Hill Street Beverage (TSXV: BEER) quietly announced this morning that it will not be proceeding with the acquisition of Regina, SK-based OneLeaf Cannabis. The acquisition, which was to be in the form of $16 million worth of Hill Street shares, was originally announced on May 28.
Hill Street Beverage provided little idea as to why the transaction would not be proceeding, only stating that the due diligence period had expired and that the two parties agreed to not move the transaction forward. Part of the issue may be that Hill Street was only able to raise roughly $1.6 million for the transaction, out of a goal of $5 million. The funding was required to cover debt that would be assumed with the acquisition. A concurrent fallout in share price prevented any interest from showing up for the $0.40 per share placement.
The 48,200 square foot cannabis facility was to become center stage for Hill Street’s beverage operation. The firm was anticipating on installing production and bottling lines for its products, which would reduce the firms reliance on third party suppliers to manufacture their product. In total, an annual production volume of over 300,000 cases of wine and beer was estimated for the facility.
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. 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.Terry Donnelly, Hill Street’s Chairman and CEO
The OneLeaf facility was anticipated to have received certain licenses from Health Canada by this point in time, which may have impacted the transaction as well. The facility has not been licensed as of the time of writing.
The firm noted in its press release that the termination of the agreement will not affect the deal currently in place related to Lexaria Biosciences infusion technology.
Hill Street Beverage is currently trading at $0.16 on the TSX Venture Exchange.
Information for this briefing was found via Sedar and Hill Street Beverage Company. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
As the founder of The Deep Dive, Jay is focused on all aspects of the firm. This includes operations, as well as acting as the primary writer for The Deep Dive’s stock analysis. In addition to The Deep Dive, Jay performs freelance writing for a number of firms and has been published on Stockhouse.com and CannaInvestor Magazine among others.