According to Transparency Market Research, the $1.6 trillion global non-alcoholic beverage market will reach $1.9 trillion by 2020 – expanding about 4% a year over that time.
In 2016, The North American marijuana market reached $6.7 billion – up 30% from 2015, according to ArcView Market Research.
It doesn’t take a genius to predict that these two mega-trends are going to make kissy face.
Tinley (TNY.C) is a marijuana beverage company. The basic concept is to take an already habituated behavior (consuming beverages) and merge it into a frontier industry (cannabis) that is looking for new ideas.
Tinley is providing customers with a unique option to consume marijuana in a healthy liquid rather than traditional method of inhaling it. The focus is on the large California market. Tinley’s drinks are made in Los Angeles. The company has a medical cannabis collective in California to assist with sales and distribution.
From an investment perspective, this is interesting because THC beverages have high-margins. Even though Tinley’s THC products don’t contain alcohol, they are packaged and marketed to appeal to alcohol drinkers.
Booze consumption trends in the U.S. are changing in ways that could benefit Tinley. In 1995 beer made up about 60% of the total alcohol market. It’s now dropped to 47% (craft beer sales are rising, everything else is dropping). Meanwhile spirits sales have surged to 35% of the total $220 billion alcohol market.
Tinley’s THC-infused core product line is known as, “The Tinley Collection.”
The Dark Rum features Caribbean spices with dark rum extracts and 80mg THC (8 x 1.5oz. servings). Recommended on the rocks or with soda, orange juice, black tea.
The Cinnamon Whisky is a blend of cinnamon, whisky extracts and 80mg THC (8 x 1.5oz. servings). Drink straight up or mix with cider, tea or milk.
Tinley’s THC products are designed to appeal to the recreational user but we suspect the medical user will remain a focus. Because here’s the reality: medical users are heavy consumers in California. They don’t take days off. There will eventually be more recreational users then medical – but they will consume less product per person.
Tinley isn’t just about the high, it’s also about the health. Tinley’s other product, Hemplify, is a health drink containing industrial hemp with no trace of THC.
And the health drink market is good place to be.
In the last decade, companies like Coca-Cola (KO.NYSE) have seen a 20% decline in the sales of sugary sodas – as their market share has been eaten up by health drinks.
We are going to give you three guesses who Hemplify is being marketed to.
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Older Millennials (25-35) are reliable core customers for energy boosting beverages. Their consumption in this category is increasing about 10% per year.
Hemplify is made with hemp stalk, which has terpenes, essential oils, and other non-psychoactive hemp plant constituents. The product is sugar free, vegan, non-GMO, gluten-free and is jammed with Vitamins C, D and B12), Omegas and electrolytes.
Tinley’s hemp drink can be sold legally anyway in the world.
The runway for marketing hemp is wide open. Gaining market share for specialty THC products may be more challenging.
Because THC products cannot cross state lines, Tinley’s expansion goals have involved discussions with licensed producers in other jurisdictions – including Colorado, Nevada, Washington, Oregon and Canada.
The objective is to use Tinley’s proprietary technology to create drinkable THC products in other states.
Tinley stock price has risen about 300% since we started talking about them. But they are still a micro-cap – with a $20 million valuation. The company has clear objectives, a good team, good products. If they can gain significant market penetration – the stock will go ballistic.
FULL DISCLOSURE: Tinley Beverage is an Equity Guru marketing client. We think they have an important role to play in the growing cannabis industry.