Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

v3.20.2
SEGMENT INFORMATION
 6 Months Ended
Jun. 30, 2020
Segment Reporting [Abstract]  
SEGMENT INFORMATION SEGMENT INFORMATIONThe Company operates in two distinct business segments: a consumer products segment in manufacturing, marketing and selling hemp-based CBD products to a range of market sectors; and a specialty pharmaceutical segment focused on developing and commercializing novel therapeutics utilizing 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 products 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 and six months ended June 30, 2020 and 2019 (in thousands):
Consumer Products
Segment		 Specialty Pharmaceutical Segment Consolidated Totals
Three months ended June 30, 2020:
Product sales, net $ 5,396    $ —    $ 5,396   
Gross profit $ 2,322    $ —    $ 2,322   
Research and development expense 152    594    746   
Selling, general and administrative expense 6,180    53    6,233   
Operating loss $ (4,010)   $ (647)   $ (4,657)  
Three months ended June 30, 2019:
Product sales, net $ 16,854    $ —    $ 16,854   
Gross profit $ 11,951    $ —    $ 11,951   
Research and development expense 679    1,009    1,688   
Selling, general and administrative expense 8,999    10    9,009   
Operating income (loss) $ 2,273    $ (1,019)   $ 1,254   

Consumer Products
Segment		 Specialty Pharmaceutical Segment Consolidated Totals
Six months ended June 30, 2020:
Product sales, net $ 13,666    $ —    $ 13,666   
Gross profit $ 6,330    $ —    $ 6,330   
Research and development expense 457    1,798    2,255   
Selling, general and administrative expense 13,990    62    14,052   
Operating loss $ (8,117)   $ (1,860)   $ (9,977)  
Six months ended June 30, 2019:
Product sales, net $ 31,765    $ —    $ 31,765   
Gross profit $ 22,510    $ —    $ 22,510   
Research and development expense 1,378    1,652    3,030   
Selling, general and administrative expense 27,584    20    27,604   
Operating loss $ (6,452)   $ (1,672)   $ (8,124)  
The Company's specialty and pharmaceutical segment includes goodwill of $2.8 million as of June 30, 2020 and December 31, 2019. In addition, the Company's intangible assets of $3.7 million and $3.8 million as of June 30, 2020 and December 31, 2019, respectively, are included in the specialty pharmaceutical segment. All other assets are included in the consumer products segment as of June 30, 2020 and December 31, 2019. The majority of the Company's sales are to U.S. based customers.