On November 29, The Tinley Beverage Company (TNY.C) announced the signing of a new agreement with a licensed manufacturer to expand their production capacity.
Tinley’s new manufacturing partner brings more production space as well as scalable, robust systems and controls.
Production will, however, be stalled to allow Tinley time to comply with the California Department of Public Health Manufactured Cannabis Safety Branch’s new packaging and labeling regulations.
Two thirds of Tinley’s products, like its Moscow Mule margarita, have been affected by these regulatory clarifications.
Nearly every company Tinley does business with for their margarita has also placed orders for Moscow Mule. The company has decided to keep Moscow Mule and the rest of their products in their warehouses until the relabeling process is complete.
Having not only renewed their orders, virtually all the stores which have stocked Tinley products during Q3 have requested more product to meet increased demand. Now over 10 percent of licensed stores state-wide, or approximately 50 dispensaries, are back ordered.
The company anticipates reporting a fraction of the total value of their goods shipped out during the quarter, and then reporting the remaining value when the relabeling is finished.
Once production successfully transitions, cartons are relabeled and the additional inventory demands regarding the margarita and Moscow Mule are met, the company plans on releasing their Tinley ’27 liquor-style products.
Tinley shipped over $100,000 of cannabis-infused drinks to its distributors in Q3. Tinley’s approach to revenue recognition is in line with guidelines set up by the international financial reporting standards, and the shipments made to distributors are effectively non-returnable, as per regulatory requirements.
Tinley’s Q1 results showed a considerable product demand, demonstrating a strong retailer and consumer proof of concept. The company said it has since expanded their sales and merchandising team, with more expansions to come in the next few months. The company offers both CBD and THC infused beverages.
On November 30, Andrew Stodart joined Tinley’s advisory board at the annual general meeting of shareholders. Stodart was previously an independent director with the company.
Stodart brings over 20 years of beverage industry experience to Tinley, and has worked in senior roles with products from Dan Aykroyd Wines, Crystal Head Vodka, Black Velvet Whisky, Patron Tequila and the Coca-Cola Company (NYSE:KO).
The contractors hired by Tinley state that the company’s 19,760 square foot bottling plant which is situated in Long Beach, California, should be completely operational late in Q1 2019.
The facility is currently undergoing retrofits and, once completed, will come equipped with the full bottling capacity necessary to meet Tinley’s needs.
The contractors intend to have full bottling functionality by the second quarter of 2019 and, for the time being, Tinley will continue to operate out of its present temporary facility in Riverside, California.
The Riverside facility is overseen by a licensed facility operator which is licensed for medicinal and adult-use cannabis manufacturing.
In Tinley’s Q3 financial statements, the company reports having over CAD$6.2 million in cash assets. Tinley closed at $0.58 today and the company has a market cap of just under $50 million.
Full disclosure: Tinley is an Equity Guru marketing client.