DEBT

3 Months Ended

Mar. 31, 2026

Debt Disclosure [Abstract]

DEBT

DEBT

Convertible Debenture

On November 14, 2022, the Company entered into the Subscription Agreement with BT DE Investments, Inc., providing for the issuance of a $56.8 million (C$75.3 million) convertible debenture. The debenture is denominated in Canadian Dollars ("CAD" or "C$"). The debenture is convertible into 19.9% ownership of the Company's common shares at a conversion price of C$2.00 per Common Share of the Company on the TSX. The debenture will accrue interest at a stated annualized rate of 5% until such time that there is federal regulation permitting the use of CBD as an ingredient in food products and dietary supplements in the United States. Following federal regulation of CBD, the stated annualized rate of interest shall reduce to 1.5%. Interest is accrued annually and payable on the maturity date or date of earlier conversion.

On March 30, 2026, the Company announced that it has entered into an agreement to complete a transaction with BAT comprised of two components: (i) amendment and conversion of BAT’s outstanding C$75.3 million convertible debenture, as well as, all accrued interest, into Charlotte’s Web's common shares at a conversion price of C$0.94 per share; and (ii) a concurrent additional equity investment by BAT of $10 million (approximately C$13.6 million at current exchange rates) by way of a private placement at a price equal to the greater of (a) C$0.94 per share, and (b) a dollar amount equal to the maximum discount available pursuant to section 607 of the TSX Company Manual applied to the 5-day volume weighted average price of the Company’s common shares on the TSX prior to the closing date (collectively, the “Transaction”). The Transaction will result in the issuance of approximately 110 million Charlotte's Web's common shares to BAT and represents a total equity commitment of approximately C$103 million (approximately $75 million). Completion of the Transaction is subject to, among other conditions, TSX and shareholder approval. The Company's shareholders will be asked to approve the Transaction at an annual general and special meeting of the shareholders to be held on or about May 28, 2026.

The following is a summary of the Company's convertible debenture as of March 31, 2026:

	As of March 31, 2026
	Principal Amount		Unamortized Debt Discount and Costs		Net Carrying Amount
Convertible Debenture
Convertible debenture due November 2029	$	63,839	$	(12,335)	$	51,504

The following is a summary of the Company's convertible debenture as of December 31, 2025:

	As of December 31, 2025
	Principal Amount		Unamortized Debt Discount and Costs		Net Carrying Amount
Convertible Debenture
Convertible debenture due November 2029	$	63,944	$	(13,095)	$	50,849

The debenture was C$75.3 million per the subscription agreement and translated to USD on the transaction date. For the three months ended March 31, 2026 and March 31, 2025, the Company recognized a foreign currency gain of $725 and $62, respectively, related to the net carrying value of the debenture within the condensed consolidated statements of operations.

Interest is accrued annually and payable on the maturity date or date of earlier conversion. On conversion, accrued interest will either be converted into common shares equal to the amount of accrued interest or will be paid in cash if agreed with the Lender. As of March 31, 2026 and December 31, 2025, the principal amount of the debenture includes $9,850 and $9,057, respectively, of accrued interest expense. The following is a summary of the interest expense and amortization expense, recorded within the condensed consolidated statements of operations, of the Company's convertible debenture for the three months ended March 31, 2026 and 2025:

	Three Months Ended March 31,
	2026		2025
Interest expense	$	793	$	722
Amortization of debt discounts and costs	587		463
Total interest and amortization expense	$	1,380	$	1,185