CV Sciences Inc (CVSI)

[Det_Robert_Thorne]

We've seen no evidence of either of those

Their margins went up since they are selling direct to consumers now and not through a middle man. Plus they can now use domestically grown hemp, further cutting production costs.

We have seen no evidence of either of those things happening.

The 60% gross margin for 3Q/14 was the same as in 2Q/14, on a 38% decline in revenues.

Though they talked about having some hemp grown in the U.S., there is no evidence that they have bought any, and their current contracts in Europe run through 2015, with contractual rights through 2018. From the 3Q/14 10-Q:

The Company is a party to a contract for the growth and processing of 2,600 kilograms of product currently being delivered and scheduled to be delivered through August 31, 2015. The total amount left to be paid under this contract is approximately $6.9 million through October 2015. The Company is party to a second purchasing contract to provide up to 1 million kilograms of raw product to the Company. There is approximately $3.1 million remaining to be paid under this second contract. We have contractual rights for the growth and processing of hemp oil for delivery through October 2018 under both of these contracts. We anticipate the cost under both contracts will remain consistent with current year prices.