Unrivaled Brands (UNRVD) 10-Q 10 May 17 2017 Q1 Quarterly report Financial data

Document and Entity Information

Document and Entity Information - shares	3 Months Ended
	Mar. 31, 2017	May 05, 2017
Document And Entity Information
Entity Registrant Name	Terra Tech Corp.
Entity Central Index Key	1,451,512
Document Type	10-Q
Document Period End Date	Mar. 31, 2017
Amendment Flag	false
Current Fiscal Year End Date	--12-31
Is Entity a Well-known Seasoned Issuer	No
Is Entity a Voluntary Filer	No
Is Entity's Reporting Status Current	Yes
Entity Filer Category	Smaller Reporting Company
Entity Common Stock, Shares Outstanding		586,696,306
Document Fiscal Period Focus	Q1
Document Fiscal Year Focus	2,017

CONSOLIDATED BALANCE SHEETS

CONSOLIDATED BALANCE SHEETS - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Current Assets:
Cash	$ 10,252,700	$ 9,749,572
Accounts Receivable, Net	419,282	747,792
Inventory	2,117,857	1,909,330
Prepaid Expenses	1,860,612	704,721
Total Current Assets	14,650,451	13,111,415
Property, Equipment and Leasehold Improvements, Net	10,525,431	10,464,764
Intangible Assets, Net	23,197,573	23,627,098
Goodwill	28,921,260	28,921,260
Other Assets	282,987	54,193
TOTAL ASSETS	77,577,702	76,178,730
Current Liabilities:
Accounts Payable and Accrued Expenses	3,692,329	2,417,400
Derivative Liability	4,848,600	6,987,000
Short-Term Debt	505,000	564,324
Income Taxes Payable	615,830	615,830
Contingent Consideration	16,434,620	12,085,859
Total Current Liabilities	26,096,379	22,670,413
Long-Term Liabilities:
Long-Term Debt	1,706,378	1,354,352
Total Long-Term Liabilities	1,706,378	1,354,352
Total Liabilities	27,802,757	24,024,765
COMMITMENTS AND CONTINGENCIES
STOCKHOLDERS' EQUITY:
Common Stock, Par Value $0.001: 990,000,000 Shares Authorized as of March 31, 2017 and December 31, 2016; 577,022,942 Shares Issued and Outstanding as of March 31,2017; 553,863,812 Shares Issued and Outstanding as of December 31, 2016	577,023	553,864
Additional Paid-In Capital	133,004,724	124,915,182
Accumulated Deficit	(82,982,987)	(72,870,999)
Total Terra Tech Corp. Stockholders' Equity	50,636,186	52,634,873
Non-Controlling Interest	(861,241)	(480,908)
Total Stockholders' Equity	49,774,945	52,153,965
TOTAL LIABILITIES AND STOCKHOLDERS' EQUITY	77,577,702	76,178,730
Series A Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred Stock, Value
Series B Preferred Stock [Member]
STOCKHOLDERS' EQUITY:
Preferred Stock, Value	$ 37,426	$ 36,826

CONSOLIDATED BALANCE SHEETS (Pa

CONSOLIDATED BALANCE SHEETS (Parenthetical) - $ / shares	Mar. 31, 2017	Dec. 31, 2016
Stockholders' Equity
Common stock, par value	$ 0.001	$ 0.001
Common stock, Authorized	990,000,000	990,000,000
Common stock, Issued	577,022,942	553,863,812
Common stock, Outstanding	577,022,942	553,863,812
Series A Preferred Stock [Member]
Stockholders' Equity
Preferred stock, Par value	$ 0.001	$ 0.001
Preferred stock, Authorized	100	100
Preferred stock, Issued	100	100
Preferred stock, Outstanding	100	100
Series B Preferred Stock [Member]
Stockholders' Equity
Preferred stock, Par value	$ 0.001	$ 0.001
Preferred stock, Authorized	49,999,900	49,999,900
Preferred stock, Issued	37,425,953	36,825,953
Preferred stock, Outstanding	37,425,953	36,825,953

CONSOLIDATED STATEMENTS OF OPER

CONSOLIDATED STATEMENTS OF OPERATIONS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Consolidated Statements Of Operations
Total Revenues	$ 6,824,456	$ 1,548,167
Cost of Goods Sold	6,465,393	1,414,193
Gross Profit	359,063	133,974
Selling, General and Administrative Expenses	6,386,300	2,046,348
Loss from Operations	(6,027,237)	(1,912,374)
Other Income (Expense):
Amortization of Debt Discount	(610,616)	(94,406)
Loss on Extinguishment of Debt	(1,039,458)	(920,797)
Gain (Loss) on Fair Market Valuation of Derivatives	1,610,750	(1,160,700)
Interest Expense	(157,833)	(55,995)
Loss on Fair Market Valuation of Contingent Consideration	(4,348,761)
Total Other Income (Expense)	(4,545,918)	(2,231,898)
Loss Before Provision for Income Taxes	(10,573,155)	(4,144,272)
Provision for Income Taxes
Net Loss	(10,573,155)	(4,144,272)
Net Loss Attributable to Non-Controlling Interests	461,167	18,208
NET LOSS ATTRIBUTABLE TO TERRA TECH CORP.	$ (10,111,988)	$ (4,126,064)
Net Loss Per Common Share Attributable to Terra Tech Corp. Common Stockholders - Basic and Diluted	$ (0.02)	$ (0.01)
Weighted-Average Number of Common Shares Outstanding – Basic and Diluted	567,271,642	326,500,982

CONSOLIDATED STATEMENT OF CASH

CONSOLIDATED STATEMENT OF CASH FLOWS (UNAUDITED) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
CASH FLOWS FROM OPERATING ACTIVITIES:
Net Loss	$ (10,111,988)	$ (4,126,064)
Adjustments to Reconcile Net Loss to Net Cash Used in Operating Activities:
Loss (Gain) on Fair Market Valuation of Derivatives	(1,610,750)	1,160,700
Loss on Fair Market Valuation of Contingent Consideration	4,348,761
Loss on Extinguishment of Debt	1,039,458	920,797
Amortization of Debt Discount	610,616	94,406
Depreciation and Amortization	892,598	161,349
Warrants Issued With Common Stock and Debt	107,035
Stock Issued for Interest Expense	129,639
Stock Issued for Compensation	1,061,506
Stock Issued for Director Fees	37,500
Stock Issued for Services	145,011	60,550
Stock Option Expense	47,589	47,589
Change in Allowance for Doubtful Accounts		(6,659)
Changes in Operating Assets and Liabilities:
Accounts Receivable	328,510	(55,413)
Inventory	(208,527)	(310,991)
Prepaid Expenses	(1,155,891)	127,862
Other Assets	(228,795)	3,892
Accounts Payable and Accrued Expenses	1,274,929	265,177
NET CASH USED IN OPERATING ACTIVITIES	(3,292,799)	(1,656,805)
CASH FLOWS FROM INVESTING ACTIVITIES:
Purchase of Property, Equipment and Leasehold Improvements	(523,740)	(770,203)
Purchase of Intangible Assets – Domain Names		(50,000)
NET CASH USED IN INVESTING ACTIVITIES	(523,740)	(820,203)
CASH FLOWS FROM FINANCING ACTIVITIES:
Proceeds from Issuance of Notes Payable	3,000,000
Proceeds from Issuance of Common Stock	1,700,000	3,208,134
Net Loss Attributable to Non-Controlling Interest	(461,167)	(18,208)
Cash Contribution from Non-Controlling Interest	80,834
NET CASH PROVIDED BY FINANCING ACTIVITIES	4,319,667	3,189,926
NET CHANGE IN CASH	503,128	712,918
Cash at Beginning of Period	9,749,572	418,082
CASH AT END OF PERIOD	10,252,700	1,131,000
SUPPLEMENTAL DISCLOSURE FOR OPERATING ACTIVITIES:
Cash Paid for Interest		9,000
SUPPLEMENTAL DISCLOSURE FOR FINANCING ACTIVITIES:
Derivative Debt Converted into Equity	2,770,650
Issuance of Common Stock for Debt and Interest Expense	$ 3,688,963

DESCRIPTION OF BUSINESS

DESCRIPTION OF BUSINESS	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 1. DESCRIPTION OF BUSINESS	Organization References in the notes to unaudited consolidated financial statements to “the Company”, “Terra Tech”, “we”, “us”, or “our” are intended to mean Terra Tech Corp., individually, or as the context requires, collectively with its subsidiaries on a consolidated basis. Through MediFarm, LLC, a Nevada limited liability company (“MediFarm”), MediFarm I, LLC, a Nevada limited liability company (“MediFarm I”), and MediFarm II, LLC, a Nevada limited liability company (“MediFarm II”), subsidiaries in which the Company owns interests, the Company operates and/or plans to operate medical marijuana dispensary facilities, cultivation, and production facilities in Nevada. Through IVXX, LLC, a Nevada limited liability company (“IVXX LLC”), and IVXX, Inc., a California corporation (“IVXX Inc.”; together with IVXX LLC, “IVXX”), the Company’s wholly-owned subsidiary, the Company produces and sells a line of cannabis flowers, as well as a line of cannabis pure concentrates. Most recently, the Company formed another wholly-owned subsidiary, MediFarm I Real Estate, LLC, a Nevada limited liability company (“MediFarm I RE”), which owns the real property on which a medical marijuana dispensary will be constructed. The dispensary will be operated by MediFarm I. Through Black Oak Gallery, we operate a medical marijuana retail dispensary, a medical marijuana cultivation facility, and have a second medical marijuana cultivation facility in the early stages of construction, all in Oakland, California. The Company is a wholesale seller of locally grown hydroponic produce, herbs and floral products through its wholly-owned subsidiary, Edible Garden Corp., a Nevada corporation (“Edible Garden”). On April 1, 2016, the Company acquired Black Oak Gallery, a California corporation (“Black Oak”). Black Oak operates a medical marijuana retail dispensary in Oakland, California under the name Blüm, pursuant to that certain Agreement and Plan of Merger, dated December 23, 2015 (the “Merger Agreement”), with Generic Merger Sub, Inc., a California corporation and our wholly-owned subsidiary (the “Merger Sub”), and Black Oak. Since the Merger was completed on April 1, 2016, Black Oak’s financial results are not included in our unaudited consolidated financial statements for the three months ended March 31, 2016.

SUMMARY OF SIGNIFICANT ACCOUNTI

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES	Basis of Presentation The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Terra Tech’s annual report on Form 10-K for the year ended December 31, 2016. Non-Controlling Interest Non-controlling interest is shown as a component of shareholders’ equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations. Use of Estimates The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates. Inventory We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its current estimated net realizable value (“NRV”). ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”, Property, Equipment and Leasehold Improvements Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: 32 years for buildings; three to eight years for furniture and equipment; and the shorter of the estimated useful life or the underlying lease term for leasehold improvements. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred. Goodwill Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired and liabilities assumed in a business acquisition. Goodwill is not amortized for accounting purposes. We review the goodwill allocated to each of our reporting units for possible impairment annually on August 1 and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform a two-step impairment test. If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment, which is the first step of the two-step impairment test. In the two-step impairment test, we measure the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit. Intangibles Intangible assets are stated at historical cost and amortized over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 5 to 12 Years Trade Names 2 to 8 Years Dispensary License 14 Years Patent 2 Years We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Intangible assets that have indefinite useful lives are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the reporting unit exceeds its fair value. Impairment of Long-Lived Assets We have adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification (“ASC”) for our long-lived assets. Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives. Other Assets Other assets are comprised primarily of security deposits for leased properties in California, Nevada and New Jersey. The deposits will be returned at the end of the lease term. Revenue Recognition We recognize revenue in accordance with ASC 605, “Revenue Recognition,” Cannabis Dispensary, Cultivation and Production We recognize revenue from manufacturing and distribution product sales and upon transfer of title and risk to the customer, which occurs either at shipping (F.O.B. terms) or upon sell through depending on the arrangement. Revenue from our retail dispensaries is recognized net of discounts, rebates, promotional adjustments, price adjustments and returns, and net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Revenue is recorded upon transfer of title and risk to the customer which occurs at the time customers take delivery of our products at our retail dispensaries. Upon purchase, we have no further performance obligations and collection is assured as sales are paid for at time of purchase. Revenue related to the sale of consignment inventory is not recognized until the product is pulled from inventory and sold directly to end-customers. We recognize revenue from the sale of consignment inventory on a gross basis, as we have determined that: 1) we are the primary obligor to the customer; 2) we have latitude in establishing the sales prices and profit margins of our products; 3) we have discretion in selecting our suppliers; 4) we are responsible for loss or damage to consigned inventory; and 5) our customer validation process performs an important part of the process of providing such products to authorized customers. We believe that these factors outweigh the fact that we do not have title to the consigned inventory prior to its sale. Herbs and Produce Products We recognize revenue from products grown in our greenhouses and sold net of discounts, rebates, promotional adjustments, price adjustments, and estimated returns and upon transfer of title and risk to the customer, which occurs at shipping (F.O.B. terms). Upon shipment, we have no further performance obligations, selling price is fixed, and collection is reasonably assured. Cost of Goods Sold Cannabis Dispensary, Cultivation and Production Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, other expenses for services, and allocated overhead. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. It also includes the cost incurred in producing the oils, waxes, shatters, and clears sold by IVXX. Herbs and Produce Products Cost of goods sold are for the plants grown, packaging, other supplies and in addition to purchased plants which are sold into the retail marketplace by Edible Garden. Other expenses include freight, allocations of rent, utilities and repairs and maintenance. Stock-Based Compensation The Company accounts for its stock-based awards in accordance with ASC subtopic 718-10, “Compensation,” Warrants ASC 815-40, “Contracts in Entity’s Own Equity” ASC 815, “Derivatives and Hedging” Research and Development Research and development costs are expensed as incurred. Income Taxes We provide for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have incurred net operating losses for financial-reporting and tax-reporting purposes. At March 31, 2017 and December 31, 2016, such net operating losses were offset entirely by a valuation allowance. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations. Loss Per Common Share Net loss per share is computed in accordance with the provisions of ASC 260, “Earnings Per Share,” Fair Value of Financial Instruments We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 – Level 2 – Level 3 – In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. We have not elected the fair value option for any eligible financial instruments. Recently Issued Accounting Standards FASB ASU 2017-04 (Topic 350), “Intangibles - Goodwill and Others” FASB ASU No. 2016-02 (Topic 842), “Leases” FASB ASU No. 2014-09 (Topic 606), “Revenue from Contracts with Customers” “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” “Principal versus Agent Considerations (Reporting Gross versus Net),” “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” “Narrow-Scope Improvements and Practical Expedients”

CONCENTRATIONS OF BUSINESS AND

CONCENTRATIONS OF BUSINESS AND CREDIT RISK	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 3. CONCENTRATIONS OF BUSINESS AND CREDIT RISK	The Company maintains cash balances in several financial institutions that are insured by the Federal Deposit Insurance Corporation up to certain federal limitations. At times, the Company’s cash balance exceeds these federal limitations. The Company provides credit in the normal course of business to customers located throughout the U.S. The Company performs ongoing credit evaluations of its customers and maintains allowances for doubtful accounts based on factors surrounding the credit risk of specific customers, historical trends, and other information.

INVENTORY

INVENTORY	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 4. INVENTORY	Raw materials consist of Edible Garden’s herb product lines and IVXX’s line of cannabis pure concentrates. Work-in-progress consists of live plants grown for Edible Garden’s herb product lines, live plants grown at Black Oak, and IVXX’s line of cannabis pure concentrates. Finished goods consists of IVXX’s line of cannabis packaged products to be sold into dispensaries, and Edible Gardens products to be sold via food, drug, and mass channels. Cost of goods sold is calculated using the average costing method. The Company reviews its inventory periodically to determine net realizable value. The Company writes down inventory, if required, based on forecasted demand. These factors are impacted by market and economic conditions, new products introductions, and require estimates that may include uncertain elements. As of March 31, 2017 and December 31, 2016, inventory consisted of the following: March 31, 2017 December 31, 2016 Raw Materials $ 453,442 $ 486,119 Work-in-Progress 740,877 570,145 Finished Goods 923,538 853,066 Total Inventory $ 2,117,857 $ 1,909,330

PROPERTY, EQUIPMENT AND LEASEHO

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 5. PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS	As of March 31, 2017 and December 31, 2016, property, equipment and leasehold improvements at cost, less accumulated depreciation, consisted of the following: March 31, 2017 December 31, 2016 Land and Building $ 1,454,124 $ 1,454,124 Furniture and Equipment 3,326,103 3,141,244 Computer Hardware and Software 435,093 396,479 Leasehold Improvements 8,328,059 8,027,792 Subtotal 13,543,379 13,019,639 Less Accumulated Depreciation (3,017,948 ) (2,554,875 ) Property, Equipment and Leasehold Improvements, Net $ 10,525,431 $ 10,464,764 Depreciation expense related to property, equipment and leasehold improvements for the three months ended March 31, 2017 and 2016 was $463,073 and $150,729, respectively.

INTANGIBLE ASSETS

INTANGIBLE ASSETS	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 6. INTANGIBLE ASSETS	As of March 31, 2017 and December 31, 2016, intangible assets consisted of the following: March 31, 2017 December 31, 2016 Estimated Useful Life in Years Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Amortized Intangible Assets: Customer Relationships 5 to 12 $ 8,960,700 $ (999,744 ) $ 7,960,956 $ 8,960,700 $ (780,960 ) $ 8,179,740 Trade Brands and Patent 2 to 8 498,598 (118,409 ) 380,189 498,598 (91,061 ) 407,537 Dispensary License 14 10,270,000 (733,572 ) 9,536,428 10,270,000 (550,179 ) 9,719,821 Total Amortized Intangible Assets 19,729,298 (1,851,725 ) 17,877,573 19,729,298 (1,422,200 ) 18,307,098 Unamortized Intangible Assets: Trade Name Indefinite 5,320,000 – 5,320,000 5,320,000 – 5,320,000 Total Unamortized Intangible Assets 5,320,000 – 5,320,000 5,320,000 – 5,320,000 Total Intangible Assets $ 25,049,298 $ (1,851,725 ) $ 23,197,573 $ 25,049,298 $ (1,422,200 ) $ 23,627,098 Intangible assets with finite lives are amortized over their estimated useful lives. We recorded amortization expense of $429,525 and $10,620 for the three months ended March 31, 2017 and 2016, respectively.

ACCOUNTS PAYABLE AND ACCRUED EX

ACCOUNTS PAYABLE AND ACCRUED EXPENSES	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 7. ACCOUNTS PAYABLE AND ACCRUED EXPENSES	As of March 31, 2017 and December 31, 2016, accounts payable and accrued expenses consisted of the following: March 31, 2017 December 31, 2016 Accounts Payable $ 2,155,895 $ 1,986,907 Sales Tax Payable 1,008,479 122,470 Accrued Interest Payable 124,827 96,633 Accrued Expenses 403,128 211,390 Total Accounts Payable and Accrued Expenses $ 3,692,329 $ 2,417,400

NOTES PAYABLE

NOTES PAYABLE	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 8. NOTES PAYABLE	As of March 31, 2017 and December 31, 2016, notes payable consisted of the following: March 31, 2017 December 31, 2016 Unsecured promissory demand notes issued to an accredited investor, which bear interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. $ 5,000 $ 64,324 Convertible promissory note dated December 14, 2015, issued to accredited investors, which matured December 13, 2016 and bears interest at a rate of 12% per annum. The holder of the note extended the maturity to December 13, 2017. The conversion price is $0.1211, subject to adjustment. 500,000 500,000 Senior convertible promissory note dated October 28, 2016, issued to accredited investors, which matures April 28, 2018 and bears interest at a rate of 1% per annum. The conversion price is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. – 102,582 Senior convertible promissory note dated November 1, 2016, issued to accredited investors, which matures May 1, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.35, subject to adjustment. 53,539 31,615 Senior convertible promissory note dated December 16, 2016, issued to accredited investors, which matures June 16, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.27, subject to adjustment. 743,841 1,220,155 Senior convertible promissory note dated February 23, 2017, issued to accredited investors, which matures August 22, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.25, subject to adjustment. 908,998 – Total Debt 2,211,378 1,918,676 Less Short-Term Portion 505,000 564,324 Long-Term Portion $ 1,706,378 $ 1,354,352 As of March 31, 2017 and December 31, 2016, total debt was $2,211,378 and $1,918,676, respectively, which included unamortized debt discount of $3,443,622 and $4,295,648, respectively. The senior secured promissory notes are secured by shares of common stock. There was accrued interest payable of $124,827 and $96,633 as of March 31, 2017 and December 31, 2016, respectively. Securities Purchase Agreement Dated February 22, 2017 and 12% Senior Convertible Promissory Note Due August 22, 2018 On February 22, 2017, the Company entered into a Securities Purchase Agreement (the “Purchase Agreement”) with an accredited investor (the “Purchaser”) pursuant to which the Company sold to the Purchaser a 12% Senior Convertible Promissory Note due August 22, 2018 (the “Note”) in the principal amount of $3,000,000 for a purchase price of $3,000,000 (the “Offering”). There were no fees or expenses deducted from the net proceeds received by the Company in the Offering. The Note and the shares of the Company’s common stock, par value $0.001 per share (the “Common Stock”) issuable upon conversion of the Note (the “Conversion Shares”) are collectively referred to herein as the “Securities.” All principal and interest due and owing under the Note is convertible into shares of Common Stock at any time at the election of the holder at a conversion price per share equal to the lower of (i) $0.2495 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (the “Conversion Price”), which Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection. The Company accounts for debt discount according to ASC 470-20 Debt With Conversion And Other Options Convertible Note In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) day’s notice, that the holder convert the Note at the Conversion Price. The Company may prepay in cash any portion of the outstanding principal amount of the Note and any accrued and unpaid interest by, upon ten (10) days’ written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of the Note; (ii) 115% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of the Note; or (iii) 125% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of the Note.

CONTINGENT CONSIDERATION LIABIL

CONTINGENT CONSIDERATION LIABILITY	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 9. CONTINGENT CONSIDERATION LIABILITY	The Company accounts for “contingent consideration” according to FASB ASC 805, “Business Combinations” In the acquisition of Black Oak Gallery, the Company valued the contingent consideration based on an analysis using a cash flow model to determine the expected contingent consideration payment, which model determined that the aggregate expected contingent consideration liability was $15,305,463 and the present value of the contingent consideration liability was $12,754,553. Accordingly, the Company recognized at April 1, 2016, the closing date of the Black Oak merger, a $12,754,553 contingent consideration liability associated with the contingent consideration paid pursuant to the Merger Agreement. On April 1, 2017, the anniversary date of the acquisition, as well as the settlement date of the contingent consideration, the final contingent consideration was $16,434,620, or approximately $1.1 million greater than the expected contingent consideration liability of $15,305,463 which the Company estimated on April 1, 2016, the closing date of the Black Oak acquisition. At March 31, 2017 and December 31, 2016, the total contingent consideration based upon the analysis using the cash flow model to determine the expected contingent consideration payment was $16,434,620 and $12,085,858, respectively, a difference of approximately $4.3 million. The increase was primarily due to i.) revisions in the estimated probability that the upper threshold of $16,667,000 of the revenue target component of the contingent consideration would be met, which revenue target was met as of April 1, 2017, and ii.) the change in the quoted price of the underlying shares of the Company’s common stock which change affected the number of shares to be issued pursuant to the contingent consideration. Changes in the fair market valuation of contingent consideration are recognized in the consolidated statements of operations. For the three months ended March 31, 2017, the change in the fair market valuation of contingent consideration was $4,348,761 which amount reflects the final settlement of the change in fair value of the Contingent Consideration liability. See “Note 10 – Fair Value Measurements” See “Note 16 – Subsequent Events”

FAIR VALUE MEASUREMENTS

FAIR VALUE MEASUREMENTS	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 10. FAIR VALUE MEASUREMENTS	Financial Assets and Liabilities Measured at Fair Value on a Recurring Basis The following tables set forth the financial liabilities measured at fair value on a recurring basis by level within the fair value hierarchy as of the dates indicated: Fair Value at March 31, Fair Value Measurement Using Description 2017 Level 1 Level 2 Level 3 Derivative Liabilities – Conversion Feature $ 4,848,600 $ – $ – $ 4,848,600 Liability – Contingent Consideration 16,434,620 – – 16,434,620 $ 21,283,220 $ – $ – $ 21,283,220 Fair Value at December 31, Fair Value Measurement Using Description 2016 Level 1 Level 2 Level 3 Derivative Liabilities – Conversion Feature $ 6,987,000 $ – $ – $ 6,987,000 Liability – Contingent Consideration 12,085,859 – – 12,085,859 $ 19,072,859 $ – $ – $ 19,072,859 No financial assets were measured on a recurring basis as of March 31, 2017 and December 31, 2016. The following table presents a reconciliation of the derivative liabilities measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2017 and 2016: Balance at December 31, 2016 $ 6,987,000 Change in Fair Market Value of Conversion Feature (1,610,750 ) Derivative Debt Converted into Equity (2,770,650 ) Issuance of Debt Instruments with Derivatives 2,243,000 Balance at March 31, 2017 $ 4,848,600 The following table presents a reconciliation of the Contingent Consideration liability measured at fair value on a recurring basis using significant unobservable inputs (Level 3) for the three months ended March 31, 2017: Balance at December 31, 2016 $ 12,085,859 Change in Fair Market Valuation of Contingent Consideration 4,348,761 Balance at March 31, 2017 $ 16,434,620 Non-Financial Assets Measured at Fair Value on a Non-Recurring Basis Non-financial assets, such as property, equipment and leasehold improvements, goodwill, and intangible assets, are required to be measured at fair value only when an impairment loss is recognized. The Company did not record an impairment charge related to these assets during the three months ended March 31, 2017 and 2016.

INCOME TAXES

INCOME TAXES	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 11. INCOME TAXES	For the three months ended March 31, 2017 and 2016, the Company had no income tax expense (benefit). As of March 31, 2017 and December 31, 2016, the components of deferred income tax assets and deferred income tax liabilities consisted of the following: March 31, 2017 December 31, 2016 Deferred Income Tax Assets: Allowance for Bad Debt $ – $ – Warrants Expense 4,523,171 4,186,000 Derivatives Expense 5,958,719 4,067,000 Net Operating Losses 16,763,194 15,242,000 Deferred Income Tax Liabilities: Depreciation (1,467,893 ) (1,334,000 ) Total 25,777,191 22,161,000 Valuation Allowance (25,777,191 ) (22,161,000 ) Net Deferred Tax Liabilities $ – $ – For the three months ended March 31, 2017 and 2016, certain of the Company’s subsidiaries produced and sold cannabis or cannabis pure concentrates, subjecting the Company to the limits of IRC Section 280E. Pursuant to IRC Section 280E, the Company is allowed only to deduct expenses directly related to sales of product. Permanent differences include ordinary and necessary business expenses deemed by the Company as a non-allowable deduction under IRC Section 280E, and tax deductions related to equity compensation that are less than the compensation recognized for financial reporting. As of March 31, 2017 and December 31, 2016, the Company had net operating loss carryforwards of approximately $37,885,008 and $34,940,000, respectively, which, if unused, will expire beginning in the year 2034. These tax attributes are subject to an annual limitation from equity shifts, which constitute a change of ownership as defined under Internal Revenue Code (“IRC”) Section 382, which will limit their utilization. The Company has yet to assess the effect of these limitations, but expects these losses to be substantially limited. Accordingly, the Company has placed a reserve against any assets associated with these losses. The Company files income tax returns in the U.S. federal jurisdiction and various state and local jurisdictions. All tax years from 2012 to 2016 are subject to examination. Management assesses the available positive and negative evidence to estimate if sufficient future taxable income will be generated to use the existing deferred tax assets. A significant piece of objective negative evidence evaluated was the cumulative losses incurred through the period ended March 31, 2017. Such objective evidence limits the ability to consider other subjective evidence, such as our projections for future growth. On the basis of this evaluation, as of March 31, 2017, a valuation allowance has been recorded against all deferred tax assets as these assets are more likely than not to be unrealized. The amount of the deferred tax asset considered realizable, however, could be adjusted if estimates of future taxable income during the carryforward period are reduced or increased or if objective negative evidence in the form of cumulative losses is no longer present and additional weight may be given to subjective evidence such as our projections for growth.

EQUITY

EQUITY	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 12. EQUITY	Preferred Stock Series A Preferred Stock is convertible on a one-for-one basis into common stock and has all of the voting rights of the Company’s common stock. Each share of Series B Preferred Stock: (i) is entitled to 100 votes for each share of common stock into which a share of Series B Preferred Stock is convertible and (ii) is convertible, at the option of the holder, on a 1-for-5.384325537 basis, into shares of the Company’s common stock. During the three months ended March 31, 2017, the Company issued 600,000 shares of Series B preferred stock for compensation in the amount of $1,035,406. Common Stock During the three months ended March 31, 2017, senior secured convertible promissory notes and accrued interest in the amount of $3,688,963 were converted into 16,281,088 shares of common stock. During the three months ended March 31, 2017, the Company sold 6,185,395 shares of common stock for the net amount of $1,700,000 pursuant to an equity financing facility with an accredited investor. During the three months ended March 31, 2017, the Company issued 125,000 shares of common stock for director fees in the amount of $37,500, issued 467,647 shares of common stock for services performed in the amount of $145,011 and issued 100,000 shares of common stock for compensation in the amount of $26,100. During the three months ended March 31, 2016, senior secured convertible promissory notes and accrued interest in the amount of $961,740 were converted into 13,906,149 shares of common stock. During the three months ended March 31, 2016, the Company sold 25,715,674 shares of common stock for the net amount of $3,208,134 pursuant to an equity financing facility with an accredited investor. Stock-Based Compensation Expense A summary of stock based compensation for the three months ended March 31, 2017 and 2016 is as follows: March 31, 2017 March 31, 2016 Type of Award Number of Shares or Options Granted Stock-Based Compensation Expense Number of Shares or Options Granted Stock-Based Compensation Expense Stock Options – $ 47,589 6,700,000 $ 47,589 Stock Grants: Employees (Common Stock) 100,000 26,100 – – Employees (Series B Preferred Stock) 600,000 1,035,406 – – Directors (Common Stock) 125,000 37,500 350,000 60,550 Non-Employee Consultants (Common Stock) 467,647 145,011 – – Total Stock-Based Compensation Expense 1,292,647 $ 1,291,606 7,050,000 $ 108,139

OPERATING LEASE COMMITMENTS

OPERATING LEASE COMMITMENTS	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 13. OPERATING LEASE COMMITMENTS	The Company leases certain business facilities under operating lease agreements that specify minimum rentals. Many of these have renewal provisions. The Company’s net rent expense for the three months ended March 31, 2017 and 2016 was $314,813 and $133,867, respectively.

SEGMENT INFORMATION

SEGMENT INFORMATION	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 14. SEGMENT INFORMATION	The Company’s operating and reportable segments are currently organized around the following products that it offers as part of its core business strategy: · 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 These two reportable segments, which are described in greater detail below, had previously been reported on a combined basis as they had been operated and evaluated as one operating segment. The Company experienced significant growth over the last year in most of our product areas. As the Company has grown organically, and as the Company previously added to its capabilities through acquisitions, its products have increased in scale and become more strategically important and distinctly organized and managed under these two groupings. In addition, Derek Peterson, the Company’s Chief Operating Decision Maker (“CODM”), has begun reviewing results and managing and allocating resources between these two strategic business groupings, and has begun budgeting using these business segments. The Company’s CODM reviews revenues including intersegment revenues, gross profit and operating income (loss) before income taxes when evaluating segment performance and allocating resources to each segment. Accordingly, intersegment revenue is included in the segment revenues presented in the tables below and is eliminated from revenues and cost of sales in the “Eliminations and Other” column. The “Eliminations and Other” column also includes various income and expense items that the Company does not allocate to its operating segments. These income and expense amounts include the results of the Company’s hydroponic equipment, which are not material, interest income, interest expense, corporate overhead, and corporate-wide expense items such as legal and professional fees as well as expense items for which we have not identified a reasonable basis for allocation. The accounting policies of the reportable segments are the same as those described in Note 2 of the Notes to the Consolidated Financial Statements. Herbs and Produce Products Either independently or in conjunction with third parties, we are a retail seller of locally grown hydroponic herbs, produce, and floral products, which are distributed through major grocery stores throughout the East 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 dispensaries, medical marijuana cultivation and production facilities in California and Nevada. We own real property in Nevada on which we plan to build a medical marijuana dispensary. All of our retail dispensaries in California and Nevada offer a broad selection of medical cannabis products including flowers, concentrates and edibles. We also produce and sell a line of medical cannabis flowers, as well as a line of medical cannabis-extracted products, which include concentrates, cartridges, vape pens and wax products. Summarized financial information concerning the Company’s reportable segments is shown in the following tables. Total asset amounts at March 31, 2017 and 2016, exclude intercompany receivable balances eliminated in consolidation. Three Months Ended March 31, 2017 Herbs and Produce Products Cannabis Dispensary, Cultivation and Production Eliminations and Other Total Total Revenues $ 917,143 $ 5,887,038 $ 20,275 $ 6,824,456 Cost of Goods Sold 969,815 5,495,578 - 6,465,393 Gross Profit (52,672 ) 391,460 20,275 359,063 Selling, General and Administrative Expenses 659,063 2,627,005 3,100,232 6,386,300 Loss from Operations (711,735 ) (2,235,545 ) (3,079,957 ) (6,027,237 ) Other Expense: Amortization of Debt Discount - - (610,616 ) (610,616 ) Loss on Extinguishment of Debt - - (1,039,458 ) (1,039,458 ) Loss on Fair Market Valuation of Derivatives - - 1,610,750 1,610,750 Interest Income (Expense) - - (157,833 ) (157,833 ) Loss on Fair Market Valuation of Contingent Consideration - (4,348,761 ) - (4,348,761 ) Total Other Expense - (4,348,761 ) (197,157 ) (4,545,918 ) Loss Before Provision for Income Taxes $ (711,735 ) $ (6,584,306 ) $ (3,277,114 ) $ (10,573,155 ) Total Assets at March 31, 2017 $ 7,133,499 $ 59,367,012 $ 11,077,191 $ 77,572,702 Three Months Ended March 31, 2016 Herbs and Produce Products Cannabis Dispensary, Cultivation and Production Eliminations and Other Total Total Revenues $ 1,401,443 $ 130,203 $ 16,521 $ 1,548,167 Cost of Goods Sold 1,200,932 213,261 – 1,414,193 Gross Profit 200,511 (83,058 ) 16,521 133,974 Selling, General and Administrative Expenses 518,652 202,136 1,325,560 2,046,348 Loss from Operations (318,141 ) (285,194 ) (1,309,039 ) (1,912,374 ) Other Expense: Amortization of Debt Discount - - (94,406 ) (94,406 ) Loss on Extinguishment of Debt - - (920,797 ) (920,797 ) Gain on Fair Market Valuation of Derivatives - - (1,160,700 (1,160,700 ) Interest Expense - - (55,995 ) (55,995 ) Total Other Expense - - (2,231,898 ) (2,231,898 ) Loss Before Provision for Income Taxes $ (318,141 ) $ (285,194 ) $ (3,540,937 ) $ (4,144,272 ) Total Assets at March 31, 2016 $ 6,667,866 $ 2,734,868 $ 2,750,386 $ 12,153,120

LITIGATION AND CLAIMS

LITIGATION AND CLAIMS	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 15. LITIGATION AND CLAIMS	The Company is the subject of lawsuits and claims arising in the ordinary course of business from time to time. The Company reviews any such legal proceedings and claims on an ongoing basis and follows appropriate accounting guidance when making accrual and disclosure decisions. The Company establishes accruals for those contingencies where the incurrence of a loss is probable and can be reasonably estimated, and it discloses the amount accrued and the amount of a reasonably possible loss in excess of the amount accrued, if such disclosure is necessary for the Company’s financial statements to not be misleading. To estimate whether a loss contingency should be accrued by a charge to income, the Company evaluates, among other factors, the degree of probability of an unfavorable outcome and the ability to make a reasonable estimate of the amount of the loss. The Company does not record liabilities when the likelihood that the liability has been incurred is probable, but the amount cannot be reasonably estimated. Based upon present information, the Company determined that there were no matters that required an accrual as of March 31, 2017, nor were there any asserted or unasserted material claims for which material losses are reasonably possible.

SUBSEQUENT EVENTS

SUBSEQUENT EVENTS	3 Months Ended
	Mar. 31, 2017
Notes to Financial Statements
Note 16. SUBSEQUENT EVENTS	Put on Equity Financing Facility In the second quarter of 2017, the Company sold 3,689,701 shares of common stock for the net amount of $750,000 pursuant to an equity financing facility with an accredited investor. Debt and Interest Converted into Equity During the second quarter of 2017, senior secured convertible promissory notes and accrued interest in the amount of $1,267,537 was converted into 6,060,886 shares of common stock. Black Oak Gallery Contingent Consideration Liability Subsequent to the quarter ended March 31, 2017, the Company is required to release from escrow common stock equivalent of approximately 18,090,000 shares of its common stock and make a cash payment of $2,088,000 in connection with the Black Oak Gallery acquisition and the associated contingent consideration liability. Common stock equivalent of approximately 32,336,000 shares were clawed-back pursuant to the appreciation of the quoted price of the Company’s stock underlying the market-based component of the contingent consideration.

SUMMARY OF SIGNIFICANT ACCOUN22

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Policies)	3 Months Ended
	Mar. 31, 2017
Summary Of Significant Accounting Policies Policies
Basis of Presentation	The accompanying unaudited consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States for interim financial information and with the instructions to Form 10-Q and Article 10 of Regulation S-X. Accordingly, they do not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. In the opinion of management, all adjustments (consisting only of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2017 are not necessarily indicative of the results that may be expected for the year ending December 31, 2017. The consolidated balance sheet at December 31, 2016 has been derived from the audited consolidated financial statements at that date but does not include all of the information and footnotes required by generally accepted accounting principles for complete financial statements. For further information, refer to the consolidated financial statements and footnotes thereto included in Terra Tech’s annual report on Form 10-K for the year ended December 31, 2016.
Non-Controlling Interest	Non-controlling interest is shown as a component of shareholders’ equity on the consolidated balance sheets and the share of income (loss) attributable to non-controlling interest is shown as a component of income (loss) in the consolidated statements of operations.
Use of Estimates	The preparation of financial statements in conformity with United States generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent assets and liabilities as of the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Inventory	We value our inventory at the lower of the actual cost of our inventory, as determined using the first-in, first-out method, or its current estimated net realizable value (“NRV”). ASU No. 2015-11, “Inventory (Topic 330): Simplifying the Measurement of Inventory”,
Property, Equipment and Leasehold Improvements	Property, equipment and leasehold improvements are stated at cost less accumulated depreciation. Depreciation is calculated using the straight-line method over the estimated useful lives of the assets. The approximate useful lives for depreciation of our property, equipment and leasehold improvements are as follows: 32 years for buildings; three to eight years for furniture and equipment; and the shorter of the estimated useful life or the underlying lease term for leasehold improvements. Repairs and maintenance expenditures that do not extend the useful lives of related assets are expensed as incurred.
Goodwill	Goodwill is measured as the excess of consideration transferred and the net of the acquisition date fair value of assets acquired and liabilities assumed in a business acquisition. Goodwill is not amortized for accounting purposes. We review the goodwill allocated to each of our reporting units for possible impairment annually on August 1 and whenever events or changes in circumstances indicate its carrying amount may not be recoverable. When assessing goodwill for impairment, we have the option to first assess qualitative factors to determine whether the existence of events or circumstances leads to a determination that it is more likely than not that the fair value of a reporting unit is less than its carrying amount. If, after assessing the totality of events or circumstances, we determine it is more likely than not that the fair value of a reporting unit is less than its carrying amount, then we perform a two-step impairment test. If we conclude otherwise, then no further action is taken. We also have the option to bypass the qualitative assessment and only perform a quantitative assessment, which is the first step of the two-step impairment test. In the two-step impairment test, we measure the recoverability of goodwill by comparing a reporting unit’s carrying amount, including goodwill, to the estimated fair value of the reporting unit.
Intangibles	Intangible assets are stated at historical cost and amortized over their estimated useful lives. We use a straight-line method of amortization, unless a method that better reflects the pattern in which the economic benefits of the intangible asset are consumed or otherwise used up can be reliably determined. The approximate useful lives for amortization of our intangible assets are as follows: Customer Relationships 5 to 12 Years Trade Names 2 to 8 Years Dispensary License 14 Years Patent 2 Years We review intangible assets subject to amortization quarterly to determine if any adverse conditions exist or a change in circumstances has occurred that would indicate impairment or a change in the remaining useful life. Intangible assets that have indefinite useful lives are tested annually for impairment, and are tested for impairment more frequently if events and circumstances indicate that the asset might be impaired. An impairment loss is recognized to the extent that the carrying amount of the reporting unit exceeds its fair value.
Impairment of Long-Lived Assets	We have adopted paragraph 360-10-35-17 of FASB Accounting Standards Codification (“ASC”) for our long-lived assets. Our long-lived assets are reviewed for impairment whenever events or changes in circumstances indicate the carrying amount of an asset may not be recoverable. We assess the recoverability of our long-lived assets by comparing the projected undiscounted net cash flows associated with the related long-lived asset or group of assets over their remaining estimated useful lives against their respective carrying amounts. Impairment, if any, is based on the excess of the carrying amount over the fair value of those assets. Fair value is generally determined using the assets expected future discounted cash flows or market value, if readily determinable. If long-lived assets are determined to be recoverable, but the newly determined remaining estimated useful lives are shorter than originally estimated, the net book values of the long-lived assets are depreciated over the newly determined remaining estimated useful lives.
Other Assets	Other assets are comprised primarily of security deposits for leased properties in California, Nevada and New Jersey. The deposits will be returned at the end of the lease term.
Revenue Recognition	We recognize revenue in accordance with ASC 605, “Revenue Recognition,” Cannabis Dispensary, Cultivation and Production We recognize revenue from manufacturing and distribution product sales and upon transfer of title and risk to the customer, which occurs either at shipping (F.O.B. terms) or upon sell through depending on the arrangement. Revenue from our retail dispensaries is recognized net of discounts, rebates, promotional adjustments, price adjustments and returns, and net of taxes collected from customers that are remitted to governmental authorities, with the collected taxes recorded as current liabilities until remitted to the relevant government authority. Revenue is recorded upon transfer of title and risk to the customer which occurs at the time customers take delivery of our products at our retail dispensaries. Upon purchase, we have no further performance obligations and collection is assured as sales are paid for at time of purchase. Revenue related to the sale of consignment inventory is not recognized until the product is pulled from inventory and sold directly to end-customers. We recognize revenue from the sale of consignment inventory on a gross basis, as we have determined that: 1) we are the primary obligor to the customer; 2) we have latitude in establishing the sales prices and profit margins of our products; 3) we have discretion in selecting our suppliers; 4) we are responsible for loss or damage to consigned inventory; and 5) our customer validation process performs an important part of the process of providing such products to authorized customers. We believe that these factors outweigh the fact that we do not have title to the consigned inventory prior to its sale. Herbs and Produce Products We recognize revenue from products grown in our greenhouses and sold net of discounts, rebates, promotional adjustments, price adjustments, and estimated returns and upon transfer of title and risk to the customer, which occurs at shipping (F.O.B. terms). Upon shipment, we have no further performance obligations, selling price is fixed, and collection is reasonably assured.
Cost of Goods Sold	Cannabis Dispensary, Cultivation and Production Cost of goods sold includes the costs directly attributable to product sales and includes amounts paid for finished goods, such as flower, edibles, and concentrates, as well as packaging and other supplies, fees for services and processing, other expenses for services, and allocated overhead. Overhead expenses include allocations of rent, administrative salaries, utilities, and related costs. It also includes the cost incurred in producing the oils, waxes, shatters, and clears sold by IVXX. Herbs and Produce Products Cost of goods sold are for the plants grown, packaging, other supplies and in addition to purchased plants which are sold into the retail marketplace by Edible Garden. Other expenses include freight, allocations of rent, utilities and repairs and maintenance.
Stock-Based Compensation	The Company accounts for its stock-based awards in accordance with ASC subtopic 718-10, “Compensation,”
Warrants	ASC 815-40, “Contracts in Entity’s Own Equity” ASC 815, “Derivatives and Hedging”
Research and Development	Research and development costs are expensed as incurred.
Income Taxes	We provide for income taxes based on enacted tax law and statutory tax rates at which items of income and expense are expected to be settled in our income tax return. Certain items of revenue and expense are reported for Federal income tax purposes in different periods than for financial reporting purposes, thereby resulting in deferred income taxes. Deferred taxes are also recognized for operating losses that are available to offset future taxable income. Valuation allowances are established when necessary to reduce deferred tax assets to the amount expected to be realized. We have incurred net operating losses for financial-reporting and tax-reporting purposes. At March 31, 2017 and December 31, 2016, such net operating losses were offset entirely by a valuation allowance. The Company recognizes uncertain tax positions based on a benefit recognition model. Provided that the tax position is deemed more likely than not of being sustained, the Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement. The tax position is derecognized when it is no longer more likely than not of being sustained. The Company classifies income tax related interest and penalties as interest expense and selling, general and administrative expense, respectively, on the consolidated statements of operations.
Loss Per Common Share	Net loss per share is computed in accordance with the provisions of ASC 260, “Earnings Per Share,”
Fair Value of Financial Instruments	We define fair value as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities which are required to be recorded at fair value, we consider the principal or most advantageous market in which we would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as risks inherent in valuation techniques, transfer restrictions and credit risk. Fair value is estimated by applying the following hierarchy, which prioritizes the inputs used to measure fair value into three levels and bases the categorization within the hierarchy upon the lowest level of input that is available and significant to the fair value measurement: Level 1 – Level 2 – Level 3 – In accordance with the fair value accounting requirements, companies may choose to measure eligible financial instruments and certain other items at fair value. We have not elected the fair value option for any eligible financial instruments.
Recently Issued Accounting Standards	FASB ASU 2017-04 (Topic 350), “Intangibles - Goodwill and Others” FASB ASU No. 2016-02 (Topic 842), “Leases ” FASB ASU No. 2014-09 (Topic 606), “Revenue from Contracts with Customers” “Revenue from Contracts with Customers (Topic 606): Deferral of the Effective Date” “Principal versus Agent Considerations (Reporting Gross versus Net),” “Technical Corrections and Improvements to Topic 606, Revenue from Contracts with Customers” “Narrow-Scope Improvements and Practical Expedients”

SUMMARY OF SIGNIFICANT ACCOUN23

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Tables)	3 Months Ended
	Mar. 31, 2017
Summary Of Significant Accounting Policies Tables
Useful Lives for amortization of our Intangible assets	Customer Relationships 5 to 12 Years Trade Names 2 to 8 Years Dispensary License 14 Years Patent 2 Years

INVENTORY (Tables)

INVENTORY (Tables)	3 Months Ended
	Mar. 31, 2017
Inventory Tables
Inventory	As of March 31, 2017 and December 31, 2016, inventory consisted of the following: March 31, 2017 December 31, 2016 Raw Materials $ 453,442 $ 486,119 Work-in-Progress 740,877 570,145 Finished Goods 923,538 853,066 Total Inventory $ 2,117,857 $ 1,909,330

PROPERTY, EQUIPMENT AND LEASE25

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
Property Equipment And Leasehold Improvements Tables
Property, equipment, and leasehold improvements	As of March 31, 2017 and December 31, 2016, property, equipment and leasehold improvements at cost, less accumulated depreciation, consisted of the following: March 31, 2017 December 31, 2016 Land and Building $ 1,454,124 $ 1,454,124 Furniture and Equipment 3,326,103 3,141,244 Computer Hardware and Software 435,093 396,479 Leasehold Improvements 8,328,059 8,027,792 Subtotal 13,543,379 13,019,639 Less Accumulated Depreciation (3,017,948 ) (2,554,875 ) Property, Equipment and Leasehold Improvements, Net $ 10,525,431 $ 10,464,764

INTANGIBLE ASSETS (Tables)

INTANGIBLE ASSETS (Tables)	3 Months Ended
	Mar. 31, 2017
Intangible Assets Tables
Intangible assets	As of March 31, 2017 and December 31, 2016, intangible assets consisted of the following: March 31, 2017 December 31, 2016 Estimated Useful Life in Years Gross Carrying Amount Accumulated Amortization Net Carrying Value Gross Carrying Amount Accumulated Amortization Net Carrying Value Amortized Intangible Assets: Customer Relationships 5 to 12 $ 8,960,700 $ (999,744 ) $ 7,960,956 $ 8,960,700 $ (780,960 ) $ 8,179,740 Trade Brands and Patent 2 to 8 498,598 (118,409 ) 380,189 498,598 (91,061 ) 407,537 Dispensary License 14 10,270,000 (733,572 ) 9,536,428 10,270,000 (550,179 ) 9,719,821 Total Amortized Intangible Assets 19,729,298 (1,851,725 ) 17,877,573 19,729,298 (1,422,200 ) 18,307,098 Unamortized Intangible Assets: Trade Name Indefinite 5,320,000 – 5,320,000 5,320,000 – 5,320,000 Total Unamortized Intangible Assets 5,320,000 – 5,320,000 5,320,000 – 5,320,000 Total Intangible Assets $ 25,049,298 $ (1,851,725 ) $ 23,197,573 $ 25,049,298 $ (1,422,200 ) $ 23,627,098

ACCOUNTS PAYABLE AND ACCRUED 27

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Tables)	3 Months Ended
	Mar. 31, 2017
Accounts Payable And Accrued Expenses Tables
Accounts payable and accrued expenses	March 31, 2017 December 31, 2016 Accounts Payable $ 2,155,895 $ 1,986,907 Sales Tax Payable 1,008,479 122,470 Accrued Interest Payable 124,827 96,633 Accrued Expenses 403,128 211,390 Total Accounts Payable and Accrued Expenses $ 3,692,329 $ 2,417,400

NOTES PAYABLE (Tables)

NOTES PAYABLE (Tables)	3 Months Ended
	Mar. 31, 2017
Notes Payable Tables
Notes payable	March 31, 2017 December 31, 2016 Unsecured promissory demand notes issued to an accredited investor, which bear interest at a rate of 4% per annum. Holder may elect to convert into common stock at $0.75 per share. $ 5,000 $ 64,324 Convertible promissory note dated December 14, 2015, issued to accredited investors, which matured December 13, 2016 and bears interest at a rate of 12% per annum. The holder of the note extended the maturity to December 13, 2017. The conversion price is $0.1211, subject to adjustment. 500,000 500,000 Senior convertible promissory note dated October 28, 2016, issued to accredited investors, which matures April 28, 2018 and bears interest at a rate of 1% per annum. The conversion price is 90% of the average of the lowest three (3) VWAPs for the five (5) consecutive trading days prior to the conversion date. – 102,582 Senior convertible promissory note dated November 1, 2016, issued to accredited investors, which matures May 1, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.35, subject to adjustment. 53,539 31,615 Senior convertible promissory note dated December 16, 2016, issued to accredited investors, which matures June 16, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.27, subject to adjustment. 743,841 1,220,155 Senior convertible promissory note dated February 23, 2017, issued to accredited investors, which matures August 22, 2018 and bears interest at a rate of 12% per annum. The conversion price is $0.25, subject to adjustment. 908,998 – Total Debt 2,211,378 1,918,676 Less Short-Term Portion 505,000 564,324 Long-Term Portion $ 1,706,378 $ 1,354,352

FAIR VALUE MEASUREMENTS (Tables

FAIR VALUE MEASUREMENTS (Tables)	3 Months Ended
	Mar. 31, 2017
Fair Value Measurements Tables
Fair value hierarchy financial assets measured	Fair Value at March 31, Fair Value Measurement Using Description 2017 Level 1 Level 2 Level 3 Derivative Liabilities – Conversion Feature $ 4,848,600 $ – $ – $ 4,848,600 Liability – Contingent Consideration 16,434,620 – – 16,434,620 $ 21,283,220 $ – $ – $ 21,283,220 Fair Value at December 31, Fair Value Measurement Using Description 2016 Level 1 Level 2 Level 3 Derivative Liabilities – Conversion Feature $ 6,987,000 $ – $ – $ 6,987,000 Liability – Contingent Consideration 12,085,859 – – 12,085,859 $ 19,072,859 $ – $ – $ 19,072,859
Reconciliation of the Derivative Liabilities measured	Balance at December 31, 2016 $ 6,987,000 Change in Fair Market Value of Conversion Feature (1,610,750 ) Derivative Debt Converted into Equity (2,770,650 ) Issuance of Debt Instruments with Derivatives 2,243,000 Balance at March 31, 2017 $ 4,848,600
Reconciliation of the Contingent Consideration Liability	Balance at December 31, 2016 $ 12,085,859 Change in Fair Market Valuation of Contingent Consideration 4,348,761 Balance at March 31, 2017 $ 16,434,620

INCOME TAXES (Tables)

INCOME TAXES (Tables)	3 Months Ended
	Mar. 31, 2017
Income Taxes Tables
Deferred tax assets and liabilities	March 31, 2017 December 31, 2016 Deferred Income Tax Assets: Allowance for Bad Debt $ – $ – Warrants Expense 4,523,171 4,186,000 Derivatives Expense 5,958,719 4,067,000 Net Operating Losses 16,763,194 15,242,000 Deferred Income Tax Liabilities: Depreciation (1,467,893 ) (1,334,000 ) Total 25,777,191 22,161,000 Valuation Allowance (25,777,191 ) (22,161,000 ) Net Deferred Tax Liabilities $ – $ –

EQUITY (Tables)

EQUITY (Tables)	3 Months Ended
	Mar. 31, 2017
Equity Tables
Stock-Based Compensation Expense	March 31, 2017 March 31, 2016 Type of Award Number of Shares or Options Granted Stock-Based Compensation Expense Number of Shares or Options Granted Stock-Based Compensation Expense Stock Options – $ 47,589 6,700,000 $ 47,589 Stock Grants: Employees (Common Stock) 100,000 26,100 – – Employees (Series B Preferred Stock) 600,000 1,035,406 – – Directors (Common Stock) 125,000 37,500 350,000 60,550 Non-Employee Consultants (Common Stock) 467,647 145,011 – – Total Stock-Based Compensation Expense 1,292,647 $ 1,291,606 7,050,000 $ 108,139

SEGMENT INFORMATION (Tables)

SEGMENT INFORMATION (Tables)	3 Months Ended
	Mar. 31, 2017
Segment Information Tables
Summarized financial information	Summarized financial information concerning the Company’s reportable segments is shown in the following tables. Total asset amounts at March 31, 2017 and 2016, exclude intercompany receivable balances eliminated in consolidation. Three Months Ended March 31, 2017 Herbs and Produce Products Cannabis Dispensary, Cultivation and Production Eliminations and Other Total Total Revenues $ 917,143 $ 5,887,038 $ 20,275 $ 6,824,456 Cost of Goods Sold 969,815 5,495,578 - 6,465,393 Gross Profit (52,672 ) 391,460 20,275 359,063 Selling, General and Administrative Expenses 659,063 2,627,005 3,100,232 6,386,300 Loss from Operations (711,735 ) (2,235,545 ) (3,079,957 ) (6,027,237 ) Other Expense: Amortization of Debt Discount - - (610,616 ) (610,616 ) Loss on Extinguishment of Debt - - (1,039,458 ) (1,039,458 ) Loss on Fair Market Valuation of Derivatives - - 1,610,750 1,610,750 Interest Income (Expense) - - (157,833 ) (157,833 ) Loss on Fair Market Valuation of Contingent Consideration - (4,348,761 ) - (4,348,761 ) Total Other Expense - (4,348,761 ) (197,157 ) (4,545,918 ) Loss Before Provision for Income Taxes $ (711,735 ) $ (6,584,306 ) $ (3,277,114 ) $ (10,573,155 ) Total Assets at March 31, 2017 $ 7,133,499 $ 59,367,012 $ 11,077,191 $ 77,572,702 Three Months Ended March 31, 2016 Herbs and Produce Products Cannabis Dispensary, Cultivation and Production Eliminations and Other Total Total Revenues $ 1,401,443 $ 130,203 $ 16,521 $ 1,548,167 Cost of Goods Sold 1,200,932 213,261 – 1,414,193 Gross Profit 200,511 (83,058 ) 16,521 133,974 Selling, General and Administrative Expenses 518,652 202,136 1,325,560 2,046,348 Loss from Operations (318,141 ) (285,194 ) (1,309,039 ) (1,912,374 ) Other Expense: Amortization of Debt Discount - - (94,406 ) (94,406 ) Loss on Extinguishment of Debt - - (920,797 ) (920,797 ) Gain on Fair Market Valuation of Derivatives - - (1,160,700 (1,160,700 ) Interest Expense - - (55,995 ) (55,995 ) Total Other Expense - - (2,231,898 ) (2,231,898 ) Loss Before Provision for Income Taxes $ (318,141 ) $ (285,194 ) $ (3,540,937 ) $ (4,144,272 ) Total Assets at March 31, 2016 $ 6,667,866 $ 2,734,868 $ 2,750,386 $ 12,153,120

DESCRIPTION OF BUSINESS (Detail

DESCRIPTION OF BUSINESS (Details Narrative)	3 Months Ended
	Mar. 31, 2017
Description Of Business Details Narrative
State of Incorporation	Nevada
Date of incorporation	Jul. 22, 2008

SUMMARY OF SIGNIFICANT ACCOUN34

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details)	3 Months Ended
	Mar. 31, 2017
Customer Relationships [Member] | Minimum [Member]
Useful Life (in Years)	5 years
Customer Relationships [Member] | Maximum [Member]
Useful Life (in Years)	12 years
Trade Name [Member] | Minimum [Member]
Useful Life (in Years)	2 years
Trade Name [Member] | Maximum [Member]
Useful Life (in Years)	8 years
Dispensary license [Member]
Useful Life (in Years)	14 years
Patent [Member]
Useful Life (in Years)	2 years

SUMMARY OF SIGNIFICANT ACCOUN35

SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES (Details Narrative)	3 Months Ended
	Mar. 31, 2017
Tax benefit	Company recognizes the largest amount of tax benefit that is greater than 50% likely of being ultimately realized upon settlement.
Building [Member]
Estimated useful life	32 years
Furniture and Equipment [Member] | Minimum [Member]
Estimated useful life	3 years
Furniture and Equipment [Member] | Maximum [Member]
Estimated useful life	8 years
Leasehold Improvements [Member]
Estimated useful lives	The shorter of the estimated useful life or the underlying lease term for leasehold improvements

INVENTORY (Details)

INVENTORY (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Inventory Details
Raw Materials	$ 453,442	$ 486,119
Work-In-Progress	740,877	570,145
Finished Goods	923,538	853,066
Total Inventory	$ 2,117,857	$ 1,909,330

PROPERTY, EQUIPMENT AND LEASE37

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Property, Equipment and Leasehold Improvements, Gross	$ 13,543,379	$ 13,019,639
Less accumulated depreciation	(3,017,948)	(2,554,875)
Property, Equipment and Leasehold Improvements, Net	10,525,431	10,464,764
Land [Member]
Property, Equipment and Leasehold Improvements, Gross	1,454,124	1,454,124
Furniture and Equipment [Member]
Property, Equipment and Leasehold Improvements, Gross	3,326,103	3,141,244
Computer Hardware and Software [Member]
Property, Equipment and Leasehold Improvements, Gross	435,093	396,479
Leasehold Improvements [Member]
Property, Equipment and Leasehold Improvements, Gross	$ 8,328,059	$ 8,027,792

PROPERTY, EQUIPMENT AND LEASE38

PROPERTY, EQUIPMENT AND LEASEHOLD IMPROVEMENTS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Property Equipment And Leasehold Improvements Details Narrative
Depreciation expense	$ 463,073	$ 150,729

INTANGIBLE ASSETS (Details)

INTANGIBLE ASSETS (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Gross Carrying Amount	$ 25,049,298	$ 25,049,298
Accumulated Amortization	(1,851,725)	(1,422,200)
Net carrying value	$ 23,197,573	23,627,098
Customer Relationships [Member] | Minimum [Member]
Useful Life (in Years)	5 years
Customer Relationships [Member] | Maximum [Member]
Useful Life (in Years)	12 years
Dispensary license [Member]
Useful Life (in Years)	14 years
Amortized Intangible Assets [Member]
Gross Carrying Amount	$ 19,729,298	19,729,298
Accumulated Amortization	(1,851,725)	(1,422,200)
Net carrying value	17,877,573	18,307,098
Amortized Intangible Assets [Member] | Customer Relationships [Member]
Gross Carrying Amount	8,960,700	8,960,700
Accumulated Amortization	(999,744)	(780,960)
Net carrying value	$ 7,960,956	8,179,740
Amortized Intangible Assets [Member] | Customer Relationships [Member] | Minimum [Member]
Useful Life (in Years)	5 years
Amortized Intangible Assets [Member] | Customer Relationships [Member] | Maximum [Member]
Useful Life (in Years)	12 years
Amortized Intangible Assets [Member] | Trade Brands and Patent [Member]
Gross Carrying Amount	$ 498,598	498,598
Accumulated Amortization	(118,409)	(91,061)
Net carrying value	$ 380,189	407,537
Amortized Intangible Assets [Member] | Trade Brands and Patent [Member] | Minimum [Member]
Useful Life (in Years)	2 years
Amortized Intangible Assets [Member] | Trade Brands and Patent [Member] | Maximum [Member]
Useful Life (in Years)	8 years
Amortized Intangible Assets [Member] | Dispensary license [Member]
Gross Carrying Amount	$ 10,270,000	10,270,000
Accumulated Amortization	(733,572)	(550,179)
Net carrying value	$ 9,536,428	9,719,821
Useful Life (in Years)	14 years
Unamortized Intangible Assets [Member]
Gross Carrying Amount	$ 5,320,000	5,320,000
Accumulated Amortization
Net carrying value	5,320,000	5,320,000
Unamortized Intangible Assets [Member] | Trade Brands and Patent [Member]
Gross Carrying Amount	5,320,000	5,320,000
Accumulated Amortization
Net carrying value	$ 5,320,000	$ 5,320,000
Estimated useful lives	Indefinite

INTANGIBLE ASSETS (Details Narr

INTANGIBLE ASSETS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Intangible Assets Details Narrative
Amortization expense	$ 429,525	$ 10,620

ACCOUNTS PAYABLE AND ACCRUED 41

ACCOUNTS PAYABLE AND ACCRUED EXPENSES (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Accounts Payable And Accrued Expenses Details
Accounts payable	$ 2,155,895	$ 1,986,907
Sales tax payable	1,008,479	122,470
Accrued Interest Payable	124,827	96,633
Accrued expenses	403,128	211,390
Accounts payable and accrued expenses	$ 3,692,329	$ 2,417,400

NOTES PAYABLE (Details)

NOTES PAYABLE (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Total Debt	$ 2,211,378	$ 1,918,676
Less short-term portion	505,000	564,324
Long-term portion	1,706,378	1,354,352
Unsecured Promissory Demand Note [Member]
Total Debt	5,000	64,324
Convertible promissory note [Member]
Total Debt	500,000	500,000
Convertible promissory note one [Member]
Total Debt		102,582
Convertible promissory note two [Member]
Total Debt	53,539	31,615
Convertible promissory note three [Member]
Total Debt	743,841	1,220,155
Convertible promissory note four [Member]
Total Debt	$ 908,998

NOTES PAYABLE (Details Narrativ

NOTES PAYABLE (Details Narrative)	1 Months Ended
	Feb. 22, 2017USD ($)$ / shares	Oct. 28, 2016	Mar. 31, 2017USD ($)$ / shares	Feb. 23, 2017$ / shares	Dec. 31, 2016USD ($)$ / shares	Dec. 16, 2016$ / shares	Nov. 01, 2016$ / shares	Dec. 14, 2015$ / shares
Total Debt			$ 2,211,378		$ 1,918,676
Unamortized debt discount			3,443,622		4,295,648
Accrued interest			$ 124,827		$ 96,633
Common stock, par value | $ / shares			$ 0.001		$ 0.001
Debt discount			$ 3,443,622		$ 4,295,648
Senior convertible promissory note [Member]
Unamortized debt discount	$ 2,243,000
Common stock, par value | $ / shares	$ 0.001
Principal amount	$ 3,000,000
Purchase price	$ 3,000,000
Description of conversion price	Conversion price per share equal to the lower of (i) $0.2495 or (ii) 85% of the lowest daily volume weighted average price of the Common Stock in the fifteen (15) trading days prior to the conversion date (the Conversion Price), which Conversion Price is subject to adjustment for (i) stock splits, stock dividends, combinations, or similar events and (ii) full ratchet anti-dilution protection.
Debt discount	$ 2,243,000
Debt instrument maturity date	Aug. 22, 2018
Term of conversion feature	The conversion price of the Note will automatically become 70% of the average of the three (3) lowest volume weighted average prices of the Common Stock in the twenty (20) consecutive trading days prior to the conversion date for so long as such event of default remains in effect. All interest payments under the Note are payable, at the Company’s option, in cash or shares of Common Stock.
Additional term of conversion feature	In addition, at any time that (i) the daily volume weighted average price of the Common Stock for the prior ten (10) consecutive trading days is $0.70 or more and (ii) the average daily trading value of the Common Stock is greater than $2,500,000 for the prior ten (10) consecutive trading days, then the Company may demand, upon one (1) day’s notice, that the holder convert the Note at the Conversion Price.
Description of prepayment	The Company may prepay in cash any portion of the outstanding principal amount of the Note and any accrued and unpaid interest by, upon ten (10) days' written notice to the holder, paying an amount equal to (i) 110% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is within 90 days of the issuance date of the Note; (ii) 115% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is between 91 days and 180 days of the issuance date of the Note; or (iii) 125% of the sum of the then-outstanding principal amount of the Note plus accrued but unpaid interest, if the prepayment date is after 180 days of the issuance date of the Note.
Senior convertible promissory note [Member] | Minimum [Member]
Common stock average trading volume to activate conversion feature	$ 2,500,000
Unsecured Promissory Demand Note [Member]
Total Debt			$ 5,000		64,324
Interest rate			4.00%
Common stock, par value | $ / shares			$ .75
Convertible promissory note [Member]
Total Debt			$ 500,000		500,000
Interest rate		1.00%						12.00%
Conversion price | $ / shares								$ 0.1211
Convesion price, percentage		0.90
Convertible promissory note one [Member]
Total Debt					102,582
Interest rate							12.00%
Conversion price | $ / shares							$ 0.35
Convertible promissory note two [Member]
Total Debt			53,539		31,615
Interest rate						12.00%
Conversion price | $ / shares						$ 0.27
Convertible promissory note three [Member]
Total Debt			$ 743,841		$ 1,220,155
Interest rate				12.00%
Conversion price | $ / shares				$ 0.25

CONTINGENT CONSIDERATION LIAB44

CONTINGENT CONSIDERATION LIABILITY (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016	Dec. 31, 2016
Contingent consideration liability	$ 16,434,620		$ 12,085,859
Expected contingent consideration liability	15,305,463
Increase in contingent consideration liability	$ 4,300,000
Description of contingent consideration payment	The increase was primarily due to i.) revisions in the estimated probability that the upper threshold of $16,667,000 of the revenue target component of the contingent consideration would be met, which revenue target was met as of April 1, 2017, and ii.) the change in the quoted price of the underlying shares of the Company’s common stock which change affected the number of shares to be issued pursuant to the contingent consideration
Loss on Fair Market Valuation of Contingent Consideration	$ 4,348,761
Black Oak merger [Member]
Contingent consideration liability	12,754,553
Increase in contingent consideration liability	1,100,000
April 1, 2016 (Acquisition Date) [Member]
Contingent consideration liability	12,754,553
Holdback Consideration [Member]
Performance-Based Clawback Amount upper threshold	$ 16,667,000

FAIR VALUE MEASUREMENTS (Detail

FAIR VALUE MEASUREMENTS (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Derivative liability - Conversion Feature	$ 4,848,600	$ 6,987,000
Liability – Contingent Consideration	16,434,620	12,085,859
Fair value of financial liabilities	21,283,220	19,072,859
Fair Value Measurement Using, Level 1 [Member]
Derivative liability - Conversion Feature
Liability – Contingent Consideration
Fair value of financial liabilities
Fair Value Measurement Using, Level 2 [Member]
Derivative liability - Conversion Feature
Liability – Contingent Consideration
Fair value of financial liabilities
Fair Value Measurement Using, Level 3 [Member]
Derivative liability - Conversion Feature	4,848,600	6,987,000
Liability – Contingent Consideration	16,434,620	12,085,859
Fair value of financial liabilities	$ 21,283,220	$ 19,072,859

FAIR VALUE MEASUREMENTS (Deta46

FAIR VALUE MEASUREMENTS (Details 1) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Fair Value Measurements Details 1
Liabilities measured at fair value Beginning Balance	$ 6,987,000
Change in fair market value of Conversion Feature	(1,610,750)	$ 1,160,700
Derivative debt converted into equity	(2,770,650)
Issuance of equity instruments with derivatives	2,243,000
Liabilities measured at fair value Ending Balance	$ 4,848,600

FAIR VALUE MEASUREMENTS (Deta47

FAIR VALUE MEASUREMENTS (Details 2) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Fair Value Measurements Details 2
Fair value of contingent consideration Beginning Balance	$ 12,085,859
Change in fair market value of contingent conversion Feature	4,348,761
Fair value of contingent consideration Ending Balance	$ 16,434,620

INCOME TAXES (Details)

INCOME TAXES (Details) - USD ($)	Mar. 31, 2017	Dec. 31, 2016
Deferred Income Tax Assets:
Allowance for Bad Debt
Warrants Expense	4,523,171	4,186,000
Derivatives Expense	5,958,719	4,067,000
Net Operating Losses	16,763,194	15,242,000
Deferred Income Tax Liabilities:
Depreciation	(1,467,893)	(1,334,000)
Total	25,777,191	22,161,000
Valuation Allowance	(25,777,191)	(22,161,000)
Net Deferred Tax Liabilities

INCOME TAXES (Details Narrative

INCOME TAXES (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Dec. 31, 2016
Income Taxes Details Narrative
Net operating loss carryforwards	$ 37,885,008	$ 34,940,000
Net operating loss carryforwards expiring year	2,034

EQUITY (Details)

EQUITY (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Number of Shares or Options Granted	1,292,647	7,050,000
Stock-Based Compensation Expense	$ 1,291,606	$ 108,139
Stock Options [Member]
Number of Shares or Options Granted		6,700,000
Stock-Based Compensation Expense	$ 47,589	$ 47,589
Employees (Common Stock) [Member]
Number of Shares or Options Granted	100,000
Stock-Based Compensation Expense	$ 26,100
Employees (Series B Preferred Stock) [Member]
Number of Shares or Options Granted	600,000
Stock-Based Compensation Expense	$ 1,035,406
Directors (Common Stock) [Member]
Number of Shares or Options Granted	125,000	350,000
Stock-Based Compensation Expense	$ 37,500	$ 60,550
Non-Employee Consultants (Common Stock) [Member]
Number of Shares or Options Granted	467,647
Stock-Based Compensation Expense	$ 145,011

EQUITY (Details Narrative)

EQUITY (Details Narrative)	3 Months Ended
	Mar. 31, 2017USD ($)Numbershares	Mar. 31, 2016USD ($)shares
Stock issued for services, shares | shares	467,647
Stock issued for services, amount | $	$ 145,011
Compensation [Member]
Stock issued for services, shares | shares	100,000
Stock issued for services, amount | $	$ 26,100
Director fees [Member]
Stock issued, shares | shares	125,000
Stock issued, amount | $	$ 37,500
Accredited investor [Member]
Common stock sold | shares	6,185,395	25,715,674
Net amount | $	$ 1,700,000	$ 3,208,134
Promissory notes [Member]
Converted common stock, shares | shares		13,906,149
Converted common stock, amount | $		$ 961,740
Promissory notes [Member]
Converted common stock, shares | shares	16,281,088
Converted common stock, amount | $	$ 3,688,963
Series B Preferred Stock [Member]
Number of votes | Number	100
Common stock conversion basis	1-for-5.384325537
Stock issued, shares | shares	600,000
Stock issued, amount | $	$ 1,035,406

OPERATING LEASE COMMITMENTS (De

OPERATING LEASE COMMITMENTS (Details Narrative) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Operating Lease Commitments Details Narrative
Net rent expense	$ 314,813	$ 133,867

SEGMENT INFORMATION (Details)

SEGMENT INFORMATION (Details) - USD ($)	3 Months Ended
	Mar. 31, 2017	Mar. 31, 2016
Total Revenues	$ 6,824,456	$ 1,548,167
Cost of Goods Sold	6,465,393	1,414,193
Gross Profit	359,063	133,974
Selling, general and administrative expenses	6,386,300	2,046,348
Loss from operations	(6,027,237)	(1,912,374)
Other Expense:
Amortization of debt discount	(610,616)	(94,406)
Gain (Loss) on fair market valuation of derivatives	1,610,750	(1,160,700)
Interest Income (Expense)	(157,833)	(55,995)
Loss on Fair Market Valuation of Contingent Consideration	4,300,000
Total Other Expense	(4,545,918)	(2,231,898)
Loss Before Provision for Income Taxes	(10,573,155)	(4,144,272)
Herbs and Produce Products [Member]
Total Revenues	917,143	1,401,443
Cost of Goods Sold	969,815	1,200,932
Gross Profit	(52,672)	200,511
Selling, general and administrative expenses	659,063	518,652
Loss from operations	(711,735)	(318,141)
Other Expense:
Amortization of debt discount
Loss on extinguishment of debt
Gain (Loss) on fair market valuation of derivatives
Interest Income (Expense)
Loss on Fair Market Valuation of Contingent Consideration
Total Other Expense
Loss Before Provision for Income Taxes	(711,735)	(318,141)
Total assets	7,133,499	6,667,866
Cannabis Dispensary Cultivation and Production [Member]
Total Revenues	5,887,038	130,203
Cost of Goods Sold	5,495,578	213,261
Gross Profit	391,460	(83,058)
Selling, general and administrative expenses	2,627,005	202,136
Loss from operations	(2,235,545)	(285,194)
Other Expense:
Amortization of debt discount
Loss on extinguishment of debt
Gain (Loss) on fair market valuation of derivatives
Interest Income (Expense)
Loss on Fair Market Valuation of Contingent Consideration	(4,348,761)
Total Other Expense	(4,348,761)
Loss Before Provision for Income Taxes	(6,584,306)	(285,194)
Total assets	59,367,012	2,734,868
Eliminations And Other [Member]
Total Revenues	20,275	16,521
Cost of Goods Sold
Gross Profit	20,275	16,521
Selling, general and administrative expenses	3,100,232	1,325,560
Loss from operations	(3,079,957)	(1,309,039)
Other Expense:
Amortization of debt discount	(610,616)	(94,406)
Loss on extinguishment of debt	(1,039,458)	(920,797)
Gain (Loss) on fair market valuation of derivatives	1,610,750	(1,160,700)
Interest Income (Expense)	(157,833)	(55,995)
Loss on Fair Market Valuation of Contingent Consideration
Total Other Expense	(197,157)	(2,231,898)
Loss Before Provision for Income Taxes	(3,277,114)	(3,540,937)
Total assets	11,077,191	2,750,386
Segment Information [Member]
Total Revenues	6,824,456	1,548,167
Cost of Goods Sold	6,465,393	1,414,193
Gross Profit	359,063	133,974
Selling, general and administrative expenses	6,386,300	2,046,348
Loss from operations	(6,027,237)	(1,912,374)
Other Expense:
Amortization of debt discount	(610,616)	(94,406)
Loss on extinguishment of debt	(1,039,458)	(920,797)
Gain (Loss) on fair market valuation of derivatives	1,610,750	(1,160,700)
Interest Income (Expense)	(157,833)	(55,995)
Loss on Fair Market Valuation of Contingent Consideration	(4,348,761)
Total Other Expense	(4,545,918)	(2,231,898)
Loss Before Provision for Income Taxes	(10,573,155)	(4,144,272)
Total assets	$ 77,572,702	$ 12,153,120

SUBSEQUENT EVENTS (Details Narr

SUBSEQUENT EVENTS (Details Narrative) - USD ($)	3 Months Ended	6 Months Ended
	Mar. 31, 2017	Jun. 30, 2017
Cash payment	$ 2,088,000
Common stock shares released from escrow	18,090,000
Number of shares clawed-back	32,336,000
Subsequent Event [Member]
Common stock, shares		3,689,701
Common stock, amount		$ 750,000
Converted common stock, shares		6,060,886
Converted common stock, amount		$ 1,267,537