(TheNewswire)
TORONTO, Ontario, June 27,2024 . - TheNewswire- Hill Incorporated, formerly Hill StreetBeverage Company Inc. (TSXV: HILL) (" Hill ” or the" Company ") is pleased to provide, in this final week of itsfiscal year 2024, the following business and corporate update,including several recent foundational advances it has made that theCompany expects will help set it up for success as it moves intofiscal year 2025.
Highlights of the DehydraTECH licensing updateinclude:
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Hill expandslicensing rights of DehydraTECH commercialization partner Dehydr8, LLC to extendto all legal US states, recognizing Dehydr8’s significantinvestments to date in a national DehydraTECH commercializationstrategy and streamlining the process of launching new states withmulti-state operators and other cannabis operators
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An exciting newlicensee, multi-state operator Greenlight Dispensary to launch multiple newDehydraTECH-powered edibles products with Dehydr8 in the upcomingquarter
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Hill amends licensing fee structure with legacyDehydraTECH licensee 1906 , maker of the popular‘Drops’ line of tablets, to align with 1906’s go-forwardstrategies and growth agenda
Hill Expands Licensing Rights ofDehydraTECH Commercialization Partner Dehydr8, LLC to Extend to AllLegal US States
In July 2021, the Company announced its licensingpartnership with Dehydr8 MI, LLC to begin the US B2B commercializationof Hill’s rights to use Lexaria Bioscience Corp’s groundbreakingDehydraTECH patent portfolio in the pilot state of Michigan.
From the initial R&D and pilot market launch inMichigan, Dehydr8 has since expanded operations to Illinois, Oregon,Massachusetts, Maryland and Delaware. In addition, they have madesignificant capital investments in people and equipment, and have nowalso acquired through an affiliate, a cannabis-licensed facility inwhich to conduct DehydraTECH product R&D, culminating in aDehydraTECH R&D and commercialization platform that can easilyscale nationwide.
In recognizing their progress and their investments inthe extensive resources that are needed to operate the DehydraTECHcommercialization model, Hill has now granted US-wide licensing rightsto Dehydr8 on a non-exclusive basis. Adding the new geographicrights also streamlines the administrative process of entering newstates for Dehydr8, resulting in significant efficiencies whenexpanding licensee operations, such as when major multi-stateoperators like recently added licensee MariMed launch newstates.
“ We made theearly strategic decision, after acquiring the rights to DehydraTECH,to build our US commercialization model with Dehydr8 and they havebrought significant skills, expertise and capital investment to thepartnership ”, said Craig Binkley, Hill CEO. “ Dehydr8’s team hasprovided the backbone of science, product formulation and operationsexperience to support the vital R&D and operations work required for each new DehydraTECHsales process and in-market product launch. They have also made major capitalinvestments in people and equipment in each of their operating states,including DehydraTECH equipment and manufacturing technicians thattravel to each market for production. We are pleased to expand andaccelerate their ability to commercialize DehydraTECH with theirgrowing base of cannabis operators .”
MJBiz estimates that the US cannabis market is expectedto grow almost 70% over the next five years, reaching $52B in 2029,providing robust opportunities for DehydraTECH -powered consumer products.
So, while licensing revenues have been uneven acrossquarters as licensee sales have expanded in some periods andcontracted in others, the future looks bright for continued growth inthe addressable market for DehydraTECH as Dehydr8 expands theiroperations.
New Licensee, Multi-State Operator Greenlight Dispensary to Launch Multiple New DehydraTECH-PoweredEdibles Products with Dehydr8 in the Upcoming Quarter
As mentioned, Dehydr8 has been successfully bringingnew state and multi-state operators into the DehydraTECH licensingecosystem and the addition of Greenlight continues that expansivetrend.
Since the beginning of 2024, an exciting newDehydraTECH licensee, multi-state operator Greenlight Dispensary , has been conducting R&D and product developmentactivities to develop several DehydraTECH-powered edibles productlines. We are excited to announce that Greenlight plans to launchthese new edibles products beginning in its home state of Missouri inthe next quarter.
Greenlight Dispensary is one of the leading cannabis brands in the United States,with operations in Missouri, Arkansas, West Virginia, Illinois andSouth Dakota. Greenlight’s founders are some of the most innovativeoperators in the US, having built one of the world’s largestdispensaries in Las Vegas, Nevada, the world’s first “MarijuanaFarmers Market” and the first cannabis museum in a dispensary. Theyplan to launch multiple DehydraTECH-powered products – both newproducts and enhanced versions of existing products - in Missouri inthe upcoming first quarter of fiscal year 2025.
Hill Amends Licensing Fee Structurewith Legacy DehydraTECH Licensee 1906 to Align with 1906’sGo-Forward Strategies and Growth Agenda
When Hill acquired the rights to DehydraTECH for THCproducts from Lexaria in December 2020, 1906 was the only operatingDehydraTECH licensee, having started their operations in Colorado in2016. The brand has been a major success, with their ‘Drops’products becoming the #1 fast-acting edible in some markets and theleading swallow pill in the US as they expanded from their originalpilot markets and opened eleven states in an efficient and agile testmodel.
The stated goal of 1906 is to make cannabis a trusted,normal part of daily wellness with products that are easy tounderstand, easy to fit into your life, and offer the healthiestformat available. At the end of 2023, 1906 launched adirect-to-consumer (DTC) product line across most US states to dramatically expand their reach towards the goalby providing consumers who don’t live in legal states or cannot ordo not want to buy in dispensaries, access to 1906 Drops. The DTCinitiative offers hemp-derived Delta-9 THC lower-dosed versions oftheir popular ‘Drops’ products, which are also produced usingDehydraTECH.
As they launched this exciting new DTC business, 1906have also cost-effectively exited lower performing markets and haveannounced that they are streamlining their business to focus thedispensary availability of their higher micro-dosed, marijuana-deriveddelta-9 THC Drops on the key growth markets of Illinois,Massachusetts, Missouri, New Jersey, New York and Pennsylvania. Thecombination of DTC availability across 40 US states, plus thewholesale dispensary business in six key US states, constitutes astrong growth agenda for 1906 in 2024 and beyond. More information on1906’s products can be found at 1906.shop .
We have been working with the 1906 team to harmonizeour licensing fee structures with their evolved business strategies,ensuring that we are working together as partners for shared success. To support their continued growth, we have agreed to revise theirlicensing fee terms to better match their current operations andfootprint, rather than continue the old fee structure that weinherited in the Lexaria acquisition based on a legacy business model. As a part of this negotiation, we have agreed to forgive certainlicensing fees related to the old business model that were beingcarried as accounts receivable, in order to focus on the moreadvantageous, scaled model for the future.
“ Ourpartners Dehydr8 and 1906 are energized about the future of theirDehydraTECH-powered operations, and we are thrilled to reset andrefresh their deals to better propel them as we enter fiscal year2025 ”, said Pearl Chan, Chief Operating andLegal Officer. “ 1906 is abeloved brand and a great example of how DehydraTECH can powersuccessful consumer brands. Dehydr8 continues to have successbringing new licensees on board and helping them develop and launchnew and improved, better tasting, fast-acting and consistentDehydraTECH edibles products. We are confident that expanding theirrights will help facilitate growth .”
Corporate Update
The Company also announces that it has entered into amutual agreement with Matthew Jewell for his departure as ChiefFinancial Officer as of June 30, 2024, the end of the current fiscalyear.
In his tenure, Matthew has been instrumental instandardizing Hill’s accounting systems and financial reportingprocesses and streamlining the Company’s financials. He alsoworked to connect the financial systems to the operations managementsystems and models that have been built for the Company’sDehydraTECH licensing business and the alcohol-free wine business,where detailed visibility to both supply chain and retail sales iscritical in our new, more efficient business model.
With these established processes in place, we are nowable to streamline our organizational structure. As such, ReubanNadesan, current VP of Strategy & Corporate Development of theCompany, will step in as interim CFO. Reuban is a CharteredProfessional Accountant and has been supporting the Company’sfinance team since he joined the company in 2018. He has extensiveexperience with all the operating and financial systems and modelsthat have been developed jointly with Matthew. Having been deeply involved in leading the audit process in previousyears, he is also very well suited to lead the fiscal year 2024 auditover the coming months.
About Hill Incorporated (TSXV:HILL)
Hill Incorporated is a progressive bioscienceimplementation company that is dedicated to building pathways tobetter and healthier living by leveraging our deep CPG expertise tocommercialize leading-edge technologies to craft superior cannabissolutions and non-alcoholic beverage products globally. Our HillAvenue Cannabis business unit is pioneering the space where craftconsumer products meet bioscience by combining our deep CPGcommercialization expertise with our rights to use LexariaBioscience Corp’s ground-breaking DehydraTECH patentportfolio for product development, licensing and B2B and B2C salesof cannabis ingredients or products on a global scale. Our Hill StreetBeverages business unit represents the Company’s legacy alcohol-freeconsumer beverage marketing and distribution business.
For more information on our business activities visit www.hillincorporated.com , tolearn more about our DehydraTECH cannabis biodelivery technology, goto www.dehydratech-thc.com , orto check out Hill Street Beverage’s award-winning alcohol-free wineline-up and order product to be delivered straight to your home, go to www.hillstreetbeverages.com .
If you wish to sign up for the Hill Incorporatedmailing list, click HERE .
For more information, contact:
Craig Binkley, Chief Executive Officer
Email: craig@hillincorporated.com
Phone: 604-609-6154
Statements in this press release may containforward-looking information. Any statements in this press release thatare not statements of historical fact may be deemed to beforward-looking statements. Forward-looking statements are oftenidentified by terms such as “may”, “should”, “would”,“anticipate”, “expects”, and similar expressions. The readeris cautioned that assumptions used in the preparation of anyforward-looking information may prove to be incorrect. Events orcircumstances, such as future availability of capital on favourableterms, may cause actual results to differ materially from thosepredicted, as a result of numerous known and unknown risks,uncertainties, and other factors, many of which are beyond the controlof the Company. The reader is cautioned not to place undue reliance onany forward-looking information. Such information, although consideredreasonable by management at the time of preparation, may prove to beincorrect and actual results may differ materially from thoseanticipated. Forward-looking statements contained in this pressrelease are expressly qualified by this cautionary statement. Theforward-looking statements contained in this press release are made asof the date of this press release. The Company does not undertake anyobligation to update publicly or to revise any of the includedforward-looking statements, whether as a result of new information,future events or otherwise, except as required by securitieslaw.
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