Terra Tech Corp. (TRTC) reported third-quarter earnings after the market closed on Thursday with revenues rising as a result of the addition of Nevada dispensaries. Total revenues for the quarter ending September 30 were $10.1 million, which topped last year’s $7 million for the same time period.
Cannabis sales jumped by 81.8% as a result of higher sales from the four Blum Dispensaries in Nevada. This was offset by declining sales from the floral business Edible Gardens, which the company has discontinued. Gross profits for the quarter were roughly $2.3 million versus last year’s $1.3 million. Gross margins rose to 23% from last year’s 18% as the company shifts away from the lower margin floral business.
Operating losses are falling as Terra tech delivered a $3.9 million loss, which was an improvement over last year’s $4.7 million loss. Net losses rose to $7.8 million or one cent per share from last year’s net loss of $5.6 million or two cents per share.
“The third quarter marked the expansion of Blüm℠’s cannabis sales into Nevada’s adult-use market for the first time,” said Derek Peterson, Chief Executive Officer of Terra Tech Corp., “This was a turning point for the Company, as it opened up our total addressable market significantly. We are pleased with our early-stage traction in the adult-use market, which drove 82% revenue growth in the cannabis segment compared with the same period in the prior year. To support the increased demand for cannabis products throughout Nevada we are expanding our cultivation and production facilities through an arrangement with NuLeaf, and expect to start ramping production at the new facilities in Sparks, NV and Reno, NV by the end of the year.”
The company is now preparing for its California expansion. Terra Tech acquired the assets of Tech Center Drive Management, which operated The Reserve OC medical dispensary and will be rebranded as a Blum Dispensary. The company also signed its second Craft Cultivator agreement to grow the proprietary high grade “IVXX” cannabis flower and oils. That farm called Cultivar is located in Salinas, California and is approved for up to six acres of cannabis cultivation, to be grown in high tech, climate-controlled greenhouses.
“We expect the favorable market conditions to continue to accelerate our growth, with California adult-use sales expected to come online in 2018,” said Peterson. “We are investing in our California production facilities so that we can rapidly pivot to meet demand from the adult-use market as legal sales commence in 2018. During the third quarter, we signed our second craft cultivator agreement to enable us to expand our production, and our new cultivation facility in Oakland, California is expected to be fully operational in early 2018.”
Terra Tech has no short-term debt, but its long-term debt grew from $1.4 million last year to the current level of $2.1 million. The stock was lately trading at 21 cents, down from its 52-week high of 51 cents.