Cresco Labs (CSE: CL) was the latest cannabis operator to report earnings this morning for the second quarter. Growth has slowed for the company, whom only saw 1.8% growth on a sequential basis, and 4% growth on a year over year basis.
Recognizing the growth story is aging quickly, CEO Charles Bachtell commented within the release, “Over the next three years, growth will come from the transition to adult use in seven large markets: New Jersey, New York, Pennsylvania, Ohio, Virginia, Florida and Maryland. Our combined footprint with Columbia Care, gives us exposure to all of these markets and leading positions in several. This is arguably the highest value footprint in cannabis – 180 million Americans and all 10 of the 10 highest projected 2025 revenue states.”
Revenue for the quarter amounted to $218.2 million, versus $214.4 million in the first quarter. Margins however improved slightly, climbing from 50.1% to that of 51.7% on a sequential basis.
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Operating expenses meanwhile climbed to $90.1 million, lead by SG&A of $77.9 million. Income from operations as a result totaled $22.7 million.
After other expenses of $7.3 million and income tax expenses of $23.6 million, the firm reported a net loss of $8.3 million for the quarter, versus a loss of $23.7 million in the first quarter. Adjusted EBITDA declined slightly on a sequential basis, falling from $50.7 million to $50.6 million in the second quarter.
The major item for the second quarter appears to be the firms cash position, which fell substantially from $179.3 million to $89.5 million. Total current assets meanwhile dropped from $399.8 million to that of $314.3 million over the three month period, while total liabilities fell from $331.2 million to that of $228.2 million.
In terms of the acquisition of Columbia Care (CSE: CCHW), the company expects the transaction to clear “around year-end.” Divestiture and regulatory processes are reportedly on track at this point in time for the transaction to proceed, with Columbia Care shareholders approving the transaction in July. Court approval was granted several days later.
Cresco Labs last traded at $4.81 on the CSE.
Information for this briefing was found via Sedar and the companies mentioned. The author has no securities or affiliations related to this organization. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.
