Hill Street Reports FY 2021 Third Quarter Results and Provides Update on Operations

Hill Street Beverage Company Inc. (TSXV: BEER) ("Hill Street" or the "Company") reported its third quarter results for the period ended March 31, 2021. A complete set of financial statements and Management's Discussion & Analysis has been filed at www.sedar.com. All dollar figures are quoted in Canadian dollars.

The third quarter of FY21 saw continued momentum for the Company as it demonstrated progress toward its ambition to pioneer the unique space where craft consumer products meet bioscience, combining deep CPG expertise and the rights to use Lexaria Bioscience Corp.'s ground-breaking DehydraTECH™ patent portfolio.

Strong performance of Hill Street's legacy alcohol-free beverages, combined with rapid growth of the Hill Avenue Cannabis Technologies business line, resulted in substantially increased the Company's gross and net revenues of 54% and 69% respectively, year-over-year.

"This quarter marked real progress as we continued to broaden our business into the progressive cannabis solutions space," said Craig Binkley, interim co-chief executive officer of the Company. "While our Hill Street alcohol-free beverages line continues to provide a strong and growing base of revenue, the rapid growth of DehydraTECH™ licensing revenues and the production of our first cannabis infused beverage in Canada are exciting proof points of our evolution."

Gross and Net Revenues from Hill Avenue Cannabis Co.'s Licensing Arrangements Grew 180% from Q2 to Q3.

The Company realized rapid growth in its recently created B2B business line, Hill Avenue Cannabis Technologies ("Hill Avenue"), which is currently focused on licensing usage rights for DehydraTECH™ patented global Intellectual Property to CPG customers for application in cannabis infused consumer products. The Company continues to focus on growing these existing relationships and pursuing new licensing relationships with extractors and other manufacturers of consumer goods whose products are infused with cannabis and or hemp extracts.

"In addition to the revenue growth evidenced by the Hill Avenue Cannabis Technologies business line, we're pleased to see the extremely high margin on this business, and that it is sourced largely beyond Canada, demonstrating the expanded geographic potential for our Company," said Lori Senecal, interim co-chief executive officer of the Company.

Hill Avenue Cannabis Co.'s First Beverage Produced in Preparation for Launch

Hill Avenue's first cannabis infused beverage, (V)ia Regal Pink Grape Sparkler, was produced and packaged to deliver the pipeline fill order from the Ontario Cannabis Store (OCS) and became available for retail purchase at the OCS and select retailers on May 18, 2021. The Company also began to investigate expanded Canadian distribution opportunities beyond the Ontario market for both (V)ia Regal Pink Grape Sparkler and its companion product (V)ia Regal White Grape Sparkler.

Progress Continued on Securing Cannabis License for Hill Avenue Through the Lucknow Facility

The Company continued planning for its licensed cannabis operations at the Lucknow facility which is strategically located near Pearson Airport in Mississauga, Ontario. The Company remains committed to obtaining the Health Canada Standard Processor License for the facility to produce DehydraTechTM powder, even as the Company has encountered challenges in terms of construction permits, scarcity of materials and labour shortages due to COVID.

Consolidated Hill Street Beverage Company Inc. Substantially Increased Gross and Net Revenues Year Over Year by 54% and 69% Respectively, Despite Pandemic Challenges

Coincidentwith driving its cannabis initiatives, Hill Street's legacy alcohol free business showed strong momentum in the quarter. Consolidated gross revenue increased by 54% versus the same quarter a year ago, to $774,747 from $502,997. Net Revenue grew by 69% increasing from $388,536 in the previous Q3 2020, to $655,259 in Q3 2021. In addition to Hill Avenue Cannabis Co. growth, alcohol-free sales increased, driven by presumed ongoing trend amongst many consumers to make more mindful decisions about their consumption habits and due to strong orders from retail partners to replenish stock following pandemic related shortages. Additionally, online sales for the Company's alcohol-free products increased 176% versus the same quarter a year ago, as customer loyalty to the program showed strength, with many repeat and month to month purchasers.

Gross Margin percentage increased significantly year-over-year for the quarter from 32% to 44%, primarily driven by favourable Cannabis licensing margins.

Hill Street's CFO, Hinta Chambers stated, "Beyond the strong increases in gross and net revenue, we are pleased to report a solid improvement in net earnings and gross margin by focusing on growing our higher margin business lines."

The Company initiated a Private Placement to Fund its Growth Agenda

During the quarter, the Company announced a non-brokered private placement of units to raise capital to support its global growth agenda. It anticipates that this capital will fund the next phase of corporate development as the Company continues to build out programs to monetize the global patent usage rights to DehydraTECHTM (R) fast-acting emulsion technology from Lexaria Bioscience Corp. The private placement closed on May 9, 2021, for gross proceeds to the Company of $3,403,884.

RESULTS OF OPERATIONS

The following table summarizes certain financial information of the Company for the three months ended March 31, 2021 and March 31, 2020. It also summarizes certain financial information for the nine months ended March 31, 2021 and March 31, 2020.

Results for the Period EndedQuarter Ended March 31, 2021Quarter Ended
March 31, 2020
Nine Months Ended
March 31, 2021
Nine Months Ended
March 31, 2020
Gross Revenue$774,747$502,997$2,034,726$1,990,473
Chargebacks, finance fees, and listing fees-$119,488-$114,461-$359,006-$583.222
Net Revenue$655,259$388,536$1,675,720$1,407,251
Direct Costs$317,155$226,366$809,701$773,630
Gross profit$338,104$162,170$866,019$633,621
     
Operating Expenses (excl. One-time & Non Cash)$884,739$421,347$2,092,925$1,841,540
Other One-time Expenses$47,643$238,843$71,479$1,350,886
Non Cash Expenses$146,199$312,497$401,711$635,058
     
Loss before other Income (Expense)-$740,476-$810,517-$1,700,096-$3,193.863
     
Other income (Expenses)    
   Foreign exchange gain (loss)$15,463$14,092$13,483$,335
   Gain on favourable interest rate$6,541-$6,541-
   Loss on conversion of Debt-$1,168--$1,168-
   Gain on Settlement of liability$59,253-$65,983 
   Write-off of intangibles----$8,000
   Write-off of inventory----$1,535-$23,466
   Other Income$--$30-
Loss and comprehensive loss for the period$660,387$796,425$1,616,762$3,224,994
Basic and diluted loss per common share($0.00)$0.01$0.01$0.03
Weighted average number of common shares outstanding141,905,150110,475,579125,375,081102,033,744

 


About Hill Street Beverage Company Inc. (TSXV: BEER)

Hill Street Beverage Company is a progressive non-alcoholic beverage and cannabis solutions company. We are pioneering the space where craft consumer products meet bioscience by combining our deep CPG expertise and our rights to use Lexaria Bioscience Corp.'s ground-breaking DehydraTECH™ patent portfolio for product development, licensing and B2B sales of Cannabis ingredients.

Hill Street Beverages brands include Hill Street Craft Brewed Lager, and Vin(Zero), and have won numerous medals and accolades around the world. Hill Avenue Cannabis Brands include (V)ia Regal Pink and White Grape Sparklers.

Check out Hill Street's award-winning alcohol-free line-up and order product to be delivered straight to your home at www.hillstreetbeverages.com, and cannabis related business activities and products at www.hillavenuecannabis.com.

For more information:

Lori Senecal, Interim Co-Chief Executive Officer Hill Street Beverage Company Inc.lori@hillstreetbevco.com
Craig Binkley, Interim Co-Chief Executive Officer Hill Street Beverage Company Inc.craig@hillstreetbevco.com

FORWARD-LOOKING STATEMENTS

Statements in this press release may contain forward-looking information. Any statements in this press release that are not statements of historical fact may be deemed to be forward-looking statements. Forward-looking statements are often identified by terms such as "may", "should", "anticipate", "expects", and similar expressions. The reader is cautioned that assumptions used in the preparation of any forward-looking information may prove to be incorrect. Events or circumstances, such as future availability of capital on favourable terms, may cause actual results to differ materially from those predicted, as a result of numerous known and unknown risks, uncertainties, and other factors, many of which are beyond the control of the Company. The reader is cautioned not to place undue reliance on any forward-looking information. Such information, although considered reasonable by management at the time of preparation, may prove to be incorrect and actual results may differ materially from those anticipated. Forward-looking statements contained in this press release are expressly qualified by this cautionary statement. The forward-looking statements contained in this press release are made as of the date of this press release. The Company does not undertake any obligation to update publicly or to revise any of the included forward-looking statements, whether as a result of new information, future events or otherwise, except as required by securities law.

Neither TSX Venture Exchange nor its Regulation Services Provider (as that term is defined in policies of the TSX Venture Exchange) accepts responsibility for the adequacy or accuracy of this release.

Not for dissemination in the United States.

Follow Hill Street on Twitter https://twitter.com/hillstreetbevco and on
Facebook at https://www.facebook.com/hillstreetbevco

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/85517

News Provided by Newsfile via QuoteMedia

The Conversation (0)
Cannabis leaf over map of Australia.

A State-by-State Guide to Cannabis in Australia

Australia federally legalised medicinal cannabis in 2016, and Australia's cannabis market has seen major growth since then.

Medical cannabis approvals were up by 120 percent in the first half of 2023 compared to the same period in 2022. Statista forecasts that Australian cannabis revenue will reach AU$3.73 billion in 2024 and grow at an annual rate of 3.22 percent, culminating in market volume worth AU$4.53 billion by 2029.

However, Australia’s cannabis industry is still young. Despite there being a strong case for a regulated market, which was outlined in a July 2024 report by the Penington Institute, recreational use is not legal and medical access remains limited and regulated.

Medical cannabis patients have access to various forms of the drug, including flower, oils and tinctures. However, only two medicinal cannabis products, Sativex and Epidyolex, are registered with the Therapeutic Goods Administration, and none are subsidised through the country’s Pharmaceutical Benefits Scheme. Patients who want access to medicinal cannabis must go through special pathways, and doctors who want to prescribe medicinal cannabis have to apply to do so.

Keep reading...Show less
Cannabis leaf on road marked with "2025," with sunlight in the background.

New Cannabis Consumption Trends, Regulatory Shifts Seen Driving Market in 2025

Understanding trends in the cannabis industry is paramount for investors eyeing a market with steady growth potential, but the landscape is complex as products and regulations continue to evolve.

Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

Consumption methods evolving post-legalization

Shifts in consumer behavior are reshaping markets across the board, and the cannabis industry is no exception.

While smoking remains the dominant method of cannabis consumption, a recent report from the Centers for Disease Control and Prevention highlights the growing popularity of edibles, vaping and dabbing.

The report notes that vaping and dabbing are particularly pronounced among younger adults.

A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.


The study indicates that while the use of flower, cannabis concentrates, oil, tinctures and topicals has decreased during that time, the use of vape cartridges, edibles and beverages has increased.

Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

Meanwhile, cannabis lounges have been popping up across the US for the last several years. As of early 2025, several states had legalized or were in the process of implementing regulations for cannabis consumption lounges.

Hemp market growth despite regulatory uncertainty

The burgeoning hemp industry is another segment of the expanding cannabis market.

The legalization of industrial hemp — defined as cannabis with a THC concentration of 0.3 percent or less — through the 2018 Farm Bill led to initial investment and optimistic projections for CBD wellness products and various industrial applications. The sector’s rapid evolution also brought the rise of hemp-derived intoxicating cannabinoids, creating a market that presented both opportunities and complexities for participants.

However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

The 2018 Farm Bill is now set to expire on September 30, 2025.

While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

US cannabis legalization remains stalled

Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

In addition to that, new research is adding complexity to the debate.

A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

Investor takeaway

While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

Person touching a cannabis plant; Australia map in flag colours.

ASX Cannabis Stocks: 10 Biggest Companies

While Australia has yet to legalise all forms of cannabis, the country is a growing medical cannabis and hemp market, with many companies manufacturing, researching and exporting the plant-based product.

Medical cannabis was federally legalised in 2016, and the export of cannabis from Australia was legalised in 2018. As for recreational use, the only state to legalise recreational use and possession so far is the Australian Capital Territory, which did so in 2020, but it did not establish a regulated recreational cannabis market.

The country's medical cannabis market has been steadily expanding in size and scope. A Penington Institute report shows that Australians spent approximately AU$400 million on medicinal cannabis in the first half of 2024, 72 percent higher than the AU$234 million they spent over the entirety of 2022.

Keep reading...Show less
Cannabis leaves, gavel.

Cannabis Round-Up: Rescheduling Faces New Roadblocks, SAFER Banking Act Gets Another Look

February 2025 was characterized by an evolving legislative landscape and important financial updates from major players.

These developments underscore the complex and dynamic nature of the sector as it continues to navigate legal, financial, and regulatory challenges while experiencing ongoing growth and evolution.

Discussions around cannabis rescheduling, changes in federal agency leadership, state-level legalization efforts, and financial reports from key companies all contributed to a month of notable activity in the cannabis space.

Keep reading...Show less

Trulieve Announces Launch of Onward: A Premium THC Beverage

Available now online and coming soon to select Total Wine locations in Florida

Trulieve Cannabis Corp. (CSE: TRUL ) (OTCQX: TCNNF ) ("Trulieve" or "the Company"), a leading and top-performing cannabis company in the U.S., today announced the launch of Onward, a premium, non-alcoholic THC beverage offering a modern alternative for social occasions. These Farm Bill compliant beverages are available now online and coming soon to select Total Wine locations in Florida .

News Provided by Canada Newswire via QuoteMedia

Keep reading...Show less

Cronos Group Inc. to Hold 2024 Fourth Quarter and Full-Year Earnings Conference Call on February 27, 2025

Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) ("Cronos" or the "Company") will hold its 2024 fourth-quarter and full-year earnings conference call on Thursday, February 27, 2025 at 8:30 a.m. ET. Cronos' senior management team will discuss the Company's financial results and will be available for questions from the investment community after prepared remarks.

To attend the conference call or webcast, participants should register online at https://ir.thecronosgroup.com/events-presentations . To avoid delays, we encourage participants to dial into the conference call fifteen minutes ahead of the scheduled start time. The webcast of the call will be archived for replay on the Company's website.

News Provided by GlobeNewswire via QuoteMedia

Keep reading...Show less

Latest Press Releases

Related News

×