Cresco Labs Q3 Revenue Drops Slightly YoY, Cuts Net Loss

Cresco Labs Inc. CL CRLBF (FSE:6CQ) Q3 2022 revenue was $210 million, down 2% year-over-year.

Q3 2022 Financial Highlights

• Gross profit of $99.1 million or 47% of revenue, compared to gross profit of $108.3 million or 50% of revenue in Q3 2021.

• Adjusted EBITDA of $41.7 million, compared to $56.4 million in Q3 2021.

• Net loss was $3.2 million compared to loss of $263.5 million in Q3 2021.

• On November 4, 2022, Cresco Labs announced planned divestitures of Cresco and Columbia Care assets in New York, Illinois and Massachusetts to entities controlled by Sean Combs for a total purchase price of up to $185 million; closing is expected to occur concurrently with the closing of the Columbia Care acquisition around the end of the first quarter of 2023.

• As of September 30, 2022, current assets were $355 million, including cash and cash equivalents of $130 million. The company had working capital of $85 million and senior secured term loan debt, net of discount and issuance costs, of $380 million.

"It’s an exciting time for the cannabis industry as we get closer to a clear inflection point. In the face of multiple industry headwinds and an unprecedented macro environment, our team did an incredible job of taking everything that the quarter had to give and maintained our industry position as the No. 1 wholesaler of branded cannabis and the No. 1 branded product portfolio chosen by consumers. In the quarter, we took actions to reduce costs to position ourselves for long-term improvement. This included the closing of underperforming facilities and the sell through of related inventory. While this had a short-term negative impact on gross margin in Q3, it was the right thing to do to align our cost structure and optimize our operations ahead of closing the Columbia Care transaction and in furtherance of our commitment to improved margin growth in the coming quarters,” stated Charles Bachtell, CEO and co-founder of Cresco Labs.

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Photo by Richard T on Unsplash

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