The TINLEY BEVERAGE COMPANY CSE:TNY OTC:QRSRF Q3 2016
Tinley is producing some of North America’s first premium hemp extract drinks “Hemp Extract” – made from the stalk AquaBliss • Contains ingredients common to other Cannabaceae family plants including cannabis and hops • Increasingly gaining consumer awareness, though no FDA-approved claims yet • CV Sciences, a prominent, publicly-traded raw ingredient supplier, generated $14 million (last 12 months), largely at the wholesale level • One of the most requested supplements at several health food chains in LA; seen as the next “hot” supplement ingredient “Hemp”, “Hemp Hearts”, “Hemp Oil”, “Hemp Protein”, “Hemp Nuts” – made from seeds • Virtually all hemp food and beverage products available today are made from hemp seeds, not from the green plant material • Hemp seed products have seen a resurgence in demand, now known for their health benefits rather than for their relationship with marijuana • Beverages like Hemp2O and Rocky Mountain High are popular • Hemp extract may soon be seen as “next generation hemp” “The enthusiasm is incredible. I’ve never seen anything like this before.” -Mark Blumenthal, founder of the American Botanical Council regarding hemp extract Page 2 Confidential
Introducing “ Hemplify ” • Refreshing, drinkable vitality • Manufactured with patented supplement containing hemp extract formulation technology combined with ingredients found in • The technology infuses oil-based popular sports and functional drinks ingredients into water-based drinks in a • Fortified with 100% B12, D and E, manner that masks the oil’s taste, 40-60% A, B1/2/5/6, 200mg Omega elevates bioavailability and ensures shelf 3 and 9-12x the electrolyte stability potassium content of major sports drinks • Works by creating micelles that preserve • Sugar-free, vegan, non-GMO and the structure of the oil as it progresses gluten-free through the digestive system, and then induces the gut into absorbing more oil • Non-psychoactive (no/trace THC) into the bloodstream and through the blood-brain barrier • The supplemental ingredients help position for various popular categories: • The consumer therefore enjoys superior taste and more of the benefits of the • Sports, workout & recovery nutrients than other consumption • Yoga Now Accepting Orders From methods • Hangover Wholesalers Throughout the USA • Work/study revitalization Additional products in development • Pre/post-smoke include energy and sleep smoothies • Cognitive health Health claims in this presentation are based on anecdotal or initial • Daily vitamins/omegas scientific findings and/or common beliefs in the hemp and marijuana communities; not FDA-approved claims. • General vitality Page 3 Confidential
Tinley’s leadership team and board members have extensive entrepreneurial experience in the marijuana and beverage industries Jeffrey Maser, CEO and Director Ted, Zittell, Brand Advisor and Director • Previously at Jacob Securities, where he financed several medical • Senior consultant for McMillan Doolittle LLP, a leading Chicago-based marijuana companies in Canada and the USA retail and consumer experience agency • Began career at the Watt Design Group, the wholly-owned beverage • Advisor for US private equity and investment funds in the food and strategy and design agency of Cott Corporation; at the time, Watt was beverage sectors the second-largest food and beverage branding firm in North America and Cott was the largest cola company in the world after Coke and Pepsi • Previously President of Cott Corporation's Retail Brands International, • 10 years in venture capital, merchant and investment banking with a where he led the creation and launch of dozens of premium retailer focus on emerging industries including marijuana, health foods and brand and marketing programs worldwide technology • Senior partner at Cott's Watt Design Group for 17 years • Recent executive-level engagements include work for Walmart, Kroger, Richard Chessman, Beverage Operations and Sales CVS Pharmacy, P&G, Nestlé, Loblaws, Sainsbury's and Tesco • 10 years beverage operations experience, including a successful, technologically-advanced hydration beverage company • 20+ independent salespeople in network across the USA Adam Szweras, Corporate Secretary and Director • Partner at Fogler, Rubinoff LLP, a leading Canadian law firm; expertise in David Posner, Director medical and recreational marijuana law in the USA and Canada • CEO of Nutritional High, which is building a 25,000 square foot licensed • 20 years securities law experience marijuana edibles manufacturing facility in Colorado • Co-founder and Chairman of Foundation Markets Inc., a Toronto-based • Brought “Hempen Gold”, the first hemp -infused beer to Canada investment bank and Exempt Market Dealer • Imported and created marketing and branding initiatives for various • Successfully obtained 3 marijuana licenses in the USA other alcoholic products in Canada Jeff Pencer, Advisor David Ellison, Director • 3 rd generation Beverage executive • Principal at Acuity Corporate Securities Lawyers in Toronto • Various roles at Cott Corporation • Has provided capital markets, legal and operational services to US-based cannabis cultivators, processors and extractors over the past two years Roger Dent, Director • Clifford Chance LLP (UK) - International Structured Finance Group • CEO of Quinsam Capital; previously VP at Matrix Fund Management and • Solicitor of the Supreme Court of England and Wales Managing Director of Research at CIBC World Markets • MBA, Harvard University and B. Comm, Queens University • Prominent small-cap investor Page 4 Confidential
Why is Tinley focusing on hemp extract drinks rather than THC? Hemp extract products are currently being sold in all 50 states via • conventional retail channels (not dispensaries) Drinkable hemp extract products can therefore position in the • functional drink market, which is 10x the size of the legal THC industry and the fastest-growing sub-sector of the non-alcoholic beverage industry “The drop in soda consumption represents the single largest change • in the American diet in the last decade.” – The New York Times: The Decline of ‘Big Soda’ – October 2, 2015 Bottled water has replaced much of the lost soda consumption, in • large part because it is the only option on shelves that contains no sugar Functional drinks are a better solution for the big soda • companies than bottled water because they are more differentiated and higher-priced Hemp stalk drinks are positioned to benefit from this growth as • they are increasingly believed to provide functional health benefits The major beverage companies are seeking to enter new functional Source: New York Times, October 2, 2015 • beverage categories via acquisition rather than internal development (e.g. Coca Cola investment in Suja Juice at $300 million valuation) Hemp extract products can be produced by contract manufacturers • (unlike THC products which must be manufactured in licensed facilities in each state) and distributed via established channels No large capex to build facility & no sharing economics with • local cannabis licensees Page 5 Confidential
Tinley’s go to market strategy involves 4 channels: Health/natural food stores, head/smoke/liquor shops, music/lifestyle festivals and online Health & natural foods stores • Strong consumer awareness and demand; affluent consumers • Oil products are selling well • Indicative orders received • California and Colorado sales reps in place Convenience, liquor, college and head/smoke shops • In liquor store on Bally’s property in Las Vegas • 2 sales groups and 1 distributor in place in California and Nevada • Received several orders from independent stores; shipping in July 2016 • Very strong consumer awareness & electrolyte content helps hangovers • Marketing via social media, infused-products contests and in-store tastings Online • E-commerce via drinkhemplify.com launching in July • Large affiliate network – commission-based • Blog ambassador and social media network • Working to list on third-party hemp and mainstream sites (e.g. Amazon) Festivals and Events • Sold products at music and art festivals in June and July • Music promotion group in place to generate social media content and staff events Page 6 Confidential
Tinley is actively marketing its brands on social media, at live events, in stores and online Festivals and Event Sales In-Store Sampling and …More Influencers B2B Trade Shows & Sampling Social Media Influencers Art and Hemp Events Bally’s Las Vegas Liquor & Post Malone SSE Buyers Marketplace (LA & Las Vegas) Convenience Store (Justin Bieber opening act) (Phoenix) \ Electric Daisy Carnival Cody Simpson Backstage A$AP Lion “BIG” Show (Las Vegas) (Surf Event) (A$AP Rocky Crew) (Denver) Online marketing through affiliates, social media, blog ambassadors and search ads Page 7 Confidential
Tinley is actively marketing its brands on social media, at live events, in stores and online (cont.) Page 8 Confidential
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