Earnings were reported by both Emerald Health Therapeutics (OTCQX: EMHTF) and Terra Tech (OTC:TRTC). This is a quick summary of what the companies reported.
With cash dwindling at Terra Tech and expenses rising, the company announced it would begin selling assets in order to focus on the properties with the highest returns. The company also said it was postponing its plans to enter the CBD market.
Terra Tech Corp. reported revenues of $4.31 million versus $2.05 million for the quarter ending March 31, 2019, an increase of approximately $2.26 million. The net loss for the quarter was $17.33 million, or $0.11 per basic and diluted share versus $11.74 million, or $0.13 per basic and diluted share, for the three months ending March 31, 2019.
The company had $0.95 million in cash as of March 31, 2020. Expenses were approximately $9.04 million, compared to approximately $8.59 million for the same quarter last year, an increase of approximately $0.45 million.
Matthew Morgan, Chief Executive Officer of Terra Tech, commented, “Our first-quarter results demonstrate continued improvement in our cannabis operations, driven by both medical and adult-use sales from our San Leandro Blüm dispensary as well as wholesale revenues. Following the COVID-19 pandemic, which has resulted in many retailers delaying purchase decisions and reversing plans to launch new CBD products in stores, it has become clear to us that we must focus on our THC business in California to maximize near-term revenues. We have therefore chosen to postpone our expansion strategy in the CBD market through our OneQor business.”
Morgan went on to add, “For us to advance our strategy, we are now completing a number of asset sales in order to strengthen the Company’s cash position and redirect resources to assets that generate the highest returns. We expect to have approximately $24 million coming in from asset sales over the next 12 months from our Blüm dispensaries in Nevada and Santa Ana, California, as well as various sales of non-core licenses and properties. This is expected to set the Company on a path to sustainability that will allow us to be lean and cost-effective. We intend to complete the build out of our Hegenberger cultivation facility in California and leverage our existing capital base to ramp revenues from wholesale THC products as well as sales at our Blüm dispensaries in San Leandro and Oakland.”
Emerald Health net sales increased 36% to $2.9 million over last year’s $2.1 million for the same time period. The net loss for the quarter was still elevated at $4.9 million, which included a $2 million loss on the dilution of joint venture ownership and a $1.1 million inventory write-down.
The company reported that its total SG&A expenses of $6.0 million showed a decrease of $2.3 million over $8.3 million expense in the comparable first quarter of 2019. Total SG&A expense included $2.1 million of non-cash or non-recurring items.
“In the first quarter and year to date, the benefits of Emerald’s significant restructuring and cost-rationalization are strongly emerging. While these benefits were not fully realized in our Q1 financials, we can see our operational metrics and financial results clearly moving in the desired direction,” said Riaz Bandali, President and Chief Executive Officer of Emerald. “In not even two full quarters, our two newly launched and scaled-up cultivation facilities in BC and Quebec have been achieving important milestones and are positioned to move us toward profitably. On top of that we own over 41% of one of the premiere large-scale cannabis cultivation operations in the country.”
The company said that revenue for the quarter was driven by increased sales from the adult-use market where sales were up 35% as compared to 4Q19. 30% of revenue in the adult-use channel from SYNC oils contributed to improving margins, as this high CBD, low THC oil is not subject to excise duty. A higher proportion of sales from the branded SYNC oil, coupled with the lower cost of dried flower contributed to improved margins compared to 1Q19. Significant harvests from the newly operational production sites led to capitalized inventory, which reflected as a further improvement in production costs. Emerald recognized $5.2 million as its share of net income from Pure Sunfarms, as compared to $5.8 million recognized 1Q19.