British American Tobacco plc completed a transaction with Charlotte’s Web Holdings, Inc. on March 30, 2026 that converted a C$75.3 million convertible debenture into common shares at a conversion price of C$0.94 per share and added an additional US$10 million in equity. The conversion and investment give BAT an approximate 40% non‑diluted stake in Charlotte’s Web.
The transaction eliminates about US$65 million of debt and stops the company’s annual interest expense of roughly US$3 million. By removing its largest balance‑sheet liability, Charlotte’s Web strengthens its capital structure and gains liquidity to support its participation in the Centers for Medicare & Medicaid Innovation (CMMI) Medicare pilot program and other strategic initiatives.
Charlotte’s Web reported a net loss of US$11.5 million, or US$0.07 per share, in Q4 2025, compared with a net loss of US$3.4 million, or US$0.02 per share, in Q4 2024. The company’s full‑year 2025 revenue was US$49.9 million, a 0.5% increase from 2024, while the full‑year net loss remained at US$29.7 million, unchanged from 2024. Charlotte’s Web operates a single segment – hemp‑derived wellness products.
"2025 was a defining year for Charlotte’s Web. Our participation as a launch partner for the CMMI Medicare pilot marks a landmark breakthrough, bringing physician‑authorized CBD access into the healthcare system for seniors, with Charlotte’s Web at the forefront." – Bill Morachnick, CEO. "The new BAT Transaction will be transformational for our balance sheet, eliminating material liabilities and adding US$10 million in additional capital. As we progress with this strengthened financial foundation to support the anticipated Medicare pilot launch, Charlotte’s Web will be well‑positioned to convert strategic catalysts into sustainable long‑term performance." – Bill Morachnick. "In addition to this being an important balance sheet event, it also reflects support for Charlotte’s Web and its strategic direction." – Bill Morachnick.
The deal aligns with BAT’s broader strategy of diversifying beyond traditional combustibles into high‑growth, lower‑margin categories. Charlotte’s Web’s role as a launch partner in the CMMI pilot positions it to tap into a Medicare‑eligible consumer base, while the CBD market is projected to grow at a CAGR of 31% from 2025 to 2030, reaching an estimated $45.17 billion by 2035. By securing a significant minority stake, BAT expands its presence in the rapidly growing cannabidiol market and gains exposure to a new distribution channel that could reshape the industry’s future.
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