Pot stock Althea Group (ASX:ATH) is staying active in the Great White North.

The company said its Canada-based subsidiary, Peak Processing Solutions, has inked a distribution deal with The Tinley Beverage Company.

Listed in Toronto, Tinley also has a base in California. The company manufactures and distributes drinks products across North America.

Cannabis infusion

Peak’s deal with Tinley will see it acquire the rights for three cannabis-infused beverages from the Tinley’s ’27 elixir range — Coconut Cask, Cinnamon Cask and Almond Cask.

Althea said Peak expects to generate revenues of $CA100,000 (~$105,000) from selling the drinks.

An initial order has been placed for the March quarter of next year, giving Peak the rights to manufacture and distribute the drinks into the Canadian market.

And strong consumer demand is “expected to result in similar monthly orders”, Althea said. The deal is for an initial term of three years.

Althea acquired Peak in July 2019 for $5.8m after raising $30m in an institutional share placement priced at $1 per share.

At the time, the company said another $8.32m of the funds raised would be allocated towards the build-out of Peak’s manufacturing plant in Canada.

Following this morning’s announcement, shares in ATH found rose six per cent to 51.5c, although the stock is still off its 2020 highs above 60c reached in mid-September.

Commenting on the agreement, Althea CEO Josh Fegan said Peak is looking to stay active on the deal and distribution front after obtaining its Standard Processing Licence from Canadian health regulators in September.

Along with Tinley, Peak has signed distribution deals with three other Canadian cannabis companies since June.

Fegan said Peak is now projected to generate revenues of $CA4.65m (~$4.9m) over the next 12 months.

The president of Tinley’s California operations, Rick Gillis, said the deal marked an important step in the company’s regional expansion strategy.

“Peak’s team has already demonstrated expert capabilities with the depth and rigor required to produce our sophisticated formulations in a compliant and consistent manner,” Gillis said.

“Our team is confident that they can support the growth and scalability we anticipate requiring to execute in Canada’s booming infused drink category in the months and years to come.”