April 27, 2020

By Lynda Kiernan

Based in Nunavut, Canada, Province Brands has raised C$2.2 million (US$1.6 million) in bridge funding, led by a San-Francisco-based private investor, to advance its first-of-its-kind technology to brew beer from plant material that had never previously been able to be fermented.

This funding is the fifth successful round for the startup since its launch in 2016, and follows the raising of a C$5 million (US$3.56 million) Series B last year at a C$70 million (US$49.9 million) pre-money valuation. To-date, the company has raised a total of C$23 million (US$16.4 million). 

Originally the company focused its technology on the cannabis industry, offering an alternative use for the crop. However, Tech Crunch reports that when the cannabis market began its slide, the company reimagined its model and began to market its technology across the wider brewing industry. It was then that the company sought bridge funding from its investors, raising C$2.2 million.

“The cannabis industry was overvalued from an equities perspective for years,” said Dooma Wendschuh, co-founder, Province Brands. “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.”

Province Brands’ patent pending technology allows beer to be brewed from non-starch plant materials including wood, shrub, or grass, even including food waste, such as spent grains (DDGs), or pulp mill waste.

Using this technology, brewers can cut their cost of production by 20 percent, and can make beers that are lower calorie, lower carb, gluten-free, and that contain beneficial compounds such as probiotics that are not in other beverages. This process also allows for brewers to locally source brewing material to create new flavors, while reducing their carbon footprint and the need to pay for waste removal.

Able to be adapted at a low cost, Province Brews’ technology can benefit a range of beverage makers, giving functional beverage makers the ability to make functional, gluten-free products, and giving cannabis beverage companies the ability to make non-alcoholic brews from their own byproducts.

Proving this out, the company is working with well-known liquor companies on making beer from their feedstock, including a tequila company interested in making beer from agave. 

The capital from this round, which was committed by existing institutional and angel investors, will be used by the company to fund the expanded marketing of its technology to brewers that are negatively affected by rising prices for grain, such as barley, and to launch its own brand – Cambridge Bay Canadian Hemp Lager.

“The technology we created to brew beer from cannabis would allow us to brew beer from any non-starch plant material,” said Wendschuh. “This could be transformative for beer companies where the price of barley has gone through the roof.”

Province Brews stated that Cambridge Bay Canadian Hemp Lager will be the first beer made from hemp, with an ingredient list consisting only of hemp, hops, water, and yeast, with no THC, CBD, or phytocannabinoids.

With plans to scale up operations for the Cambridge Bay launch, the funds also will be used in support of construction of a 123,000 square-foot production site.

“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 Jennifer Thomas, co-founder, Province Brews.

This ramp-up is happening with end markets already in sight. The company has signed a distribution agreement with Ayre Resorts, the owner of five-star resorts that will be opening its first location in Antigua in 2021, according to The Drinks Business. And with intentions to break into the European market, in August 2019 Province Brews engaged Niall Phelan, co-founder of Ireland’s Ry River Brewing, in the role of consultant. 

“This is a proven technology that can be put into practice at minimal expense,” said the startup. “And it’s going to change the brewing industry forever.”

– Lynda Kiernan is Editor with GAI Media and daily contributor to the GAI News and Agtech Intel platforms. If you would like to submit a contribution for consideration, please contact Ms. Kiernan at lkiernan@globalaginvesting.com.