Adam JacksonCresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) posted its first-quarter results ending March 31, showing some market resilience as the company tries to sew up its transaction with Columbia Care.
Despite a slight sequential revenue decrease of 3% to $194 million, the company demonstrated notable growth in other areas, including a 32% year-over-year increase in branded equivalized unit volume and a 4% increase in retail transactions.
However, the firm’s first quarter ended with a net loss of $28 million.
The Chicago-based cannabis firm, which operates in several other states, recorded an adjusted gross profit of $89 million, 46% of revenue, and an adjusted EBITDA of $29 million, or 15% of revenue.
“Our team generated $194 million of sales. Our revenue performance was solid across our footprint, with some softening in Illinois that caused sequential decline in revenue as well as much of the margin pressure,” CEO Charles Bachtell noted in a statement Wednesday.
While revenue experienced a slight dip, Cresco generated a positive operating cash flow of $3 million in the first quarter, after making $32 million of tax payments. The company also expanded its presence with the opening of eight new Sunnyside stores in Florida and Pennsylvania, raising its nationwide store count to 63.
The first quarter also marked a milestone for Cresco, as it surpassed $1 billion in online retail sales exclusively through its e-commerce platform, Sunnyside.shop. The company has retained its top share position in Illinois, Pennsylvania, and Massachusetts markets, maintaining wholesale leadership with its portfolio.
Cresco also said its SEED Community Incubator Program also made notable strides in the first quarter, providing staff hours and expert guidance to an Illinois social equity dispensary license holder set to open its first store in the coming quarter.
On the corporate side, the company is still in the process of acquiring Columbia Care, with which it entered into an arrangement agreement in March 2022. Despite the ongoing regulatory challenges, the company said it’s still optimistic about finding a strategic and financially sensible path forward.
“The company has no update on the timing for execution of agreements relating to outstanding divestiture transactions,” it said.
The first quarter results come following a challenging Q4 2022, in which the company recorded a $180 million loss and missed revenue targets. As of March 31, the company’s current assets were valued at $286 million, which included $90 million in cash, cash equivalents, and restricted cash. The company’s senior secured term loan debt, net of discount and issuance costs, stood at $382 million.
