Hill Street Beverage Company Inc. (TSXV: BEER) (“Hill Street” or the “Company”) reported its second quarter results for the period ended December 31, 2020. 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 second quarter of FY21, saw continued momentum for the Company despite ongoing pandemic related challenges. Net revenue grew 8% to $745,748 from $689,276 versus the same quarter year ago. The Company also saw significant improvement on its bottom line, reducing its net loss by 50% from ($.956) million to ($.481) million, year over year for the quarter, as a result of improved gross margin and cost management efforts. On December 9, 2020, the company announced the closing of the acquisition of substantially all of the assets of Lexaria Canpharm (“Canpharm“), the cannabis products division of Lexaria Biosciences, resulting in the addition of a new B2B Line of Business.
“This transformative transaction adds a wholly new operating line to our current alcohol free and cannabis infused beverage businesses: the licensing of DehydraTECH™ technology to companies around the globe,” said Lori Senecal, Hill Street Interim Co-CEO. “The combination of these three businesses creates a vertically integrated, product value chain that leverages knowledge from our consumer lines with our new, patented ingredient line, to span from consumer to enterprise,” added Hill Street Co-CEO Craig Binkley.
The Company Recorded its First Cannabis Revenues
With the Lexaria Biosciences transaction the Company acquired existing contracts to provide licenses for use of these patents by companies in Canada and the USA. With these contracts the company recorded its first cannabis revenues.
Hill Avenue Cannabis Beverages Continued Launch Preparations
The Company worked closely with its licensed production partner to address the regulatory requirements for the upcoming launch of its first cannabis infused beverages. The Notice of New Product Introduction to Health Canada was filed on December 31, 2020 beginning the sixty-day notice period. The Company anticipates its cannabis beverages will launch toward the end of the third quarter of fiscal 2021.
Progress Continued on Securing Cannabis License
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 worked to confirm the evolving regulatory and operational requirements for the facility as it sought to incorporate its new strategies and line of business, post-transaction.
Alcohol Free Business Increased Net Revenues Year Over Year
Coincident with driving its cannabis initiatives, Hill Street’s legacy alcohol-free business showed growth in the quarter. Total Net…