TRTC

What Investors Need to See From Terra Tech Corp (OTCMKTS:TRTC)

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Terra Tech Corp (OTCMKTS:TRTC) has been a big laggard since the stock broke out back in Q1 of 2016. Price spiked up to stick a wick into the $0.75 level, but has been a choppy ride lower ever since, bouncing back and forth in the $0.15-0.30 range over the past 6 months. The big question here is this: what step can TRTC take to reignite the love from the market?

Clearly, management believes it has something to do with “craft cultivators”. The model is essentially a tactic to partner into a premium branding niche in its IVXX segment. Management signed its first craft cultivation partner back in May, an experienced cannabis cultivator in Honeydew, California. Now, we see that, in recent days, the company has signed another craft cultivation partner, Cultivar Inc., located in Salinas, California. The farm is approved for up to six acres (approximately 244,000 square feet) of cannabis cultivation, to be grown in high tech, climate-controlled greenhouses.

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 is seeking to reignite excitement in shares with its new craft cultivation model. We think the idea is quite effective: IVXX specializes in developing and supplying the premium strain of cannabis. The craft cultivation facility specializes in mass producing it under ideal conditions with controlled costs and high regularity of output.

It’s very much like the pharmaceutical model: big biopharma R&D pipelines produce the drug. And the contract manufacturing organization (CMO) specializes in generating the pills. So, what will investors want to see?

Enough volume in sales to make this step matter, and a clear and unequivocal jump in margins across the entire process of taking a specialty MMJ cannabis product to market.

Mr. Peterson concluded, “California is a major emerging market for cannabis consumption, with adult-use sales expected to begin in 2018. Developing our craft cultivation business model through partnerships such as this agreement with Cultivar, Inc. enables Terra Tech to expand its cultivation footprint and product supply while maintaining control over costs, with a view to driving improved margins. We are moving rapidly to grow market share and to improve patient access to high-quality and effective medical cannabis products as the market continues to open up.”

Now commanding a market cap of $131.1M, TRTC has a significant war chest ($9.1M) of cash reported on the books, which stands against about $576K in total current liabilities. TRTC is pulling in trailing 12-month revenues of $28.7M. However, the company is seeing declines on the top line on a quarterly y/y basis, with revenues falling at -19.1%. 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.