Charlotte’s Web is America’s largest vertically integrated hemp-derived CBD company
Charlotte’s Web Holdings, Inc. (“Charlotte’s Web” or the “Company“) (TSX: CWEB) (OTCQX: CWBHF), the company behind the world’s most trusted hemp extract, and Abacus Health Products, Inc. (“Abacus“) (CSE: ABCS) (OTCQB: ABAHF), a leader in over-the-counter topical products combining active pharmaceutical ingredients with hemp extract, are pleased to announce that they have completed the previously-announced plan of arrangement (the “Arrangement“). Pursuant to the Arrangement, Charlotte’s Web acquired all the issued and outstanding subordinate voting shares of Abacus (the “Abacus Shares“). All the outstanding proportionate voting shares of Abacus were converted into Abacus Shares prior to closing of the Arrangement. Pursuant to the Arrangement, holders of Abacus Shares received 0.85 (the “Exchange Ratio“) of a common share of Charlotte’s Web for each Abacus Share held at the time of closing.
Charlotte’s Web is America’s largest vertically integrated hemp-derived CBD company. Combined, the companies distribute to more than 21,000 unique retail locations with limited shelf overlap due to adjacent but complementary positions across the ingestible and topical CBD product categories. Recently Charlotte’s Web added 1,100 new drug stores, more than 700 pet stores, and Abacus added more than 5,000 retail doors with the signing of a new retail partner.
Joining the Charlotte’s Web family of brands are Abacus’ consumer brands CBD MEDIC™ and Harmony Hemp, and for professional practitioners, Abacus’ CBD CLINIC™ brand. Substantial product cross selling opportunities are available through each company’s respective distribution network. Starting in July, multiple Abacus topical products will be available for purchase through Charlotte’s Web’s leading Direct to the Consumer (DTC) ecommerce platform.
“The addition of Abacus Health cements a market leading position in both topical and ingestible products in the CBD category, representing approximately 33%1 market share of the U.S. CBD food/drug/mass retail channel,” said Deanie Elsner, Chief Executive Officer of Charlotte’s Web. “We thank the founders and team members of both Charlotte’s Web and Abacus for their vision and hard work to build our respective vital brands. We are now one dynamic team and mission-driven company.”
Perry Antelman has been the CEO of Abacus since 2016 and will join Charlotte’s Web, effective today, as Executive Vice President and President of Topicals.
Following the closing of this acquisition, on June 11, 2020, Charlotte’s Web has 90,287,520 Common Shares outstanding and 92,455.5775 Proportionate Voting Shares convertible at 400:1, for an effective equivalent of 127,269,751 aggregate Common Shares outstanding.
With the completion of the Arrangement, the Abacus Shares and common share purchase warrants of Abacus listed under the symbol “ABCS.WT” on the Canadian Securities Exchange (the “Abacus Warrants“) are expected to be de-listed from the Canadian Securities Exchange at the close of trading on or about June 11, 2020. On close of the Arrangement, each Abacus Warrant outstanding immediately prior to closing was exchanged for a common share purchase warrant of Charlotte’s Web (the “Replacement Warrants“) that entitles the holder to acquire common shares of Charlotte’s Web in lieu of Abacus Shares, subject to adjustment in number and exercise price to give effect to the Exchange Ratio. Charlotte’s Web has applied to list the Replacement Warrants on the Toronto Stock Exchange (the “TSX“) and it is anticipated that, subject to satisfaction of the TSX listing requirements, the Replacement Warrants will begin trading on the TSX under the symbol “CWEB.WS” at market open on or about June 15, 2020.
In order to receive the consideration in exchange for their Abacus Shares, registered shareholders must complete, sign, date and return the Letter of Transmittal that was mailed to each registered shareholder of Abacus. The Letter of Transmittal is also available from Abacus’ depositary, Odyssey Trust Company. Non-registered holders of Abacus Shares whose Abacus Shares are registered in the name of a broker, investment dealer, bank, trust company, trustee or other intermediary or nominee should contact that intermediary or nominee for assistance in depositing their Abacus Shares and should follow instructions of such intermediary or nominee in order to deposit their Abacus Shares.
Further information about the Arrangement is set out in the Abacus’ management information circular dated May 4, 2020, which can be accessed online under Abacus’ issuer profile on SEDAR at www.sedar.com.