Mr. Bill Morachnick reports

CHARLOTTE'S WEB PROVIDES UPDATE ON DIVERGING HEMP POLICIES: FEDERAL MOMENTUM BUILDS AS CALIFORNIA RESTRICTS THERAPEUTIC HEMP PRODUCT ACCESS

Charlotte's Web Holdings Inc. today provided an update on developments pulling federal and state hemp policy in opposite directions.

California restriction effective July 1, 2026

New California requirements under SB 378 and related state regulations will significantly restrict the sale and distribution of ingestible full-spectrum and broad-spectrum hemp-derived products to consumers in the state. California's approach will be among the most restrictive in the nation, specifically limiting direct-to-consumer and on-line sales, whereas most other states have primarily focused on retail channels.

As a result, beginning July 1, Charlotte's Web must cease direct shipments of affected products to California consumers.

"This bill is a tragedy for many California families who have come to rely on these products to live fuller lives," said Bill Morachnick, chief executive officer of Charlotte's Web. "We hear every day from parents, veterans and individuals who have found meaningful support in therapeutic hemp products and the thought of losing access is deeply personal to them, and to us. Without thoughtful alternative access, this becomes a public health crisis in the making; one that risks taking away safe, trusted options that so many people depend on. Our purpose has always been rooted in helping people thrive, and we will continue to stand with Californians, working tirelessly to ensure their voices are heard and their needs are not overlooked."

Certain product categories are expected to remain available, including topical products that meet the established 0.3-per-cent THC dry-weight definition of hemp, as well as cannabinoid isolates and mushroom-based products, subject to final regulatory confirmation.

The company remains focused first on supporting its California customers, many of whom rely on these products as part of their health. Charlotte's Web has maintained a long-standing presence in California and has consistently advocated and lobbied alongside families at the state capitol and will continue to do so.

Charlotte's Web is actively notifying affected customers and encouraging them to share their perspectives with policymakers, while continuing to advocate for responsible hemp regulation and consumer access at both the state and federal levels.

Federal call to protect access

California's action comes at a time when the federal administration and policymakers are moving forward in a markedly different direction. On June 24, 2026, the White House called on Congress to revise federal hemp regulations to preserve consumer access to appropriate full-spectrum hemp-derived CBD products, or, at a minimum, to delay separate federal changes currently scheduled to take effect on Nov. 12, 2026. The administration emphasized that any path forward should "allow Americans to benefit from access to appropriate full-spectrum CBD products while preserving Congress's intent to restrict the sale of products that pose serious health risks," and pointed to bipartisan legislation introduced by Representative Andy Barr (R-KY) as a potential model.

As a member of the One Hemp coalition, working alongside industry leaders and consumer advocates, Charlotte's Web supports a policy framework, at both the federal and state levels, that clearly distinguishes non-intoxicating, full-spectrum hemp wellness products, from intoxicating beverages and recreational products. The company believes these categories warrant distinct regulatory approaches grounded in science and consumer safety.

"This is exactly why federal leadership matters," added Kelly Fair, general counsel at Charlotte's Web. "Consumers deserve consistent, science-based rules that preserve access to trusted products, regardless of where they live."

The administration's request is expected to be taken up by Congress in the coming months. However, there can be no assurance as to the timing or outcome of any legislative action. Charlotte's Web will continue to monitor developments closely and will provide updates, including potential options to support California consumers, as information becomes available.

About Charlotte's Web Holdings Inc.

Charlotte's Web Holdings, a Certified B corporation headquartered in Louisville, Colo., is a botanical wellness innovation company and a market leader in hemp extract wellness that includes Charlotte's Web whole-plant full-spectrum CBD extracts as well as broad-spectrum CBD and cannabinoid isolates. The company's hemp extracts have naturally occurring botanical compounds including cannabidiol (CBD), CBN, CBC, CBG, THC, terpenes, flavonoids and other beneficial compounds. Charlotte's Web product categories include CBD oil tinctures (liquid products), CBD gummies (sleep, calming, exercise recovery, immunity), CBN gummies, hemp-derived THC microdose gummies, functional mushroom gummies, CBD capsules, CBD topical creams and lotions, as well as CBD pet products for dogs. Through its substantially vertically integrated business model, Charlotte's Web maintains stringent control over product quality and consistency with analytic testing from soil to shelf for quality assurance. Charlotte's Web products are distributed to retailers and health care practitioners throughout the U.S. and are available online through the company's website.

Shares of Charlotte's Web trade on the Toronto Stock Exchange under the symbol CWEB and are quoted in U.S. dollars in the United States on the OTCQX under the symbol CWBHF.

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