Chicago-based Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) released its unaudited financial results for the fourth quarter and full year ending December 31, 2018. The fourth quarter revenue was $17.0 million, an increase of 411% over last year for the same time period and up 33% sequentially.
The company trimmed its net losses to $2.6 million versus the net loss of $3.0 million for 2017 fourth quarter. The quarter’s pro forma revenue was $22.5 million.
Full Year Results
Cresco Labs delivered full-year revenue of $43.3 million, which increased 294% from 2017 and the full year pro forma revenue was $75.6 million. The company was profitable for the full year as it delivered a net income of $3.9 million, compared to a net loss of $4.0 million in the prior year. Cresco Labs is now operational in seven U.S. states, with binding transactions pending in New York, Massachusetts, and Florida. On March 25, 2019, it received approval to enter into the State of Michigan
“We completed 2018 with another quarter of positive pre-tax income that reflected continued strong execution across all areas of our operations,” said Charles Bachtell, Co-founder, and CEO of Cresco Labs. “Building on our momentum from 2018, we have already made incredible progress this year in building Cresco Labs’ leadership position in the cannabis industry. The definitive agreement signed with Origin House earlier this month is a transformational deal for Cresco that creates a cannabis industry powerhouse with the premier distribution platform in the United States serving the greatest number of dispensaries in the country. Combined with our recent entrance into the Florida market, Cresco has built the largest and most strategic footprint of any cannabis company in the United States.”
Success In The Capital Markets
Cresco Labs is a relatively young company that has accomplished a great deal very quickly. It only began trading its common shares on the Canadian Securities Exchange on December 3, 2018 under the symbol “CL” following the successful completion of the Company’s reverse takeover of Randsburg International Gold Corp. On March 6, 2019, the company was approved to list on the OTCQX market and its common shares are currently trading under the symbol “CRLBF.” Cresco successfully raised $205 million in growth capital through three capital raises in 2018.
As of December 31, 2018, Cresco had total assets of $318.4 million, including cash and cash equivalents of $131.3 million. In addition to that, it had a working capital position of $172.7 million with zero debt on the balance sheet.
The company gave the following operational updates in its statement:
- Construction is underway to expand the Company’s cultivation facility in Lincoln, IL to 170,000 square feet with expected completion during the second quarter of 2019.
- Launched an Illinois Opioid Alternative Pilot Program in the Company’s FloraMedex dispensary, which opens up access to medical cannabis across the state and removes certain registration barriers previously imposed on medical marijuana patients.
- The Company opened its third dispensary (New Kensington) under its first license in the state.
- The Company became the first dispensary in the Pittsburgh market to offer online ordering.
- The Company is currently in the process of expanding its Brookville cultivation facility by approximately 85,000 square feet.
- On January 16, 2019, the Company made the first legal sale of medical marijuana in Ohio, the second consecutive state in which Cresco Labs was first to market (following similar success in Pennsylvania).
- Hope Heal Health, one of the companies with which Cresco entered into a definitive merger agreement, opened a medical cannabis dispensary in Fall River, Bristol County, Massachusetts. This acquisition is pending regulatory approval.
- The Company will be launching a wholesale distribution of more than 50 products under the Cresco brand during the second quarter of 2019.
- The Company’s new processing facility in Mendota, CA is scheduled to open during the second quarter of 2019. This will enable the Company to distribute its full suite of brands across the state.
- Mindy’s Edibles are now carried in 62 out of 67 dispensaries in Nevada and have three of the top 10 selling edibles in the state, including the top-selling edible, according to Headset Inc., a cannabis data intelligence company.