Three Things to Know About Tinley Beverage Co

As many followers know, Tinley Beverage Co (CSE: TNY; OTCMKTS: TNYBF) is a personal favourite of ours. Although yes, they are a client, our love for them extends beyond a simple business relationship, as we’ve made clear on numerous social media platforms. Their product is just that delicious.

Aside from the product itself however, there remains much to love about this bustling beverage firm on the forefront of a new industry. The management team that has been assembled at Tinley Beverage is one thing – it receives much recognition for this – but there is much more to address that the company is doing right.

For this, we’ve brought back an old article format that we haven’t jockeyed with in quite some time. Here’s three things you should know about Tinley Beverage Co.

Tinley Offers Co-Packing Services

Much is known about the facilities Tinley currently has online already – Phase II is up and running, with Phase III anticipated to be substantially complete by the end of the current quarter. Current production capacities are at 3 million bottles per year at its phase two facility, and with phase three coming online the total annual capacity will be approximately 15 million bottles.

At price points of US$3-4 per bottle for single serve and US$15-17 per bottle for multi serve drinks, its an easy math equation to determine anticipated revenues for Tinley assuming full production throughout the year.

And its a lot more likely to hit production capacity than others in the space for one simple reason – it offers co-packing services for other brands within the niche space. With many members of management hailing from lead roles at Cott Beverage, one of the largest co-packing bottlers in the USA, Tinley execs know the specialty service well, and are targeting the service towards other brands within the cannabis space.

The company has prepared for a strong success in this venture, as evidenced by its phase three facility which has expansion space for two more bottling lines to come online should demand continue to rise. It’s also incorporated its own distribution centre into the facility, to capture additional economics from the value chain.

There’s also the small tidbit related to its phase two facility, which is prepared to pack up and move to a second priority jurisdiction (i.e. a state targeted for future expansion) upon the commencement of operations at the phase three facility.

The Bank is Cashed up at Tinley Beverage

Earlier this month, Tinley closed a financing in two tranches. The grand total of these financings raised $8,890,263 – more than enough for the firms current operational targets. This funding has in effect fully funded the completion of the phase three facility located in Long Beach, California, enabling the firm to generate revenues at a much quicker pace than its phase two facility currently allows.

Within the May 13, 2019, news release announcing the closing of this financing, there were several tidbits to be gleaned for investors. First, the raise was conducted at $0.60, with a half warrants. Warrants are exercisable at $0.90, thus allowing the equity to breathe before these come into play. What we are more focused on however, is the use of the proceeds from the raise.

The Company intends to use the net proceeds for general working capital including the completion and commissioning of its Phase 3 facility in Long Beach, California, financing production to fulfill its existing $200,000 backorders and anticipated new orders, conducting robust marketing programs in major markets throughout California, pursuing co-packing deals and expanding into additional territories.

What we are most focused on here, is that again the firm has identified it is very focused on obtaining co-packing deals to ensure the lines never stop moving at their facilities. Even more significant however, is that Tinley has again identified their intent to move beyond the borders of California to make their brand known across multiple jurisdictions.

This second tranche of the raise has allowed that, which is further made clear when the company states, “The additional capital raised on this Second Tranche enhances the Company’s resources for territorial expansion marketing programs, enabling it to leverage the Company’s early mover advantage.”

Tinley now has the cash in the bank to address these opportunities thanks to this raise, and is ever closer to bringing the vision of the company to life.

Tinley has Fresh Product Hitting Store Shelves

The final item we wanted to address, is Tinley’s new line of products known as the Tinley ’27 Collection. As the Deep Dive addressed late last month, Tinley has shipped the inaugural batches of both the Cinnamon Cask and Almond Cask varieties of this product line, which is intended to closely mirror popular alcoholic beverages.

Tinley Beverage Co '27 Collection

In total, the product line contains three varieties of beverages which are sold in a multi serve format. Each container is intended to contained 8.5 ‘shots’ of 1.5 ounce servings. The drinks, which closely mirror an amaretto, cinnamon whisky, and coconut rum, are intended to be used in similar situations as that of their alcoholic counterparts.

Californian regulations require that product labelling has no reference to alcoholic beverages, thus their unique names and lack of reference to their alcoholic counterparts.

Current batches of the Tinley ’27 Collections are expected to complete manufacturing this month, with shipment to vendors to follow.

Tinley Beverage Co closed yesterdays session at $0.71, up $0.03 or 4.41%.

FULL DISCLOSURE: Tinley Beverage is a client of Canacom Group, the parent company of The Deep Dive. The author has been compensated to cover Tinley Beverage on The Deep Dive, with The Deep Dive having full editorial control. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security.