HEXO Corp. (HEXO) Q3 2019 Earnings Call Transcript
David Kideckel -- AltaCorp Capital -- Analyst
Okay, thanks. That's helpful. And to clarify as well, then 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?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
So, 1.0 is nailed down and our 1.0 is amazing. It's better than anything that's in the US today by hands down. But I think our 1.0 has a lot of room to grow. What I'm excited about is the future, right. I'm excited about a two minute onset. I'm excited about a 45 minute onset. I'm excited about bad experiences, a sparkling water where we reduce your appetite using the ingredients in cannabis that are non-psychoactive. These are all things the R&D teams are working on and I think that's going to provide for really exciting roadmap for the next five 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.
David Kideckel -- AltaCorp Capital -- Analyst
Okay. So then 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 US.
Sebastien St-Louis -- Co-founder and Chief Executive Officer
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 I have launched, you will probably be -- we'll see how we're performing against the other top LP obviously, Canopy with the Constellation partnership I'm sure are going to be coming out with 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 the 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 Bellville facility rollout and the Truss rollout within that Bellville 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 US, there's some infrastructure in US which is why we formed HEXO USA, our hope in Delaware to have that corporate structure to start acquiring assets and doing infrastructure build out in the US.
David Kideckel -- AltaCorp Capital -- Analyst
Okay. Great. Thank you for that. Another question, I have a couple more here quick ones. I know, Sebastien, you mentioned sort of capital deployment over time around the CAD6 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?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
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 US just yet, I'd rather do it and then tell you guys about it.
David Kideckel -- AltaCorp Capital -- Analyst
Understood. That's great. My last question, Sebastien, actually, I think it was brought up by another analyst before in passing around bio-synthetics. 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 cost as well. So, on that note with bio synthetics, can you maybe -- is there any color you can give to your discussions with the Fortune 500s around any sort of bio-synthetic discussion that's of relevance for them? And how that could impact your strategy if you decide to move into the area of bio-synthetics as well?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
Yeah. I think bio-synthetic 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 bio-synthetic 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 and especially when it comes to rare cannabinoids that would be relevant to a specific powered by HEXO experience. So those are the really ones that are going to keep our attention. We have great relationships with quite a few of the bio-synthetics companies. We're keeping an eye on them. We're tracking their progress and I think from the Fortune 500 perspective, they're leveraging our maturity in market and understanding of all that 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 US for 80% of our cannabinoids and then a few bio-synthetic 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 of Fortune 500 would need HEXO as a partner, it's because to figure all this out in a relatively effective way, it takes a lot of energy and expertise which they simply don't have on their team. So that's why our powered by HEXO, a partnership model has resonated very well with Molson and is resonating very well with a number of companies in our funnel.
David Kideckel -- AltaCorp Capital -- Analyst
That's a really great insight, Sebastien. Thank you. That's it for me.
Operator
Your next question comes from John Chu of Desjardins Capital Markets. Please go ahead.
John Chu -- Desjardins Capital Markets -- Analyst
Hi. Good morning. Just a couple of quick questions. On the US strategy, the CAD400 million in revenue guidance for 2020, is that including any revenue generated from the US? And then second one, I just...
Sebastien St-Louis -- Co-founder and Chief Executive Officer
No, it doesn't, John, and let me clarify. So the CAD400 million guidance is for fiscal ending July. When I say 2020 US, 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's not in the guidance.
John Chu -- Desjardins Capital Markets -- Analyst
Right. Okay. And then to what extent does FDA approval on the CBD side come into play in terms of your entry into the US?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
Yeah, we're watching the FDA very closely, because how they will decide to treat overall CBD treatment relative to the 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.
John Chu -- Desjardins Capital Markets -- Analyst
Okay. And then just lastly, you mentioned in terms of shipping flower to Ontario, BC and in other provinces, are you going 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?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
Yeah. So when you look at the -- you look at our throughput of course, Quebec remains -- has remained a huge market. But that has not been demand constrained. That has been supply constraint to-date. As we double this quarter and as we go of course, and we start to ramp from there into our CAD400 million next year, as I mentioned, the infrastructure block 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 Quebec, 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.
John Chu -- Desjardins Capital Markets -- Analyst
Okay, that's it for me. Thank you.
Operator
Your next question is from John Zamparo of CIBC. Please go ahead.
Krishna Ruthnum -- CIBC -- Analyst
Hi. 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. I just wanted to understand whether that was simply due to lower oil sales, a greater focus on Quebec or maybe what you alluded to earlier, which was constraints on the packaging size?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
Yeah. Thank you. I think a little bit on oil, but it's really we're starting -- so earlier in the call, I'm not sure you got the point, but I was talking about how we're going to go into a period of price compression around flower as you have these 150 smaller LPs that vie for market share and that 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 it's been prudent to have a bet on companies like HEXO that will have to scale in 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.
Krishna Ruthnum -- CIBC -- Analyst
Okay. Thanks for that. 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?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
So we're not disclosing the terms, but you can kind of look at how we operate. We always operate from a 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 two things to look at. Where do you need the supply to come from and how is that supply relevant to specific jurisdictions? So in the US, you need hemp to participate, but then two, whether it's bio-synthesis, hemp or marijuana, we are continuously evaluating our cost per milligram of all cannabinoids in 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.
Krishna Ruthnum -- CIBC -- Analyst
Okay. Thanks for that. 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?
Sebastien St-Louis -- Co-founder and Chief Executive Officer
We're going to reach the target. I mean, I'd ask you and I continuously, I welcome a challenge-as 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.
Krishna Ruthnum -- CIBC -- Analyst
Thank you.
Operator
(Operator Instructions) There are no further questions at this time. Please proceed.
Sebastien St-Louis -- Co-founder and Chief Executive Officer
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.
Operator
Ladies and gentlemen, this concludes your conference call for today. We thank you for participating and ask that you please disconnect your lines.
Duration: 65 minutes
Call participants:
Jennifer Smith -- Director of Investor Relations
Sebastien St-Louis -- Co-founder and Chief Executive Officer
Erica Eiler -- Oppenheimer -- Analyst
Oliver Rowe -- Scotiabank -- Analyst
Christopher Carey -- Bank of America Merrill Lynch -- Analyst
Brett Hundley -- Seaport Global Securities -- Analyst
Graeme Kreindler -- Eight Capital -- Analyst
Matt Bottomley -- Canaccord Genuity -- Analyst
Robert Fagan -- GMP Securities -- Analyst
David Kideckel -- AltaCorp Capital -- Analyst
John Chu -- Desjardins Capital Markets -- Analyst
Krishna Ruthnum -- CIBC -- Analyst
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