The Tinley Beverage Company Inc. is selling its shares of subsidiary Lakewood Libations, Inc. to Unlimited, LLC., the landlord for its former Long Beach, California facility.

Lakewood Libations holds the cannabis licenses for the Long Beach bottling facility, which Tinley’s has left for Blaze Life Holdings’ Delta Bev facility in Canoga Park. Unlimited had extended Tinley’s lease through Aug. 31 so the company could continue to serve co-packing clients.

Tinley's has retained Beverage Equipment Traders to sell production assets that were not part of the company’s relocation plans. Tinley’s said sale proceeds should mitigate costs associated with the transition.

Tinley’s expects its bottling equipment to be installed and operational at the Blaze Life Holdings Facility during the fourth quarter. Production of cannabis-infused beverages will begin when Blaze Life Holdings receives certain City of Los Angeles licenses and approvals to operate its cannabis processing, bottling, canning, storage and distribution facility. Final interior renovations and capital improvements required to satisfy the municipal licensing inspections and approvals are underway.

Once Tinley's bottling equipment is operational at Blaze Life Holdings’ facility, management expects the company to save approximately $1 million annually in overhead operating expenses.

Tinley’s is also working on a product lineup under a new Beckett’s infused brand, which will feature product potencies and formats designed to respond to the dispensary and home delivery market. The relaunch is planned to coincide with new production at Blaze Life Holdings’ facility.

"The scalable capacity and key manufacturing-distro adjacency at the Blaze Life Holdings facility in Canoga Park will enable efficient volume growth, both in California and across state lines, as legislation continues to evolve," said Tinley’s CEO Teddy Zittell. "We were encouraged by California's recent state legislation increasing consumption opportunities for onsite lounges, as well as by the reported Aug. 29 U.S. government recommendation to reclassify cannabis from the highly restrictive Schedule I to Schedule III, which would improve the tax and banking climate for cannabis companies, and significantly, establish the federal basis to sell and ship cannabis between U.S. states.”

Until the Blaze Life Holdings’ facility is operational, Tinley’s expects income and cash flow to remain constrained. The start of production will allow Sulo Distro, Blaze Life Holdings’ state-wide distribution arm, to market, sell and distribute Tinley's infused beverages throughout California. Once the facility begins to operate, Tinley's will receive referral fee payments from Blaze Life Holdings for Tinley's canning clients that transferred their production to its facility and all top-line revenue generated from the operation of Tinley's bottling line.

To mitigate cash flow constraints through the fourth quarter, Tinley's will negotiate payment plans with its past-due vendors and may seek to raise capital through strategic private placements.

Zittell also commented on the recent appointment of former Anheuser-Busch executive Shreyas Balakrishnan as CEO of Blaze Life Holdings.

"We look forward to working with Shreyas to build our brand and transform the category," Zittell said. "Recruiting Shreyas underscores our strategic partner's commitment to continued investment in distribution; it's a tangible acknowledgment of the essential role distro will play in brand and category success."