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derekpeterson

Terra Tech Expands, Maintains Quality: A Q&A with CEO Derek Peterson

By Aaron G. Biros
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derekpeterson
derekpeterson
Derek Peterson, chief executive officer of Terra Tech

Terra Tech, with the recent acquisition of Blum, a dispensary in Oakland, and the line of concentrates, IVXX, is sweeping the cannabis industry by setting standards for safety and quality. Terra Tech, publicly traded in the Over-The-Counter market, is well known as an agricultural company, with the subsidiary brand, Edible Garden, selling produce to Whole Foods, Wal-Mart and Kroger’s. In December of last year, we covered Terra Tech’s entrance into the cannabis marketplace and their experience with large-scale, sustainable agriculture. We sit down with Derek Peterson, chief executive officer of Terra Tech, to get an update on their progress and quality controls.

CannabisIndustryJournal: In January, Terra Tech announced revenue guidance of $20-22 million for 2016. Can you share some of your strategy going forward to meet your goals?

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Terra Tech is taking organic and GFSI-certified agricultural practices to growing cannabis

Derek Peterson: We have always played both a long game as well as a short game, meaning while we are building our longer term business, like in Nevada, we are also focusing on short term accretive acquisitions, like we did with Blum in Oakland. We want to make sure we capture short-term revenue growth while we plan our future revenue production. We feel confident about achieving those results.

CIJ: How big of a role does the acquisition of Blum and IVXX brand expansion play in meeting those goals?

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The Oakland location of Blum dispensary

Derek: Blum is a significant factor even though we are only capturing three quarters of revenue considering we closed the deal on March 31st of this year. So for the full year of 2017 we will have growth from this level considering we will be able to report a full year of Blum revenue. IVXX presents us with the best opportunity for growth in the coming years. As the market in California and Nevada grows we can continue to expand our IVXX footprint throughout the state. Being able to wholesale to thousands of other retail facilities affords us a significant opportunity to grow our sales.

CIJ: How do you think the brand of Edible Garden positions you well for expansion in the cannabis industry? 

Poinsettias ready for distribution at Edible Garden facility in Belvidere, New Jersey
Produce ready for distribution at Edible Garden facility in Belvidere, New Jersey

Derek: One of the reasons we were so successful in the Nevada market was because regulators and legislators felt a high degree of confidence in our abilities considering we are USDA organic, Kosher and GFSI-certified. Our traditional agricultural experience has been very synergistic with our cannabis division from both an optics and operational perspective.

CIJ: Could you give us an update on progress in Medifarm LLC in Nevada? And on your distribution plan for IVXX in California?

IVXXconcentrates
IVXX concentrates

Derek: We are continuing to expand our IVXX line throughout the state and increasing our sales force. In addition we will continue to develop new products to distribute into our existing supply chain, like we just did with our new pre filled cartridge line.

We are opening our Decatur location in Las Vegas in early July and Reno and Desert Inn towards the end of August. Our cultivation and extraction facilities should be complete no later than January 2017. We will have our entire infrastructure in place if the recreational bill passes in Nevada this November.

Blum Las Vegas location will open in July
Blum Las Vegas location will open in July

CIJ: Tell us about the role of laboratory testing in your business.

Derek: Laboratories play a significant role, as they are becoming a mandated step in most new legislation around the company. Independent lab testing is extremely important to maintain safe access for consumers and patients. We work primarily with Steep Hill Labs and CW analytics.

CIJ: Can you expand on your integrated pest management and your growing practices?

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Platinum Cookies ready for packaging and labelling

Derek: Well we cannot say organic, however we do cultivate all naturally. We also cultivate traditional produce that we sell to major retailers. We are USDA organic-certified and we implement similar processes in our cannabis cultivation. Pest control is extremely challenging for any farmer but we rely primarily on bio control, meaning the good bugs eat the bad bugs. This has been very effective for us in the cultivation of all our products.

CIJ: How is your business different from the slew of other dispensaries and growers in California?

Consistency in quality standards requires meticulous SOPs
Consistency in quality standards requires meticulous SOPs

Derek: Service and consistency; we have over 42,000 registered patients and our operations team has over 19 years of experience in California. One of the reasons we have become one of the largest dispensaries in the state is because of that experience. In addition, consistency is extremely important. Consumers expect the same product in every other business and ours is no different. If they come in for our Platinum Cookies one month and the next month it has different characteristics you are going to lose patient confidence. So in the front of the house, we are focused on pairing patients’ needs with the correct product and in the back of the house we are focused on providing a meticulously cultivated product, produced at the highest standards.

CIJ: Can you delve into some of the processing for concentrates? How do you meet such rigorous quality standards?

IVXX processing
Extraction equipment in one of the processing facilities for IVXX

Derek: Through research and development, we have engineered a proprietary process in which our solvent profiles used under our proprietary conditions ensures solvent residual levels which are not detected by instrumentation at 3rd party testing agencies such as Steep Hill Labs. In addition, any good scientific method requires repetition and corroboration of results. In order to accomplish this we also rely on random routine testing in which we send out extracts out to other 3rd party testing labs. Proprietary conditions include, but are not limited to, heat, vacuum, agitation, etc. By utilizing the correct amalgamation of solvent profiles, extraction conditions, purging conditions, as well as rigorous quality control standards, we are able to ensure a product that is void of any residual solvents, without sacrificing potency or identity of the cannabinoids and terpenes. Cannabinoids and terpenes are of chief interest when extracting cannabis for patients so that they have access to these essential oils without any of the actual leaf and bud.

All solvents used are the highest grade available to us, which ensures a truly medical product for the patient. In addition, all of our extraction equipment is routinely cleaned and sterilized using medical grade cleaning agents.

From Produce to Cannabis: The Future of Indoor Agriculture

By Aaron G. Biros
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Throughout the United States, a majority of cannabis for medical and adult use is grown indoors, which requires a tremendous amount of energy and is generally inefficient. State regulators and cultivators alike are beginning to notice the benefits of greenhouse and outdoor-grown cannabis, primarily for energy efficiency and environmental sustainability.

Basil plants ready for packaging and shipping at the Edible Garden facility in Belvidere, New jersey
Basil plants ready for packaging and shipping at the Edible Garden facility in Belvidere, New jersey

Terra Tech, a publicly traded company, cultivates environmentally sustainable produce through its subsidiary, Edible Garden, in Belvidere, New Jersey. Utilizing Dutch hydroponic cultivation methods, integrated pest management and computer-controlled automation, Edible Garden grows certified organic herbs such as thyme and basil in their greenhouses in New Jersey.

Poinsettias ready for distribution at Edible Garden facility in Belvidere, New Jersey
Poinsettias ready for distribution at Edible Garden facility in Belvidere, New Jersey

Edible Garden is certified by the Global Food Safety Initiative (GFSI), which provides internationally recognized benchmarks and guidance for managing food safety and meeting standards. According to Ken VandeVrede, chief operating officer of Terra Tech, the company plans to take these cutting-edge practices and standards from cultivating produce to the cannabis industry to grow quality, sustainable and safe cannabis in states where it is currently legal.

The company is actively making its operations more environmentally sustainable via greenhouse cultivation, Dutch style hydroponics, shipping locally, and integrated pest management. “We plan on implementing guidance from our two years of GFSI certification and our organic certification along with all of our practices from the food side and bring them to cannabis; for us, it is just another plant,” says VandeVrede. With the help of computer automation, he says they can cultivate cannabis at the commercial scale, creating more homogeneity by removing human elements and utilizing environmental controls. Through computer automated blackout curtains in their greenhouses, they plan to minimize energy usage by using natural sunlight when possible.

“The procedures are very similar across industries so we are creating our own internal standards for cannabis cultivation,” says VandeVrede. “We are trying to be at the forefront of the industry and set the standard for growing cannabis, because right now, there are no standards in place.”

Mint plants ready for harvest at the Edible Garden greenhouse
Mint plants ready for harvest at the Edible Garden greenhouse

Terra Tech has already started its move into the cannabis industry via its subsidiary, IVXX LLC, which makes medical cannabis extracts for dispensaries in California. The company has also broken ground on cultivation and production facilities in Nevada and dispensaries in California, and submitted an application for licenses in Maryland. “Terra Tech is doing everything with vertical integration in mind; we will control the cultivation, bringing experience from our agricultural background to cultivate high quality and high yield cannabis, making oil and extracts with it to sell in our dispensaries,” adds VandeVrede.

Looking to the future of cannabis cultivation, Terra Tech’s plan is to keep environmental sustainability at top of mind. “As a company we are growing indoor, but moving toward greenhouse cultivation across the board”, says VandeVrede. “Our focus on expansion will be [include] greenhouse-grown cannabis, which is a lot more efficient, saving us money but more importantly reducing our overall carbon footprint.” With more companies adopting these sustainable farming practices, the industry might soon usher in a new era of environmentally friendly cannabis cultivation.