VIDEO: Province Brands Launches Beer Brewed from Cannabis Plant

MidasLetter Live

Province Brands CEO Dooma Wendschuh shares the company’s go-public financing strategy with James West and Ed Milewski. When operating at full capacity, Province Brands will be the largest cannabis brewery in the world, producing 60 million bottles of cannabis beer annually. Province Brands is uniquely situated as a cannabis brewer because it has both brewing and cannabis licenses, which allows the company to act as a contract facility in addition to producing its own branded products. Unlike other cannabis beers, Province Brands’ low-calorie product is brewed from the cannabis plant itself, providing consumers with an authentic, craft industry experience.


James West:   This whole economy based around cannabis is taking on a head of steam, and nobody can represent that evolution more succinctly than my good friend Dooma Wendschuh, who also happens to be the CEO and founder of Province Brands. Dooma, welcome back.

Dooma Wendschuh:   It’s great to be here. Thank you for having me, it’s an honour.

James West:   Dooma, you are making incredible strides with Province Brands; you’ve got a prototype packaged beer here, and that looks like a beer –

Ed Milewski:  Is that the right spot right there?

James West:   That’s the right spot. So it’s obvious you’re making great progress. You’ve closed financing, you’ve got a go-public strategy that’s unfolding.

Dooma Wendschuh:   That’s correct, yeah. We just announced that we closed our Series A round. We raised $10.9 million CDN. Now, the total that we’ve raised since starting the company is around $16 million CDN. We have announced that we will be taking the company public, ideally before the end of the year, and we are planning our Series B, which will be our go-public round, which I mentioned actually before on your show will be underwritten by Paradigm as well as a few other banks that will be joining the group that will be raising the capital.

James West:   Great.

Dooma Wendschuh:   It’s coming together; we look to be raising about $30 million concurrent with our public listing.

James West:   Wow, okay. So, is that enough to build the brewery?

Dooma Wendschuh:   It’ll get us started, let’s put it that way. We can get a small brewery and we can increase capacity, and when we’re up and running at full capacity, we’ll be 175,000 hectolitres, which is roughly 60 million bottles of cannabis beer per year, and we’ll be able to scale up from that, given success. But we’ll be the largest cannabis brewery in the world, and we will be also a contract facility. We’ve been getting, as you might imagine this week after the big announcements that have happened, we’ve had a lot of interest from licensed producers who may have a marijuana license but they can’t brew a beer, and also brewers who may have a brewery but they don’t have a marijuana license. Because we have both of those things, we can do contract brewing for LPs and for breweries.

James West:   You mean I could get you to produce a Midas Letter beer?

Dooma Wendschuh:   Well, I’ve already been working on one in secret.

James West:   Really? Okay, well…[laughter]

Dooma Wendschuh:   You’re going to love it. You just ruined the surprise.

James West:   Oh no! Well, I know, I’m sorry about that, I’ve just ruined my own surprise.

Dooma Wendschuh:   It was going to be for your next anniversary.

James West:   Excellent! Okay, so every time we meet, there are evolutions and slight tweaks and changes to the landscape regulatory side in Canada for what is allowed and what isn’t, and I know for a fact that at this point we’re still not clear on alcoholic beverages with cannabis components, or any beverages with active cannabis ingredients, yet, but the language keeps changing in that story.

Dooma Wendschuh:   Well I think one thing that is clear is that they are not going to allow mixing alcohol and cannabis, which I think is a great thing.

James West:   We’ll have to do that ourselves.

Dooma Wendschuh:   You can do that at the bar on your own, or at your home, I guess, on your own, because it doesn’t seem like they’ll allow social consumption of cannabis right after that, either. The products that we brew at Province are non-alcoholic and intoxicate using marijuana or its phytocannabinoids. They’re different from an infused beer because they’re actually brewed from the cannabis plant itself; we use the stalks, stems, roots of the cannabis plant as the starting material in place of barley, from which we will brew our beer. So it is a really unique, authentic product; there’s nothing like it on the market, it is super cool. But in terms of regulations, what we do know for sure is that come October of 2019 if not before, marijuana beverages will be on the shelf here in Canada. And if there was ever any doubt of that, the large investment by Constellation into Canopy Growth is sort of indicating that certainly there is a lot of interest and a lot of energy going into producing cannabis beverages, and a lot of money to lobby the government to make sure that they follow through on their promise.

James West:   You bet. Interesting. So then, what –

Ed Milewski:  So is this a beer? Is it a type of beer?

Dooma Wendschuh:   It’s a type of beer brewed from the cannabis plant instead of barley, so the ingredients are basically cannabis, hops, water, and brewer’s yeast.

Ed Milewski:     Any nutritional value there?

Dooma Wendschuh:   It will have some protein, just like a barley beer does, but just a little. What’s important about it is, it is gluten-free, it is much lower calorie than a typical beer, lower carb, lower sugar, and it’s a great story.

Ed Milewski:  You were just talking about hemp being a superfood. Now you got a super-drink.

Dooma Wendschuh:   Super food, super drink.

James West:   And after some alcohol and cannabis, you’ll feel like Superman.

Dooma Wendschuh:   We’ll try to avoid that.

James West:   That’s right. So I’m thinking about the, you know, the nature of cannabis plants, and I understand that hemp is, in fact, related to the hops plant. But I can’t for the life of me imagine how you would deal with the flavour characteristics of a cannabis plant in the same context as you would barley in a beer.

Dooma Wendschuh:   Well, if you think about it, the flavour of beer comes from a lot of things. It comes from the yeast that you use, it comes from the process and the amount that you ferment it, whether you caramelize the sugars, whether you roast the malt…there are so many things that comprise the flavour of a beer. The actual barley is a very small percentage. I mean, the biggest component in the flavour of the beer is the hops, or can be, depending on how much hops you use.

Now we use hops, we use, you know, brewer’s yeast, just like everyone else, but instead of that barley, we’re using cannabis, and it has a very nice, robust, nutty, savoury flavour. If you think about wine, you know, the white wines, there are sweet wines and dry white wines; we are basically a dry beer. It’s lower sugar, it’s lower calorie, it has this sort of savoury aspect to it that’s different.

Ed Milewski:  How many calories, for instance?

Dooma Wendschuh:   Well, we’ve been saying 60, but our last test came back at around 40, and we’re going to continue to develop it up until October of 2019 to get the lowest calories possible in a natural way. We’re not using any Nutrasweet or Splenda or anything in place of sugar, it is actually –

Ed Milewski:  I’m going to try it for sure.

Dooma Wendschuh:   We’d love for you to try it.

James West:   Yes, well, I’ve tried several tests –

Dooma Wendschuh:   I’ve tried it.

Ed Milewski:  Does this have cannabis in it?

Dooma Wendschuh:   This is a mock-up that you’re looking at.

Ed Milewski:  Oh, I was just going to say can I…

Dooma Wendschuh:   Take it, take it.

James West:   It’s a mock-up, Ed, that means it’s soda water. [laughter] So that’s great. So you’re continuing to develop the product in full confidence that you’re going to be able to sell it on the shelves in Canada very soon.

Dooma Wendschuh:   We know for sure we’ll be able to sell it on the shelves in Canada, and if that’s not enough, we’ve applied now for a license in Greece, and we’re looking to sell it in Europe in medical marijuana markets which also allow beverages. And we may be able to export it from Canada to certain medical markets already. So we may be able to even do that before legalization.

James West:   So how does the existence of an entity like Molson-Coors in the space, how do you feel about that?

Dooma Wendschuh:   We think it’s fantastic. I mean, no one ever thought there was going to be one type of cannabis beer, just like there’s not one type of alcohol beer. There are different beers for different occasions, for different people, for different types of things. We think what we do is very unique and very different from what Molson may do, or what Canopy and Constellation may do, or what Hill Street may do, or any of the other beverage companies that have announced plans to launch beer in Canada. You know, those guys are taking a non-alcoholic beer that’s made from barley, and they’re infusing a marijuana oil, which hey, they’re welcome to do that. But should they wish to actually brew from the cannabis plant, whether it’s hemp or marijuana, they would likely need to license our patent-pending technology, and the technology has a lot of benefits. You know, not the least of which is, it’s a great story. It’s truly authentic, and when you think about the cannabis consumer, you know, one thing they have in common with the craft beer consumer is this love of authenticity.

You know, cannabis by its nature was a small-batch, craft industry for so many years, and what we’re doing is making something that stays true to those very authentic roots of the cannabis plant. We think of it as the difference between a single-malt Scotch and a blended whisky, right? They’re both going to get you drunk, sure, you know, but do a chemical analysis on them, they’re basically the same thing. So why is it that people are willing to pay so much more for that single-malt Scotch than they are for that blended whisky? It’s like, it’s about the process that they use, the quality of the ingredients, all of these different aspects of what people are paying for.

James West:   And Ed can give you another reason why people are happy to play a premium for blended Scotch – or for a premium single malt over a blended whisky.

Dooma Wendschuh:   What’s the other reason?

Ed Milewski:  Well, I would say it has something to do with their ego, right?

James West:   I was going to say: bragging rights! I was trying to transmit that you telepathically, Ed. I thought it was coming through. We’ve been having such a great and then – pfft! Is it because it’s almost quitting time?

Ed Milewski:  I thought you wanted to say ego. I read it wrong, sorry.

James West:   Well, bragging rights, ego, same kind of thoughts.

Ed Milewski:  Yeah, because you know, at the end of the day, it’s very difficult to discern flavour by itself. Like, because, if you only have one thing, I mean, that’s what it is. But you usually need to compare, like even viewing, or audio, or anything, you have to compare it to really say which one’s better, right? You only got one stock to buy, how do you know if it’s good?

James West:   How do you create excitement? How do you bash another guy’s stock while pumping your own?

Dooma Wendschuh:   Yeah, you know, we think what we’re making is sort of the single malt Scotch equivalent, and the infused beers would be sort of a blended whisky equivalent. So it’s very exciting to see what’s going to happen in this industry.

James West:   So when will we be able to try an actual cannabis beer from your brewery?

Dooma Wendschuh:   Well, the marijuana beers will be available when marijuana beverages are allowed for sale here in Canada, and that looks like it will be around October of 2019.

James West:   Okay, and what about the actual beer brewed from cannabis?

Dooma Wendschuh:   Well, we are playing around with ideas, and maybe announcing pretty soon that we might launch a beer made from hemp that would have alcohol in it. And, but yes, when I said marijuana beers before, the beers brewed from marijuana will be available October of 2019.

James West:   Oh, okay. Fantastic.

Dooma Wendschuh:   You know, whenever anyone else is allowed to sell it.

James West:   Well, that’s a long time to wait for a beer, isn’t it, Ed?

Ed Milewski:  Time to get mighty thirsty.

James West:   What time is it now?

Dooma Wendschuh:   Mighty thirsty.

Ed Milewski:  It’s beer o’clock.

Dooma Wendschuh:   Beer o’clock, I love it.

James West:   Well, Dooma, as usual, it’s fantastic to hear about the evolution of this story. It’s innovation at its finest, and we congratulate you for the progress that you made.

Dooma Wendschuh:   Thank you.

James West:   We’re also very excited about having you back again soon for another update. So thanks for joining me today.

Dooma Wendschuh:   any more. Thanks for having me, it’s been an honour.

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