related parties" within the meaning of Multilateral Instrument 61-101 - Protection of Minority Shareholders in Special Transactions ("MI 61-101"). In the absence of exceptions, the Company would need to obtain formal minority shareholder review and approval for the "related party transaction." MI 61-101-Minority Shareholder Approval Requirements Contained in Section 5.5(a) and Section 5.7 (1)(a) of MI 61-101 (fair market value not to exceed 25% of market capitalization), on the basis that neither (A) the fair market value of the item nor ( B) the fair market value of the transaction consideration, as far as interested parties are concerned, exceeds 25% of the Company's market capitalization as determined in good faith by the Company's Board of Directors pursuant to with MI 61-101.‎.‎

Further details will be included in a relevant amendment report to be filed by the Company. The material change report will be submitted no later than 21 days prior to the closing of the transaction, as there are less than 21 days left until the announcement of the transaction and the early closing.‎

About BAT

BAT is a leading multi-category consumer products company with a mission to build A Better Tomorrow™ by reducing the health impact of its business by offering a greater variety of enjoyable and less risky products for adult consumers.

The company continues to make it clear that combustible cigarettes pose serious health risks and that the only way to avoid these risks is to not start or stop doing so. BAT encourages those who would otherwise continue to smoke to switch entirely to scientifically proven, reduced-risk alternatives*†. To accomplish this, BAT is transforming itself into a truly consumer-focused, multi-category consumer products company.

BAT aims to have 50 million consumers of its non-fuel products by 2030 and generate £5bn in revenue from new categories by 2025. BAT has set comprehensive ESG targets, including achieving carbon neutrality for scopes 1 and 2 by 2030, eliminating unnecessary one-time costs of plastic use and making all plastic packaging reusable, recyclable or compostable by 2025.

BAT employs more than 50,000 people. BAT Group reported sales of £27.65 billion and operating profit of £10.5 billion in 2022.

The company's strategic portfolio consists of its global cigarette brands and a growing selection of reduced-risk tobacco and nicotine products*† New category and traditional non-combustible tobacco products. These include electronic cigarettes, heated tobacco products, modern oral products including tobacco-free nicotine pouches, and traditional oral products such as snus and wet snuff. In 2022 we had 22.5 million consumers of our non-fuel products, an increase of 4.2 million compared to 2021.

*Based on weight of evidence and assuming complete smoking cessation. These products are dangerous and addictive.
† Our Vuse vaping product (including Alto, Solo, Ciro and Vibe) and certain products including Velo, Grizzly, Kodiak and Camel snus sold in the US are subject to FDA regulation and no claims of discount risk associated with these products without the permission of the agency. .

About AJNA BioSciences PBC

AJNA BioSciences PBC is a botanical drug development company based inDenver, Colorado, with a focus on natural medicines that address mental and neurological disorders. Designed for the rapid development of investigational new drugs, AJNA's unique platform combines dedicated laboratory infrastructure and CMC resources with world-class clinical and regulatory expertise. a wide range of botanical species and clinical indications. As a non-profit company, AJNA's business model maximizes profitability and sustainability for people and the planet.

Sobre Charlotte's Web Holdings, Inc.

Charlotte's Web Holdings, Inc., a Certified B Corporation headquartered indenver, is a leader in innovative hemp extract wellness products under a family of brands that includes Charlotte's Web™, CBD Medic™ and CBD Clinic™. Charlotte's Web whole-plant CBD extracts are available in full-spectrum and broad-spectrum (THC-free) options, including the only ones in the worldNSF Certified for Sport Broad Spectrum CBD®, the official CBD of Major League Baseball©. Founded by the Sevenstanley brothers, Charlotte's Web ignited the CBD industry when the brothers garnered worldwide attention with their coverage of a young woman's surprising reaction to hemp extract. Its appearance changed the laws, public perception and research surrounding the enormous health potential of herbal solutions. The Stanleys created their company with the mission of bringing botanical options to health seekers around the world. Charlotte's Web brand premium products begin with proprietary hemp genetics grown on American farms using organic and regenerative farming practices. The Company's hemp extracts contain natural botanicals, including cannabidiol ("CBD"), CBC, CBG, terpenes, flavonoids, and other beneficial compounds. CW Labs' research and development department turns hemp science into a center of excellence inLouisville, Colorado. Charlotte's web product categories include CBD Oil Tinctures (Liquid Products), CBD Gummies (Sleep, Stress, Fitness Recovery), CBD Capsules, CBD Topical Creams and Lotions, and CBD Pet and Pet Products for dogs. Through its essentially vertically integrated business model, Charlotte's Web maintains tight control over product quality and consistency with more than 20 product batch tests to ensure quality. Charlotte's Web products are distributed to retailers and healthcare professionals around the world.EUand online through the company's website

forward looking information

Certain information in this press release constitutes forward-looking statements and forward-looking information within the meaning of applicable securities laws (collectively, "Forward-Looking Information"). In some cases, but not necessarily in all cases, forward-looking information is identified by the use of forward-looking terms such as "plans", "targets", "expects" or "does not expect", "is expected". , "an opportunity exists," "is positioned," "estimates," "intends," "anticipates," "anticipates" or "does not anticipate," or "believes," or variations of these words and phrases or statements, that certain actions, Events or results "may", "could", "would", "will", "will" or "be achieved", "occur" or "will be achieved". In addition, all statements that address expectations, forecasts or other characterizations of future events or circumstances contain forward-looking information. ‎In particular, this press release contains forward-looking statements related to, among other things, the joint venture's ability to achieve its goal, including obtaining FDA approval for a new CBD-based herbal medication.

Statements containing forward-looking information are not historical facts, but rather represent management's current expectations, estimates and projections about the future of our business, future plans, strategies, forecasts, anticipated events and trends, the economy and other future conditions. The search for information is necessarily based on various opinions, assumptions and estimates which, while believed by the Company to be reasonable as of the date of this press release, are subject to known and unknown risks, uncertainties, assumptions and other factors that could cause the actual results differ. Actual results, activity level, performance or achievements will differ materially from those expressed or implied in such forward-looking statements. Although these statements, which contain forward-looking information, are based on assumptions the Company believes are reasonable based on information available at the time the statements are made, such statements are not guarantees of future performance and readers are cautioned not to exercise inappropriateness. rely on forward-looking information.

Significant factors and assumptions used in developing the forward-looking information contained in this document include, among others, political and international considerations; regulatory changes; ‎and the factors discussed in the “Risk Factors” section of the Company's most recent Annual Information Form available atwww.SEDAR.comand the Company's most recently filed annual report on Form 10-K and quarterly report on Form 10-Q, as amended, and other filings with the Securities and Exchange Commission, which are available Except as required by applicable securities laws, the Company does not undertake any obligation to publicly update any forward-looking information, whether written or oral, from time to time, whether as a result of new information, future developments or otherwise.

FONTE Charlottes Web Holdings, Inc.

Charlotte's Web forms a joint venture with BAT and AJNA BioSciences to seek FDA approval for a patented full-spectrum botanical hemp extract drug (1)

For more information: Charlotte's Web, Cory Pala, Investor Relations Officer, (720) 484-8930,[email protected]; AJNA BioSciences Media Contact, ICR, Michael Robinson, (202) 255-0737,[email protected]

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