U.S.-based Charlotte’s Web Holdings (CW) has agreed to a restructuring deal with British American Tobacco (BAT) that removes the CBD maker’s largest liability while sharply increasing the tobacco giant’s ownership stake.
The move comes as publicly-traded CW reported losses of roughly $30 million in 2025 against total revenues of about $50 million. Those figures are essentially the same as they were in 2024.
The deal wipes out about $65 million in debt by turning it into shares, leaving Charlotte’s Web Holdings with no long-term obligations – but significantly diluting existing shareholders – while adding $10 million in new cash. The combined transaction results in the issuance of roughly 110 million new shares.
Priorities
Charlotte’s Web said the added liquidity will support near-term priorities, including participation in a U.S. Centers for Medicare & Medicaid Services pilot program and continued development of its clinical pipeline. The company said it believes its products are qualified for the program.
Following the deal, BAT will own approximately 40% of Charlotte’s Web on a non-diluted basis, making it the dominant shareholder. BAT previously held 20% after an investment in 2022.
While CW emphasized that BAT will not control day-to-day operations, the ownership shift consolidates its role as a long-term strategic backer, with the right to nominate directors in proportion to its stake.
Going medical
In a press release announcing the company’s 2025 financial performance, CEO Bill Morachnick said CW’s participation in the Medicare program is “a landmark breakthrough, bringing physician-authorized CBD access into the healthcare system for seniors.
“We see this as an early model for potential healthcare integration across additional segments of Medicare’s approximately 67 million beneficiaries. Alongside the Presidential Executive Order and growing bipartisan momentum for a rational federal framework, we believe our industry is at a pivotal inflection point,” he said.
BAT is one of the world’s largest consumer goods companies, with tens of billions in annual revenue and a market value of around $80–100 billion, operating in more than 180 countries. Built on cigarettes, it is shifting toward “reduced-risk” products—vapes, heated tobacco and oral nicotine—while also exploring cannabinoids.