One of the most famous CBD companies in the country has a new CEO.
Charlotte’s Web announced that William Morachnick will join the company as Chief Executive Officer, in addition to joining the company’s board of directors as a non-independent director, according to a press release. He’ll replace previous CEO Jacques Tortoroli, who elected to resign from his roles at the company.
However, the company rejected the resignations of three other board directors after a withhold campaign by a group of activist shareholders earlier this summer.
Morachnick is a global business executive with experience building differentiated products and products across multiple channels around the globe and throughout a broad range of product categories. Previously, he held the role of president at Santa Fe Reynolds Tobacco International GmbH in Zurich, Switzerland from 2006 to 2016, taking the company for a startup to a “highly profitable organization,” according to the release, while managing hundred of employees and a network of importers and distributors operators in Europe, Asia and the Middle East.
After the company was acquired by Japan Tobacco Group in 2016 for 5 billion, Morachnick led the integration of the combined companies as CEO and chairman for two years in Tokyo before returning to the U.S. in 2018.
Since then, he’s served as an executive advisor or board member for a number of companies looking to launch or expand their business in the U.S. and overseas markets.
“Bill has an accomplished career building businesses in multiple categories,” said John Held, Charlotte’s Web chairman. “With his proven operational expertise Bill is well-suited to take the reins to lead the Charlotte’s Web team through the next phase of the Company’s growth opportunities.”
Charlotte’s Web also extended its thanks to Tortoroli for his years of “valued contributions.” Held noted that Tortoroli served on the company’s board since November 2019 and as CEO since late 2021 in a “difficult environment devoid of regulatory oversight and clarity.” He also recognized Tortoroli for streamlining the organization, “reducing the cash burn” and recapitalizing the company through a $57 million investment via a convertible loan.
“We are grateful to Jacques for his valuable contributions,” Held said.
Fellow directors John Held, Thomas Lardieri and Alicia Morga also extended offers to resign in June, which the board referred to a committee of independent board members for consideration and to make a recommendation to the board surrounding whether to accept the resignation offers.
“The Committee carefully considered all relevant factors and determined that there are exceptional circumstances that warrant the rejection of the offers to resign,” according to the release.
Ahead of that board election, Charlotte’s Web co-founders Jesse and Joel Stanley, along with a group of other stakeholders —like Major League Baseball — campaigned for investors to withhold their votes for four of six board nominees, including Tortoroli.
“The truth is that the actions of this board have clearly contributed to the destruction of shareholder value,” Jesse Stanley said in a June statement.
Shareholders referenced the company’s dropping stock price and revenue as concerns after Joel Stanley departed from the board in 2021. The group instead sought for the Stanley brothers’ nomination for election to the board of directors with two other candidates.
“The majority voting objectives of the Toronto Stock Exchange and (the company’s majority voting) policy are the continuous improvement of corporate governance standards through provision of a meaningful means for security holders to hold individual directors accountable,” Charlotte’s Web said in a statement. “The withhold campaign launched by the activist shareholders, however, was not aligned with those objectives.”
The board is focused on “effective corporate governance and on maximizing value for all Company stakeholders,” with the news release stating that the board’s current composition “aligns with this objective.”
