Why is my grenade not working on its second throw?

You only make one grenade:

Grenade = game.ReplicatedStorage.Grenade:clone()

You should make a new grenade every time they attempt to throw a grenade.

Also, you shouldn't use KeyDown because it's deprecated.

Also, use your variables. You made a variable Explosion then don't use it.

Use Local Variables.

Last thing is Local Scripts can't access ServerStorage, so you should move everything to ReplicatedStorage for this.

local player = game.Players.LocalPlayer --\\ Better
local mouse = player:GetMouse()
local HoldingArm = player:FindFirstChild('RightArm')
local Explosion = game.ReplicatedStorage.Explosion
local Explosion1 = Explosion .Explosion1
local Explosion2 = Explosion .Explosion2
local Explosion3 = Explosion .Explosion3
local Explosion4 = Explosion .Explosion4
local Explosion5 = Explosion .Explosion5
local Explosion6 = Explosion .Explosion6
local Explosion7 = Explosion .Explosion7
local Explosion8 = Explosion .Explosion8
local CanThrow = true
local b = 1

repeat wait(0.001) until player.Character

Anim = player.Character.Humanoid:LoadAnimation(script.Animation)

game:GetService("UserInputService").InputBegan:Connect(function(inputObject,GPE)
    if CanThrow == false then return end
    --\\ Using UserInputService.
    if not GPE and inputObject.KeyCode == Enum.KeyCode.E then
        if b > 5 then return end
        CanThrow = false
        --\\ Moved:
        local Grenade = game.ReplicatedStorage.Grenade:Clone() 
        local Bv = Instance.new('BodyVelocity')

        print('Grenade about to throw')
        Grenade.Parent = workspace
        Anim:Play()
        wait(0.75)
        Grenade.CFrame = player.Character.Torso.CFrame*CFrame.new(0,0,0)
        Bv.Parent = Grenade
        Bv.MaxForce = Vector3.new(1e8,1e8,1e8)
        Bv.Velocity = player.Character.Torso.CFrame.lookVector*60
        print('Grenade Thrown')
        game.Debris:AddItem(Grenade,2)
        CanThrow = true
        b = b + 1
    end
end)

This is only an example.

If this doesn't work, let me know any and all errors you receive and I'll try to make corrections to my code.