Cresco Labs Announces First Quarter 2022 Results

 

Company reports 20% year-over-year revenue growth and 45% year-over-year adjusted EBITDA 1 growth and continues industry leadership in branded wholesale and retail productivity

 

  Clears first milestone in proposed Columbia Care transaction with expiration of 30-day HSR   2   review period  

 

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (" Cresco Labs " or the " Company "), a vertically integrated, multi-state operator and the number one U.S. wholesaler of branded cannabis products, today released its financial results for the three months ended March 31, 2022. All financial information presented in this release is reported in accordance with U.S. Generally Accepted Accounting Principles ("U.S. GAAP") and in U.S. dollars.

 

  First Quarter 2022 Financial Highlights  

 
  • First quarter revenue of $214 million, up 20% year-over-year
  •  
  • Gross profit excluding fair value mark-up for acquired inventory of $113 million, or 53% of revenue, an increase of 29% year-over-year
  •  
  • First quarter adjusted EBITDA 1 of $51 million, or 24% of revenue, an increase of 45% year-over-year
  •  
  • Wholesale revenue of $95 million, maintained position as #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
  •  
  • Ended the quarter with $179 million of cash on hand
  •  
  • Opened four new retail stores, three in Florida and one in Pennsylvania, bringing the Company's total retail footprint to 50
  •  
  • Launched branded product portfolio in Florida, including High Supply ® , Good News ® , Remedi and Sunnyside* Chews
  •  

  1 See "Non-GAAP Financial Measures" at the end of this press release for more information regarding the Company's use of non-GAAP financial measures.
2 Hart-Scott-Rodino Antitrust Improvements Act of 1976 ("HSR")

 

  Management Commentary  

 

"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.

 

"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.

 

  Balance Sheet, Liquidity, and Other Financial Information  

 
  • As of March 31, 2022, current assets were $400 million, including cash and cash equivalents of $179 million. The Company had working capital of $69 million and senior secured term loan debt, net of discount and issuance costs, of $378 million.
  •  
  • Total shares on a fully converted basis were 439,870,970 as of March 31, 2022.
  •  

  Social Equity and Education Development Program  

 
  • Over the past few months, The Sentence of Michael Thompson documentary has been accepted into eight film festivals and has won a Clio Award, Audience Choice Award at the South by Southwest Film Festival, and Best Documentary Short Film Award at the RiverRun International Film Festival. The short film was produced by the Company's Cresco ® brand and aims to help people truly understand the gravity of the impact of injustice on the lives of people adversely impacted by the War on Drugs. This is all in furtherance of the Company's mission to leverage its platform to drive awareness and action toward cannabis legalization and criminal justice reform.
  •  

  Capital Markets and M&A Activity  

 
  • On March 23, 2022, the Company announced a definitive arrangement agreement whereby Cresco will acquire Columbia Care in an all-stock transaction. Please click here for additional details.
  •  
  • On May 16, 2022, the Company announced the expiration of the 30-day waiting period under the HSR in connection with the proposed Columbia Care transaction.
  •  

  Conference Call and Webcast  

 

The Company will host a conference call and webcast to discuss its financial results on Wednesday, May 18, 2022, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 1-844-200-6205 (US Toll Free), 1-833-950-0062 (CDN Toll Free), 1-646-904-5544 (US Local), +1 929-526-1599 (Other) providing access code 017231. Archived access to the webcast will be available for one year on the Cresco Labs' investor relations website .

 

  Consolidated Financial Statements  

 

The financial information reported in this press release is based on unaudited management prepared financial statements for the three months ended March 31, 2022. These financial statements have been prepared in accordance with U.S. GAAP. This release contains certain preliminary financial results for first quarter, including Cost of goods sold; Gross profit; Impairment loss; Other expense, net; Income tax expense; Net loss; Inventory, net; Goodwill; and Deferred, contingent consideration and other payables, short-term. The Company expects to file its unaudited interim condensed consolidated financial statements for the three months ended March 31, 2022, on SEDAR by May 19, 2022. Accordingly, such financial information may be subject to change. All financial information contained in this press release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes between the information contained in this press release and the consolidated financial statements it files on SEDAR, to the extent that the financial information contained in this press release is inconsistent with the information contained in the Company's financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Company's filed financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company's audited financial statements for the year ended December 31, 2021, previously filed on SEDAR.

 

Cresco Labs references certain non-GAAP financial measures throughout this press release, which may not be comparable to similar measures presented by other issuers. Please see the "Non-GAAP Financial Measures" section below for more detailed information.

 

  Non-GAAP Financial Measures  

 

Earnings before interest, taxes, depreciation, and amortization ("EBITDA"), Adjusted EBITDA, and Adjusted gross profit are non-GAAP financial measures and do not have standardized definitions under U.S. GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with U.S. GAAP and may not be comparable to similar measures presented by other issuers. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the U.S. GAAP financial measures presented herein. Accordingly, the Company has included below reconciliations of the supplemental non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP. The Company has not quantitatively reconciled its guidance for forward-looking non-GAAP metrics to their most comparable U.S. GAAP measures because the Company does not provide specific guidance for the various reconciling items as certain items that impact these measures have not occurred, are out of the Company's control, or cannot be reasonably predicted. Accordingly, a reconciliation to the most comparable U.S. GAAP financial metric is not available without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the Company's results.

 

  About Cresco Labs Inc.  

 

Cresco Labs is one of the largest vertically integrated, multistate cannabis operators in the United States, with a mission to normalize and professionalize the cannabis industry. Employing a consumer-packaged goods ("CPG") approach, Cresco Labs is the largest wholesaler of branded cannabis products in the U.S. Its brands are designed to meet the needs of all consumer segments and comprised of some of the most recognized and trusted national brands including Cresco®, Cresco Reserve®, High Supply®, Mindy's™, Good News®, Remedi™, Wonder Wellness Co.® and FloraCal®. Sunnyside*®, Cresco Labs' national dispensary brand, is a wellness-focused retailer created to build trust, education and convenience for both existing and new cannabis consumers. Recognizing that the cannabis industry is poised to become one of the leading job creators in the country, Cresco Labs operates the industry's largest Social Equity and Educational Development initiative, SEED™, which was established to ensure that all members of society have the skills, knowledge and opportunity to work and own businesses in the cannabis industry. Learn more about Cresco Labs at www.crescolabs.com .

 

  Forward Looking Statements  

 

This press release contains "forward-looking information" within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute "forward-looking statements" within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, "forward-looking statements"). Such forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company's beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company's control. Generally, such forward-looking statements can be identified by the use of forward-looking terminology such as, ‘may,' ‘will,' ‘should,' ‘could,' ‘would,' ‘expects,' ‘plans,' ‘anticipates,' ‘believes,' ‘estimates,' ‘projects,' ‘predicts,' ‘potential' or ‘continue' or the negative of those forms or other comparable terms. The Company's forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Company's actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to those risks discussed under "Risk Factors" in the Company's Annual Information Form for the year ended December 31, 2021, filed on March 25, 2022, other documents filed by the Company with Canadian securities regulatory authorities; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Company's forward-looking statements. No assurances are given as to the future trading price or trading volumes of Cresco Labs' shares, nor as to the Company's financial performance in future financial periods. The Company does not intend to update any of these factors or to publicly announce the result of any revisions to any of the Company's forward-looking statements contained herein, whether as a result of new information, any future event or otherwise. Except as otherwise indicated, this press release speaks as of the date hereof. The distribution of this press release does not imply that there has been no change in the affairs of the Company after the date hereof or create any duty or commitment to update or supplement any information provided in this press release or otherwise.

 
                                                                                                                                                                                                                                                                            
 

  Cresco Labs Inc.  

 
 

  Financial Information and Non-GAAP Reconciliations  

 
 

(All amounts expressed in thousands of U.S. Dollars)

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

  Unaudited Consolidated Statements of Operations  

 
 

  For the Three Months Ended March 31, 2022, December 31, 2021 and March 31, 2021  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

  For the Three Months Ended  

 
 

  ($ in thousands)  

 
 

 

 
 

  March 31,
2022
 

 
 

 

 
 

  December 31,
2021
 

 
 

 

 
 

  March 31,
2021
 

 
 

Revenue

 
 

 

 
 

$

 
 

214,391

 
 

 

 
 

 

 
 

$

 
 

217,787

 
 

 

 
 

 

 
 

$

 
 

178,437

 
 

 

 
 

Cost of goods sold

 
 

 

 
 

 

 
 

107,018

 
 

 

 
 

 

 
 

 

 
 

107,765

 
 

 

 
 

 

 
 

 

 
 

91,414

 
 

 

 
 

  Gross profit  

 
 

 

 
 

 

 
 

  107,373  

 
 

 

 
 

 

 
 

 

 
 

  110,022  

 
 

 

 
 

 

 
 

 

 
 

  87,023  

 
 

 

 
 

  Gross profit %  

 
 

 

 
 

 

 
 

  50.1  

 
 

  %  

 
 

 

 
 

 

 
 

  50.5  

 
 

  %  

 
 

 

 
 

 

 
 

  48.8  

 
 

  %  

 
 

Operating expenses:

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

Selling, general and administrative

 
 

 

 
 

 

 
 

76,048

 
 

 

 
 

 

 
 

 

 
 

70,540

 
 

 

 
 

 

 
 

 

 
 

59,549

 
 

 

 
 

Share-based compensation

 
 

 

 
 

 

 
 

6,506

 
 

 

 
 

 

 
 

 

 
 

4,496

 
 

 

 
 

 

 
 

 

 
 

5,595

 
 

 

 
 

Depreciation and amortization

 
 

 

 
 

 

 
 

4,552

 
 

 

 
 

 

 
 

 

 
 

4,484

 
 

 

 
 

 

 
 

 

 
 

5,641

 
 

 

 
 

Impairment loss

 
 

 

 
 

 

 
 

 
 

 

 
 

 

 
 

 

 
 

14,945

 
 

 

 
 

 

 
 

 

 
 

 
 

 

 
 

Total operating expenses

 
 

 

 
 

 

 
 

87,106

 
 

 

 
 

 

 
 

 

 
 

94,465

 
 

 

 
 

 

 
 

 

 
 

70,785

 
 

 

 
 

  Income from operations  

 
 

 

 
 

 

 
 

  20,267  

 
 

 

 
 

 

 
 

 

 
 

  15,557  

 
 

 

 
 

 

 
 

 

 
 

  16,238  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

Other expense:

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

Interest expense, net

 
 

 

 
 

 

 
 

(14,363

 
 

)

 
 

 

 
 

 

 
 

(14,851

 
 

)

 
 

 

 
 

 

 
 

(11,302

 
 

)

 
 

Other (expense) income, net

 
 

 

 
 

 

 
 

(6,772

 
 

)

 
 

 

 
 

 

 
 

10,911

 
 

 

 
 

 

 
 

 

 
 

(12,340

 
 

)

 
 

Loss from equity method investments

 
 

 

 
 

 

 
 

 
 

 

 
 

 

 
 

 

 
 

 
 

 

 
 

 

 
 

 

 
 

(1,196

 
 

)

 
 

Total other expense, net

 
 

 

 
 

 

 
 

(21,135

 
 

)

 
 

 

 
 

 

 
 

(3,940

 
 

)

 
 

 

 
 

 

 
 

(24,838

 
 

)

 
 

  (Loss) income before income taxes  

 
 

 

 
 

 

 
 

  (868  

 
 

  )  

 
 

 

 
 

 

 
 

  11,617  

 
 

 

 
 

 

 
 

 

 
 

  (8,600  

 
 

  )  

 
 

Income tax expense

 
 

 

 
 

 

 
 

(22,807

 
 

)

 
 

 

 
 

 

 
 

(23,528

 
 

)

 
 

 

 
 

 

 
 

(15,524

 
 

)

 
 

  Net loss 1  

 
 

 

 
 

  $  

 
 

  (23,675  

 
 

  )  

 
 

 

 
 

  $  

 
 

  (11,911  

 
 

  )  

 
 

 

 
 

  $  

 
 

  (24,124  

 
 

  )  

 
 

  1 Net loss includes amounts attributable to non-controlling interests.

 
 
                                                                                                   
 

  Cresco Labs Inc.  

 
 

  Unaudited Reconciliation of Gross Profit to Adjusted Gross Profit (Non-GAAP)  

 
 

  For the Three Months Ended March 31, 2022, December 31, 2021 and March 31, 2021  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

  For the Three Months Ended  

 
 

  ($ in thousands)  

 
 

 

 
 

  March 31,
2022
 

 
 

 

 
 

  December 31,
2021
 

 
 

 

 
 

  March 31,
2021
 

 
 

  Revenue  

 
 

 

 
 

$

 
 

214,391

 
 

 

 
 

 

 
 

$

 
 

217,787

 
 

 

 
 

 

 
 

$

 
 

178,437

 
 

 

 
 

Cost of goods sold 1

 
 

 

 
 

 

 
 

107,018

 
 

 

 
 

 

 
 

 

 
 

107,765

 
 

 

 
 

 

 
 

 

 
 

91,414

 
 

 

 
 

  Gross profit  

 
 

 

 
 

  $  

 
 

  107,373  

 
 

 

 
 

 

 
 

  $  

 
 

  110,022  

 
 

 

 
 

 

 
 

  $  

 
 

  87,023  

 
 

 

 
 

Fair value mark-up for acquired inventory

 
 

 

 
 

 

 
 

5,322

 
 

 

 
 

 

 
 

 

 
 

8,407

 
 

 

 
 

 

 
 

 

 
 

585

 
 

 

 
 

  Adjusted gross profit (Non-GAAP)  

 
 

 

 
 

  $  

 
 

  112,695  

 
 

 

 
 

 

 
 

  $  

 
 

  118,429  

 
 

 

 
 

 

 
 

  $  

 
 

  87,608  

 
 

 

 
 

  Adjusted gross profit %  

 
 

 

 
 

 

 
 

  52.6  

 
 

  %  

 
 

 

 
 

 

 
 

  54.4  

 
 

  %  

 
 

 

 
 

 

 
 

  49.1  

 
 

  %  

 
 

  1 Production (cultivation, manufacturing, and processing) costs related to products sold during the period.

 
 
                                                                                               
 

  Cresco Labs Inc.  

 
 

  Summarized Unaudited Consolidated Statements of Financial Position  

 
 

  As of March 31, 2022 and December 31, 2021  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

  ($ in thousands)  

 
 

 

 
 

  March 31,
2022
 

 
 

 

 
 

  December 31,
2021
 

 
 

Cash and cash equivalents

 
 

 

 
 

$

 
 

179,320

 
 

 

 
 

$

 
 

223,543

 
 

Other current assets

 
 

 

 
 

 

 
 

220,480

 
 

 

 
 

 

 
 

198,212

 
 

Property and equipment, net

 
 

 

 
 

 

 
 

394,994

 
 

 

 
 

 

 
 

369,092

 
 

Intangible assets, net

 
 

 

 
 

 

 
 

435,930

 
 

 

 
 

 

 
 

437,644

 
 

Goodwill

 
 

 

 
 

 

 
 

448,336

 
 

 

 
 

 

 
 

446,767

 
 

Other non-current assets

 
 

 

 
 

 

 
 

105,877

 
 

 

 
 

 

 
 

105,205

 
 

  Total assets  

 
 

 

 
 

  $  

 
 

  1,784,937  

 
 

 

 
 

  $  

 
 

  1,780,463  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

Total current liabilities

 
 

 

 
 

 

 
 

331,194

 
 

 

 
 

 

 
 

288,394

 
 

Total long-term liabilities

 
 

 

 
 

 

 
 

689,998

 
 

 

 
 

 

 
 

694,333

 
 

Total shareholders' equity

 
 

 

 
 

 

 
 

763,745

 
 

 

 
 

 

 
 

797,736

 
 

  Total liabilities and shareholders' equity  

 
 

 

 
 

  $  

 
 

  1,784,937  

 
 

 

 
 

  $  

 
 

  1,780,463  

 
 
                                                                                                                                                                                        
 

  Cresco Labs Inc.  

 
 

  Unaudited Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP)  

 
 

  For the Three Months Ended March 31, 2022, December 31, 2021 and March 31, 2021  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

  For the Three Months Ended  

 
 

  ($ in thousands)  

 
 

 

 
 

  March 31,
2022
 

 
 

 

 
 

  December 31,
2021
 

 
 

 

 
 

  March 31,
2021
 

 
 

  Net loss 1  

 
 

 

 
 

  $  

 
 

  (23,675  

 
 

  )  

 
 

 

 
 

  $  

 
 

  (11,911  

 
 

  )  

 
 

 

 
 

  $  

 
 

  (24,124  

 
 

  )  

 
 

Depreciation and amortization

 
 

 

 
 

 

 
 

10,960

 
 

 

 
 

 

 
 

 

 
 

8,197

 
 

 

 
 

 

 
 

 

 
 

10,151

 
 

 

 
 

Interest expense, net

 
 

 

 
 

 

 
 

14,363

 
 

 

 
 

 

 
 

 

 
 

14,851

 
 

 

 
 

 

 
 

 

 
 

11,302

 
 

 

 
 

Income tax expense

 
 

 

 
 

 

 
 

22,807

 
 

 

 
 

 

 
 

 

 
 

23,528

 
 

 

 
 

 

 
 

 

 
 

15,524

 
 

 

 
 

  Earnings before interest, taxes, depreciation, and amortization (EBITDA) (Non-GAAP)  

 
 

 

 
 

  $  

 
 

  24,455  

 
 

 

 
 

 

 
 

  $  

 
 

  34,665  

 
 

 

 
 

 

 
 

  $  

 
 

  12,853  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

Other expense (income), net

 
 

 

 
 

 

 
 

6,772

 
 

 

 
 

 

 
 

 

 
 

(10,911

 
 

)

 
 

 

 
 

 

 
 

12,340

 
 

 

 
 

Loss from equity method investments

 
 

 

 
 

 

 
 

 
 

 

 
 

 

 
 

 

 
 

 
 

 

 
 

 

 
 

 

 
 

1,196

 
 

 

 
 

Fair value mark-up for acquired inventory

 
 

 

 
 

 

 
 

5,322

 
 

 

 
 

 

 
 

 

 
 

8,407

 
 

 

 
 

 

 
 

 

 
 

585

 
 

 

 
 

Adjustments for acquisition and other non-core costs

 
 

 

 
 

 

 
 

6,694

 
 

 

 
 

 

 
 

 

 
 

4,954

 
 

 

 
 

 

 
 

 

 
 

1,738

 
 

 

 
 

Impairment loss

 
 

 

 
 

 

 
 

 
 

 

 
 

 

 
 

 

 
 

14,945

 
 

 

 
 

 

 
 

 

 
 

 
 

 

 
 

Share-based compensation

 
 

 

 
 

 

 
 

7,506

 
 

 

 
 

 

 
 

 

 
 

4,933

 
 

 

 
 

 

 
 

 

 
 

6,280

 
 

 

 
 

  Adjusted EBITDA (Non-GAAP)  

 
 

 

 
 

  $  

 
 

  50,749  

 
 

 

 
 

 

 
 

  $  

 
 

  56,993  

 
 

 

 
 

 

 
 

  $  

 
 

  34,992  

 
 

 

 
 

  1 Net (loss) includes amounts attributable to non-controlling interests.

 
 
                                                                                                              
 

  Cresco Labs Inc.  

 
 

  Unaudited Summarized Consolidated Statements of Cash Flows  

 
 

  For the Three Months Ended March 31, 2022, December 31, 2021 and March 31, 2021  

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

 

 
 

  For the Three Months Ended  

 
 

  ($ in thousands)  

 
 

 

 
 

  March 31,
2022
 

 
 

 

 
 

  December 31,
2021
 

 
 

 

 
 

  March 31,
2021
 

 
 

Net cash (used in) provided by operating activities

 
 

 

 
 

$

 
 

(3,418

 
 

)

 
 

 

 
 

$

 
 

37,653

 
 

 

 
 

 

 
 

$

 
 

12,950

 
 

 

 
 

Net cash (used in) investing activities

 
 

 

 
 

 

 
 

(34,219

 
 

)

 
 

 

 
 

 

 
 

(64,107

 
 

)

 
 

 

 
 

 

 
 

(26,790

 
 

)

 
 

Net cash (used in) provided by financing activities

 
 

 

 
 

 

 
 

(6,365

 
 

)

 
 

 

 
 

 

 
 

(2,375

 
 

)

 
 

 

 
 

 

 
 

132,206

 
 

 

 
 

Effect of foreign currency exchange rate changes on cash

 
 

 

 
 

 

 
 

(180

 
 

)

 
 

 

 
 

 

 
 

134

 
 

 

 
 

 

 
 

 

 
 

(169

 
 

)

 
 

  Net (decrease) increase in cash and cash equivalents  

 
 

 

 
 

  $  

 
 

  (44,182  

 
 

  )  

 
 

 

 
 

  $  

 
 

  (28,695  

 
 

  )  

 
 

 

 
 

  $  

 
 

  118,197  

 
 

 

 
 

Cash and cash equivalents and restricted cash, beginning of period

 
 

 

 
 

 

 
 

226,102

 
 

 

 
 

 

 
 

 

 
 

254,797

 
 

 

 
 

 

 
 

 

 
 

140,774

 
 

 

 
 

  Cash and cash equivalents and restricted cash, end of period  

 
 

 

 
 

  $  

 
 

  181,920  

 
 

 

 
 

 

 
 

  $  

 
 

  226,102  

 
 

 

 
 

 

 
 

  $  

 
 

  258,971  

 
 

 

 
 

 

 

  

  

  Media  
Jason Erkes, Cresco Labs
Chief Communications Officer
press@crescolabs.com  
312-953-2767

Investors  
Megan Kulick, Cresco Labs
SVP, Investor Relations
investors@crescolabs.com  

For general Cresco Labs inquiries:  
312-929-0993
info@crescolabs.com  

 

News Provided by Business Wire via QuoteMedia

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Closeup of lush green cannabis leaves.

Thailand Reverses Course on Cannabis, Moves to Recriminalize Amid Political Fallout

Thailand’s groundbreaking experiment with cannabis decriminalization is rapidly unraveling, with the government formally moving to reclassify the plant as a narcotic and ban recreational sales.

The decision has sent shockwaves through an industry once projected to be worth over US$1 billion.

The country’s Ministry of Public Health issued an order this week stating that cannabis only be sold with a medical prescription, effectively ending a short-lived era of liberal recreational access.

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Cannabis leaf over map of Australia.

A State-by-State Guide to Cannabis in Australia

Australia federally legalised medicinal cannabis in 2016, and Australia's cannabis market has seen major growth since then.

Medical cannabis approvals were up by 120 percent in the first half of 2023 compared to the same period in 2022. Statista forecasts that Australian cannabis revenue will reach AU$3.73 billion in 2024 and grow at an annual rate of 3.22 percent, culminating in market volume worth AU$4.53 billion by 2029.

However, Australia’s cannabis industry is still young. Despite there being a strong case for a regulated market, which was outlined in a July 2024 report by the Penington Institute, recreational use is not legal and medical access remains limited and regulated.

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Cannabis leaf on road marked with "2025," with sunlight in the background.

New Cannabis Consumption Trends, Regulatory Shifts Seen Driving Market in 2025

Understanding trends in the cannabis industry is paramount for investors eyeing a market with steady growth potential, but the landscape is complex as products and regulations continue to evolve.

Consumption habits are changing as edibles, vaping and THC beverages gain traction, especially among younger users, and cannabis companies are adapting their offerings to meet shifting demand.

Meanwhile, regulatory uncertainty, particularly surrounding the future of the US Farm Bill and state-level restrictions on hemp-derived cannabinoids, continues to challenge the market.

Despite these headwinds, production data and long-term growth forecasts suggest the cannabis industry remains on a promising — albeit turbulent — path. Read on for more on key trends to watch in 2025.

Consumption methods evolving post-legalization

Shifts in consumer behavior are reshaping markets across the board, and the cannabis industry is no exception.

While smoking remains the dominant method of cannabis consumption, a recent report from the Centers for Disease Control and Prevention highlights the growing popularity of edibles, vaping and dabbing.

The report notes that vaping and dabbing are particularly pronounced among younger adults.

A separate study published by the American Medical Association and funded in part by the Canadian Institutes of Health Research also points to how product preferences have changed among Canadian users since legalization in 2018.


The study indicates that while the use of flower, cannabis concentrates, oil, tinctures and topicals has decreased during that time, the use of vape cartridges, edibles and beverages has increased.

Edibles and beverages were legalized in Canada in late 2019, and Truss Beverage was one of the first players to introduce cannabis-infused drinks. Truss was a joint venture formed by Molson Coors Canada (TSX:TPX.A,TSX:TPX.B) and HEXO, a cannabis company that has since been acquired by Tilray Brands (TSX:TLRY,NASDAQ:TLRY).

In early 2020, Tilray launched a lineup of confectionery, wellness products and beverages through its subsidiary, High Park; Canopy Growth (TSX:WEED,NASDAQ:CGC) made a similar move. These companies gradually brought their products to the US as more states legalized cannabis for medical and/or recreational use.

Today, established cannabis brands typically offer edibles and beverages alongside their other products. Organigram Global (TSX:OGI,NASDAQ:OGI) is one of the newest US entrants, with its April acquisition of Collective Project providing immediate access to the US hemp-derived THC beverage market.

Growing awareness of health and wellness, potentially amplified by the pandemic-led adoption of health trackers, appears to be making an impact on the alcoholic beverage market.

A 2023 Gallup poll reveals a two decade decline in alcohol consumption, particularly among younger adults, suggesting a shift towards more health-conscious lifestyles within this demographic.

Craft beer production declined by 4 percent year-on-year in 2024, according to data collected by the Brewers Association. This marked the largest drop in the industry's history, excluding the pandemic. For small, independent craft breweries, 2024 marked the third consecutive year of declining production. A drop in the number of operating small breweries last year provides further evidence of this trend, with 501 closures in 2024 versus 434 openings.

Challenges in the alcohol market extend beyond the brewing industry, with the New York Times recently reporting the closure of a handful of nightclubs facing decreased alcohol sales alongside rising insurance and rent costs.

Meanwhile, cannabis lounges have been popping up across the US for the last several years. As of early 2025, several states had legalized or were in the process of implementing regulations for cannabis consumption lounges.

Hemp market growth despite regulatory uncertainty

The burgeoning hemp industry is another segment of the expanding cannabis market.

The legalization of industrial hemp — defined as cannabis with a THC concentration of 0.3 percent or less — through the 2018 Farm Bill led to initial investment and optimistic projections for CBD wellness products and various industrial applications. The sector’s rapid evolution also brought the rise of hemp-derived intoxicating cannabinoids, creating a market that presented both opportunities and complexities for participants.

However, after an initial boom, a lack of infrastructure and clearly defined regulations for CBD, as well as state-level variations and market oversupply, ultimately contributed to a quick retraction.

2024 was a pivotal year for the US hemp industry, as the hemp-related provisions of the 2018 Farm Bill — originally set to expire in September 2023, but extended to December 31, 2024 — created an urgent need to address critical issues like THC limits and the regulation of novel hemp-derived cannabinoids. A major point of contention was the proposed shift from defining hemp based on Delta-9 THC concentration (0.3 percent or less) to “total THC,” which includes THCA.

This change had the potential to significantly impact farmers and processors, as many hemp varieties that are compliant under the Delta-9 THC rule could exceed the 0.3 percent limit when THCA is included.

Various bills and amendments were proposed in 2024 as part of the Farm Bill discussions, each with different approaches to regulating hemp. Separate regulatory frameworks for industrial hemp and hemp grown for cannabinoids were suggested, and many states took their own action, leading to a patchwork of regulations and even outright bans.

Despite challenges, data from the US Department of Agriculture suggests signs of recovery.

The department's annual National Hemp Report from 2024 points to an 18 percent increase in industrial hemp production value between 2022 and 2023, with output growth seen in specific sectors like floral (18 percent), fiber (133 percent) and seed hemp (414 percent). The 2025 report from the Department of Agriculture indicates further expansion, with notable increases observed in both acreage (up 64 percent from 2023) and value (46 percent).

The 2024 Farm Bill ultimately did not pass, and right now the hemp industry is operating under a temporary extension of the 2018 Farm Bill under the American Relief Act of 2025, signed into law on December 21, 2024.

The 2018 Farm Bill is now set to expire on September 30, 2025.

While analysts for Markets and Markets project that the North American hemp industry will grow at a CAGR of 22.4 percent and ultimately reach a valuation of US$30.24 billion by 2029, the future of the industry will be heavily influenced by the outcome of the ongoing Farm Bill discussions.

US cannabis legalization remains stalled

Although there is clear demand for cannabis products, the now-defunct rescheduling process in the US is likely to continue casting a shadow of uncertainty over the industry's long-term trajectory.

Legal and procedural delays, including allegations of improper conduct and bias within the US Drug Enforcement Administration (DEA), led to hearing cancellations, and the new administration of US President Donald Trump has brought leadership changes to key agencies like the DEA and the Department of Justice.

Terry Cole, who Trump nominated to be DEA administrator on February 11, has a history of opposing cannabis legalization in the country. Similarly, Pam Bondi, Trump’s pick to lead the justice department, staunchly opposed a movement to legalize medical cannabis during her tenure as Florida’s attorney general.

While there have been bipartisan efforts in Congress to end federal cannabis prohibition and establish regulations for eventual legalization, the DEA’s actions and statements indicate a potential stall or reversal of progress.

In addition to that, new research is adding complexity to the debate.

A study published in the American Journal of Psychiatry this past March highlights an association between the use of high-potency cannabis strains and increased risks of psychosis, a factor that may not have been fully considered by the Department of Health and Human Services. As stronger cannabis strains become more widely available, a reassessment of their potential health risks may be required.

Investor takeaway

While the cannabis industry holds promise for growth and innovation, investors must remain acutely aware of the regulatory uncertainties and market volatility that will undoubtedly shape its trajectory in the years to come.

Don’t forget to follow us @INN_Cannabis for real-time news updates!

Securities Disclosure: I, Meagen Seatter, hold no direct investment interest in any company mentioned in this article.

Person touching a cannabis plant; Australia map in flag colours.

ASX Cannabis Stocks: 10 Biggest Companies

While Australia has yet to legalise all forms of cannabis, the country is a growing medical cannabis and hemp market, with many companies manufacturing, researching and exporting the plant-based product.

Medical cannabis was federally legalised in 2016, and the export of cannabis from Australia was legalised in 2018. As for recreational use, the only state to legalise recreational use and possession so far is the Australian Capital Territory, which did so in 2020, but it did not establish a regulated recreational cannabis market.

The country's medical cannabis market has been steadily expanding in size and scope. A Penington Institute report shows that Australians spent approximately AU$400 million on medicinal cannabis in the first half of 2024, 72 percent higher than the AU$234 million they spent over the entirety of 2022.

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Cannabis leaves, gavel.

Cannabis Round-Up: Rescheduling Faces New Roadblocks, SAFER Banking Act Gets Another Look

February 2025 was characterized by an evolving legislative landscape and important financial updates from major players.

These developments underscore the complex and dynamic nature of the sector as it continues to navigate legal, financial, and regulatory challenges while experiencing ongoing growth and evolution.

Discussions around cannabis rescheduling, changes in federal agency leadership, state-level legalization efforts, and financial reports from key companies all contributed to a month of notable activity in the cannabis space.

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Cannabis leaves, US flag.

Cannabis Round-Up: Banking Reform and Rescheduling De-Prioritized as Trump Takes Office

As a new year began, the cannabis industry saw a range of impactful events in January.

Legal obstacles continued to impede progress on a once-promising attempt to reschedule cannabis in the US, and President Donald Trump's leadership choices for key agencies are diminishing hopes it can be accomplished.

Meanwhile, cannabis banking reform won't be discussed at Wednesday's (February 5) meeting of the Standing Senate Committee on Banking, Commerce and the Economy, and Congress seems in no rush to address it.

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