EXCLUSIVE: Cannabis Companies Must 'Get More Juice From The Same Squeeze,' Says Cresco Labs CEO As Challenges Persist

Finding a balance between getting more scale, but still being productive and having high margins in the current landscape in the cannabis industry, is a "daily challenge." That's according to Charlie Bachtell, CEO and co-founder of Cresco Labs Inc CRLBF, a company running over 70 cannabis retail locations nationwide.

It involves continually adapting to new challenges, strategies, and emerging trends across a company's operations. "You’re constantly trying to forecast where this industry is headed and at the same time, understand the industry that you’re in today," Bachtell said during a fireside chat with Jesse Redmond, head of cannabis at Water Tower Research LLC, at the Benzinga Cannabis Capital Conference on Wednesday, in Chicago.

He added that running a cannabis business over the past decade depended heavily on how well organizations have been able to speculate about how fast and in what direction the nascent market would go.

The cannabis industry is unique among other "super fast-moving" emerging industries due to challenges to access capital and the impact of 280e on taxation.

"Not only are you fighting this fight with one and a half hands tied behind your back, but then you are also expected to get profitable too," Bachtell said, adding it’s a constant evaluation and balancing growth while maintaining margins.

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A Success Story

Cresco Labs made its debut in Chicago in 2013 when Illinois passed the Compassionate Use of Medical Cannabis Act. “The company's goal and that of its management team has been to help normalize and professionalize this industry,” Bachtell said.

Following nascent years of getting the first buildings built and becoming operational, the company has been scaling ever since. After attempting and failing to merge with Columbia Care Inc. CCHWF – now known as The Cannabist Company Holdings Inc. CBSTF – 2023 came as "the year of the core."

"After attempting the large MMA deal, we really needed to focus on our core business and making sure that we got Cresco Labs as tight and as sound and as efficient as we possibly could, which would then best prepare us for growth in the years ahead," he said.

Year-to-date, Cresco has positioned itself to capitalize on catalysts, such as potential shifts to recreational markets in states where it already operates as a medical cannabis provider, including Ohio, Florida, and Pennsylvania, where the regulatory landscape continues to evolve.

It is important to figure out "ways to get smarter… leaner and get more juice from the same squeeze," Bachtell said. The primary focus should be to develop "skill sets that are transportable and transferable from state to state in the limited ability that you have to do it."

Seizing Cannabis Regulatory Shifts

That said, Bachtell is optimistic Florida's Amendment 3 would allow the company to go recreational in the state. Former President Donald Trump‘s support has increased the likelihood of the success, he added.

"The two leaders of the main political parties in the United States both being in favor of legalization is something that we should not miss, and recognize the importance of it," Bachtell said.

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Charlie Bachtell, CEO and co-founder of Cresco Labs, speaks at the Benzinga Cannabis Capital Conference on Wednesday. Photo by Wendy Davis.