Hill Street

Bringing Cannabis-Infused and Alcohol-Free Beverages to Canada.

This Hill Street profile is part of a paid investor education campaign.*

Overview

Hill Street Beverage Company Inc. (TSXV:BEER) is creating a vertically-integrated cannabis-infused beverage company, using its established portfolio of award-winning alcohol-free beverages as a foundation for its cannabis-infused beverages line.

Hill Street is preparing to enter the cannabis-infused beverages segment, which will become legal in Canada this coming October, and expects to have products available for purchase by Spring 2020. These new beverages will be created using Hill Street’s award-winning alcohol-free products, many of which are currently sold in over 4,000 locations across Canada, including at Loblaws (TSX:L), Sobeys, Shoppers Drug Mart, and Zehrs.

Last year, Hill Street announced a partnership agreement with Lexaria Bioscience Corp. (CSE:LXX,OTCQB:LXRP), whose patented water-soluble DehydraTECH™ infusion technology is expected to allow Hill Street to infuse its alcohol-free beverage portfolio with cannabis without any impact on the taste or smell of the beverage.

Hill Street is also acquiring OneLeaf Holding Corp., a late-stage cannabis cultivation and processing applicant that expects to receive its licenses within the near term. OneLeaf is currently constructing a state-of-the-art, EU-good manufacturing practices (GMP)-compliant 48,200-square-foot cannabis cultivation, research, and processing facility in Regina, Saskatchewan. The company also has over 700 distinct cultivars from award-winning breeders throughout the US and Canada. Ninety percent of the cultivars within OneLeaf’s collection are not currently commercially available, and many cultivars express both rare and unique cannabinoid and terpene content.

Through its acquisition of OneLeaf, Hill Street will be welcoming Dr. Brent Guppy to its team as Chief Science Officer. Guppy has a background in immunotherapeutic drug discovery and development including plant genomics and medicinal biochemistry, which is expected to help bring validity to Hill Street’s research. Hill Street expects to pursue intellectual property applications based on Dr. Guppy’s research and development efforts.

Hill Street has partnered with numerous not-for-profit medical research organizations within Canada to promote healthy alternatives to alcohol and to highlight the risks associated with alcohol consumption. These partnerships expose the Hill Street brand to the millions of people associated with these organizations, and help not only drive awareness for the company’s current alcohol-free products, but also legitimize its future cannabis offerings.

Hill Street’s management team holds approximately 38 percent of the company’s shares.

Hill Street’s Company Highlights

  • Alcohol-free beverages producer with a presence in over 4,000 retail locations across Canada.
  • Expected to enter the cannabis-infused beverage space once cannabis-edibles become legal in October 2019, with product available for sale by Spring 2020.
  • Acquiring OneLeaf Cannabis, who expects to receive its cultivation license in the near term and is constructing a state-of-the-art, EU-GMP-certified 48,200-square-foot cannabis production and processing facility in Regina, Saskatchewan.
  • OneLeaf has over 700 distinct clone and seed varietals from award-winning breeders throughout the US and Canada. Ninety percent of the strains within OneLeaf’s collection are currently not commercially available.
  • Hill Street products have won three gold, two silver, and two bronze medals at the US Open Beer Championships, a Retail Council of Canada’s Grand Prix award, and a Double Gold medal at the San Francisco International Wine Challenge.
  • Hill Street co-founded the Cannabis Beverage Producers Alliance, a unified body of manufacturers, industry professionals, and advisers who advocate for the safe, reliable and responsible production of legal cannabis beverages.
  • Led by an experienced management team with numerous years of significant beverage experience.
  • Management holds approximately 38 percent of the company’s shares.

The Cannabis-Infused Beverages Market

The global cannabis beverages market is expected to reach US$4.46 billion by 2025, according to a report by Zion Market Research. Market expansion is being fueled by the growing demand for wellness products, as more consumers seek healthier alternatives to inhaling cannabis.

Health Canada recently announced that the amended regulations to the Cannabis Act governing cannabis-edibles will come into force on October 17, 2019. In preparation for the new regulations, alcoholic beverage companies, such as Constellation Brands (NYSE:STZ) and Molson-Coors (NYSE:TAP;TSX:TAP), have formed agreements with cannabis companies to enter the beverages market.

Products

Cannabis-Infused Beverages

Hill Street has developed a portfolio of award-winning alcohol-free adult beverage brands which will serve as a foundation for its cannabis-infused beverages. Last year, Hill Street announced a partnership agreement with Lexaria Bioscience Corp. (CSE:LXX,OTCQB:LXRP), whose patented water-soluble DehydraTECH™ infusion technology is expected to allow Hill Street to infuse its alcohol-free beverage portfolio with cannabis without any impact on the taste or smell of the beverage.

These new cannabis-infused products are expected to be available by Spring 2020.

Alcohol-Free Beverages

Hill Street has significantly grown the distribution of its alcohol-free portfolio over the last two years, from 900 stores to over 4,000 stores today. Hill Street products cannot be found throughout major grocery retailers such as Loblaws, Sobeys, Shoppers Drug Mart, and Zehrs. Last October, Hill Street signed CDL Inc. as the exclusive sales distributor in Quebec, which is expected to significantly increase distribution within that province.

Hill Street currently offers two varieties of its non-alcoholic beer, ‘Designated Draft’ and ‘Hill Street Craft Brewed Lager’ in addition to a variety of red, white, rosé, and sparkling wine options under both the Vin(Zero) and Vintense brands. Consumers can purchase the company’s products through its retail partners, and direct from the company via it’s online e-commerce platform.

Awards

Hill Street has won numerous awards for its alcohol-free products. To date, the company has earned recognition at the US Open Beer Championships, the Retail Council of Canada’s Grand Prix award, and the San Francisco International Wine Challenge.

OneLeaf

Hill Street is in the process of acquiring OneLeaf Holding Corp., an “evidence package” stage licensed cannabis cultivator and producer applicant. OneLeaf is anticipated to receive its cultivation license in the near term.

OneLeaf is currently constructing a state-of-the-art, EU-GMP-certified 48,200-square-foot cannabis production and processing facility near the global transportation hub in Regina, Saskatchewan. The facility’s central location in Saskatchewan will make it easy for Hill Street to distribute its products throughout Canada as well as into the US and other foreign markets as regulations change.

Phase One construction of the facility consists of 17,000-square-feet and is nearing completion. Phase One is expected to produce approximately 4,100 kilograms of high-quality cannabis per year with an additional 16,000 kilograms coming online when all three production facilities are built out. There is a total of 6.5 acres of land available for expansion opportunities.

In addition to its facility, OneLeaf also has over 500 distinct clone and seed varietals from award-winning breeders throughout the US and Canada. 90 percent of the strains within OneLeaf’s collection are currently not commercially available. With the collection of cannabis genetics, Hill Street and OneLeaf intend to develop consumer, medical and therapeutic products.

Once the acquisition closes, Hill Street intends to install its bottling and canning lines at the OneLeaf facility. The beverage product lines are projected to have an output capacity of approximately 350,000 cases of infused wine and beer annually, representing in excess of $100MM annual revenue including beverages and cannabis products. The annual capacity can be expanded through the upgrading of bottling and canning speeds, adding additional products in available space in the facility, and as Health Canada licenses additional future planned facilities.

Strategic Partnerships

Grocery Retailers

Hill Street has distribution for its alcohol-free products in over 4,000 stores across Canada, with shelf-space within major grocery retailers that contributes to Hill Street’s brand awareness.

Hill Street retailers

Lexaria

Hill Street has signed a definitive agreement with Lexaria, a drug delivery platform innovator. Under the terms of the five-year agreement, Lexaria will license its DehydraTECHTM technology to Hill Street on a semi-exclusive basis to produce a line of cannabis-infused, alcohol-free beers and wines for Canadian distribution.

DehydraTECH is a patented water-soluble infusion technology that allows cannabis to be infused in any beverage without impact the taste or smell of the product, and with onset and duration that mimics the intoxicating effects of alcohol. To date, Lexaria has over 50 patents pending and 14 patents issued for its technology. Tobacco giant, Altria, has invested over USD$13MM into Lexaria’s technology for use with nicotine.

Lifford Cannabis Solutions

Hill Street has signed a national agreement with Lifford Cannabis Solutions Inc., a company that assists licensed cannabis companies in getting their products through control boards to retail. Lifford is a subsidiary of Lifford Wine and Spirits, a leading beverage and alcohol distributor. Under the terms of the agreement, Lifford will be responsible for the sales and distribution of Hill Street’s cannabis-infused beverages portfolio in Canada.

Lifford is actively selling cannabis products and accessory products for a number of licensed producers. The company also handles listing procurement, field-level production detailing, brand ambassadors and event coordination.

Not-for-Profit Medical Research partnerships

Since the company was founded in 2007, Hill Street has donated almost C$2 million to its not-for-profit medical research partners. These partners use this funding to help achieve their organizational goals and to fund valuable research, such as studies that support alcohol-free and cannabis-infused beverages as better alternatives to alcohol.

Hill Street partners

Hill Street Management

Terry Donnelly — Chairman and Chief Executive Officer

Terry Donnelly is a serial entrepreneur with over 30 years of experience. Immediately prior to joining Hill Street, he served as Chief Marketing Officer, Canada for MDC Partners (NASDAQ:MDCA), the largest Canadian marketing services company with $1.3Bn in revenues and over 17,000 employees. Prior to MDC, Terry served as the co-founder, CMO, and Chairman of Adcentricity and Bee Media, and as the Executive Vice-President, Digital at Mandrake.

Terry also has significant governance and leadership experience, having previously served as a director of Brainhunter Inc. (TSX:BH), Atlantis Systems Corp. (TSX:AIQ), Active Control Technologies (TSX-V:ACT), SilverBirch Inc. (TSX-V:SVB), China Opportunity Inc. (TSX-V:COC.P), and a director and advisor to numerous privately held companies, mainly in the early stage technology sector. He has raised nearly $100MM in venture capital and executed over two dozen acquisitions during his career.

Terry is the co-founder of the Cannabis Beverage Producers Alliance, a national organization representing the unique interests of beverage producers for the purposes of lobbying and public education.

Brian Bolshin — President and Chief Product Officer

Brian Bolshin has over 30 years experience in Marketing and Advertising, most recently at Grey Worldwide as Vice President, Director of Strategic Planning & Business Development, and Doner Schur Peppler, GJ&P and JWT. His experience covers virtually all industries from Fashion to Pharmaceuticals, Furniture to Financial Services. Mr. Bolshin earned a Bachelor of Arts from York University in 1974.

Hinta Chambers — Chief Financial Officer

Hinta Chambers has over two decades of experience in a multitude of disciplines, including finance, marketing, compliance, facilities, human resources and legal. Prior to joining Hill Street, Hinta was CFO at Bond Brand Loyalty and Rockstar Consortium. She built her finance career at Nortel Networks in increasingly senior global finance roles in Canada, England and France. She holds an Honours Bachelor of Business Administration from Wilfrid Laurier University, and is a Chartered Professional Accountant (CPA) and Certified Management Accountant (CMA). She also completed a Master CFO Certificate Program with the Institute of Management Accountants.

David Pullara — Chief Marketing Officer

David Pullara is a senior business leader with almost two decades of diverse and progressive experience in marketing strategy, brand management, and innovation. He has spent 12 years of his career working with four renowned, consumer-centric, Fortune 500 organizations: Starbucks, Yum! Brands (Pizza Hut), Coca-Cola, and Google. David earned his Honors BBA (marketing) and MBA (strategic management, international business) from the Schulich School of Business at York University, and a certificate in “Disruptive Strategy” from Harvard Business School Online. David is recognized as a Chartered Marketer by the Canadian Marketing Association (CMA).

Doug Taylor — Executive Vice President, Sales/Distribution

Doug Taylor’s 30 year BTC career has been with Fortune 500 companies like Unilever, Coke, OLG and Microsoft. Immediately prior to joining Hill Street, Doug led Epson Canada’s Consumer division. His functional experience crosses many disciplines including sales, marketing, operations, and finance. Passionate about building productive and profitable partner relationships, Doug’s focus at Hill Street is building the company’s distribution infrastructure and driving profitable topline revenue in all channels. Doug has a BA in Finance/ Economics from University of Western Ontario.

Bruce Anderson — Chief Information Officer

Bruce Anderson has over 30 years of experience in software development, corporate management, and computer technology innovation with companies in Canada and Australia. He was Founder, President and Owner of HRA Software in Vancouver, Canada, creating specialized Human Resource Information Systems (HRIS) for companies from 50-5,000 employees, and led HRA for over 20 years with clients around the world.

June Nicholson — Executive Vice President, Partnerships/Government Affairs

June Nicholson is the former President and CEO of numerous companies, including Fundtastic Fundraising Inc, Nature’s Treasures, Inc. and The Naked Waffle Co Ltd. June’s 30-year career has included partnership development, charity involvement, and senior executive company management. Immediately prior to joining Hill Street, June was the Vice President Development for the Canadian Liver Foundation, as well as VP Development for an international fundraising services agency.

Trevor Green — EVP Legal and Corporate Strategy

Trevor Green has over 10 years of experience as a corporate securities lawyer. He is an experienced legal and business advisor in complex, compliance-based industries. He has co-founded multiple successful businesses, including professional services, oil and gas exploration, production and transportation.

Dr. Brent Guppy — Chief Science Officer

Dr. Brent Guppy has a B.Sc. in Human Genetics and a Ph.D. in Biochemistry and Medical Genetics. He has a background in immunotherapeutic drug discovery and development. He completed a postdoctoral fellowship in Regenerative Medicine at the University of Manitoba.


This profile is sponsored by Hill Street Beverage Company Inc. (TSXV:BEER). This profile provides information which was sourced by the Investing News Network (INN) and approved by Hill Street Beverage Company Inc., in order to help investors learn more about the company. Hill Street Beverage Company Inc. is a client of INN. The company’s campaign fees pay for INN to create and update this profile.

INN does not provide investment advice and the information on this profile should not be considered a recommendation to buy or sell any security. INN does not endorse or recommend the business, products, services or securities of any company profiled.

The information contained here is for information purposes only and is not to be construed as an offer or solicitation for the sale or purchase of securities. Readers should conduct their own research for all information publicly available concerning the company. Prior to making any investment decision, it is recommended that readers consult directly with Hill Street Beverage Company Inc. and seek advice from a qualified investment advisor.