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EAST: Opening up Ohio and entering into the Ready To Drink market

02/01/2019
By Ian Gilson, PhD, CFA

NASDAQ:EAST

READ THE FULL EAST RESEARCH REPORT

Eastside Distilling (NASDAQ:EAST) has announced that it has requested a license to operate (LTO) from the Ohio Department of Commerce Division of Liquor Control to sell alcohol in Ohio, which is one of the 17 states that control the distribution and sale of liquor.

The company has received a significant number of requests for, and there has been a large amount of social media activity on, Redneck Riviera Whiskey. We expect the LTO will be granted and distribution through RNDC will occur in 1Q19 with some sales in this quarter. The initial emphasis will be in the larger cities in Ohio.

Eastside is not restricted in what products it will introduce into Ohio. This state does not control liquor that is less than 42 proof. This would include RTD canned mixes that Eastside has recently launched in Oregon.

The RTD market is one of the fastest growing segments of the alcoholic beverage industry with a CAGR of over 8%. The company's introduction of its Portland Mule, 250 ml at 21 proof, a blend of Potato Vodka, fresh lime juice with ginger syrup and a little cane sugar plus some added fizz (carbon dioxide) is just one of the many products that could be co-branded for sale in national markets.

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