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

• With 24.66% of common shares already voted to WITHHOLD on four directors, the entrenched Board refuses to engage with its largest shareholders and co-founders
• Unwillingness to have a constructive conversation not only unnecessarily delays inevitable change but comes at the expense of shareholders’ time, money and resources

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.

“We believe that with the right leadership moving forward, Charlotte’s Web’s best days are yet to come. The Board needs to return to a founder’s mentality, end wasteful spending and assemble a team that knows what it takes to grow the Company,” said Joel Stanley, co-founder of the Company. “We support the election of Susan Vogt and Jonathan Atwood and we believe their experience will remain a valuable asset to the newly constituted Board. We are hopeful that Susan and Jonathan are as committed to putting the interests of shareholders first as we are and that they will act as a voice of reason to any Board members that may be more focused on keeping their jobs than creating shareholder value. We remain ready and open to engage and hope they can encourage their director colleagues to do the same.”

The Concerned Shareholders are also calling for an independent chair to preside over the Meeting as concerns regarding the entrenched nature of the current Board grows. An independent chair, untethered from board members looking out for their own interests, can impartially oversee the annual meeting and facilitate fair proceedings. In particular, an independent chair may determine that waiving the advance notice requirements and avoiding the cost and expense of another shareholders meeting is in the best interests of the Company.

IT’S NOT TOO LATE -- YOU CAN STILL CHANGE YOUR VOTE!

THE CONCERNED SHAREHOLDERS ENCOURAGE FELLOW SHAREHOLDERS TO “WITHHOLD” VOTES FOR JOHN HELD, JACQUES TORTOROLI, THOMAS LARDIERI AND ALICIA MORGA. DOING SO WILL HELP BRING ABOUT THE POSITIVE CHANGE THAT CHARLOTTE’S WEB NEEDS.

If you are a beneficial shareholder (hold shares through a financial intermediary) or a registered shareholder (hold shares in certificate form) you may immediately change your vote online by using a 16-digit control number at www.proxyvote.com or by calling 1-800-690-6903.

Your control number can be found with the proxy materials mailed to you. If you do not have your materials, you can request your control number by email at shareholder@broadridge.com or by calling 1-800-353-0103.

Need more information or need help voting? Call Kingsdale Advisors on 1-888-564-7333 or email contactus@kingsdaleadvisors.com.

ADVISORS

Kingsdale Advisors (“Kingsdale”) is acting as strategic shareholder and communications advisor and Fasken Martineau DuMoulin LLP is acting as legal advisors to the Concerned Shareholders.

INFORMATION IN SUPPORT OF PUBLIC BROADCAST SOLICITATION

The following information is provided in accordance with applicable law. The Concerned Shareholders are relying on the exemption under sections 9.2(4) of National Instrument 51-102 – Continuous Disclosure Obligations to make this public broadcast solicitation.

This news release and any solicitation made by the Concerned Shareholders in advance of the Meeting is, or will be, as applicable, made by Concerned Shareholders and not by or on behalf of the management of the Company.

The Concerned Shareholders may solicit proxies in reliance upon the public broadcast exemption to the solicitation requirements under applicable law, conveyed by way of public broadcast, including through press releases, speeches or publications, and by any other manner permitted under applicable law. Proxies may also be solicited by the Concerned Shareholders pursuant to an information circular sent to shareholders after which solicitations may be made by or on behalf of the Concerned Shareholders by mail, telephone, fax, email or other electronic means as well as by newspaper or other media advertising, and in person by directors, officers and employees of the Concerned Shareholders, who will not be specifically remunerated therefor. The Concerned Shareholders may engage the services of one or more agents and authorize other persons to assist in soliciting proxies on behalf of the Concerned Shareholders.

The Concerned Shareholders have retained Kingsdale as its strategic advisor and to assist the Concerned Shareholders in the solicitation of proxies. The Concerned Shareholders will pay Kingsdale fees currently estimated at up to $100,000. Kingsdale’s responsibilities will principally include advising the Concerned Shareholders on developing and implementing shareholder communication and engagement strategies, and advising with respect to meeting and proxy protocol.

All costs incurred for any solicitation will be borne by the Concerned Shareholders, provided that, subject to applicable law, the Concerned Shareholders may seek reimbursement from the Company of the Concerned Shareholders’ out-of-pocket expenses, including proxy solicitation expenses and legal fees, incurred in connection therewith.

A registered shareholder of the Company that gives a proxy may revoke it: (a) by completing and signing a valid proxy bearing a later date than the proxy being revoked and returning the newly completed and signed proxy in accordance with the instructions contained in the form of proxy; (b) by depositing an instrument in writing executed by the shareholder or by the shareholder’s attorney authorized in writing, as the case may be: (i) at the registered office of the Company at any time up to and including the last business day preceding the day of the Meeting at which the proxy is to be used, or (ii) with the chairman of the Meeting on the day of the Meeting; or (c) in any other manner permitted by law. A non-registered holder of common shares of the Company will be entitled to revoke a form of proxy or voting instruction form given to an intermediary at any time by written notice to the intermediary in accordance with the instructions given to the non-registered holder by its intermediary.

To the knowledge of the Concerned Shareholders, the Company’s mailing address is 700 Tech Court Louisville, CO 80027. A copy of this news release may be obtained on the Company’s SEDAR profile at www.sedar.com.

CAUTIONARY STATEMENT REGARDING FORWARD-LOOKING STATEMENTS

This press release contains forward-looking information within the meaning of applicable securities laws. In general, forward-looking information refers to disclosure about future conditions, courses of action, and events. All statements contained in this press release that are not clearly historical in nature or that necessarily depend on future events are forward‐looking, and the use of any of the words “anticipates”, “believes”, “expects”, “intends”, “plans”, “will”, “would”, and similar expressions are intended to identify forward-looking statements. These statements are based on current expectations of the Concerned Shareholders and currently available information.

Forward-looking statements are not guarantees of future performance, involve certain risks and uncertainties that are difficult to predict, and are based upon assumptions as to future events that may not prove to be accurate. The Concerned Shareholders undertake no obligation to update publicly or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable securities legislation.

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