Cresco Labs Revenue Rises, But Losses, Debts Grow Too

While the news of the Columbia Care acquisition was the big news of the morning, Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) also reported its financial results for the fourth quarter and year ending December 31, 2021. Cresco’s fourth-quarter revenue rose 34% over last year to $218 million, this was only a slight increase over the third quarter’s revenue of $215 million. The cash flow from operations was $38 million. Taxes and interest payments pushed the company to report a net loss of $11 million the quarter.

A deeper dive into the quarterly revenue showed that wholesale revenue was $101 million and maintained the position as the number one seller of branded cannabis products in the U.S. with a leading share in the flower, concentrates, and vape categories. Retail revenue increased 10% sequentially, to $117 million, an average of $2.8 million per store. Same-store-sales increased 28% year-over-year, 1% sequentially.

Full Year Results

Cresco reported that revenue rose 73% in 2021 to $822 million over 2020’s $476 million. The net loss though was a whopping $296 million versus 2020’s net loss of $92 million.  The company said it ended the year with over $224 million of cash on hand.

“This has been an incredible year of growth and margin expansion for Cresco Labs. We generated $822 million in annual revenue, representing 73% annual growth. Adjusted EBITDA more than tripled as the investments we’ve made in the business start to bear fruit. We ended the year with 46 retail stores, more than double where we were at the end of last year. The Cresco Labs family expanded from approximately 2,300 employees to approximately 3,500, as we grew both organically and integrated five acquisitions,” said Charles Bachtell, Co-Founder, and CEO of Cresco Labs.

Growing Debt

Cresco noted in its release that total current liabilities crept up to $288 million by the end of 2021 from $252 million by the end of 2020. The total long-term liabilities also shot up to $694 million from 2020’s $404 million. The interest expense in 2021 was $51 million versus 2020’s $31 million.

“As we all saw, there was a slowing of market growth in the fourth quarter and we were not immune to this. The good news is our plan is working – consumers love our brands, we maintained our leadership as the #1 wholesaler of branded cannabis, and we were the most productive retailer in the industry. We competed very well, gaining or maintaining share in seven of our 10 states. We remain focused on driving growth for our shareholders through optimizing operations to drive margins and market share and by opening up new markets in which to sell our leading brands. With many more growth initiatives ahead, 2022 is set to be another record year as we continue to drive strategic breadth, depth and execute on our plan.”

 

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.


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