Charlotte's Web Holdings, Inc. — Proxy Solicitation & Information Statement 2023

Jun 14, 2023

UNITED STATES SECURITIES AND EXCHANGE COMMISSION

WASHINGTON, D. C. 20549

SCHEDULE 14A

Proxy Statement Pursuant to Section 14(a) of the Securities Exchange Act of 1934

Filed by the Registrant ☒ Filed by a party other than the Registrant ☐

Check the appropriate box:

• ☐ Preliminary Proxy Statement

• ☐ Confidential, for Use of the Commission Only (as permitted by Rule 14a-6(e)(2))

• ☐ Definitive Proxy Statement

• ☒ Definitive Additional Materials

• ☐ Soliciting Material under §240.14a-12

Charlotte’s Web Holdings, Inc.

(Name of Registrant as Specified in Its Charter)

(Name of Person(s) Filing Proxy Statement, if other than the Registrant)

Payment of Filing Fee (Check all boxes that apply):

• ☒ No fee required

• ☐ Fee paid previously with preliminary materials

• ☐ Fee computed on table in exhibit required by Item 25(b) per Exchange Act Rules 14a-6(i)(1) and 0-11

In connection with the previously announced annual general shareholder meeting to be held on June 15, 2023, Charlotte ’ s Web Holdings, Inc. issued a press release, dated June 13, 2023, responding to a letter and subsequent press release issued by Joel and Jesse Stanley regarding the replacement of a majority of the board of directors. A copy of the press release is being filed herewith as soliciting material.

PRESS RELEASE

Charlo�e's Web Comments on Le�er

from Joel and Jesse Stanley

The Board of Directors, as well as Ins�tu�onal Shareholder Services (“ISS”) and Glass Lewis and Co., LLC (“Glass Lewis”), recommend that shareholders vote “FOR” each of the Company’s nominees for elec�on to the Board at the upcoming Annual Mee�ng.

LOUISVILLE, Colo., June 13, 2023 - (TSX: CWEB) (OTCQX: CWBHF), Charlo�e's Web Holdings, Inc. ("Charlo�e's Web" or the "Company"), the market leader in full spectrum hemp extract wellness products, comments on certain demands made to the Company’s Board of Directors (the “Board”) by Joel and Jesse Stanley (“Joel and Jesse”) in connec�on with the Company’s upcoming June 15, 2023 annual general shareholder mee�ng (the “Mee�ng”) .

Late a�ernoon on Friday, June 9, 2023, Joel and Jesse delivered a le�er to the Board (the “Le�er”) demanding that the Board take immediate steps to facilitate the replacement of a majority of Board members, including all but one of the independent Board members (the “Targeted Directors”) with four individuals selected by Joel and Jesse. Two of the four individuals proffered were Joel and Jesse themselves and one of the individuals is their longstanding business associate. The Le�er provided that the Board acquiesce to their demands within 48 hours of receipt of the Le�er.

Both the Le�er, and a subsequent press release issued by Joel and Jesse on June 12, 2023, advise that they have communicated with certain Company shareholders in an effort to recons�tute the Board. The Le�er demanded that the Board waive the applica�on of the Company’s advance no�ce by-laws, which are designed to ensure that the Corporate Governance and Nomina�ng Commi�ee and the Board have sufficient �me to vet poten�al Board nominees, including with respect to suitability and independence. Joel and Jesse’s demands generally, and the �ming specifically, are designed to circumvent the procedures and processes in place to protect shareholders and allow them to make an informed decision with respect to the elec�on of directors.

There are significant ongoing business rela�onships between Charlo�e’s Web and en��es in which Joel and/or Jesse hold direct or indirect interests, certain of which are or will be subject to Board review and approval in the near future. The Board does not intend to abrogate its fiduciary responsibili�es to shareholders by facilita�ng the removal of three independent Targeted Directors in favor of non-independents. This would effec�vely hand control of the Company to individuals of which at least two have significant conflicts of interest and who have elected to avoid appropriate ve�ng procedures. Such procedures are designed to, among other things, protect shareholders from conflicts of interest.

The Board has a duty to act in the best interests of all its shareholders and to protect Company assets. The Board and the Company intend to comply with all legal requirements and appropriate protocols, as well as TSX and shareholder-approved Company policies, in connec�on with the elec�on and appointment of any Board members.

The Company notes that both ISS and Glass Lewis have recommended shareholders vote “FOR” the appointment of the nominees described in the Company’s Mee�ng informa�on circular.

Charlo�e's Web has engaged DLA Piper LLP as legal advisor, Morrow Sodali (Canada) Ltd. as proxy solicitor and strategic advisor and ICR Strategic Communica�ons as communica�ons advisor.

How to Vote:

IT IS IMPERATIVE TO PROTECT YOUR INVESTMENT THAT SHAREHOLDERS VOTE THEIR FORM OF PROXY OR VOTING INSTRUCTION FORM IN ACCORDANCE WITH MANAGEMENT’S RECOMMENDATIONS.

Please note you can vote again if you have already voted - the last vote that you submit will be the one that officially counts toward the elec�on results.

Please submit your vote before the date indicated on your vo�ng instruc�on form, or, if vo�ng by proxy, by no later than 11:59 P.M. (Eastern Time) on Wednesday, June 14, 2023.

If you have any ques�ons or require assistance with the comple�on and delivery of your proxy, please contact Morrow Sodali, our proxy solicita�on agent, by telephone at 1.888.777.2092 (North American Toll Free); or 1.289.695.3075 (Collect Outside North America); or by email at assistance@morrowsodali.com.

Beneficial Holders:

If your common shares are held through an intermediary, such as a securi�es dealer or broker, bank or trust company, you are a "beneficial shareholder" and a Vo�ng Instruc�on Form was mailed to you with your circular. CAN Beneficial Holders (Shares held through Canadian brokers ):

OBO’s (Objec�ng Beneficial Owners)

• Internet - visit www.proxyvote.com and enter your control number;

• Telephone - call 1-800-474-7493 (English) or 1-800-474-7501 (French);

• Mobile Data Device - scan the bar code on your Vo�ng Instruc�on Form.

U.S. Beneficial Holders (Shares held through U.S. Brokers):

• Internet - visit www.proxyvote.com and enter your control number;

• Telephone - call 1-800-454-8683;

• Mobile Data Device - scan the bar code on your Vo�ng Instruc�on Form.

Registered Holders:

If your shares are held in your own name and represented by a physical cer�ficate, you are a "registered shareholder" and a Form of Proxy was mailed to you with your circular. You can vote via the following methods:

• Internet - Visit www.proxyvote.com or scan the QR Barcode on your form of proxy,

• Telephone - from a touch-tone telephone call 1-800-690-6903 to transmit your vo�ng instruc�ons. Have your proxy card in hand when you call and then follow the instruc�ons.

About Charlo�e’s Web Holdings, Inc.

Charlo�e's Web Holdings, Inc., a Cer�fied B Corpora�on headquartered in Denver, is the market leader in innova�ve hemp extract wellness products under a family of brands that includes Charlo�e's Web™, CBD Medic™, and CBD Clinic™. Charlo�e’s Web whole-plant CBD extracts come in full-spectrum and broad-spectrum (THC-free) op�ons, including ReCreate™ by Charlo�e’s Web, the world’s only broad-spectrum CBD cer�fied NSF for Sport®, which is the official CBD of Major League Baseball©. Charlo�e's Web branded premium quality products start with proprietary hemp gene�cs that are American farm-grown using organic and regenera�ve cul�va�on prac�ces. The Company's hemp extracts have naturally occurring botanical compounds including cannabidiol ("CBD"), CBC, CBG, terpenes, flavonoids, and other beneficial compounds. The Company's CW Labs R&D division advances hemp science at a center of excellence in Louisville, Colorado. Charlo�e’s Web product categories include CBD oil �nctures (liquid products) CBD gummies (sleep, stress, exercise recovery), CBD capsules, CBD topical creams and lo�ons, as well as CBD pet products for dogs. Through its substan�ally ver�cally integrated business model, Charlo�e’s Web maintains stringent control over product quality and consistency with 20+ product lot tes�ng for quality assurance. Charlo�e’s Web products are distributed to retailers and health care prac��oners throughout the U.S.A, and online through the Company's website at www.charlo�esweb.com.

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Par�cipants in the Solicita�on

The Company and its directors and execu�ve officers and other persons may be deemed to be par�cipants in the solicita�on of proxies from the Company’s shareholders in respect of the Mee�ng, the elec�on to the Board of the Company’s nominees and related ma�ers. Informa�on regarding the Company’s directors and execu�ve officers is available in Company’s proxy statement for the Mee�ng filed with the U.S. Securi�es and Exchange Commission (the “SEC”) on April 28, 2023. Addi�onal informa�on regarding the par�cipants in the proxy solicita�on and a descrip�on of their direct and indirect interests are contained in the Proxy Statement (defined below).

No Offer or Solicita�on

This communica�on shall not cons�tute an offer to sell or the solicita�on of an offer to buy any securi�es, nor shall there be any sale of securi�es in any jurisdic�on in which the offer, solicita�on or sale would be unlawful prior to the registra�on or qualifica�on under the securi�es laws of any such jurisdic�on. No offering of securi�es shall be made except by means of a prospectus mee�ng the requirements of Sec�on 10 of the Securi�es Act of 1933, as amended.

Addi�onal Informa�on

The Company has filed with the SEC a defini�ve proxy statement (the “Proxy Statement”) in connec�on with the Mee�ng to consider and vote upon the elec�on to the Board of the Company’s nominees and other ma�ers and, beginning on or about April 29, 2023, mailed the no�ce of internet availability of proxy materials and other relevant documents to its shareholders as of the April 21, 2023 record date for the Mee�ng. The Company’s shareholders and other interested persons are advised to read the Proxy Statement and any other relevant documents that have been or will be filed with the SEC in connec�on with the Company’s solicita�on of proxies for the Mee�ng because these documents contain important informa�on about the Company, the elec�on to the Board of the Company’s nominees and related ma�ers. Shareholders may also obtain a free copy of the Proxy Statement, as well as other relevant documents that have been or will be filed with the SEC, without charge, at the SEC’s website located at www.sec.gov, on SEDAR at www.sedar.com or on the “Investor Rela�ons” sec�on of the Company’s website at h�ps://investors.charlo�esweb.com.

Forward-Looking Informa�on

Certain informa�on in this news release cons�tutes forward-looking statements and forward-looking informa�on within the meaning of applicable securi�es laws (collec�vely, "forward-looking informa�on"). In some cases, but not necessarily in all cases, forward looking informa�on can be iden�fied by the use of forward-looking terminology such as "plans", "targets", "expects" or "does not expect", "is expected", "an opportunity exists", "is posi�oned", "es�mates", "intends", "assumes", "an�cipates" or "does not an�cipate" or "believes", or varia�ons of such words and phrases or state that certain ac�ons, events or results "may", "could", "would", "might", "will" or "will be taken", "occur" or "be achieved". In addi�on, any statements that refer to expecta�ons, projec�ons or other characteriza�ons of future events or circumstances contain forward-looking informa�on.

Statements containing forward-looking informa�on are not historical facts, but instead represent management's current expecta�ons, es�mates and projec�ons regarding the future of our business, future plans, strategies, projec�ons, an�cipated events and trends, the economy and other future condi�ons. Forward-looking informa�on is necessarily based on a number of opinions, assump�ons and es�mates that, while considered reasonable by the Company as of the date of this news release, are subject to known and unknown risks, uncertain�es, assump�ons and other factors that may cause the actual results, level of ac�vity, performance or achievements to be materially different from those expressed or implied by such statements containing forward-looking informa�on. Although these statements containing forwardlooking informa�on are based on assump�ons the Company considers to be reasonable based on the informa�on available on the date such statements are made, such statements are not guarantees of future performance and readers are cau�oned against placing undue reliance on forward-looking informa�on.

The material factors and assump�ons used to develop the forward-looking informa�on herein include, but are not limited to, interna�onal and poli�cal considera�ons; regulatory changes; and the factors discussed throughout the "Risk Factors" sec�on of the Company's most recently filed annual informa�on form available on www.SEDAR.com and in the Company's most recently filed Annual Report on Form 10-K and quarterly report on Form 10-Q as amended, and other filings with the Securi�es and Exchange Commission available on www.SEC.gov. Except as required by applicable securi�es laws, the Company undertakes no obliga�on to publicly update any forward-looking informa�on, whether wri�en or oral, that may be made from �me to �me, whether as a result of new informa�on, future developments or otherwise.

Shareholder enquiries:

Dexter John Morrow Sodali (Canada) Ltd 1.888.777.2092 d.john@morrowsodali.com