Quarterly report pursuant to Section 13 or 15(d)

12. SEGMENT INFORMATION

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12. SEGMENT INFORMATION
 3 Months Ended
Mar. 31, 2018
Segment Reporting [Abstract]  
SEGMENT INFORMATION

The Company operates in two distinct business segments: a consumer product segment in manufacturing, marketing and selling plant-based CBD products to a range of market sectors; and, a specialty pharmaceutical segment focused on developing and commercializing novel therapeutics utilizing synthetic CBD. The Company’s segments maintain separate financial information for which operating results are evaluated on a regular basis by the Company’s senior management in deciding how to allocate resources and in assessing performance. The Company evaluates its consumer product segment based on net product sales, gross profit and operating income or loss. The Company currently evaluates its specialty pharmaceutical segment based on the progress of its clinical development programs.

 

The following table presents information by reportable operating segment for the three months ended March 31, 2018 and 2017:

 

  Consumer Products Segments     Specialty Pharmaceutical Segment     Consolidated Totals  
Three Months Ended                        
March 31, 2018:                        
Product sales, net   $ 8,070,765     $ –     $ 8,070,765  
Gross profit     5,561,903       –       5,561,903  
Selling, general and administrative     (4,726,584 )     (14,009 )     (4,740,593 )
Research and development     (116,634 )     (37,070 )     (153,704 )
Operating loss   $ 718,685     $ (51,079 )   $ 667,606  
                         
March 31, 2017:                        
Product sales, net   $ 3,764,191     $ –     $ 3,764,191  
Gross profit     2,433,003       –       2,433,003  
Gain on change in derivative liability     210,600       –       210,600  
Royalty buy-out     –       (2,432,000 )     (2,432,000 )
Selling, general and administrative     (3,605,177 )     (71,533 )     (3,676,710 )
Research and development     (49,033 )     (139,683 )     (188,716 )
Operating loss   $ (1,010,607 )   $ (2,643,216 )   $ (3,653,823 )