Benzinga | Jun 15, 2021 02:05PM EDT

Cannabis Co. Terra Tech To Sell $40M Worth Of Hydrofarm Shares, Aims To Complete Unrivaled And SilverStreak Solutions Acquisitions

Vertically integrated cannabis company Terra Tech Corp. (OTCQX: TRTC) confirmed Tuesday it will monetize its investment in Hydrofarm Holdings Group, Inc. (NASDAQ: HYFM), which would yield gross proceeds of around $40 million. The original investment in Hydrofarm from November 2018 amounted to $5 million.

"Since taking over as CEO, we have continued to review our operations, divest unproductive assets and drive appropriate cost reductions," Frank Knuettel, CEO of Terra Tech, stated. "As announced last week, we entered into a definitive agreement to sell our non-operating N. 4th Street property in Las Vegas, which resulted in a $900k improvement to our balance sheet and alleviated numerous costs associated with its ownership."

With the announced sale of Hydrofarm stock, the Santa Ana, California-based company will have added around $41 million to its balance sheet in just one month without dilution, Knuettel added.

The CEO went on to announce that the company also has a note receivable and puttable equity worth around $13 million, related to the sale of two Nevada dispensaries from last year. Those $13 million will likely be monetized in the coming twelve months.

With the improved capital, TerraTech plans to complete the acquisition of a multi-state cannabis operator Unrivaled on or about July 1st, and to close the transaction to acquire SilverStreak Solutions in the third or fourth quarter, Knuettel added.

The CEO further pointed out that TerraTech is open to future potential acquisitions as it aims to focus on "organic growth from existing assets," while expanding its outreach across California, Nevada and Oregon.

"I'm pleased to state that we believe the Company has never been on more stable financial footing than it is now. With this new strong foundation, we look forward to continued progress, always focusing on building sustainable shareholder value," Knuettel concluded.

Price Action

Terra Tech's shares were trading 1.76% higher at 29 cents per share at the time of writing.

Photo by Esteban Lopez on Unsplash