Tinley's Provides Corporate Updates; Announces Cost Cutting Initiatives, Board & Management Changes

Tinley's Provides Corporate Updates; Announces Cost Cutting Initiatives, Board & Management Changes

The Tinley Beverage Company Inc. (CSE: TNY) (OTCQB: TNYBF) ("Tinley's" or the "Company") provides update on the status of the previously announced decommissioning of its Long Beach manufacturing facility and relocation of its bottling and related assets to the new Blaze Life Holdings, LLC ("BLH") 45,000 square foot cannabis manufacturing and distribution facility located in Canoga Park, California, and on related measures being immediately implemented to facilitate the relocation including, but not limited to, substantive cost cutting initiatives and changes to the board and management teams.

Corporate Updates

Relocation to Canoga Park Facility and Long Beach Production Schedule

Tinley's confirms that it will decommission its Long Beach bottling assets before the end of the second quarter of this year, and currently expects installation and commissioning of bottling lines at strategic partner BLH's Canoga Park facility to take place at the beginning of the third quarter of this year. To help client brands ensure sufficient inventory for testing and release of products to distribution through the transition, the Company is collaborating with Long Beach contract manufacturing clients to complete service requests by the end of the week of March 20, 2023 to confirm added production dates prior to the decommissioning of the Long Beach facility. A detailed press release outlining the Company's strategy and movement to the Canoga Park facility, including anticipated overhead savings of the Company, was issued on January 23, 2023.

Recent Long Beach Production

Working through the end of 2022 and into January 2023 with co-pack client Green Monké, the Company successfully completed production of newly formulated infused iced tea and lemonade varieties developed by Green Monké under contract for the well-known "Cookies" brand.

Production in Long Beach includes both repeat and new client SKU's as well as inventory-building orders from high-volume recurring clients booked across the Company's three manufacturing lines. The Company has also recently run Tinley's own brand batches, as well as the first of several production runs scheduled in Q2 2023 for our strategic partner BLH's Illa-Canna LLC's new infused drinks. Additionally, certain established and innovating brands, introduced to the Company by BLH, have booked production for their products this quarter in Long Beach on an interim basis prior to the planned move to the Canoga Park facility.

Beckett's USA - Reorder in Progress

Following receipt of new purchase orders from Total Wine & More to replenish inventory, production of Beckett's Tonics RTD and Beckett's '27 multi-serve spirits and liqueur is now underway at the Company's chosen contract manufacturers. Delivery to Total Wine & More is expected at or around the end of the current quarter.

Substantive Cost Cutting Initiatives

To ensure a successful transition from Long Beach to Canoga Park, and to ensure that adequate financial resources are available to the Company in a market where access to capital is severely limited, Tinley's has immediately implemented substantive cost cutting measures to aggressively preserve capital and accelerate expense reduction. These steps recognize recent challenges in capital markets, growing costs in the California cannabis sector and the need for superior manufacturing and distribution scale, benefits of which are expected to materialize following the move.

Canadian Business - Pause on Expansion

In Canada, market complexities including high entry costs and ongoing challenges to profitability based on market structure continue to present challenges. As a Canadian company with a wide base of Canadian retail shareholders, Tinley's board and management acknowledge the natural interest in participating profitably in Canadian markets. We also recognize our need to prioritize our responsibility to the Company to manage cash flow and profitably, and will propose to invest overhead dollars saved as a result of the move, and revenues from Tinley's California and Beckett's USA, into initiatives with higher probability potential of return. Based on a current analysis of reintroduction of reformulated infused products to the Ontario Cannabis Store and the complexities of relaunching Beckett's into Canada at this time, to reflect the need to preserve capital and reduce expenses to focus future investment on high return initiatives, the Company has decided to pause its plan to re-enter Canada indefinitely.

Staff and Management Changes

In addition to reducing staff at the Long Beach facility in anticipation of the move to BLH's Canoga Park facility, the Company also regrets to announce that effective immediately, Rick Gillis has agreed to step down from his role as President, Tinley's Brands USA, a decision primarily driven in support of the Company's initiatives for preserving capital and cost cutting, and his concurrent appointment to the Company's advisory board. "We thank Mr. Gillis for his contributions as a Tinley officer to date," said Ted Zittell, Tinley's director and CEO. "We welcome Rick's ongoing commitment to support the Company and our Tinley's and Beckett's brands in his new role on the Company's Advisory Board," he added. In order to contribute to the preservation of cash, the Company's CEO, CFO and certain remaining employees and consultants have temporarily agreed to defer their respective salaries for a limited period of time.

Advance from BLH

On or about March 16, 2023, the Company received an advance of $200,000 from the remaining funds available to the Company under the BLH lending facility, with the final $300,000 from BLH currently expected to be expended by the Company during the move to BLH's Canoga Park facility. The $200,000 will be applied by the Company for general corporate purposes to provide the Company, together with the Company's ordinary course collection of client receivables, with sufficient capital to undertake its ordinary course operations until the Company is able to move to BLH's Canoga Park facility and realize on anticipated synergies of that move.

Board Changes

The Company regrets to announce that effective immediately, Kirsten Chapman has resigned from the Company's Board of Directors for personal reasons and to pursue other commitments. We thank Kirsten for her service and wish her continued success in the future.

About The Tinley's Beverage Company and Beckett's Tonics

The Tinley's Beverage Company Inc. (CSE: TNY) (OTCQB: TNYBF) develops and has licensed the production through its Long Beach, CA state-licensed manufacturing facility of terpene and cannabis-infused non-alcoholic Tinley's™ '27 and Tinley's™ Tonics products which are distributed to licensed dispensaries and home delivery channels in California. Expansion of these products, adapted for manufacturing and sale in Canada, is currently underway. The Beckett's Classics® and Beckett's '27® lines of non-alcoholic, terpene-infused non-cannabis versions of these formulations are available in select mainstream food, beverage, and specialty retailers, as well as online, in the United States as well as having appeared in select grocery and specialty stores in Canada. The Long Beach Facility contains versatile and technologically advanced cannabis-licensed beverage bottling equipment, and provides manufacturing and first-mile distribution services under one roof for third-party brands in addition to the Company-owned brands. Please visit www.drinktinley.com, and www.drinkbecketts.com Twitter and Instagram (@drinktinleys and @drinkbecketts) for recipes, product information and home delivery options.

Forward-Looking Statements

This news release contains forward-looking statements and information (collectively, "forward-looking statements") within the meaning of applicable Canadian securities laws. Forward-looking statements are statements and information that are not historical facts but instead include financial projections and estimates, statements regarding plans, goals, objectives and intentions, statements regarding the Company's expectations with respect to its future business and operations, the timing of the completion of the transfer of the Company's operations from the Long Beach facility to the BLH facility, management's expectations regarding growth and phrases containing words such as "ongoing", "estimates", "expects", "anticipates", or the negative thereof or any other variations thereon or comparable terminology referring to future events or results, or that events or conditions "will", "may", "could", or "should" occur or be achieved, or comparable terminology referring to future events or results. Factors that could cause actual results to differ materially from any forward-looking statement include, but are not limited to, the timing of BLH's receipt of certain licences necessary to operate at the Canoga Park facility, the timing of the Canoga Park facility becoming fully operational, potential delays or unanticipated problems related to the relocation of Tinley's bottling assets to the Canoga Park facility, risks associated with Tinley's existing bottling customers continuing production at the Canoga Park facility and Tinley's existing can customers agreeing to move their production to the Canoga Park facility, Tinley's being sufficiently capitalized to meet its financial obligations related to the move to Canoga Park and otherwise continue to operate its business in the ordinary course, potential delays in obtaining, or failures to obtain, necessary governmental approvals required to operate the Canoga Park facility, political risks, uncertainties relating to the availability, and costs, of financing needed in the future, changes in equity markets, inflation, changes in exchange rates, fluctuations in input costs, the ability to resume expansion to the Canadian market at a later date and the ability to collect receivables. Forward-looking statements are subject to significant risks and uncertainties, and other factors that could cause actual results to differ materially from expected results. Readers should not place undue reliance on forward-looking statements. These forward-looking statements are made as of the date hereof and the Company assumes no responsibility to update them or revise them to reflect new events or circumstances other than as required by law. Products, formulations, and timelines outlined herein are subject to change at any time.

For further information, please contact:
The Tinley Beverage Company Inc.
Teddy Zittell
(310) 507-9146
relations@drinktinley.comCSE:TNY; OTC:TNYBF
Twitter: @drinktinleys and @drinkbecketts
Instagram: @drinktinleys and @drinkbecketts
www.drinktinley.com

To view the source version of this press release, please visit https://www.newsfilecorp.com/release/159229

News Provided by Newsfile via QuoteMedia

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Tinley's Provides Corporate Update

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However, Australia’s cannabis industry is still young. Despite there being a strong case for a regulated market, which was outlined in a July 2024 report by the Penington Institute, recreational use is not legal and medical access remains limited and regulated.

Medical cannabis patients have access to various forms of the drug, including flower, oils and tinctures. However, only two medicinal cannabis products, Sativex and Epidyolex, are registered with the Therapeutic Goods Administration, and none are subsidised through the country’s Pharmaceutical Benefits Scheme. Patients who want access to medicinal cannabis must go through special pathways, and doctors who want to prescribe medicinal cannabis have to apply to do so.

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Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

Consumption methods evolving post-legalization

Shifts in consumer behavior are reshaping markets across the board, and the cannabis industry is no exception.

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The report notes that vaping and dabbing are particularly pronounced among younger adults.

A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.


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Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

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The burgeoning hemp industry is another segment of the expanding cannabis market.

The legalization of industrial hemp — defined as cannabis with a THC concentration of 0.3 percent or less — through the 2018 Farm Bill led to initial investment and optimistic projections for CBD wellness products and various industrial applications. The sector’s rapid evolution also brought the rise of hemp-derived intoxicating cannabinoids, creating a market that presented both opportunities and complexities for participants.

However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

The 2018 Farm Bill is now set to expire on September 30, 2025.

While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

US cannabis legalization remains stalled

Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

In addition to that, new research is adding complexity to the debate.

A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

Investor takeaway

While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

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