Charlotte’s Web’s Board Refuses to Engage with its Largest Shareholders

Despite strong support for change to the board of directors (the “Board”) of Charlotte’s Web Holdings, Inc. (TSX: CWEB) (OTCQX: CWBHF) (“Charlotte’s Web” or the “Company”) ahead of the annual general meeting of shareholders scheduled to be held on June 15, 2023 (the “Meeting”), the Board has refused to engage with Jesse and Joel Stanley (the “Concerned Shareholders”), co-founders of Charlotte’s Web, instead telling them to talk to the Company’s lawyers.

“One of the number one responsibilities of a director is to engage with their shareholders, understand their views, and, while those views may differ, engage in a constructive dialogue for the betterment of all shareholders. On all accounts this Board has failed,” said Jesse Stanley, co-founder of the Company. “We would like to thank the shareholders who have reached out to us since we made our desire for change public. We share both their surprise and disappointment that, rather than facilitate a smooth and cost-efficient transition, the Board has been silent. Shareholders are justifiably concerned about what costly entrenchment tactics the Board may employ in an attempt to delay inevitable change supported by the founders and largest shareholder group.”

On June 12, 2023, following a weekend of silence from the Company, the Concerned Shareholders were forced to announce in a press release that they have submitted instructions to “WITHHOLD” votes for four of six of the Company’s director nominees – namely, John Held, Jacques Tortoroli, Thomas Lardieri and Alicia Morga (the “Subject Directors”). Certain supporting shareholders (the “Supporting Shareholders”) have also submitted instructions to “WITHHOLD” votes for the Subject Directors ahead of the Meeting.

The Concerned Shareholders and the Supporting Shareholders collectively represent 24.66% of the common shares of the Company (“Common Shares”) entitled to vote at the Meeting. This represents a significant majority of those shareholders expected to be represented at the Meeting given the historical voter turnout for the election of directors and indicates that change is imminent.

The Concerned Shareholders have proposed to the Company that Subject Directors not stand for election, and the Board waive the Company’s advance notice requirements, which would allow the Concerned Shareholders to nominate Joel Stanley, Jesse Stanley, Lynn Kehler and Angela McElwee for election as directors of the Company at the Meeting.