While the last few months have seen Cresco Labs (OTCQX: CRLBF) in the headlines for deal collapses and market exits, the company’s executives focused on its refined growth strategy in a call to discuss its latest financial results.
“There’s a lot that goes into producing the Q3 that we had,” CEO Charlie Bachtell said, while lauding his team’s efforts.
Bachtell credited the better-than-expected performance to Cresco’s “year-of-the-core” initiatives, which emphasized being “incredibly competitive in our core markets” and rigorous cost management.
The approach – which the company leaned heavily into after its merger with Columbia Care (now The Cannabist) collapsed – resulted in a moderate decline in sales as the company closed out operations in states where it had a weaker position, such as Arizona. But the metric fell less than the high single-digit drop initially projected.
It’s not a one-and-done strategy, according to CFO Dennis Olis.
“I think the decline you’ll see from Q3 to Q4 will be less than what you saw from Q2 to Q3, but we’re going to continue to examine every dollar we spend and look for every opportunity to run the business more efficiently at corporate and in the field,” Olis said.
That includes decisions about how to allocate the company capital when targeting expansion, Bachtell said.
“As we continue leaning into this area and creating more with less, you’re going to see us allocate capital to the things that continue to move us in this direction,” he said.
“We’re seeing trends already developed in states like New Jersey and Maryland that will make us a more effective and more efficient acquirer, should we choose to move into those states, than (if) the opportunity would have presented itself over the last 18 to 24 months.”
The company is also looking for market opportunities in states like Florida, Ohio, and Pennsylvania.
Cresco is also looking internally for opportunities to expand and innovate, according to Gregory Butler, the company’s chief commercial officer.
“We’ve got brands that we know consumers love,” Butler said, pointing out that their strategy is to “continue to grow and defend our share positions.”
“It’s just about driving efficiency on the back end of those brands to really help drive margin so that we can flex with price as we have to,” he added.