Terra Tech Corp. (OTCQX: TRTC) has ended a bitter lawsuit with former partner Heidi Loeb Hegerich by purchasing her stake in their dispensary in Reno.
Hegerich was a 50-50 partner with California-based Terra Tech in the Blüm dispensary that opened in 2017, but things ended acrimoniously between them. She accused the firm of fraud, conspiracy, elder abuse and other charges in an 80-page lawsuit filed at Washoe County District Court in November 2018.
She accused her former assistant of misleading her into joining a venture that provided little to no return on her investment. Hegerich said that Terra Tech skimmed funds and funnelled them into the company’s other ventures.
The company hit back, branding her claims “meritless” and “inaccurate” and arguing that the lawsuit and interviews she gave amounted to an attempt to manipulate Terra Tech into paying money she is not owed. It added that the real victims were the 120,000 shareholders in Terra Tech, who may have suffered losses as a result of her “spurious actions”.
Concluding the Lawsuit
The Nevada Department of Taxation has now approved it to purchase Hegerich’s stake in the business, concluding the lawsuit. Some have described it as a $6.3 million settlement with Loeb, but in a financial report to the U.S. Securities and Exchange Commission that it “is not an admission or acknowledgement of liability or responsibility on the part of the company in connection with the lawsuit”.
Instead it claims it is just purchasing the remainder of the business and that it is excited about its potential for future growth. “Since Nevada legalized adult use cannabis we have seen even stronger sales at Blüm Reno, and we are pleased to now have complete ownership and control over the dispensary as we continue to execute against our growth strategy for this location,” said chief executive Derek Peterson.
The Worst is Behind Us
However, Terra Tech has previously declared that its intention is to shift its focus away from Nevada and double down on California. Last month it agreed to sell one of its Blüm dispensaries, located just off the Las Vegas strip in Nevada, to Picksy LLC for $10 million.
It now has three in California and two in Nevada – another in Vegas and the Reno site, which it now fully owns. The proceeds from the sale to Picksy LLC will be channelled into its California operations and that remains the firm’s priority.
It recently commenced adult use sales at its dispensary in San Leandro and it has just launched a cannabis delivery service in a bid to boost sales throughout Orange County, California.
Revenue dropped by 12.5% in 2018 compared to the previous year and its net loss widened from $32.7 million to $39.8 million. Peterson branded it “a tough year”, as it was hit by regulatory headwinds in the Golden State and mired in controversy due to the lawsuit.
But he insists its prospects for future growth are strong, declaring that “the worst is behind us and the best is ahead”. The firm’s share price opened at $0.70 today, its highest position in the past week, giving it a market cap of $68 million. Peterson claims there is a sizeable disconnect between its current market value and its true value.
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