Cresco Labs Announces Record Revenue of $153.3 Million, Growth of $59 Million

Company affirms position as the largest wholesaler of branded products in the industry with $90.5 million in wholesale revenue

Record revenue of $153.3 million, 63% growth QoQ, an absolute increase of $59 million

Record adjusted EBITDA1 of $46.4 million, 182% growth QoQ

Record cashflow from operations of $17.8 million

Retail revenue growth of 60% QoQ to $62.8 million

Third consecutive quarter with over 40% revenue growth

ILLINOIS:  Cresco Labs Inc., one of the largest vertically integrated multi-state cannabis operators in the United States, today released its unaudited financial results for the third quarter ended September 30, 2020. All financial information presented in this release is in U.S. dollars, unless otherwise noted.

Management Commentary

“Cresco Labs entered the third quarter firing on all cylinders achieving record levels of revenue, profitability, and cash flow. We remain the number one operator in the industry focused on, and delivering results in, the wholesale distribution of branded products. Our retail is outperforming, and we are generating substantial operating leverage,” said Charles Bachtell, Co-founder and CEO of Cresco Labs. “Comparing Q1 to Q3, we increased revenue by $87 million while keeping SG&A flat. The investments we made to support growth are paying off, and as a result our profitability has grown dollar for dollar with gross profit. Because of the decisions we’ve made, the changes we’ve managed through and the hard work devoted by our team over the last 12 months, Cresco Labs has substantiated itself within the very top tier of the industry and confirmed the value that is driven by our differentiated strategy. This is a unique story of strategic breadth, depth and execution. As we look toward our next phase of growth, it’s rinse and repeat – the playbook will be applied to more states and, again, we will achieve meaningful, material market positions.”

Third Quarter 2020 Financial Highlights

Operating Results

  • Revenue for the third quarter of 2020 was $153.3 million, an absolute increase of over $59.0 million or a 63% increase over Q2’20 revenue. Wholesale growth was driven by an increase in harvests from expanded capacity in Illinois and Pennsylvania with strong growth in California. Retail growth was driven by strong sequential same-store growth and two new store openings in Illinois.
  • Operational Gross Profit1 as a Percentage of Revenue was 53% in the quarter as compared to 47% in the prior quarter driven by increased efficiency in our expanded Illinois and Pennsylvania facilities.
  • Adjusted EBITDA1 was $46.4 million, an increase of 182% sequentially driven primarily from higher revenue, increased operational gross profit across our largest markets and strong SG&A control which dropped dramatically as a percentage of revenue.
  • Net Income2 was $4.9 million, which includes unrealized gains and losses on mark-to-market instruments that fluctuate until obligations are settled, changes in fair value of biological assets, interest expense and tax expense.
  • Net Cash Provided by Operating Activities was $17.8 million, compared to $9.9 million used in Q2. The increase in cash provided by operating activities was driven by increased operating leverage across the business as the Company scales.

Shares Outstanding

Total shares on a fully converted basis were 380,035,735 as of September 30, 2020.

Conference Call and Webcast

The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Wednesday, November 18, 2020, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 866-688-4235 (409-216-0711 for international callers) and providing conference ID 9237505. Archived access to the webcast will be available for one year on the Cresco Labs’ investor relations website.

Curaleaf Opens New Cannabis Dispensary In Clearwater, Florida

New Location Marks Curaleaf’s 29th Storefront in Florida and 89th Nationwide

FLORIDA: Curaleaf Holdings, a leading vertically integrated cannabis operator in the United States and one of the largest cannabis operators in Florida, announced today that it has opened a new dispensary in Clearwater, Florida, marking its 29th retail location in the state.Curaleaf Clearwater, located at 2082 Gulf to Bay Boulevard, will carry a wide range of Curaleaf and Select brand products. Select, known as America’s #1 cannabis oil brand now available in 12 states, launched earlier this month in Florida with Select Elite Live, the brand’s new enhanced live resin product, which combines high-quality THC oil and live resin high-terpene extract. The company also recently launched the first-to-market Curaleaf sublingual tablets. The Clearwater location is the first of three new medical dispensaries the company plans to open in the market this quarter.

“Curaleaf remains committed to the Florida market and its patients by providing high-quality medical cannabis products and new consumption formats that make cannabis accessible for all,” said Joe Bayern, President at Curaleaf. “We are thrilled to open Clearwater and support the health and wellness needs of more Floridians.”

Florida’s continued growth in patient registration makes it one of the nation’s fastest-growing medical cannabis markets in the country. Currently, there are over 394,000 medical patients enrolled in the Florida program – about 1.8% of the state’s population – with approximately 5,000 new patients joining each week.

In response to COVID-19, Curaleaf continues to implement new policies and procedures, including curbside services and contactless and cashless payment through approved credit and debit card services, to keep patients, customers and employees safe during this time. To see Curaleaf’s dispensary locations in Florida, please visit www.curaleaf.com/locations/#florida.

Cresco Labs Announces Resignation Of Joe Caltabiano As President

ILLINOIS: Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the United States, today announced that 
has advised the Company of his decision to resign from the position of President effective immediately.

Mr. Caltabiano’s management responsibilities will be taken up by CEO and Co-founder Charlie Bachtell as well as other members of the Company’s recently strengthened leadership team. The Company wishes Joe well on his future endeavors and looks forward to continuing its path to building the most important company in cannabis.

 

Acreage Announces Grand Opening Of The Botanist By Compassionate Care Foundation in Atlantic City

The Botanist by Compassionate Care Foundation is the first The Botanist dispensary to open in the state of New Jersey

Acreage-Holdings

NEW JERSEY:  Acreage Holdings, one of the largest vertically integrated, multi-state operators of cannabis licenses and assets in the U.S., today announced the opening of The Botanist by Compassionate Care Foundation on Saturday, February 22, 2020, by its business partner, New Jersey’s Compassionate Care Foundation, Inc., a New Jersey nonprofit corporation. Acreage and CCF are parties to a services agreement with CCF under which Acreage delivers its operational expertise, product development capabilities, and The Botanist retail dispensary brand.  On November 15, 2019, Acreage and CCF entered into a reorganization agreement which will result in CCF becoming a wholly-owned, for-profit subsidiary of Acreage.  Closing of the transaction is subject to state approval.

The medicinal cannabis dispensary is located on the Atlantic City Boardwalk at 1301 Boardwalk, Atlantic City, New Jersey. With the opening, Acreage now owns or has management services, consulting or other agreements for 31 operational dispensaries in 12 states, including 13 The Botanist branded dispensaries.

Developed by Acreage, The Botanist is both a retail and product brand, deeply rooted in health and wellness, and focused on the holistic power of cannabis to help individuals live balanced lifestyles. The Botanist CCF offers a wide selection of flower-only products and features a “science meets nature” retail design reminiscent of a 19th century botanist laboratory. Offering a warm and inviting environment in which to learn about the healing properties of the cannabis plant from trained patient care specialists, The Botanist CCF’s design includes a “SEED BAR” education station, a private consultation room, The Botanist’s signature “green foliage wall,” and much more.

Acreage Announces Resignation Of Board Member Bill Weld To Focus On Presidential Campaign

NEW YORK: Acreage Holdings, announced that Bill Weld, former Governor of Massachusetts and a 2020 Republican candidate for President of the United States, has resigned as a member of Acreage’s Board of Directors to focus on his political campaign.

“I have greatly enjoyed working with CEO Kevin Murphy and the other members of the Board to help Acreage grow and work toward its mission of enabling access to legal cannabis for everyone who needs it, but I feel I owe it to my supporters and the country to focus on my Presidential candidacy at this time,” said Weld.

“We thank Bill for his tremendous service to Acreage and wish him every success in the future,” said Acreage Chairman and CEO Kevin Murphy. “His contributions will be forever remembered well beyond the value he delivered to our company in helping to elevate the national dialogue on cannabis.”

FSD Pharma To Begin Trading On The NASDAQ Capital Market Under Symbol ‘HUGE’ January 9, 2020

FSD Pharma

CANADA: FSD Pharma Inc. today announced that its Class B Subordinate Voting Shares (the “Shares”) have been approved for listing on the NASDAQ Capital Market under the symbol ‘HUGE’. Trading on the NASDAQ is expected to commence at market open on Thursday, January 9, 2020.

The Company’s Shares will continue to be listed on the Canadian Securities Exchange under the symbol ‘HUGE’.

“As we announce this much anticipated and coveted milestone, I want to congratulate the FSD Pharma team, our stakeholders, and, most importantly, our shareholders. I also want to extend my gratitude to the members of the Board of Directors of FSD Pharma, and especially to the founders of the Company, for their vision and for giving me an opportunity to lead the FSD Pharma team to achieve this strategic advantage. It is exciting to realize that once we begin trading on NASDAQ, we will be included in a select group of 12 Canadian-domiciled cannabis companies trading on either the NYSE or NASDAQ, and the first company in the history of the Canadian Securities Exchange to be dual-listed on a major U.S. exchange,” stated Raza Bokhari, MD, Executive Co-Chairman and CEO.

 

Cresco Labs Makes History On January 1st With First Sale Of Adult-Use Cannabis In Illinois

ILLINOIS: Cresco Labs, one of the largest vertically integrated multistate cannabis operators in the United States, announced today that the Company served 3,145 people on New Year’s Day at its five Sunnyside* Dispensaries located in Lakeview, Elmwood Park, Champaign, Buffalo Grove and Rockford, Illinois. Sunnyside* also sold 9,258 cannabis products, including Cresco’s house of brands and items from other Illinois suppliers, with an average ticket price totaling $135.

Customers began to form lines outside Sunnyside* locations as early as 8 PM on New Year’s Eve, and lines wrapped around the buildings throughout the day as recreational customers showed their excitement to be part of this historic day. The dispensaries opened at 6 AM to immediately start serving recreational customers, with the first sale in the state of Illinois taking place shortly thereafter at Sunnyside* Lakeview. Jacqueline Ryan from Forest Park was the first customer to purchase adult-use cannabis, followed by siblings Elise and Aaron Swopes, two participants in Cresco’s Chicago incubator program, which is part of the Company’s SEED (Social Equity and Educational Development) initiative, and Illinois Lt. Gov. Juliana Stratton, who played a critical role in shaping the state’s cannabis legislation.

“We’re ecstatic for our Sunnyside* dispensaries to begin serving recreational customers on such a historic day that launches a new era of cannabis and the development of an industry that will bring greater justice, social equity and business ownership opportunities throughout the state,” said Charlie Bachtell, Cresco Labs CEO and Co-founder. “With 13 million residents and 100 million annual tourists, Illinois is predicted to be one of the largest recreational cannabis markets in the United States. Cresco is uniquely positioned in the supply-constrained state, with permission for the largest cultivation footprint at 630,000 square feet and ten retail dispensaries, including three in high traffic areas in the city of Chicago.”

Joe Caltabiano, Cresco Labs President and Co-founder, added, “We’re thrilled to be part of this historic day and to witness firsthand so much excitement from people on the first day of legal cannabis sales. Our dispensaries served thousands of customers on day one by educating new cannabis consumers, making product recommendations and making sure they had a seamless shopping experience. With five newly re-concepted Sunnyside* locations and an additional five dispensaries opening soon in high profile locations such as one next to Wrigley Field and two in Chicago’s downtown Central District, we expect to serve thousands more customers in response to strong demand. Our Sunnyside* concept is designed to move traffic efficiently, so despite the fact that long lines will likely continue in the first few days of adult-use legalization, we are positioned to ensure that each of our customers gets only the best possible service and the products they are looking for. Cresco is already the leader in Illinois, and we expect to be able to maintain this leadership position as the recreational cannabis market grows, contributing solidly to our overall revenue and our profitability.”

M&A News: Cannabis One & ONE Cannabis Unite

Cannabis’ “House of Brands” and U.S. Cannabis Dispensary Franchisor Form a Definitive Arrangement Agreement to Combine Businesses

COLORADO: Cannabis One Holdings and ONE Cannabis Group announced that they have entered into a definitive arrangement agreement to combine businesses. Both are cannabis leaders in their own right, their combined prowess creates a strong, national force among cannabis retail and product brands alike.

Cannabis One is known for its globally-recognized “House of Brands,” comprised of award-winning products with an extensive market footprint across North America. Meanwhile, ONE Cannabis has paved the way for franchising cannabis dispensaries in the United States with more than a dozen deals signed in new and emerging markets nationwide. Franchise partners utilize the company’s deep network of seasoned experts and turnkey franchise blueprint to enter the complex industry with ease.

“As two Colorado born and bred companies, we’re comprised of industry pioneers who have honed best practices across nearly all areas of cannabis over the past decade. Together, Cannabis One and ONE Cannabis will lead the industry into a truly successful Cannabis 2.0 with our winning combination. Our products and services deliver a level of consistency and quality to cannabis consumers that’s unmatched. Connecting these exceptional performers will usher in a wave of game-changing initiatives for the industry as a whole,” said Jeff Mascio, CEO of Cannabis One.

Together, the Colorado-based companies will be focused on expanding its franchise footprint worldwide, which includes agreements signed for 15 dispensary franchises across five states and multiple corporate dispensaries in the United States. They will also continue offering leading cannabis products, including brands such as Honu, Cheech, Evergreen Organix, INDVR and Green Man Cannabis with a distribution platform of over 900 retail dispensary locations nationally.

“Franchising is the most agile and proven way to scale in the cannabis industry,” said Mike Weinberger, COO of ONE Cannabis, which began its franchise program in 2018. “Our franchisees own and operate their own dispensaries, hire locally and keep money in the communities they serve. The ongoing support and resources we provide allows them to scale more quickly [than having go at it alone]. Cannabis One shares our vision of inspiring confidence in cannabis for all, and we look forward to working together to elevate our brands across North America and beyond.”

Both Cannabis One and ONE Cannabis will be exhibiting at MJBizCon from December 11 to December 13 at booth C2948. ONE Cannabis has been nominated for MJBizDaily’s Cannabis Retailer of The Year award, which will be announced at the MJBizDaily award ceremony at 7 p.m. on December 12.

Cresco Labs Recieves Adult-Use Approval For All Five Existing Illinois Dispensaries

ILLINOIS: Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the United States, today announced that it has received Early Approval Adult-Use Dispensing Organization Licenses for all five of its existing Illinois medical cannabis dispensaries. Cresco received approval for adult-use cultivation on September 30th making it the only company approved for both adult-use cultivation and adult-use dispensary operations in the state.

“Illinois is Cresco’s home state and with the transition to a legal adult-use market in January of 2020, the state is expected to produce between $2 – 4 billion in sales at maturity (BDS Analytics)i, making this one of the single largest opportunities in the U.S. cannabis space today,” said Charlie Bachtell, Cresco Labs CEO and Co-founder. “Cresco is well-positioned to capture a significant share of this revenue opportunity for shareholders. We have 25% wholesale share of the current medical market, a portfolio of recognized brands and three cultivation facilities that can represent 630,000 square feet at completion, in what is expected to be a supply-constrained market.”

Mr. Bachtell added, “Illinois has put forth a model that will make it one of the most intelligently regulated states in the U.S. and we hope this blueprint will serve as a path for states transitioning over the next few years. Illinois was the first large state to legalize cannabis through legislative processes instead of through referendum. One of the primary reasons the government was able to achieve this was due to its focus on social equity, which is directly aligned with Cresco’s core values and approach to the market.”

Cresco Labs currently has five medical dispensaries in the state of Illinois, including: Phoenix Botanical; MedMar Lakeview; MedMar Rockford; PDI Medical; and FloraMedex. Each of these dispensaries has received approval for adult-use sales. As an existing medical cannabis dispensary operator, the Company will receive an additional adult-use license for each of its current medical dispensaries, which will bring Cresco Labs’ total adult-use footprint to 10 total retail dispensary locations. In July, Cresco Labs announced the formation of a new national retail brand Sunnyside*, a wellness-focused retailer designed to build trust, education and convenience for both existing and new cannabis consumers. All of the Company’s Illinois dispensaries will transition to this new retail concept.

The Company’s three cultivation licenses located in Joliet, Kankakee and Lincoln, can represent a total combined cultivation space at completion of 630,000 square feet per Illinois state regulations.

 

Cresco Labs Announces Closing Of Acquisition In New York State

Acquisition Adds One of Only 10 Vertically Integrated Cannabis Business Licenses Issued by the State of New York

ILLINOIS: Cresco Labs, one of the largest vertically integrated multi-state cannabis operators in the United States, today announced that it has closed its acquisition of 100% of the membership interests of Gloucester Street Capital, the parent entity of Valley Agriceuticals, via a merger between Gloucester and a subsidiary of Cresco Labs. As a result of this acquisition, Cresco Labs now holds one of the 10 vertically integrated cannabis business licenses granted in the State of New York by the New York State Department of Health. Each license gives the operator the right to operate one cultivation facility and four dispensaries in New York. The New York market is projected to grow to $500 million by 20221.

“New York is one of the most influential consumer markets in the world and we expect the state to act as a cornerstone in Cresco Labs’ plan to continue building the most strategic and valuable geographic footprint in the U.S. cannabis industry,” said Charles Bachtell, CEO and Co-founder of Cresco Labs. “Since recently receiving regulatory approval for this transaction, Valley Ag has opened two new dispensaries in Williamsburg, Brooklyn and Huntington, Long Island. As a result, Cresco Labs enters the New York market with four strategically located dispensaries. These assets position us well to immediately generate meaningful revenue from this market. As we fully implement the world-class branding, marketing and distribution expertise that has helped us to develop leading positions in some of the most attractive cannabis markets in the country, we expect to steadily increase our share of a market that is projected to grow to $500 million by 2022.”

“Cresco Labs has an incredible vision for the future of the cannabis industry, and they were the obvious choice to partner with based on their superior management team, focus on compliance and experience working across hyper-regulated industries,” said Gloucester Street Capital CEO Stephen Ashekian. “I believe their strategic decision making, commitment to social equity and priority for putting the patients first will make them a leader in the New York market.”

In addition to the new dispensaries in Williamsburg, Brooklyn and Huntington, Long Island, Cresco Labs also has operating dispensaries in Bardonia and New Hartford.

Currently a medical-use only market, New York has approximately 107,000 certified patients and 2,500 registered practitioners. The State’s medical cannabis program has 15 qualifying conditions including chronic pain, post-traumatic stress disorder (PTSD), and opioid replacement.