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Wednesday, December 2, 2020

Is the Storm Finally Easing for Terra Tech Corp (OTCMKTS:TRTC)?

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One stock that has been a huge underperformer in the cannabis patch over the past year but that has recently caught fire is Terra Tech Corp (OTCMKTS:TRTC). Shares have bolted higher by as much as 200% in the past month, but gave about half of that back in the past few days. To really add some color to the story, the company just announced its financial results for the year ended December 31, 2018, generating revenues of approximately $31.33 million, compared to approximately $35.80 million for the year ended December 31, 2017, a decrease of approximately $4.47 million.

“We faced several headwinds in 2018 that slowed our progress and impacted top line results,” commented Derek Peterson, Chief Executive Officer of Terra Tech. “These challenges included navigating the changing regulations in the State of California, which affected sales from our retail businesses in the state, Blüm Oakland and Blüm Santa Ana. Our capacity to generate wholesale revenues in California was also impacted by the regulations which required us to relocate and upgrade our IVXX™ cannabis production to a new facility, effectively halting production in some months.”

Terra Tech Corp (OTCMKTS:TRTC) has positioned itself in the cannabis space 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.

TRTC 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

Additionally, TRTC 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.

The company 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.

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As noted above, TRTC just announced its financial results for the year ended December 31, 2018, generating revenues of approximately $31.33 million, compared to approximately $35.80 million for the year ended December 31, 2017, a decrease of approximately $4.47 million.

Recent action has seen 90% piled on for shareholders of the stock during the trailing month. What’s more, the name has benefitted from a jump in recent trading volume to the tune of a bit over 360% beyond what we have been seeing over the larger time frame.

“While these factors created challenges for us in 2018, they also drove us to make investments in cultivation and manufacturing infrastructure that will enable us to scale production and achieve greater IVXX™ distribution in California in 2019. The upgraded facility in Oakland, California is nearly complete and will support a ramp in production starting in Q2 2019. Other initiatives to drive revenue growth in the state include the anticipated launch of a branded delivery system in California, and our plans to establish a pop-up retail experience,” continued Mr. Peterson.

Now commanding a market cap of $109.65M, TRTC has a significant war chest ($3.4M) of cash on the books, which must be weighed relative to about $7.7M in total current liabilities. TRTC is pulling in trailing 12-month revenues of $35.4M. However, the company is seeing declines on the top-line on a quarterly y/y basis, with revenues falling at -30%. We will update the story again soon as further details emerge. Sign-up for continuing coverage on shares of $TRTC stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $TRTC, either long or short, and we have not been compensated for this article.

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