Annual report pursuant to Section 13 and 15(d)

SEGMENT INFORMATION

v3.20.1
SEGMENT INFORMATION
12 Months Ended
Dec. 31, 2019
NOTE 18. SEGMENT INFORMATION

During 2018, the Company acquired additional real property and determined that a previously insignificant operating segment Real Estate and Construction is now significant and is a reportable segment requiring disclosure in accordance with ASC 280. Prior period information below has been revised to conform to current period presentation. We are now organized into three reportable segments:

 

Herbs and Produce Products Includes herbs and leafy greens that are grown using classic Dutch hydroponic farming methods.

 

Cannabis Dispensary, Cultivation and Production Includes cannabis-focused retail, cultivation and production.

 

Real Estateand Construction Includes building ownership where cannabis dispensary and/or cultivation operations are currently in development.

 

Our segment net revenue and contributions to consolidated net revenue for each of the last two fiscal years were as follows:

 

(in thousands)

Total Revenue

% of Total Revenue

Year Ended Decemeber 31,

Year Ended December 31,

2019

2018

2019

2018

Herbs and Produce Products

$

5,284

$

4,476

18.8

%

15.9

%

Cannabis Dispensary, Cultivation and Production

22,416

14,872

79.9

%

83.9

%

Real Estate

-

-

-%

-%

Corporate and Other

350

817

1.2

%

0.2

%

Total

$

28,050

20,165

100.0

%

100.0

%

 

See Note 2 Summary of Significant Accounting Policies to our consolidated financial statements for financial information about our segments. See also Item 1A. Risk Factors below for a discussion of certain risks associated with our operations.

 

Herbs and Produce Products

 

Either independently or in conjunction with third parties, we are a retail seller of locally grown hydroponic herbs and produce, which are distributed through major grocery stores throughout the East, West and Midwest regions of the U.S.

 

Cannabis Dispensary, Cultivation and Production

 

Either independently or in conjunction with third parties, we operate medical marijuana retail and adult use dispensaries and a medical marijuana and adult use cultivation in Nevada. In addition, we operate retail medical and adult use marijuana dispensary facilities in California, and have medical marijuana and adult use cultivation and production facilities in California. All of our retail dispensaries in California and Nevada offer a broad selection of medical and adult use cannabis products including flowers, concentrates and edibles. We also produce and sell a line of medical and adult use cannabis flowers, as well as a line of medical and adult use cannabis-extracted products, which include concentrates, cartridges, and wax products.

 

Real Estate

 

We own real property in Nevada. Additionally, we own properties in California that are in various stages of construction for medical marijuana and adult use cultivation and production facilities and dispensaries.

Summarized financial information concerning the Company s reportable segments is shown in the following tables. Total asset amounts at December 31, 2019 and 2018 excludes intercompany receivable balances eliminated in consolidation.

 

(in thousands)

For the Year Ended December 31, 2019

Herbs and Produce Products

Cannabis Dispensary, Cultivation and Production

Real Estate

Eliminations and Other

Total

Total revenues

$

5,284

$

22,416

$

-

$

350

$

28,050

Cost of goods sold

3,955

$

9,114

$

-

$

327

13,396

Gross profit

1,329

13,302

-

23

14,654

Depreciation & amortization

540

$

6,458

$

-

$

215

7,213

Stock-based compensation

-

$

-

$

-

$

4,918

4,918

Selling, general and administrative expenses (all other)

4,783

$

11,174

$

334

$

16,899

33,190

Loss from operations

(3,994

)

(4,330

)

(334

)

(22,009

)

(30,667

)

Other income / (expense):

Interest income/(expense)

-

$

(16

)

$

(1,007

)

$

(8,274

)

(9,297

)

Other income / (loss)

34

$

(7,794

)

$

-

$

(716

)

(8,476

)

Total Other Income (Expense)

34

(7,810

)

(1,007

)

(8,990

)

(17,773

)

Loss Before Provision for Income Taxes

$

(3,960

)

$

(12,140

)

$

(1,341

)

$

(30,999

)

$

(48,440

)

Total Assets at December 31, 2019

$

(8,201

)

$

56,777

$

(2,545

)

$

73,218

$

119,249

 

For the Year Ended December 31, 2018

Herbs and Produce

Cannabis Dispensary, Cultivation and Production

Real Estate

Eliminations and Other

Total

Total Revenues

$

4,476

$

14,872

$

-

$

817

$

20,165

Cost of Goods Sold

4,233

7,241

-

1,684

13,158

Gross Profit

243

7,631

-

(867

)

7,007

Depreciation & amortization

523

3,951

-

232

4,706

Stock-based compensation

-

-

-

3,136

3,136

Selling, General and Administrative Expenses

3,682

10,192

973

15,221

30,068

Loss from Operations

(3,962

)

(6,512

)

(973

)

(19,456

)

(30,903

)

Other income / (expense):

Interest income/(expense)

-

-

(687

)

(10,283

)

(10,970

)

Other income / (loss)

(77

)

-

(107

)

3,075

2,891

Total Other Income (Expense)

(77

)

-

(794

)

(7,208

)

(8,079

)

Loss Before Provision for Income Taxes

$

(4,039

)

$

(6,512

)

$

(1,767

)

$

(26,664

)

$

(38,982

)

Total Assets at December 31, 2018

$

(6,871

)

$

40,734

$

4,248

$

81,978

$

120,088