TORONTO, Ontario, June 27, 2024. - TheNewswire - Hill Incorporated, formerly Hill Street Beverage Company Inc. (TSXV: HILL) ("Hill” or the "Company") is pleased to provide, in this final week of its fiscal year 2024, the following business and corporate update, including several recent foundational advances it has made that the Company expects will help set it up for success as it moves into fiscal year 2025.  

 

Highlights of the DehydraTECH licensing update include:

• Hill expands licensing rights of DehydraTECH commercialization partner Dehydr8, LLC to extend to all legal US states, recognizing Dehydr8’s significant investments to date in a national DehydraTECH commercialization strategy and streamlining the process of launching new states with multi-state operators and other cannabis operators 

• An exciting new licensee, multi-state operator Greenlight Dispensary to launch multiple new DehydraTECH-powered edibles products with Dehydr8 in the upcoming quarter 

• Hill amends licensing fee structure with legacy DehydraTECH licensee 1906, maker of the popular ‘Drops’ line of tablets, to align with 1906’s go-forward strategies and growth agenda 

Hill Expands Licensing Rights of DehydraTECH Commercialization Partner Dehydr8, LLC to Extend to All Legal US States

In July 2021, the Company announced its licensing partnership with Dehydr8 MI, LLC to begin the US B2B commercialization of Hill’s rights to use Lexaria Bioscience Corp’s groundbreaking DehydraTECH patent portfolio in the pilot state of Michigan.

From the initial R&D and pilot market launch in Michigan, Dehydr8 has since expanded operations to Illinois, Oregon, Massachusetts, Maryland and Delaware.    In addition, they have made significant capital investments in people and equipment, and have now also acquired through an affiliate, a cannabis-licensed facility in which to conduct DehydraTECH product R&D, culminating in a DehydraTECH R&D and commercialization platform that can easily scale nationwide.

In recognizing their progress and their investments in the extensive resources that are needed to operate the DehydraTECH commercialization model, Hill has now granted US-wide licensing rights to Dehydr8 on a non-exclusive basis.  Adding the new geographic rights also streamlines the administrative process of entering new states for Dehydr8, resulting in significant efficiencies when expanding licensee operations, such as when major multi-state operators like recently added licensee MariMed launch new states.

“We made the early strategic decision, after acquiring the rights to DehydraTECH, to build our US commercialization model with Dehydr8 and they have brought significant skills, expertise and capital investment to the partnership”, said Craig Binkley, Hill CEO.  “Dehydr8’s team has provided the backbone of science, product formulation and operations experience to support the vital R&D and operations work required for each new DehydraTECH sales process and in-market product launch.  They have also made major capital investments in people and equipment in each of their operating states, including DehydraTECH equipment and manufacturing technicians that travel to each market for production. We are pleased to expand and accelerate their ability to commercialize DehydraTECH with their growing base of cannabis operators.”

MJBiz estimates that the US cannabis market is expected to 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 across quarters as licensee sales have expanded in some periods and contracted in others, the future looks bright for continued growth in the addressable market for DehydraTECH as Dehydr8 expands their operations.

 

New Licensee, Multi-State Operator Greenlight Dispensary to Launch Multiple New DehydraTECH-Powered Edibles Products with Dehydr8 in the Upcoming Quarter

As mentioned, Dehydr8 has been successfully bringing new state and multi-state operators into the DehydraTECH licensing ecosystem and the addition of Greenlight continues that expansive trend.  

Since the beginning of 2024, an exciting new DehydraTECH licensee, multi-state operator Greenlight Dispensary, has been conducting R&D and product development activities to develop several DehydraTECH-powered edibles product lines.   We are excited to announce that Greenlight plans to launch these new edibles products beginning in its home state of Missouri in the next quarter.

Greenlight Dispensary is one of the leading cannabis brands in the United States, with operations in Missouri, Arkansas, West Virginia, Illinois and South Dakota. Greenlight’s founders are some of the most innovative operators in the US, having built one of the world’s largest dispensaries in Las Vegas, Nevada, the world’s first “Marijuana Farmers Market” and the first cannabis museum in a dispensary. They plan to launch multiple DehydraTECH-powered products – both new products and enhanced versions of existing products - in Missouri in the upcoming first quarter of fiscal year 2025.

 

Hill Amends Licensing Fee Structure with Legacy DehydraTECH Licensee 1906 to Align with 1906’s Go-Forward Strategies and Growth Agenda

When Hill acquired the rights to DehydraTECH for THC products from Lexaria in December 2020, 1906 was the only operating DehydraTECH licensee, having started their operations in Colorado in 2016.  The brand has been a major success, with their ‘Drops’ products becoming the #1 fast-acting edible in some markets and the leading swallow pill in the US as they expanded from their original pilot markets and opened eleven states in an efficient and agile test model.  

The stated goal of 1906 is to make cannabis a trusted, normal part of daily wellness with products that are easy to understand, easy to fit into your life, and offer the healthiest format available. At the end of 2023, 1906 launched a direct-to-consumer (DTC) product line across most US states to dramatically expand their reach towards the goal by providing consumers who don’t live in legal states or cannot or do not want to buy in dispensaries, access to 1906 Drops.  The DTC initiative offers hemp-derived Delta-9 THC lower-dosed versions of their popular ‘Drops’ products, which are also produced using DehydraTECH.  

As they launched this exciting new DTC business, 1906 have also cost-effectively exited lower performing markets and have announced that they are streamlining their business to focus the dispensary availability of their higher micro-dosed, marijuana-derived delta-9 THC Drops on the key growth markets of Illinois, Massachusetts, Missouri, New Jersey, New York and Pennsylvania.  The combination of DTC availability across 40 US states, plus the wholesale dispensary business in six key US states, constitutes a strong growth agenda for 1906 in 2024 and beyond. More information on 1906’s products can be found at 1906.shop.

We have been working with the 1906 team to harmonize our 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 their licensing fee terms to better match their current operations and footprint, rather than continue the old fee structure that we inherited in the Lexaria acquisition based on a legacy business model.  As a part of this negotiation, we have agreed to forgive certain licensing fees related to the old business model that were being carried as accounts receivable, in order to focus on the more advantageous, scaled model for the future.

“Our partners Dehydr8 and 1906 are energized about the future of their DehydraTECH-powered operations, and we are thrilled to reset and refresh their deals to better propel them as we enter fiscal year 2025”, said Pearl Chan, Chief Operating and Legal Officer.  “1906 is a beloved brand and a great example of how DehydraTECH can power successful consumer brands.  Dehydr8 continues to have success bringing new licensees on board and helping them develop and launch new and improved, better tasting, fast-acting and consistent DehydraTECH edibles products.  We are confident that expanding their rights will help facilitate growth.”

 

Corporate Update

The Company also announces that it has entered into a mutual agreement with Matthew Jewell for his departure as Chief Financial Officer as of June 30, 2024, the end of the current fiscal year.  

In his tenure, Matthew has been instrumental in standardizing Hill’s accounting systems and financial reporting processes and streamlining the Company’s financials.  He also worked to connect the financial systems to the operations management systems and models that have been built for the Company’s DehydraTECH licensing business and the alcohol-free wine business, where detailed visibility to both supply chain and retail sales is critical in our new, more efficient business model.  

With these established processes in place, we are now able to streamline our organizational structure.  As such, Reuban Nadesan, current VP of Strategy & Corporate Development of the Company, will step in as interim CFO.  Reuban is a Chartered Professional Accountant and has been supporting the Company’s finance team since he joined the company in 2018.  He has extensive experience with all the operating and financial systems and models that have been developed jointly with Matthew.  Having been deeply involved in leading the audit process in previous years, he is also very well suited to lead the fiscal year 2024 audit over the coming months.

 

About Hill Incorporated (TSXV: HILL)

Hill Incorporated is a progressive bioscience implementation company that is dedicated to building pathways to better and healthier living by leveraging our deep CPG expertise to commercialize leading-edge technologies to craft superior cannabis solutions and non-alcoholic beverage products globally. Our Hill Avenue Cannabis business unit is pioneering the space where craft consumer products meet bioscience by combining our deep CPG commercialization expertise with our rights to use Lexaria Bioscience Corp’s ground-breaking DehydraTECH patent portfolio for product development, licensing and B2B and B2C sales of cannabis ingredients or products on a global scale. Our Hill Street Beverages business unit represents the Company’s legacy alcohol-free consumer beverage marketing and distribution business.

For more information on our business activities visit www.hillincorporated.com, to learn more about our DehydraTECH cannabis biodelivery technology, go to www.dehydratech-thc.com, or to check out Hill Street Beverage’s award-winning alcohol-free wine line-up and order product to be delivered straight to your home, go to www.hillstreetbeverages.com.

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For more information, contact:

Craig Binkley, Chief Executive Officer

Email: craig@hillincorporated.com

Phone: 604-609-6154

 

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”, “would”, “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.

 

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