Cresco Labs Continues Retail Expansion in ‘Year of the Core’

Losses rose during the second quarter.

Revenue for Chicago-based Cresco Labs (CSE: CL) (OTC: CRLBF) fell 9% in the second quarter ended June 30, compared with the same period a year ago. But the $198 million brought in during the period was a slight uptick from the first quarter.

The company, known for its branded cannabis products and Sunnyside dispensaries, attributed the sequential growth to its retail operations, which posted 4% growth, while the wholesale segment remained steady.

It also marked an 11% year-over-year rise in retail transactions and added five Sunnyside stores to its roster in Florida and Pennsylvania.

Cresco posted a net loss of $43 million for the quarter, which included $22 million of impairment charges. That’s up from the previous quarter’s $27.8 million loss and an $8.29 million loss in prior year’s period.

Still, CEO Charles Bachtell feels that the company is in a decent position for the future.

“We’re pleased to see improved profitability and cash flow in our core markets, which positions us well for the capital-efficient growth and expansion opportunities that lie ahead,” Bachtell said in a statement. “Our results are just starting to reflect the decisions we made earlier this year to support our Year-of-the-Core priorities, with much more to come.”

He highlighted a 38% sequential increase in adjusted EBITDA, emphasizing the company’s efficiency and scaling efforts.

From an operational perspective, Cresco continued its market leadership. It retained the No. 1 share position in Illinois, Pennsylvania, and Massachusetts. Additionally, its branded products, ranging from flowers to edibles, have maintained a top-ranking presence in the industry.

Cresco’s balance sheet showed current assets of $265 million, including $75 million in cash and cash equivalents. However, the company is also shouldering a senior secured term loan debt of $384 million.

Cresco also during the period cancelled its pending megamerger with Columbia Care, as well as the tied asset deal with Sean “Diddy” Combs.

Adam Jackson

Adam Jackson writes about the cannabis industry for the Green Market Report. He previously covered the Missouri Statehouse for the Columbia Missourian and has written for the Missouri Independent. He most recently covered retail, restaurants and other consumer companies for Bloomberg Business News. You can find him on Twitter at @adam_sjackson and email him at adam.jackson@crain.com.


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