Charlotte's Web Holdings, Inc.

Value-Based Care Pilot Programs

In-line with the Administration's efforts to integrate full-spectrum hemp products into the national healthcare system, Charlotte’s Web is actively engaging Accountable Care Organizations (ACOs) to launch pilot programs evaluating the role of CBD within value-based care models. These initiatives are designed to generate measurable clinical and economic outcomes that demonstrate the potential of cannabinoid-based interventions to improve patient wellness while reducing overall healthcare costs. By aligning with care delivery models inspired by the principles of the Center for Medicare & Medicaid Innovation ("CMMI"), Charlotte’s Web believes it is well positioned for a shift toward outcomes-based healthcare and future funding or shared-savings opportunities, subject to regulatory developments and program eligibility requirements.

CMMI has publicly stated that the Substance Access Beneficiary Engagement Incentive (“BEI”) for eligible hemp products will comply with the federal THC limits described above. Eligibility of full-spectrum products under these programs therefore remains linked to the outcome of the federal legislative process.