Cali Bottling FacilityLong time contributors will agree that I'm as patient and optimistic as they come when TNY is on the board but I feel compelled to share a few of my concerns.
1. Perm Facility Q1 2019
This is probably a reliable timeframe as a corporate goal but lets be honest and consider the success rate of milestones past. Namely, significant delays in receiving licensing (Jeff has already publicly commented that they have started the licensing process - which tells me it is very extensive and time consuming) and manufacturing permits (TNY experienced significant delays getting these same permits with the temp facility).
2. Bottle-Run expansion in Perm Facility
Again, if the build-out of the facility runs to the end of Q1 (March 2019) how much of a delay will there be to run "production?" What I mean by that is, will there be additional delays in tweeking the converyer belt and bottling sensors and widgets and things and will there be delays in ensuring batch/bottling consistency across an expanded run (say 20,000 bottles versus the current 2,000 bottles)? When launching our temp facility and the Flying Mule history suggests that this "batch control" process can take upwards of 6-8 addtional weeks. So now we are at May 2019. Oh, and that is just to expand our current run rate...
3. Product placement and sales
This is the company maker in my opinion!
What is the strategy for product placement? All these pictures I see now are great with Margarita nicely displayed on a shelf. Ummmm, if we are ramping to 20,000; 200,000; 2,000,000+ the dispensary is going to need more than a shelf to house and display our product! Where are we in getting the dispensaries on board to a 100-1,000% increase in product production and placement? Soooo, let's give that another 6-8 weeks also. Just as we saw with the dispensary agreement announements and on-boarding of the Margarita once it was confirmed in full production. Hello June 2019 or end of Q2 which ever you are more comfortable with!!
4. Sales numbers
Q3 sales at whatever rate we are producing at (which will remain a mystery as Jeff has specifically told me they will not release production numbers) and obviously additional expansion in the aforementioned. Yup, you guessed it now we are looking at end of November 2019 before we see REAL NUMBERS on sales of our expanded production in our brand-new Production Facility. These will be their first glance at the potential meat and potatoes that this company really has to offer.
5. Market collapse
My personal views here folks. I really like the long-term prospects of TNY. I always have. On paper I've done very well and still hold a massive stake in the company. That aside, looking at the macro-economic environment my concern is that our corporate timeline and the economic cycle don't align. I think that this years "sell in May, go away" is going to be the catalyst the pushes the market into a deep bear cycle. As I've written above, I just don't think TNY's timeframe, execution and shareprice will be fully rewarded by then. Quite disappointing really. I expect substancial upside between now and then but not the reitriement valuation I did ($5+ per share) 3 months ago. I think this time next year we will be between $1.50-$2.00 and going back to market for additional funds. Naurally, I'd be very pleased if I was incorrect in my market commentary and share price valuation.
Still holding......