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No. We're absolutely planning on using our Fortune 500 partners. So in Canada, HEXO has all the distribution. We are listed now in 9 provinces, touch 95% of the population. So we actually provide the marijuana distribution to our partners like Truss and Molson and our other spoke partners, so when we add cosmetics, when we add health and wellness, when we add edibles, when we add vape.
So in the other markets, we're going to rely on their distribution. So we're actually getting their international distribution. So in the U.S., obviously, Molson very strong with a top 4 position in beverages, top 2 in the U.K. But as we add more spoke partners, that gives us all of that more opportunity. So as we're focused on the technology and supply chain piece, those partners are bringing a deep understanding of consumer occasion, the international distribution piece and of course, the base product, which is very important because there's really 2 parts to creating an awesome cannabis product. It has to work and it has to work better than the rest. And so HEXO has got that covered, but I do think one risk that most cannabis companies are ignoring is that it will be very difficult for a cannabis company to make a better chocolate than Nestlé, to make a better face cream than L'Oreal and a better beer than a Molson. So that's why I think our strategy fundamentally leads to better products, which will lead to better success in the market.
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Operator [45]
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Your next question comes from Robert Fagan of GMP.
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Robert Fagan, GMP Securities L.P., Research Division - Equity Research Analyst of Healthcare [46]
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Just wanted to ask about the ramp up of capacity at B9. Obviously, we saw in the video how it seems to be already quite filled up with plants. And just wondering if you can give us kind of a cadence of how much of the overall capacity that facility is already ramped up and what's left to ramp up?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [47]
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Yes. Absolutely. Rob, so we're -- the facility is full. So as you've seen in the video, there's plants in the entire -- the entire 1 million feet is full of plants. So with the first harvest out of greenhouse, there's always dialing in and you'll see -- if you look at our historical numbers for B6, so our 250,000 square foot greenhouse, that will give you a really good idea of how we're dialing the environmentals and the new greenhouse. How we start to improve yields quarter-over-quarter. I think to get to our 150 ton ramp, reasonable to see us early 2020 to be at that number on a run rate basis. And so that will really reflect incremental yield improvements, but the facility is full and now it's just a question of -- you should see meaningful improvement every quarter.
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Robert Fagan, GMP Securities L.P., Research Division - Equity Research Analyst of Healthcare [48]
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Great. That's quite impressive. Is there any potential delays from beginning sales from that facility around licensing in any kind of way? Does that create any type of hurdle to actually get sales generation from that facility?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [49]
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Rob, we have our sales license. We just didn't think it was a big deal. It's kind of order of operations these days. So now we're selling from that facility. As I said earlier, we've begun and so -- no. That facility is fully licensed, so no worries there.
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Robert Fagan, GMP Securities L.P., Research Division - Equity Research Analyst of Healthcare [50]
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Excellent. Just shifting to extraction now. In light of your agreement with Valens and in the context of Belleville, hoping to be able to accommodate 375 tons of input material for extraction. How do you see the kind of margin evolution from your Cannabis 2.0 products as a result of perhaps a shift in capacity from third-party to your own for the production of those products? And then, if you can just give us maybe a bit of insight on how you intend to go about extraction operations in the U.S. with that hemp biomass being secured?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [51]
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Yes. I think from a long-term strategy perspective, if we get a third-party extractor that can match or beat, a, our capacity, two, our quality, three, our technology, we conceptually will be happy to work through a third-party operator, which is why we're working with Valens and they've been great so far. From -- remember that 10 years out, if HEXO were to look like a team of lawyers and a team of scientists and a great brand, Powered by HEXO, in hundreds of different Fortune 500 products, that's what we're striving for.
In the meantime, we have to make sure that we can deliver certain products and that means having enough capacity for HEXO scale, which is shooting to be a top 3 global player. And quite frankly, there's nobody else whether that's the extractors, other LPs that have shot for the level of scale that we're putting in. We are preparing for the possibility that we could shoot not just for a 20% share in Canada, but actually grow that. So we are preparing ourselves. And let's say, we were to say this is a 1,000 ton market, with 375 tons of potential processing power and 150 tons of grow, the idea is we're already starting to prepare to have less grow in the supply chain, so 150 tons moves through our manufacturing and extraction and formulation stage, which has 375 tons, supplemented by hemp in the short term, in the medium term perhaps supplemented by other forward contracts with other licensed producers, our imports from overseas and then moving on eventually to the final phase where we're simply an IP and technology company.
During that whole journey, as I mentioned, in the very short term, we'll see some margin compression especially as our sales on flower come in, but that margin should start to dilate back up. The nice thing is as we scale up, our costs are coming down significantly. And I think a testament to the team has been this quarter as you see our revenue per gram of course has dipped, put we've managed to hold our gross margin relatively stable. So we're recovering the costs. Unfortunately, I do think that in the face of lowering costs, you will have continued selling pressure, so it will be difficult to translate those costs to additional gross margin until those advanced products come online.
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Robert Fagan, GMP Securities L.P., Research Division - Equity Research Analyst of Healthcare [52]
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Okay. Great. Last quick one, if you could maybe -- I don't know if you can give us an idea of the mix in terms of new products in Canada. You mentioned gummies, vape and beverages. Can you give us an order of magnitude of the split there? What would be the biggest drivers?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [53]
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So our top priority is our beverage launch followed by our vape launch and then gummies is one that we think, from an edibles perspective, will be very interesting. So they're in that order. I think steady state in the future. As I mentioned on the call that at steady state, this market will be about 35% flower, 65% advanced products. Of the advanced products, we think that beverage and vape could easily be 1/3 each with other categories such as edibles, which -- gummies is the largest part of the edible segment, which would be less. That would start to give you a bit of an idea on how we see the world.
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Operator [54]
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Your next question comes from David Kideckel of AltaCorp Capital.
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David M. Kideckel, AltaCorp Capital Inc., Research Division - MD & Senior Equity Research Analyst of Healthcare and Life Sciences [55]
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I just wanted to go back to the U.S. and with Truss JV in particular. So when we're talking about in the press release and we talked about this morning so far, when you're looking to enter into 8 states in 2020, just to clarify for housekeeping here, does this only -- and you also mentioned, Sebastian, that you want to lead into the U.S. with Truss, but do these initial 8 states, is this only going to be including the Truss products?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [56]
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No. So it will be including Truss. Well -- and specifically, I should clarify. So Truss is a Canadian joint venture, so it's Canadian only. So most likely, the exact form of entity -- we haven't revealed exactly how we're doing this with MCBC yet. So MCBC and HEXO will be doing a joint release at some point in the future to explain exactly how -- under which brands. Of course, Truss and all the work that's been done will be leveraged on the marketing side. So that's 1 piece.
The other piece is we're going to have our other spoke partners, so -- I've said 1 a year, so you could assume that in 2020, we have 2 at this point. Late 2020, maybe 3. And yes, the idea is to enter the U.S. using our spoke partners, not to go direct with HEXO core products in the short term.
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David M. Kideckel, AltaCorp Capital Inc., Research Division - MD & Senior Equity Research Analyst of Healthcare and Life Sciences [57]
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Okay. That's helpful. And to clarify as well, you mentioned that the Truss beverages are great and so there's a lot of progress that has been made. So can we assume that the development in the R&D, all the innovation behind the actual beverages, are those nailed down now or are they still being tweaked?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [58]
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So 1.0 is nailed down and 1.0 is amazing. It's better than anything that's in the U.S. today. Hands down. But I think 1.0 has a lot of room to grow. What I'm excited about is the future, right? I'm excited about a 2-minute onset. I'm excited about a 45-minute onset. I'm excited about (inaudible) experiences, a sparkling water where we reduce your appetite using the ingredients in cannabis, but are nonpsychoactive. These are all things the R&D teams are working on, and I think that's going to provide for a really exciting road map for the next 5 years. Today, our starting lineup is best-in-class. It's better than anything that exists on the planet that I've seen. And so I'm tremendously excited about that.
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David M. Kideckel, AltaCorp Capital Inc., Research Division - MD & Senior Equity Research Analyst of Healthcare and Life Sciences [59]
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Okay. So just to confirm then, so the Truss product -- the beverages are ready to go subject to, I guess, number one, Canadian -- the derivative legalization and then also with your eventual and near-term strategy in the U.S.?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [60]
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Yes. We have technology. We have a level of technology and product quality right now that puts us in our own class. I expect that at launch, it will probably be -- we'll see how we're performing against the other top LP. Obviously, Canopy with their Constellation partnership I'm sure are coming out something pretty impressive as well, but I haven't seen anything else in the industry right now that compares to what we have today.
So what we have from a technology perspective today is absolutely phenomenal. The team has done a great job. And now the question is going to be the ramp up in infrastructure and that ramp up in infrastructure is dependent on our Belleville facility rollout and the Truss rollout within that Belleville facility, which we are on schedule to deliver for the fall, but that is the risk to that full rollout. And obviously, for the 2020 plan in the U.S., there's some infrastructure in U.S., which is why we formed HEXO USA, our corp in Delaware to have that corporate structure to start acquiring assets and doing infrastructure build-out in the U.S.
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David M. Kideckel, AltaCorp Capital Inc., Research Division - MD & Senior Equity Research Analyst of Healthcare and Life Sciences [61]
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Okay. Great. Another question. I have a couple of more here, quick ones. I know, Sebastian, you mentioned sort of capital deployment over time around the $6 billion mark, which could include both M&A and capital raises. Is there any -- just to tweak this down a little bit. Over the next, say, 12 months or 6 to 12 months, can you provide any CapEx guidance for HEXO?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [62]
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We're not going to provide the CapEx guidance just yet, but -- so thanks for asking. We'll see what we can do over the following quarters in terms of thinking about that. But I want to make sure we nail down our numbers. And again, we don't give up exactly the how -- of how we're entering the U.S. just yet. I'd rather do it and then tell you guys about it, if that's all right.
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David M. Kideckel, AltaCorp Capital Inc., Research Division - MD & Senior Equity Research Analyst of Healthcare and Life Sciences [63]
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Understood. That's great. My last question, Sebastian. Actually, I think it was brought up by another analyst before in passing around biosynthetics. I'm just wondering in all of your discussions with Fortune 500 partners, I mean it's apparent I think from a lot of our due diligence that a lot of the Fortune 500 partners, especially when considering cannabis, they really pride their final product with consistency, purity and potentially low costs as well. So on that note, with biosynthetics, can you maybe -- is there any color you can give to your discussions with the Fortune 500s around any sort of biosynthetic discussion that's of relevance for them and how that could impact your strategy if you decide to move into the area of biosynthetics as well.
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [64]
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Yes. I think biosynthetics certainly have a lot to offer, but they also have a lot to prove. And so from our perspective, we're waiting to see who will emerge as the biosynthetic winners before making significant investments in that space. And to us, the winners are not only the ones that will solve scale, but also the ones that will solve intellectual property, especially when it comes to rare cannabinoids that would be relevant to a specific Powered by HEXO experience.
So those are really the ones that are going to keep our attention. We have great relationships with quite a few of the biosynthetics companies. We're keeping an eye on them. We're tracking their progress. And I think from the Fortune 500 perspective, they are leveraging our maturity in market and our understanding of all that kind to kind of sort it out. The Fortune 500s today, from my perspective, are not taking bets on technology to come. They need to solve the market access now and that's something that HEXO is doing today from plants. In the future, of course -- I've talked about the HEXO team being lawyers and scientists. That could very well mean that our supply chain is sourced from greenhouses in Canada for the flower, hemp fields in the U.S. for 80% of our cannabinoids and then a few biosynthetic providers for rare, specific cannabinoids as cost depends, but I don't plan on marrying myself now to a cost structure. I think we can pivot in the future depending on which solution becomes best. And I think that the reason a Fortune 500 would need a HEXO as a partner is because to figure all this out in a relatively effective way takes a lot of energy and expertise, which they simply don't have on their team. So that's why our Powered by HEXO partnership model has resonated very well with Molson and is resonating very well with a number of companies in our funnel.
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Operator [65]
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Your next question comes from John Chu of Desjardins Capital Markets.
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John Chu, Desjardins Securities Inc., Research Division - Analyst [66]
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Just a couple of quick questions. On the U.S. strategy, the $400 million in revenue guidance for 2020, does that include any revenue generated from the U.S.? And then secondly, just...
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [67]
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No. It doesn't, John. And let me clarify, so the $400 million guidance is for fiscal ending July. When I say 2020 U.S., I'm talking to December calendar. So there's some offset, but the nuance to consider as well is that our current spoke partner, Truss, so with Molson and depending on how the future ones will be structured, the revenue itself does not consolidate up to HEXO. We're going to see our 42.5% share of the net income or loss. So you will see it post bottom line. So obviously, show up on our financials, but you wouldn't see the revenue. And so that's the primary reason that it's not in the guidance.
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John Chu, Desjardins Securities Inc., Research Division - Analyst [68]
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Right. Okay. And then, to what extent does FDA approval on the CBD side come into play in terms of your entry into the U.S.?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [69]
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Yes. We're watching the FDA very closely because how they will decide to treat overall CBD treatment relative to pharmaceutical, nutraceutical, et cetera, will obviously have an impact on how we're operating, but we're currently following a path where we believe we'll have no contest from FDA. So very confident at this point in our strategy.
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John Chu, Desjardins Securities Inc., Research Division - Analyst [70]
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Okay. And then just lastly, you mentioned -- in terms of shipping flower to Ontario, BC and other provinces, are you able to ship that officially right now? And what's the update on Alberta? That's a pretty big market, and it doesn't seem you're having much exposure there at this point in time.
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [71]
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Yes. So when you look at the -- you look at our throughput, of course, Québec remains -- has remained a huge market, but that has not been demand constrained. That has been supply constrained to date. As we double this quarter and as we go, of course, and we start to ramp from there into our $400 million next year, as I mentioned, the infrastructure blot goes away largely by fall.
So you have more and more capacity to supply into these markets. And we want to make sure that we are not only a preferred supplier in Québec, but that we're a top supplier in all other provinces. So we want to make sure when we go into these provinces that we respect our commitments, we make sure that whatever is on the shelf is always available and that we really provide a great customer experience. So not so much demand cap and that's why you haven't seen anything in Alberta yet, but expect to see more and more things in other provinces as the months go by.
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Operator [72]
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Your next question is from John Zamparo of CIBC.
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Krishna Ruthnum, CIBC Capital Markets, Research Division - Associate [73]
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This is actually Krishna Ruthnum on for John. My first question is on pricing. And my apologies, I missed part of the prepared remarks that there's a meaningful decline quarter-over-quarter in your pricing. Just wanted to understand whether that was simply due to lower oil sales, a greater focus on Québec or maybe what you alluded to earlier, which was constraints on the packaging side?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [74]
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Yes. I think a little bit on oil, but it's really -- we're starting -- so earlier in the call -- I'm not sure you caught the point, but I was talking about how we're going to into a period of price compression around flower as you have these 150 smaller LPs that buy from market share and they really have very little ability to go to market, right? So we're already seeing that price compression in the market begin. So that has started. And I think that it's prudent that we all expect that to continue for a certain period of time. And I think that is then prudent to have a bet on companies like HEXO that both have the scale and operational expertise and cost control to survive their margins in that price compression. So as you've seen, despite the price compression, we've held our margins. So I'm not too worried about it, but the smaller producers over time will not be able to because they won't have the economy of scale.
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Krishna Ruthnum, CIBC Capital Markets, Research Division - Associate [75]
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Okay. I also had another question just around the 260 tons of hemp supply that you announced. Are there any terms or is there any additional color that you can give us just sort of around that supply?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [76]
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So we're not disclosing the terms, but you can kind of look at how we operate. We always operate from kind of a fundable supply globally approved supply chain perspective. So when we look at our cost per milligram, we track everything and then there's -- so there's 2 things to look at. Where do you need the supply to come from and how is that supply relevant to specific jurisdiction? So in the U.S., you need hemp to participate. But then, 2, whether it's biosynthesis, hemp or marijuana, we are continuously evaluating our cost per milligram of all cannabinoids and formulation and flower and then searching the most cost effective alternative. So you can assume that our hemp transformation will be at a good price.
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Krishna Ruthnum, CIBC Capital Markets, Research Division - Associate [77]
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Okay. And one last question just on your guidance for Q4. Just given where we are in the quarter, just wondering if you can give us some comments on the trend to date as well as your -- the pace and sort of your confidence of reaching that target?
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [78]
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We're going to reach the target. I mean, I'd ask you and I continuously welcome challenges. I think that the analyst community is doing a phenomenal job in our space. I welcome more transparency in our space. I welcome a broader discussion for investors. If you ever hear me say something and not deliver, you have to call me out. And in reverse, I would tell you today, nobody has ever called me out on anything because HEXO has always delivered what we said we would. We're delivering a double this quarter.
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Operator [79]
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(Operator Instructions) There are no further questions at this time. Please proceed.
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Sebastien G. St-Louis, HEXO Corp. - Co-Founder, President, CEO & Director [80]
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Thank you very much, everybody, for your time and the great questions. Look forward to speaking with you during the following months and, of course, at our next earnings call.
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Operator [81]
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Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.