Charlotte’s Web Holdings is already a well-established, well-positioned company in the cannabis industry, but it is preparing to expand. The Colorado-based company has announced that it is negotiating the possible acquisition of a cannabis wellness incubator that will give it access to new territory, as well as to new market segments. According to the company’s announcement, an Option Purchase Agreement (OPA) is already in place to complete the deal.
Charlotte’s Web is set to purchase Delaware-based Stanley Brothers USA after reaching an agreement with the company and its shareholders. Stanley Brothers currently operates in California, Colorado and Florida, with expansion plans currently active in eight additional states. The OPA carries a five-year term and is extendable for another two, and would give Charlotte’s Web the option to purchase Stanley Brothers either three years following the effective date of the agreement and federal US cannabis legalization, or when the two entities finalize an agreement. The option would be exercised on the earlier of the two conditions.
Charlotte’s Web CEO Deanie Elsner added in the announcement, “Consumer attitudes, market trends, and laws surrounding cannabis and its role within the wellness category continue to trend positively. This strategic Option provides Charlotte’s Web optionality to enter the U.S. cannabis wellness market in partnership with an experienced and trusted team and brand, positioning our business for potential new growth opportunities and shareholder value creation. The Stanley Brothers are innovating cannabis wellness with the same philosophy and vision that drove their success as founders of the Charlotte’s Web brand. With this shared heritage, we could not be more aligned.”
The agreement has been approved by a special committee created for the purpose of reviewing the transaction. Charlotte’s Web purchased the OPA for $8 million in cash, and, once finalized, a formal purchase price will be negotiated. That price is expected to be weighted on the revenue of Stanley Brothers at that time, or on a base amount agreed upon by the two companies.