Unrivaled Brands, Inc.

Philip Carlson - Investor Relations Derek Peterson - Chairman and Chief Executive Officer Michael James - Chief Financial Officer

Good afternoon and welcome to Terra Tech’s Third Quarter 2017 Financial Results Conference Call. A replay of this call will be available at www.smallcapvoice.com and it will be archived on the Investors Relations section of the Terra Tech website.

Before we begin, please let me remind you that during the course of this conference call, Terra Tech’s management may make forward-looking statements. These forward-looking statements are based on current expectations that are subject to a number of risks and uncertainties that may cause actual results to differ materially from expectations.

These risks are outlined in the risk factors section of our SEC filings. Any forward-looking statement should be considered in light of these factors.

Please also note, as a Safe Harbor, any outlook we present is as of today and management does not undertake any obligation to revise any forward-looking statements in the future. With me on the call today are Mr.

Derek Peterson, Terra Tech’s Chairman and Chief Executive Officer and Mr. Mike James, Chief Financial Officer.

With that, I would now like to hand the call over to Derek.

Hey Phil, thank you very much for the introduction. Thank you everybody to the few hundred people on call today.

As we go through and discuss Terra Tech’s 2017 third quarter results and provide an operational and business updates. Today on the call we have Mike James, CFO, he will be join a little bit to a deeper dive few minutes in the call and go through the financials a little bit more.

Let me start up with a quick summary though. This quarter we surpassed a little over $10 million in revenue for the third quarter that’s a 46% increased compared to the prior quarter over the prior year.

This is the first time also we have reported a double-digit in terms of quarterly revenue, which we are pretty excited about obviously. In the Canada segment, most importantly we saw 82% year-over-year in revenue growth and as we have promised, I think probably over the last four quarters as we have been focusing on gross margin expansion, we had another quarter of increased gross margin expansion as we increased gross margins to 23% compared with 18% in Q3 2016 and 19% in 2017.

And in the year with strong momentum as we enter the holiday season, which is typically associated to higher sales in the cannabis industry. Let me jump into Nevada real quick.

I know everybody is really interested with the adult-use kicking up, in July that was actually our first complete quarter with all of dispensaries running at full steam with adult-use in Nevada. We had a lot of exciting developments out of Nevada marketplace, as I said adult-use is commenced July 1st that was really kind of a turning point for the Company, as it opened up our total addressable market significantly.

Prior to that obviously we had medical sales in Nevada and we had the open facility up in running, but the market was small, the medical program were still developing and now this gave us the huge opportunity and dropped the barrier essentially to access Canada within the state. During August 2017, we also acquired 38% ownership in MediFarm, which is our subsidiary there.

Some of you remember, we have a majority ownership position, but not a full ownership position. Previously the Company owned 60%.

So as of September 30, 2017, the Company now has 98% ownership of the MediFarm subsidiary. Retail operations as I said adult-use sales at an early stage, but we are really pleased with the traction that Nevada has made out of the gate.

Talking about Colorado, you saw Colorado come out of the gate with several hundred million in top-line revenue. That number crossed a billion and then went to a billion two.

We think there is going to be that very similar stairs type of a mentality in progress coming out of the Nevada marketplace, does that industry has an opportunity to mature. On the retail operation side, as I said Blüm we have put a lot of attention to detail on the retail endower.

We wanted to ultimately develop a kind of a homogenized approach to our retail facilities, which is something and I said this on calls. This is something that’s really been lacking in the cannabis industry, specifically in California and Nevada, which is a new marketplace.

We are one of the only industries that I can think of in the world where somebody can go in one month and they go into next month order the same product and have an entirely different experience and entirely different product. We wanted to install that for customers, so when you come in, we have very similar menu boards, we have the very similar product offerings, our budtender staff is trained in a similar manner.

So your customer experience is going to be consistent and congruent month-in, month-out location-by-location-by-location. And in addition to that, our stores have been very familiar look and feel I’m sure a lot of shareholders have been in our markets in multiple states and we use the same color pallet, the same flooring, the same lighting fixtures and those are the type of things that kind stimulate that brand adherence that brand identity which is really what we put a tremendous amount of effort into.

On the cultivation and extraction side to support the increase demand for Cannabis products throughout Nevada. We expanded our cultivation or product facilities as some of you have read through a joint venture with NuLeaf.

NuLeaf Sparks hold the Nevada Medical Cannabis Cultivation License and is in the process of constructing a 30,000 square foot Cannabis Cultivation facility in Sparks. And then also in conjunction with that NuLeaf Reno holds a Nevada Medical Cannabis Production License for extract are in the process of constructing approximately 15,000 Cannabis production facility in Reno as well.

We expect to start ramping the production of the IVXX brands and also introducing some additional brands in the Nevada marketplace, but also producing flower and other products for our retail stores. The reason we enter into this transaction was not so we have the partnership with NuLeaf which are experience providers in both the Nevada and California marketplace, but they were lot closer to finishing the facility then we were of ours.

So the deal that we entered essentially entered into provided us access to 30,000 square foot cultivation facility and a 15,000 square foot laboratory facility to produce the extracts. These facility should be online in the next 60 days or so, we should be able to meet the recreational licensing requirements and that gave us a huge head start from our Greenfield builds, where we were pursuing early on at a far lesser cost.

I think we saved close to our $7 million of what our CapEx would have been going this route. So we saved capital, took some pressure off the shareholders, but at the same time accelerated entry into the marketplace.

And again, although initially IVXX was kind of a medical - the medical market, for those of you who have seen the brands, if you haven’t look at www.ivxx.com. You will get a feel, the brands are really kind of recreational in spirit and I think they are going to be really applicable not only to the Nevada marketplace but also to California marketplace coming into January of 2018.

So speaking of California, we expect a favorable market conditions and continue to try to accelerate our growth within the California market. Adult-use sales are expected to come online in 2018, legal sales in the state are expected to hit $5.8 billion by 2021 according to Arcview Market Research up from an estimated $1.8 billion last year.

So the thing about California, we have a very developed medical marijuana market here, its two decades old and it really reduce the barriers to entry, because a lot of people could get cars for a lot of different concerns. So there was a very big developed and significant medical market here.

What that adult-use recreational actually provides is it mitigates and reduces the barriers to entry for anybody that’s over the age of 21 to get access, they don’t have to go to the doctor, they don’t have to get them medical cards, they say literally walk into the store front and show their license to procure product. We think that dropping barrier to entry to be able to purchase product is going to create a significant uptick in sales.

Again, with 40 million people occupying the state, another 250 million tourist, they come into California on an annual basis. We think it's the largest market, the largest cannabis market on the globe.

Again it's a fifth or sixth largest economy on the planet. So to position ourselves for that we are doing a few different things, obviously we are operating a retail dispensary in the open marketplace.

In addition to that, again, we are operating a dispensary in the Santa Ana marketplace the one that we just purchased previously and own as the reserve. That transaction happened in September and it's beginning to now starting to contribute revenue into this quarter, but not for the prior quarters.

So there is a nice piece of organic growth coming in from that merger and acquisition which we just consummated. We have rebranded that store as Blüm, so walking into the cannabis market in 2018 a recreational cannabis market, we have our facility up in Northern California and Oakland.

We have retail traction down here very important market in Southern California, and again we will be opening our Blüm dispensary in [indiscernible] which we expect to open in early 2018, which will also serve us the adult-use as well as the medical market as well. Cultivation and extraction, one of the other things we are attempting to do in the California marketplace is expand our cultivation footprint and expand our extraction laboratory footprint, again, to produce our IVXX products, produced more product for our stores and again reducing margins and increasing gross profit is obviously a primary focus for us.

So we have invested in these California production facilities. We want to be able to pivot to meet demand in the adult-use markets as they commence in early 2018.

During the third quarter, we signed the second craft cultivator who enable us to expand our production, Cultivar located in Salinas, California is proved up to six acres, approximately about 244,000 square of canopy. Will be grown in a high-tech climate controlled greenhouse.

We have already received 1000 pounds from our Humboldt Craft Cultivator partnership that we established earlier in the year. And then again our new cultivation facility in Oakland, California is expected to be fully operational in mid-2018.

So we are rapidly expanding that cultivation footprint not only with facilities that own and operate but by partnering with craft cultivators that do an excellent job growing a handful of proprietary strains. And what is happening just - in the California marketplace.

It's been a very I guess a great market for a lack of a better analogy what I mean by that, is you have a lot of producers that were very skilled in growing product, cultivating product, distributing product, selling product, but they don't necessarily have the infrastructure to comply with a higher degree of regulation. And regulation is coming down the pipeline in California is extremely significant.

So a lot of these providers are getting very worried about the compliance of regulatory backbone and hurdles that they have to surmount, on top of having to run their business. We have a significant and compliance backbone, obviously we are publically traded Company so from that alone, we have a significant regulatory and compliance backbone.

But we have put a lot of effort and energy in developing our government relations, our compliance backbone, our compliance network and so now we are establishing partnerships with these cultivators who are worried about adapting to these regulations and offering us to provide our compliance backbone. Allowing them to do what they do which is grow, cultivate, extract premium products and premium strains that we can lockdown to have exclusivity with to provide to our patients.

So that's one of our other growth mechanisms on top of our organic growth of building our own facilities out. New Jersey, for those of you that are back East, we know on Tuesday we had an election for a new Governor in New Jersey Phil Murphy was leading in the poll significantly for most of the race.

He was elected as the Governor of the state. So what is that mean for Terra Tech?

Murphy has said several times, not only is he in support of expanded medical, but he's also in support of recreational adult-use utilization in New Jersey. That's something we are not going to see out of New York I think for an extended period of time.

So I think that is going to be an opportunity for significant market for us. We have already started a lobbying effort, we have already started hiring attorneys, we have already started to communicate with the political leaders as they go through and begin to shape the legislative and regulatory process.

We want to make sure we have a voice in terms of zoning and taxation and those types of very important functions that exist for operators in the space. And we have said this since day one.

The reason we built that farming facility back out in New Jersey that first was a hedge and that was a hedge at a time where we were a little bit of insecure about the longevity of the market that was before holder and Obama had come out and started to kind of give support or at least take a hands off approach to the industry. And so we developed that as a hedge, which ended up being very synergistic for us and I said a few times that was I think one of the reasons we were so successful in the permitting and application process in Nevada, because the optics of the large-scale farming operations, the UFDA organic status, the GFSI certifications and those types of things gave a tremendous amount of comfort for us as an operator.

But now that backbone, I think is going to become very important for us as New Jersey goes through this regulatory and legislative process and starts to adapt, or I should say adopt regulations around adult-use. We have got an infrastructure there, strong political relationships, we have been a very large employer.

So all those things are very, very importantly when you are going through the competition process and we are going to use that farm as an opportunity to stand-up. So speaking about Edible Garden as our next topic.

As we have also advanced our plan to grow market share in the cannabis market, we are also experiencing success at Edible Garden. We saw improved gross profits which are up 11% compared to Q3 2016.

A gross profit margin improved to 70% in Q3 2017 versus 10% Q3 2016. We are continuing to launch new product line such as Snip It’s, which is are small herb line that we launched this quarter.

This will allow us to leverage our existing client base to generate more sales that we can push through our existing channels. We are mid-way through Q4, which tends to be our busiest season for Edible Garden as we come into the holiday season.

And we have also increased our infrastructure for use of our space, we are building out of pack house so we can begin to the cut ad enter the cut herb market and the cut lettuce market, which is a significant market piece. And again we have now begun to migrate our brand out to other markets not only in the Midwest and the Northeast, but we have an eye to the West Coast starting off in California through some strategic cultivation relationships we have out here making an entrance to all and some other retailers in California as well.

At this point in time, I would like to turn the call over to our CFO, Mike James to kind of do a little bit of a deeper dive into the financials.

Thank you, Derek. Good afternoon, everyone.

I will now provide you with a summary of our third quarter 2017 results. For the more detailed results please refer to the press release we issued earlier today, which is posted on our website along with the Form 10-Q filed with the Securities and Exchange Commission.

In addition, please note that we compile our financials under U.S. GAAP including the non-operating expenses.

For the three-months ended September 30, 2017, we generated revenues of $10.12 million compared to $6.95 million for the three-months ended September 30, 2016 an increase of $3.17 million or 45.6%. The increase was driven by sales in the cannabis, which increased 81.8% due to higher sales from the Company’s four Nevada-based Blüm Dispensaries.

It was partially offset by the lower sales from Edible Garden due to the discontinuation of its low-margin floral products. Our gross profit for the three-months ended September 30, 2017 was $2.33 million compared to gross margin of $1.26 million for the three-months ended September 30, 2016, an increase of $1.08 million or 85.9%.

Our gross margin percent for the three-months ended September 30, 2017 was 23.1% compared to 18.1% for the three-months ended September 30, 2016. The increase in gross margin percentage was attributable to Edible Garden’s herbs and produce segment which had $240,000 and $270,000 gross profit for the three-months ended September 30, 2017 and 2016 respectively or 16.8% and 10.2% gross margin percentage for the three-months ended September 30, 2017 and 2016 respectively.

The herbs and produce segment gross margin percentage increase was related to the expiration of the floral product contract. We also recorded higher margins in the cannabis segment which had $2.08 million and $1.02 million gross profit for the three-months ended September 30, 2017 and 2016 respectively or 24% and 21.4% gross margin percentage for the three-months ended September 30, 2017 and 2016 respectively.

Selling, general and administrative expenses for the three-months ended September 30, 2017 were $6.24 million compared to $5.94 million for the three-months ended September 30, 2016, an increase of $295,000 or 5%. The increase was partially due to an increase in the salaries due to the new hires with the Blüm Dispensaries and an increase in accounting and compliance personal cost.

Other expenses including increase in depreciation expense due to the fixed assets placed and service for the Nevada dispensaries. We have realized the net loss of $7.79 million or $0.01 per share for the three-months ended September 30, 2017 compared to a net loss of $5.59 million or $0.02 per share for the three-months ended September 30, 2016.

A primary reason for the increase was the loss on the fair market valuation of derivatives of $1.48 million and the loss on the extinguishment of debt of $1.37 million from the conversion of debt into equity. Now, turning to the balance sheet.

On September 30, 2017, we had a cash balance of approximately $6.5 million compared to a cash balance of approximately $9.75 million at December 31, 2016. We have no short-term debt as of September 30, 2017 compared to approximately $564,000 as of December 31, 2016.

Long-term debt increased from approximately $1.4 million to approximately $2.1 million during the first nine-months of 2017. Stockholders’ equity for the 2017 amounted to approximately $75.8 million compared to $32.2 million as of December 31, 2016.

Now, I would like to turn the call back over to Derek for some closing comments.

Mike, thanks for the update. I appreciate it.

So, again, in summary, in the third quarter the cannabis segment contributed 86% of total revenue. Our strong revenue growth validates kind of the strategy that we put together today.

We want to again reaffirm guidance for the year of $38 million to $40 million and we have got a major opportunity right now to grow the business and we are always on the lookout for new opportunities and some of them just fall into our lap kind of because we have skated where we thought the puck would be in New Jersey is a great example of that. We filed a patent application with U.S.

Patent and Trade Mark-Office for cannabis infused rolling papers trying to put some differentiated product out in the marketplace that give us some competitive advantage and we are going to continue to make improvements to our corporate governance as we have promise, we have recently have appointed Alan Gladstone as the Advisor to the Company. For those of you who haven't read that press release Alan started a Company called [Anna Glennon] (Ph) they had approximately 350 retail stores around the country doing over 400 million in revenue.

He is going to be a strategic advisor to the Company and create opportunities for us to kind of synergize with our multiple locations and to establish economies of scale and certain efficiencies and provide some I guess the real boots underground to experience that we don’t have building out a large scale retail chain. So that's going to be in and there are huge opportunity for us to get more efficient our approach to retail.

These are all the new steps kind of combined or to ensure shareholders interest as we always represented. For those of you who don’t know, we got rid of our preferred B shares earlier this year.

All of the executives for the Company, the insiders for the Company owned common shares and that was the big effort for us to align our interest with shareholders across the Board to make sure we are on the same boat. We care about the stock price, we care about the success of the Company, we are really encouraged this quarter by the strong results that we have reported, and we want to again continue to grow the business.

I'd like to thank not only our auditors MGL for their hard work on this quarter, Mike you and your full auditing team have put a tremendous amount of effort. Like to thank the Board of Directors, the 260 plus employees that we pay every two weeks and put food on their table for the efforts that they put back on us to create the Company that we have today.

At this time, I'd like to open up to questions-and-answers, turning the call back over to Phil, and double run through any questions to shareholders that have submitted earlier in the week.

Thank you Derek. First question, what are the states due foresee legalizing and what forecast you project going forward?

Other state, I mean well obviously Jersey is going to be the most important, right. I mean things are starting to snowball and things are starting to accelerate.

You start to read some of the news that's come out recently, I mean you're starting to see the majority of American support regulated cannabis market. I think the most recent [indiscernible] poll showed that the majority of republic are starting to support it.

The news is beginning to disseminate. The industry is starting to get some momentum behind it, some real capital behind it and I think because of that you're going to start to see more and more states begin to take a risk to broche adult-use in recreational legalization.

The tax collection has been a huge positive results, the job creation has been a huge positive and we are not seeing those kind of systemic social negative impacts that everybody has been clamoring about, the data just isn't showing here, we are not seeing an increase in teen use, we are not seeing an increase in crime. So we are starting to see overall positive results with this industry and I think that's just going to push more and more economies around the country to start looking at adapting legislation.

Our industry isn't like any other industry, we are legislated and mandated to do business in the U.S. for seed to sale.

There are not very many companies that can say that. We don't have the luxury of creating product in China or South America importing it in.

The job that we create in this industry are not only U.S. job, they are really local jobs.

So you talked about this economic thing called the multiplier effect. And what the multiplier effect essentially is, is when somebody comes and spends a dollar in the local economy is how many times that that dollar then recycle itself.

In this industry is significant, because we employee local people, both local people take the money that we pay, then they go eat at local restaurants, go to local gas stations, and those dollars re-circulate, and those are dollars we are no longer spending over the border to the Mexico and to South America that fuel the infrastructure build and illegal drug trade. These are dollars that staying in the country, and I think legislators are really beginning to wrap their head around that, and that will open up additional markets.

So especially when they start to feel and realize from our purse there is reelection risk because they are not supporting some format of tax and regulation as it pertains to cannabis.

Okay, next question. Congratulations on the recent M&A transactions in preparation for California recreational sales.

How do you feel to Terra Tech is positioned for this new market, what gaps still exists and when do you anticipate filling them?

Yes I mean I think we are positioned really well. I want to have some more brick and mortar retail spots open in the first part of the year.

So I want LA, LA is an important market to us, LA has been a mass from a regulatory standpoint so we have kind of sat on the sideline to see how everything shakes out. We didn't want to risk shareholders' capital going into a marketplace with an uncertain regulatory climate, but that's something that's kind of on a forefront, so if we can have the bay area coverage Southern California coverage, LA and San Diego are the next kind of the two important markets in California and then obviously coupled with broader distribution on the IVXX wholesale line so we can cover all markets.

So that's what is the most important to us. We have great coverage in Nevada, from Reno to the Vegas Strip.

So you can’t really drive down the street without running into our bill board of one of our sign. So we want to have similar coverage in California, obviously the geographic landscape is a lot more significant, but with some creative M&A strategies, I think we can get there.

And again, going back to what I said during the call fill is this compliance and regulatory burden that’s coming down stream in 2018 is really becoming a catalyst for M&A activity. I haven’t seen as many outbound, or is a inbound phone calls and inbound increased in the past that I have seen over the last four to five months.

So we have got a pretty good pipeline right now of interested parties, some of the valuation metrics are off the chart, but that being said, we are seeing a healthy amount of activity from people that are interesting to putting deals together and that’s kind of like I said one of the primary motivations of our platform. In addition to that Santa Ana, where we hold a dispensary now is meeting next, I think it’s on the 21st a vote on issuing additional permit.

So not only are we running a retail dispensary, but because we are an existing operator, we should have some symbols of preferential treatment to obtain cultivation and extraction permits and distribution permits and potentially other retail permits in Santa Ana. And the beauty about Santa Ana in Southern California for those of you who don’t know the demographic.

Its relatively conservative down here and a lot of the other local areas like Newport Beach and Laguna Beach and Irvine and the surrounding areas or just not going to pass, like any amount of legislation anytime soon. Santa Ana really has the same amount of opportunity that the Bay area has had in Northern California to set themselves apart as the cannabis industry hub or cannabis industry leader.

So establishing a significant presence down here on top of the retail dispensary that we also acquired is a huge, huge focus of ours. Because we think not only are we are going to attract the potential sales and revenue extracted out of the Santa Ana market, but there is a significant opportunity for us to grab market share from all of these surrounding areas and coupled with that real brand penetration on our wholesale line, as well as our retail line.

Okay. Can you provide an update on key drivers of the timing of the reverse split, which past in the most recent proxy voting?

Is that something we should anticipate in the near-term or closer to the September 25, 2018 expiration date?

Yes. I mean, we have said a ton of time, I’m not just going to reverse split for the sport of it for lack of a better term.

We will conduct a reverse obviously to gain up to the NASDAQ or to go up on some other exchange, if there was a large merger on the table where the acquire or the other party wanted a higher stock price or potentially a large non-dilutive attractive capital infusion without barring that was mandate that there was a reverse. So those are kind of the - we just do it because of the catalyst and that had a bigger purpose that gave us some sort of the benefit.

But not just for the purpose of warning to see $3 to $4 stock price, there is no reason to do that. So we wanted to put that into vote the last shareholder meetings, so that there was a tool that’s available to us.

So we didn’t have to be reactive, if anyone of those events happens to take place. Now that we have got that vote done at least to the end of this next year, September of next year we will have that air on our [indiscernible] and if we need to use that we have the ability to use it.

But as we said right now, we don’t have any plans to do it on any regular basis, but if there is a catalyst out there, there is mandates or demands, there is a competitive advantage for us doing that we will certainly utilize that tool.

Okay. Does Terra Tech management have a goal to be cash flow positive in markets that become more establish like Nevada, if so when?

That’s a huge focus. Growing top-line revenue significant focus, gross margin expansion significant focus and then the third significant focus is when we bring in these acquisitions or redevelop these companies organically, once we hit some revenue run rate, we really then go in and start to tweak efficiency.

So step number one grab market share. Step number two start to lien out operations and show improved gross margins, start to focus on being EBITDA positive and cash flow positive at the subsidiary level.

We have to do things that a lot of these other smaller companies don’t have to do we need to have a regulatory department as I discussed earlier. So we need to have a department that can go after and isolate new permit opportunities to compete for those permits, put the applications together, meet with government people.

Address legal issues, work with the regulators, start to change bills in certain markets, at the same time we need to make sure that department is monitoring ongoing legislative and regulatory requirements, make sure our facilities are operating within those regulations so we don't put our existing permits at risk. We are lot like a financial company, right or an investment bank or brokerage house that has a compliance department, we really have to establish a very similar infrastructure.

It's kind of operating cost compliance first, sales second that's one of the burdens and unfortunate side is being part of highly regulate marketplace, but that's what comes along with the ending of the probation. So at a corporate level we are constantly adding infrastructure we are adding infrastructure so we can out and grab more market share.

But the primary focus for us is once we grab that market share and when we bring it in-house is to really bring in economy of scale and start to lien out our operation, doing little things like pooling or buying in California now that we have got multiple locations. Pooling or buying in Nevada, exercising our purchasing power to get discounts, these little 1% move, Alan as the minute he joined the board the Advisory Board he just said 1% moves 1% here, 1% there, those little changes are extremely surmountable and that's what our focus is from a management standpoint when we go in and start to lien out these operation.

So in a perfect world, once we bring these companies in or once we grow these companies to get them running into operating efficiencies, like I said we then go in and try to lien out the operations to extract as much cash flow. The more cash flow we can pull out means the less capital we have to raise over the marketplace, which means less shares we have to issue, which means less delusional growth.

So we are focused on that at a subsidiary level and then at some point in time when we decide we have hit enough market saturation in the Company, obviously our objective at that point in time is to lien out operations across the board and start showing net income, but as we sit right now we are scrambling for permits, we are scrambling for market shares. I guess eventually as we have solid Constellation brands and their investments into the Canadian marketplace the big boys are interest and we need to make sure that we look attractive or we can stand on our own whatever our future happens to bear, but we want to make sure we are certainly developing strong fundamental economics within the Company.

Is it possible for Terra Tech to list on one of the Canadian Stock Exchanges? Is there an event trying to doing so or is the Board of Directors focused on U.S.

exchanges such as the New York Stock Exchange and or NASDAQ?

Yes, I mean we certainly we have to look at the Canadian opportunity and I view this analogy and probably too many times. But like I said, we are - where we think puck is going to be tight management team not where it is and I believe that's puck is in Canada right now.

But if you look at what is taken place up there in the public market segment you have got basically federal legalization. Because you have federal legalization you have the big firms like Dundee and Cannacord coming in and doing these fully bought deals and these underwriting for these companies and you are seeing unbelievable market cap expansion and the ability to raise capital on these marketplaces and that's the Canadian markets and that Canadian market is less than I think what we are going to see out of the California market.

The U.S. is where it's at, that's where the longevity in those marketplace is, that's where the consumer demand is, that's where the significant revenue is.

If we have to wait three, four, five more years to get up on an exchange, because the federal government is just not ready for it, we are going to continue to build the Company, but we want to market cap expansion of being one of the first, if not the first Company that touches the plan on the NASDAQ or the NYSE. We want that institutional investment, we want that associated market cap expansion.

Canopy growth has got to $2.9 billion market cap, and I think their full-year 2017 around on a full-year top-line revenue was $38.5 million that's right within where we are from a forecast standpoint, and we have got a $200 million something market cap. There is to me from our approach nothing but upside over the long haul, we will leverage that when we get to it, but I don't want to state where the puck is now.

I know it's eventually going to return down here. The demand is here, the market is here, the legislative development is here, but to get up on the exchange, I think we are going to need to see some symbols of federal movement.

I don't know if that's going to happen in the short run, but that being said, when it does happen I believe, it's going to be explosive. And I want to make sure that we are embedded, and I want to make sure that we are positioned, and I want to make sure our Company stands out over everybody else's.

Okay. What is the square footage in conservative production capacity of the cultivation facilities currently being constructed in Nevada, once fully functional and estimated timelines for that?

Yes, so we have 30,000 square feet in terms of NuLeaf deal they will be coming online in call it the next couple of months or so and then 15,000 square foot on the production facility side. We also have another set of permits up in Spanish Spring.

So we are beginning to move forward on that as well. We are going to develop a Greenhouse facility in Spanish Springs for couple of reasons.

We have the indoor facility in Reno that we did the partnership with NuLeaf, we are going to do the production of the Greenhouse facility also in partnership with NuLeaf. That facility could be upwards of two to 2.5 maybe even three acres of Greenhouse space.

That affords us a competitive advantage not only because the cost of production in Greenhouse is one third to one half of what it is on the indoor facility which helps margin expansion, helps us to become more competitive against our peers by having lower cost of goods, but it produces an extremely significant amount of biomass. And you talk to anyone in the extract companies in Nevada, you talk to anyone of the extract companies in California, it is challenging for them to find enough source material to produce extracts.

That used to be waste material, now everybody is chasing after, especially clean product that doesn't have chemical residuals and those types of things found in it. So we want to make sure we have the ability to not only produce enough flower for our retail facilities and our wholesale marketplace, but enough biomass so we can produce enough concentrates and oils and extracts, because that is one of the biggest drivers, edibles are one of the biggest drivers in the Nevada marketplace, because you can't smoke everywhere are edibles and vaporizing products because of the discretion associated with them.

So the Greenhouse expansion whether we build two or three acres will be significant for us to complement the indoor facility. So we will end up at the end of the day with an indoor facility, large scale Greenhouse facility and the production facility where we have an extreme amount of biomass and feedstock to be able to produce our concentrate brands.

So we are very well positioned in Nevada over some time, we have stuff coming online like I said at the next couple of months and then on the backbone of that it usually takes us about nine-months or so to build out a Greenhouse facility from our experience in New Jersey. And I think we can execute that extremely quickly on the cultivation side in Nevada as well.

Okay. Did Terra Tech suffer any losses as a result of damages from the recent wildfires in California?

No, fortunately we did not. We have our Craft Cultivator in Salinas, our Craft Cultivator in Humboldt, our facilities in Oakland.

We made a trip up there, it's heartbreaking what took place to a lot of these people. And this just ties into this frustration over our industry not having access to basic financial services whether it's banking, but in this situation more importantly insurance, crop insurance, facility insurance, umbrella policies.

There is a lot of these cultivators. Just so people understand how these people live their life.

They will literally dump their life savings into producing their crops, they will produce their crops. This is harvest season right now, they will reap the rewards of that, they will take the profits out, they will feed their family and they will reinvest the rest into the next year’s season.

These fires have affected not only the industry, but their homes and their residential neighborhoods and those types of things. So it was catastrophic for a lot of people in the industry across the Board, but again, it’s just one of those things to ties back into, this industry needs access and deserve access to fair and equitable financial services like every other business.

So it was a problem for a lot of people, fortunately we were not affected.

Okay. What is Terra Tech currently doing to help change both Federal and State laws regarding the legal use of both medical and recreational use of cannabis?

A huge line item for us from a corporate standpoint is our lobbing government affairs efforts both on the local levels, as well as the Federal level. So a lot of that just is a bifurcated approach, partially we work with legislators and regulators to understand the nuances over the industry, the operational hurdle, things that would make things more efficient, gross tax recites.

The things that are important to us is operator, so we can have longevity in the industry. As well as social equity programs and those types of things, minority program, really working with ragging your boots underground with legislators and regulators so they can adopt responsible legislation.

I have said this forever. Responsible legislation equals responsible business, responsible business equal good economics for their local communities.

And we just try to really repeat that through multiple channels and on a Federal standpoint as well. And then obviously we will leverage the media.

So when we talk to the media, we can’t repeat [indiscernible] those messages. So people can begin to understand, what our industries all about.

There is still a negative connotation that exists on the cannabis industry and it’s just been huge byproduct that dissemination or the misinformation campaign during the Say No to Drugs there. And we have got a little bit of that in today’s marketplace unfortunately.

But California coming online being fifth to six largest economy on the planet, the largest cannabis market in the world. It’s going not only be a significant economic bloom and a pivoting point for the industry.

But the data that’s going to come out of California is going to have a huge opportunity to really change the paradigm and the connotation associated with our industry. So UCI announced that they established with University of California [indiscernible] the UC System announced Interdisciplinary School of Research.

We are involved with that in addition they are putting together an incubator as well and so there are very entrenched on researching multiple aspects of the cannabis industry from economy and fiscal impact all the way to medical efficacy and everything in between. The importance of that is you have an un-bias research institute pushing information out of the industry based upon data that’s coming out of the California marketplace.

So you are going to see a tremendous amount of data over the next years to come out which I think will really reaffirm the positive stance of legalization, taxing, regulating, job creation, the economic benefits the fact that again this industry is unlike any other industry that exists out there. It’s American job, it is local job, it’s across the board, seed to sale, there is nothing get outsourced.

That is one of the most compelling arguments for American ingenuity that I have seen in my generation. And I think it’s just a matter of time before our legislators really begin to understand that and California will be a huge opportunity.

Okay. Has there been any thoughts into moving into New Jersey.

And if so, could you provide us with the future outlook for the states? Also has there been any thoughts about moving into the East Coast in anyway?

Yes, on Jersey, the last time I check Jersey is in the East Coast so yes to both of those. Within Jersey the Garden state and they have been under the leadership of Chris Christy right wrong or in different he wasn’t a fan of cannabis.

Murphy is a great leader he has a huge-huge appetite for legalization and developing the economics around that within the state. So we are absolutely 110% focused on establishing a significant footprint in New Jersey.

And if we can replicate what we have done in Nevada and California out there I think it's going to be a huge pivot point for the Company for top-line revenue and further expansion of brand recognition as well. So yes that's our primary motivation right now, I have said this is a billion times, we don’t want to jump in too many states, [indiscernible] state that I have to jump in even the team has to jump into here, we have got a develop a corporate office, we have to hire lobbyist, we have to hire attorneys, we have to put staff there, we have to have IT there.

All of that costs money, we have the biggest market in our backyard here in California, we have a [Indiscernible] in market 40 minutes away in a flight in Nevada and then we already have a significant infrastructure in New Jersey. So before we start jumping out and attacking all these others states, I want to make sure we grab the low hanging fruit off the tree and we do so effectively and efficiently.

So that's our next major market right now is Jersey, we are going to hit the ground running hard, we have already been doing work over the last few months there and we want to make sure that we again center ourselves apart, establish the significant infrastructure and then establish the IVXX and Blüm brands back to the East Coast.

And next question is the Company looking on potential M&A activities in California and Nevada, how about nationally?

Yes, all the above. Nevada we are capped out and especially in - county where there is a 10% [indiscernible].

My understanding is Nevada maybe issuing additional permits and those additional permits will only be open to existing M&A license holders which is great, so we can kind of keep pace with the market saturation in terms of our percentage ownership in the space. California again because of the regulations coming down the pipeline we think that's going to force a tremendous amount of M&A and consolidation activity.

We have kind of a unique benefit on top of most companies, obviously we have significant access to capital because of our S3 Shelf Registration but coupled with that we have liquidity in our stock, so the deal we did in Santa Ana was part cash, part stock. So we have got a huge opportunity to not only leverage our cash position or access to capital, but we have a huge opportunity to leverage our stock and bring people along for the ride and effect a successful M&A and strategy.

So we are heavily focused on M&A, we are heavily focused on more organic permitting processes here in Santa Ana. Our hope is that we walk out of additional permits on the cultivation side, so recreational as well as extraction before year-end and potentially another store front location, so we are excited about the products aspect to that as well.

But yes, heavily focused on M&A, California and Nevada nationally I will reiterate what I just said a minute ago, which is yes, but in New Jersey is our primary focused on the East Coast and then we will see where we want to go after that, but again we don’t want to get out over our skies and do a partial job in many locations, we would rather do an effective job in a handful of key locations.

Okay. Last question, with Constellation invested into canopy, do you foresee something like this happening in the U.S.?

So I said this in the media over the last three years and a lot of people don’t like to correlate those two markets together. But I never really thought it was going to be big tobacco coming into the marketplace.

If you look at [indiscernible] on big cannabis right. If you look at big alcohol, we share the same history of prohibition.

We share a very similar methodology with how manufacturing and distribution takes place, because its different mandated on the state level. We share a lot of similarities now into because of recreational why the product is consumed for recreational purposes.

In addition, we share tremendous amount of similarities on how this product is marketed with lifestyle brand type marketing being at the forefront. If I drink a corona, I feel like I'm on the beach and - you starting to see the cannabis industry that start focus on brand.

If I think of our Company I think of four pillars. Pillar number one, cultivation, I need flower.

Pillar number two, extraction, I need those alternate products that are becoming large parts of the market. Pillar number three, I need retail and wholesale distribution.

Pillar number four, brand identity and brand recognition, because we don't want to be a commodity provider. Commodity providers died, commodity providers disappeared.

We are putting a tremendous amount of effort in the brand recognition on the IVXX side, and a tremendous amount of brand recognition on the Blüm side. So you are going to see a fresh look on Blüm, you are going to see a lot of social media and that type of stuff that's done really around the lifestyle branding of what it means to shop and to be a consumer at Blüm.

So brand identity to me and brand penetration is one of the most important thing, that the beauty of the Las Vegas. We have a chance to showcase our retail and wholesale brands, not only to the entire country, to the entire world with 45 million people coming in and out of there.

So that's a really unique position to being in. And that's again tying back to this canopy growth things, is I didn't expect to see this quickly and of course we are seeing in Canada because they have the lack Federal lounge which we don't have down here.

But if you look at the economics of the transaction, they took it's call it a 10% stake for $200 million plus. They paid that $2 billion valuation for a Company that's doing $38.5 million which certainly has a tremendous amount of upside.

Canopy Growth is a great Company and so they made a very attractive investment. But it really gave us all an understanding of what we think is going to happen over the next several years.

So in a perfect world, we may actually be getting the economics and the lobbying power behind big alcohol though but not with the markets in United States. So again I'm not going to rush off to Canada, where our team is continue to build our infrastructure and our brands in the U.S.

we are going to try to penetrate as broadly and as effectively and as smart as we can. And then downstream, when this happens and it's not a matter in my perch it will happen, but now when it will happen, we want to make sure we are the stand out our Company amongst all other companies.

We are positioned for the NASDAQ and the NYSE, we have a strong balance sheet, we have significant economics and again most importantly to drive home significant brand recognition on our wholesale brands and our retail brands. If we can accomplish that, we will just wait for the puck to come to us.

And if that puck is big alcohol great, if that puck up standing alone on the [indiscernible] and continuing to build on our footprint, great. I want to make sure we have options, and we are very aggressive about this as a management team.

We are not doing this for practice, we are all on the same page, we all hold common share, we are in this to grow market cap at the end of the day. we have the issues shares now to create capital to go out and grab that market share.

But that's what we are waiting for all of us, all of us 400 shareholders that are listening to us today and the other 89,000 shareholders that we have ourselves included. We are in this for the future of what this will be when the Federal legalization that dynamic changes.

And you have institutional and retail capital chasing market opportunities. And there is not going to be a ton of them, and we want to make sure they look to us as the leader, as a very minimum one of the leaders.

So we are going to spend the next few years executing as fast and efficiently as we can and that's our promise and that's our focus as a Management team.

Okay. That's it for questions.

That's all you got?

Yes.

Okay. Again on behalf of the Board of Directors and behalf of the Officers of the Company and behalf of the 260 plus employees, on behalf of all the other people that are affiliated with the Company to 89,000 shareholders.

Thank you everybody for your support. Thank you for taking the time to listen to me blabber for an hour today.

We look forward to filing our K, we look forward to the implementation of recreational cannabis in California in 2018. Take care everyone.