Terra Tech Corp (OTCMKTS:TRTC) is the only pot stock that can proudly claim the title of being the only US-based, publicly-traded company that touches every aspect of the cannabis lifecycle—from cultivation, to extraction, to branding, and with the game changing acquisition of Blum, to retail sale. TRTC has two open medical marijuana dispensaries, and has three more getting built out for opening within the next few months for a total of four in Nevada and one in California. This is huge because we expect both California and Nevada to fully legalize marijuana and allow recreational use. No other cannabis company is primed to benefit like TRTC.
The numbers for the first quarter were solid, but did not include the Blum acquisition. Total revenues generated for the quarter ended March 31, 2016 were approximately $1.5 million, compared to $763k in the same period in 2015. This is an increase of 103% from the quarter ended March 31, 2015. The increase was driven largely by higher sales from the Edible Garden division. Short-term debt as of March 31, 2016 amounted to approximately $554,000, a decrease of approximately 40% compared to approximately $917,000 as of December 31, 2015.
In April, TRTC launched a new line of pre-filled, IVXX-branded medical cannabis cartridges. An initial order for approximately $170,000, or 10,000 units, has been received from one of Terra Tech’s distributors. This is the first of multiple cartridge lines, each containing varying percentages of cannabinoids, to be launched over the next four months. The cannabis oil cartridges will offer a variety of cannabis strains of varying potencies in easy-to-use, convenient cartridges designed for use in vaporizers. Made from local, sustainably grown cannabis that has been cleanly extracted using a supercritical CO2 method, the oil is lab-formulated for consistency, and lab-tested for purity and potency. Terra Tech manufactures the pre-filled cartridges at its IVXX Extraction Lab, and will distribute them via its existing distribution network and retail locations.
We see a big market for these cartridges for Terra Tech. Concentrates in general were maybe 10% of the marketplace a few years ago. And now they’re approaching 30% to 40% depending on the jurisdiction. Concentrates in general are becoming a larger piece of the sales cycle and convenience items will be able to assume these concentrates and a product like a pre-filled cartridge especially in a market like Las Vegas where people want grab-and-go’s.
Speaking of Las Vegas, what we like about the Vegas market is that when people come in from California, Arizona, New Jersey, or wherever medical marijuana is legal, they’re able to buy product in Nevada with their medical marijuana card. Located adjacent to the Las Vegas Strip, the Western Avenue dispensary opened on April 20th and offers patients the company’s proprietary IVXX brand of premium medical cannabis, including flowers, shatters, waxes and oils, among other high-quality cannabis products from a range of reputable providers of superior grade medical cannabis. The 3,900 square foot facility is located adjacent to the Las Vegas Strip at 1921 Western Avenue and is expected to benefit from the heavy traffic in Las Vegas. TRTC is in a great position as Las Vegas hopes to become the “Amsterdam of the US.”
Currently trading with a market cap of $132 million, we believe shares will consolidate before heading higher. We expect some profit taking in the short term as investors await the Q2 report with the Blum and Las Vegas numbers factored in. We believe these numbers will be better than analysts are anticipating and put TRTC on another bull run.
Longer term, we expect TRTC to become the first pot stock to uplist to NASDAQ. We feel there’s no better company prepared for NASDAQ than TRTC and it is certainly on the company’s agenda. As CEO Derek Peterson said on the earnings call:
“However it’s my feeling that the NASDAQ isn’t going to be ready to take account of this company. And I say that because I believe they’re going to want banking regulations to be dealt with before they let a company up on the exchange because if I’m there, if I’m putting myself in their shoes, I mean, two things; I want a large company that has high degree of financials, a healthy balance sheet, good operating cash flow.”
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