Terra Tech Corp (OTCMKTS:TRTC) is another one of the “old guard” cannabis penny stocks that has been losing some luster in the eyes of the market over the past month. We just watched an interesting market signal hit the tape earlier this week when the stock failed to hold onto gains in reaction to the company’s announcement of the construction of a new cannabis cultivation facility in Oakland, California. Either the stock is waterlogged with highly incentivized distribution, or the market is really also sending a signal about cannabis price forecasting.
At this point in the pattern for TRTC shares, the action is decidedly to the downside, setting up a possible test of very important range support that has defined the lower reaches of the stock’s price for nearly 12 months. The key level to watch is $0.22-0.23, which was visited during late February action. The last four times that level came into play set off rallies of 200%, 100%, 50% and 25%.
Terra Tech Corp (OTCMKTS:TRTC) trumpets itself as a company that engages in the design, marketing, and sale of hydroponic equipment with proprietary technology to create sustainable solutions for the cultivation of indoor agriculture in Newport Beach and Irvine, California.
It operates through two segments, Hydroponic Produce and Cannabis Products. The company offers environmental controllers and timers; ballasts; bulbs; reflectors; nutrients; and portable hydroponic trailers and The Big Bud and Little Bud, which are custom fabricated proprietary cultivation systems for horticulture enthusiasts, local urban farmers, and greenhouse growers.
Terra Tech Corp also operates as a retail seller of hydroponic produce, herbs, and floral products, which are distributed in the Midwest and the Northeast United States; and produces and sells a line of cannabis flowers and cigarettes, as well as a line of cannabis pure concentrates, including oils, waxes, shatters, and clears to dispensaries in California.
TRTC operates through multiple subsidiary businesses, including Blum, IVXX Inc., Edible Gardens, MediFarm LLC and GrowOp Technology.
Blum’s retail medical cannabis facilities focus on providing the highest quality medical cannabis to patients who are looking for alternative treatments for their chronic medical conditions. Blum offers a broad selection of medical cannabis products including; flowers, concentrates and edibles through its Oakland, CA and multiple Nevada locations.
IVXX, Inc. is a wholly-owned subsidiary of Terra Tech that produces medical cannabis-extracted products for regulated medical cannabis dispensaries throughout California. The Company’s wholly-owned subsidiary, Edible Garden, cultivates a premier brand of local and sustainably grown hydroponic produce, sold through major grocery stores such as ShopRite, Walmart, Winn-Dixie, Raley’s, Meijer, Krogers, and others throughout New Jersey, New York, Delaware, Maryland, Connecticut, Pennsylvania and the Midwest.
Terra Tech’s MediFarm LLC subsidiaries are focused on medical cannabis cultivation and permitting businesses throughout Nevada. The Company’s wholly-owned subsidiary GrowOp Technology specializes in controlled environment agricultural technologies.
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As noted above, the company just announced the execution of a lease for 13,000 square feet of industrial space on over 30,000 square feet of land in Oakland’s industrial corridor.
According to the release, the Company is in the final stages of designing a state of the art cultivation facility projected to produce over one metric ton of premium grade cannabis per annum for its IVXX brand. The design includes fully automated environmental controls which are anticipated to reduce production costs associated with the cultivation of IVXX cannabis.
Construction is expected to be completed by the end of Q3 2017, with full production capacity expected by the end of Q4 2017. As a partner to the City and in renewed commitment to the Oakland community, TRTC will work with the City of Oakland to ensure that the new cultivation facility meets all permitting and operational requirements, inclusive of any requirements that may be adopted by the Council.
Derek Peterson, Terra Tech Chief Executive Officer, stated, “This new facility will bring scale to our cannabis production capacity, representing yet another step towards increasing Terra Tech’s margins. We expect our expanded capacity to drive sales of our IVXX premium cannabis products in California, which is our leading market, as demand continues to strengthen.”
Salwa Ibrahim, Executive Director of Blum, commented, “The Oakland City Building and Fire Departments have been great to work with as we finalize our design schematics. The City is forward thinking with respect to best in class construction practices, especially green building practices. We built on our experience from previous designs and projects to streamline this construction process as we expand our capacity to meet the burgeoning demand in the emergent cannabis industry.”
At this point, TRTC has a strong balance sheet with no signs at all of vulnerability or coming distress even with their current projects. The company is pulling in trailing 12-month revenues of $20.4M, and that topline is growing fast (y/y quarterly revenues growing at 244.4%). But the action on the chart is not particularly confidence-inspiring in recent days. That said, we may be seeing rotation out of larger post-election cannabis exposure, and this stock would have been warehouse of such interest. The process may be creating another opportunity at $0.20-0.22 in the process. For continuing coverage on shares of $TRTC stock, as well as our other hot stock picks, sign up for our free newsletter today and get our next hot stock pick!