By Adriano Marchese

 

Charlotte's Web Holdings Inc. shares jumped in early trading Tuesday after the company said it was receiving a $56.8 million investment from a subsidiary of British American Tobacco PLC.

At 9:46 a.m. ET, shares were up 8.1% at C$0.94.

The Canadian hemp-derived cannabidiol wellness products company said British American Tobacco, also known as BAT, made the investment by way of a convertible debenture which is convertible into a noncontrolling equity stake in the company of about 19.9%.

Charlotte's Web said that after closing of this investment, it will have a pro-forma cash and short-term investments of around $65 million, and that the new money provides substantial liquidity at an attractive cost of capital.

BAT and its affiliates will have the right to nominate one-fifth of the company's board of directors as long as it controls at least 15% of Charlotte's Web's common shares.

"This investment will provide Charlotte's Web with funding that we anticipate will help unlock deeper and broader research and development that is key to our continued innovation, global footprint, and the advancement of our intellectual property portfolio," Charlotte's Web Chief Executive Jacques Tortoroli said.

 

Write to Adriano Marchese at adriano.marchese@wsj.com

 

(END) Dow Jones Newswires

November 15, 2022 10:02 ET (15:02 GMT)

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