Hill Street Beverage Company Inc. has signed a binding Letter of Intent to acquire OneLeaf Holding Corp. (“OneLeaf“), the parent company of OneLeaf Cannabis Corp., an “evidence package” stage applicant to become a licensed cannabis cultivator and processor, in an all share transaction. The Company also announces a proposed non-brokered private placement of units for gross proceeds of up to $5 million.
Both Hill Street and OneLeaf believe that cannabis beverages will expand consumption of cannabis beyond just the consumer base willing to smoke or vape products. By combining Hill Street’s award-winning alcohol-free beverages with OneLeaf’s access to an award-winning and unique catalogue of cannabis genetics, the combined company will have the ability to become a leader in the infused beverages market, in addition to offering differentiated traditional cannabis products.
“The OneLeaf team has built a world class, 48,200 square foot facility, built to EU GMP standards that will house growing, extraction, and infusion. It will house the infusion, bottling, and canning of our beverages under one roof. Their catalogue of over 700 distinct cannabis cultivars, which have been collected and cultivated by the founders, includes a collection of Cannabis Cup award-winning cultivars and a diverse selection of landrace varietals,” said Terry Donnelly, Hill Street’s Chairman and CEO. “We anticipate that OneLeaf’s elite genetics, which include many cultivars not legally available anywhere else, will pair perfectly with our beverages to provide unique attributes and experiences for our consumers. We believe the integration of OneLeaf and Hill Street will make for a powerful force in the market, and positions Hill Street to become a leading producer of infused beverages and other cannabis products.”
“Hill Street’s beverages have already set themselves apart on the world stage,” said Trevor Green, CEO of OneLeaf. “No other alcohol-free beer and wine producer has won as many major world championship competitions as Hill Street. With a complete portfolio of beverages ready for infusion, plus their demonstrated expertise in private label and branded beverages, we believe the OneLeaf facility will become a landmark in the industry, and the source of the finest cannabis infused beverages and other cannabis products in the market. With our world class cultivation and extraction capabilities, we will be able to produce unique cannabis cultivars to match both beverage and cannabis consumption occasions and experiences, whether they are adult format, nutraceutical, sport-recovery, wellness, or even prescription drug products.”
Cannabis beverages are the fastest growing segment of the market in US states where they are legal, according to Headset/Nielsen, growing at up to 61% in the past year. Each of Hill Street and OneLeaf believe there is a significant opportunity to grow their brands, as well as provide co-packing services to many companies wishing to enter the cannabis beverage market but who do not wish to operate their own packaging and production facilities. This includes major multinational beverage companies, international cannabis companies looking to enter the highly regulated Canadian market, and licensed producers looking to produce beverages using their own cannabis extracts.
The parties believe beverage-format products can also be a new, differentiated delivery system for cannabis-derived precision medicines and therapies, allowing consumers and patients the ability to consume cannabis-derived products in public and social settings. The addition of Hill Street’s demonstrated beverage expertise will help differentiate OneLeaf’s existing product roadmap, which includes traditional cannabis products such as dried flower products, oils, edibles, and extracts.