Terra Tech Corp (OTCMKTS:TRTC) ran up in anticipation of earnings but has drooped since after recently reporting Q2 2016 results. Revenues for the quarter were strong coming in at $9.7 million however the Company reported a net loss for the quarter of $4.9 million or $0.01 per share.
TRTC is a traders favorite with a long history of spectacular moves skyrocketing to $1.25 during the last pot stock boom. Now that the sector is on fire again, TRTC has become a staple among the top most traded stocks on the entire exchange.
Terra Tech Corp (OTCMKTS:TRTC) is one of the original pot stocks on the OTC led by Derek Peterson “The Public Spokesperson for Medical and Legalized Marijuana.” TRTC is the only US-based, publicly-traded company that touches every aspect of the cannabis lifecycle—from cultivation, to extraction, to branding, and now, with the acquisition of Blum, to retail sale.
Derek Peterson is a former Vice President at Morgan Stanley. He left Wall Street because he saw a huge opportunity in medical marijuana. His vision is setting up growing facilities in various states to grow herbs such as basil and thyme with plans to switch to Marijuana production as state laws permit.
TRTC has a number of subsidiaries including Edible Gardens which was established in 2007 and proves fresh, locally grown herbs and leafy greens to supermarkets, restaurants and the food service industry. The growing process utilizes time-tested, classic Dutch hydroponic farming methods to grow produce in a safe and healthy environment.
Another TRTC subsidiary is IVXX Elevate focused on building a recognizable, superior brand that delivers unsurpassed quality and consistency to consumers of recreational and medical cannabis throughout the legal U.S. markets. TRTC has their own lab producing their IVXX branded Marijuana products which are now sold in many California dispensaries.
Terra Tech’s pre-filled cartridges are offered in a variety of cannabis strains which are easy-to-use and are conveniently designed for vaporizers as well. IVXX Z92 cartridges have a Tetrahydrocannabinol (THC) content level between 75 to 85 percent compared with the 60 to 68 percent of the Z35s. Made from local, sustainably grown cannabis that has been cleanly extracted using supercritical CO2, the oil is lab-formulated for consistency, and lab-tested for purity and potency. Through its low heat refinement technique and a unique filtering method, the Company maintains the natural terpene profile of each strain. There is no reintroduction of terpenes or flavor enhancers at any time in the process, as is true with all IVXX products.
TRTC has an agenda to move to a higher exchange which may necessitate a reverse split and there has been much discussion on this recently. Everyone seems to think that RS is bad and usually results in lower PPS as the result of panic selling etc., but if we really examine the issue we come to an entirely different conclusion. Yes in almost all cases when a non-revenue, sub penny co with a history of dilution does another RS it almost always ends in more downside. At the other end of the spectrum when an established Company such as TRTC that already does significant revenues does a RS it almost always results in significant moves to the upside.
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A big part of TRTC recent rise is due to their recent acquisition of Black Oak Gallery, DBA: Blum Oakland, an established, retail medical cannabis dispensary in Oakland, CA which holds over 42,000 registered patients, has been operating since November 2012 and services close to 1,000 patients each day. The acquisition includes Blum’s fully integrated supply chain, which consists of a sophisticated onsite cultivation facility, its portfolio of proprietary strains, as well as its high volume retail storefront. Trailing 12-month non-GAAP revenue for Blum Oakland is over $14 million, which tracks the revenue reported by Blum Oakland in its associated sales tax and marijuana tax reporting and payments.
On August 15 TRTC announced Second Quarter 2016 Results: total revenues generated for the quarter ended June 30, 2016 were approximately $9.7 million, compared to $5.0 million in the same period in 2015. This is an increase of 93% from the quarter ended June 30, 2015.
CEO Derek Peterson commented, “This excellent result was primarily driven by higher cannabis sales from our two new Blum dispensaries in Oakland, California, and Las Vegas, Nevada. In addition, our overall gross margins also grew from 5% to 17% year-over-year. This was the first reporting period that our top-line results benefited from our brick-and-mortar retail store locations and we are very pleased with the traction our dispensaries have generated.”
On the negative side TRTC reported a net loss for the quarter of approximately $4.9 million or $0.01 per share compared with a loss of approximately $2.8 million or $0.01 per share for the second quarter of 2015. The primary reason for the increase in net loss is an approximately $1.2 million loss from the fair market valuation of derivatives during the quarter ended June 30, 2016 compared to the prior year’s second quarter, and operating cost at our Western, Las Vegas Blum dispensary.
Selling, general and administrative expenses for the second quarter of 2016 amounted to approximately $5.5 million, compared with approximately $3.4 million for the second quarter of 2015.
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Currently trading at a $119 million market valuation TRTC is the only US-based, publicly-traded company that touches every aspect of the cannabis lifecycle—from cultivation, to extraction, to branding and to retail sale. This gives TRTC a huge advantage because on-site cultivation reduces that cost to about $700 per pound, while the company’s retail price will remain at industry levels 5 to 10 times higher. TRTC is turning into a Revenue leader reporting $9.7 million in sales for Q2 2016 alone. However the Company is still losing money reporting a $4.9 million or $0.01 per share loss in Q2. Derek Peterson “The Public Spokesperson for Medical and Legalized Marijuana” is a master at selling the sizzle on the sector and getting their story into the national media spotlight with such news outlets as the Wall Street Journal, National Geographic, Fox Business News, The Huffington Post, the Daily Telegraph and CTV news all covering TRTC in the past. We will be updating on TRTC when more details emerge so make sure you are subscribed to Microcapdaily so you know what’s going on with TRTC.
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Disclosure: we hold no position in TRTC either long or short and we have not been compensated for this article.