There’s a potential climate-related crisis brewing in the beer industry and Province Brands has just raised $1.6 million for its technology that purports to be a solution.
The Canadian company, which has developed a way to make beer from any plant material, is pitching itself as a solution to the increasing shortages of barley and other grains caused by global climate change.
It’s a pivot for the brand. When it launched, the company was taking its technology to cannabis brands as a way to brew beer made from bud. But when the bottom started falling out of the cannabis market, Province Brands switched the pitch to the broader brewery business.
“The cannabis industry was overvalued from an equities perspective for years,” says Province Brands’ co-founder Dooma Wendschuh. “Starting in mid-2019 we started to see that crash… this is an industry that is very capital intensive… it requires a tremendous amount of investment to set up these facilities.”
As the market became less about the puff and more about the pass, Province decided to reach out to its investor base and raise a Canadian $2.2 million convertible note.
“We didn’t want investors to take a bath on it if that could be avoided,” says Wendschuh.
Province Brands’ last funding was its Series B in 2019 when the Company raised CAD $5 million at a CAD $70 million pre-money valuation, the company said in a statement.
“Closing this round quickly highlights the attractiveness of Province Brands’ technology, IP, and market opportunities,” said Wendschuh.
The money which came from previous institutional and angel investors will be used to continue marketing its technology more broadly to brewers impacted by rising prices for beer staples like barley and to launch its own branded hemp lager into the market.
The company’s Cambridge Bay Canadian Hemp Lager will be the first beer brewed from hemp, according to a statement from Province Brands. Made of only hemp, hops, water and yeast, the beverage contains no THC, CBD or phytocannabinoids and can legally be sold wherever alcohol is sold, the company said.
“The technology we created to brew beer from cannabis would allow us to brew beer from any non-starch plant material,” Wendschuh said. “This could be transformative for beer companies where the price of barley has gone through the roof.”
In some cases barley is too expensive for large-scale beer production, Wendschuh noted.
“Funds raised will help us complete Phase 1 construction of our 123,000-square-foot brewing facility and will enable us to receive additional licensing from Health Canada,” said Province Brands’ co-founder Jennifer Thomas. The company received its research and development license from Health Canada in late 2019.
Province Brands is already working with some bigger name liquor companies on making beer substitutes from their feedstocks. In one case, the company is working with an undisclosed tequila manufacturer on a beer made from agave.
It is notable that the transaction closed in less than two months at a time when capital markets have been challenging.
Source: Tech Crunch