Cresco Labs Revenue Falls From Fourth Quarter

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF)  released its financial results for the three months ended March 31, 2022, as revenue fell from the fourth quarter’s $217 million to the first quarter’s $214 million. Cresco Labs did note that the revenue increased 20% over last year’s $178 million for the same time period. This also beat the Yahoo Finance average analyst estimate for sales of $213 million.

Net losses for the quarter grew to $23 million over the fourth quarter’s net loss of $11 million. It was down slightly from last year’s net loss of $24 million for the same time period.

“Q1 was a solid quarter for the Cresco Labs team in a challenging environment for all consumer product categories. While our 10-state footprint saw a cumulative sequential contraction of 4.5%, we held or took market share in most of our states and outperformed the markets with our 2% decline. We understand that an emerging industry’s growth trajectory is rarely linear, especially a highly regulated industry with a fragmented state-by-state structure, conflicting federal and state laws, and the addition of general macro pressures. Notwithstanding, we continue to execute with a clear and focused strategy to obtain market leadership with a portfolio of cannabis brands consumers love and a plan to get them on as many shelves as possible. The strategy remains constant, and the Columbia Care acquisition announced in the quarter simply fits these stated priorities hand-in-glove. We are pairing the best consumer brands with a broad, deep and strategic footprint,” said Charles Bachtell, Co-Founder and CEO of Cresco Labs.

Revenue Breakdown

Cresco noted that it had wholesale revenue of $95 million and maintains that it has a position as the #1 seller of branded cannabis products in U.S. with leading share in the flower, concentrates, and vape categories. Retail revenue increased 44% year-over-year, to $119 million, or $2.5 million per average store open in the quarter and same-store sales increased 9% year-over-year.

Cash Burn

The company is certainly sitting on a comfortable level of cash with $179 million on hand at the end of the quarter. However, the company burned through $44 million in cash in the quarter, a big jump from the cash used in the fourth quarter of $28 million.

“The first quarter showed the resilience and strength of the business we have built over the past few years. We remain focused on playing the long game and building a business that will be a lasting leader in the cannabis industry under any regulatory outcome. The compliance-focused foundation of both Cresco Labs and Columbia Care is helping ensure a smooth progression towards deal approval through a reasonable and manageable regulatory process. We recently crossed our first milestone by passing the federal HSR review process on May 16 and we do not expect state regulatory approvals to be an issue for our closing timeline,” Mr. Bachtell concluded.

On March 23, 2022, the company announced a definitive arrangement agreement whereby Cresco will acquire Columbia Care in an all-stock transaction.

 

 

Debra Borchardt

Debra Borchardt is the Co-Founder, and Executive Editor of GMR. She has covered the cannabis industry for several years at Forbes, Seeking Alpha and TheStreet. Prior to becoming a financial journalist, Debra was a Vice President at Bear Stearns where she held a Series 7 and Registered Investment Advisor license. Debra has a Master's degree in Business Journalism from New York University.


One comment

  • mike mclaughlin

    May 23, 2022 at 12:56 pm

    As known, the game plan for the large cannabis companies is to have enough money to lose money to eventually survive. There seems to be too much weed around and the large growers cannot keep pumping out product before the good old LAW of supply and demand crushes them.
    When the plant gains acceptance on the federal level it will be a sea chnage for the industry. The large fish (california) will eat the small (nevada, arizona and maybe Oregon) by flooding theeir markets with cheap good pot. California has the scale. The super large Canadians companies, already in the USA, will, in my view, struggle. In the meantime the taxing authories, now hooked on tax money for social programs will keep raising taxes to maintain support levels for social programs. In other words: No mercy for the industry.

    Reply

Leave a Reply

Your email address will not be published. Required fields are marked *

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

We respect your privacy. See our privacy policy.


About Us

The Green Market Report focuses on the financial news of the rapidly growing cannabis industry. Our target approach filters out the daily noise and does a deep dive into the financial, business and economic side of the cannabis industry. Our team is cultivating the industry’s critical news into one source and providing open source insights and data analysis


READ MORE



Recent Tweets

@GreenMarketRpt – 5 hours

TerrAscend To Bring Berner’s Cookies To Pennsylvania

@GreenMarketRpt – 5 hours

Trulieve and Wiz Khalifa Bring Khalifa Kush To Florida

@GreenMarketRpt – 5 hours

Oregon’s Psilocybin Legalization Plan Under Scrutiny

Back to Top

Choose Your News

Subscribe to the Green Market Report newsletter that gives you original content delivered straight to your inbox.

 Subscribe

We respect your privacy. See our privacy policy.