Quarterly report pursuant to Section 13 or 15(d)

SEGMENT INFORMATION

v3.20.2
SEGMENT INFORMATION
 9 Months Ended
Sep. 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 nine months ended September 30, 2020 and 2019 (in thousands):
Consumer Products
Segment		 Specialty Pharmaceutical Segment Consolidated Totals
Three months ended September 30, 2020:
Product sales, net $ 5,564  $ —  $ 5,564 
Gross profit $ 2,458  $ —  $ 2,458 
Research and development expense 119  293  412 
Selling, general and administrative expense 5,188  9  5,197 
Operating loss $ (2,849) $ (302) $ (3,151)
Three months ended September 30, 2019:
Product sales, net $ 12,603  $ —  $ 12,603 
Gross profit $ 8,428  $ —  $ 8,428 
Research and development expense 437  1,107  1,544 
Selling, general and administrative expense 8,646  11  8,657 
Operating loss $ (655) $ (1,118) $ (1,773)

Consumer Products
Segment		 Specialty Pharmaceutical Segment Consolidated Totals
Nine months ended September 30, 2020:
Product sales, net $ 19,230  $ —  $ 19,230 
Gross profit $ 8,788  $ —  $ 8,788 
Research and development expense 575  2,092  2,667 
Selling, general and administrative expense 19,178  71  19,249 
Operating loss $ (10,965) $ (2,163) $ (13,128)
Nine months ended September 30, 2019:
Product sales, net $ 44,368  $ —  $ 44,368 
Gross profit $ 30,938  $ —  $ 30,938 
Research and development expense 1,815  2,759  4,574 
Selling, general and administrative expense 36,230  31  36,261 
Operating loss $ (7,107) $ (2,790) $ (9,897)
The Company's specialty and pharmaceutical segment includes goodwill of $2.8 million as of September 30, 2020 and December 31, 2019. In addition, the Company's intangible assets of $3.7 million and $3.8 million as of September 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 September 30, 2020 and December 31, 2019. The majority of the Company's sales are to U.S. based customers.