Cresco Labs To Exit Operations In California

It’s the end of an era for Cresco Labs (CSE: CL), who this morning announced that they will be selling off their California operations as part of a strategic restructuring. The efforts comes as part of an effort to focus on the highest margin markets with long term growth potential.

Discussions are said to be underway with prospective buyers for the sale of Cresco’s California assets, which include operations across cultivation, manufacturing, and distribution.

Cresco has one remaining cultivation and production facility operating in the state, although it holds two cultivation licenses, a processing license, a distribution license, and a nurse license under the Sonoma’s Finest and Cub City, LLC subsidiaries. The California operations have struggled for years however, with Cresco in 2022 taking $89.5 million in goodwill impairments, followed by impairments of $9.9 million in 2023 and $2.3 million in 2024.

“While California is the largest cannabis market in the world, the structural challenges—ranging from fragmented retail to price compression and the illicit market—combined with our lack of scaled footprint in the state, make it extremely difficult to generate sustainable profitability. Exiting California allows us to reallocate capital and resources to our core markets and build out new markets where we see clear pathways for growth and shareholder value,” commented Charlie Batchell, CEO of Cresco.

A sale of the business unit is expected to occur over the next several quarters. The FloraCal brand is not expected to be included within the sale.

Cresco Labs last traded at $0.78 on the CSE.


Information for this story was found via the sources and companies mentioned. The author has no securities or affiliations related to the organizations discussed. Not a recommendation to buy or sell. Always do additional research and consult a professional before purchasing a security. The author holds no licenses.

Video Articles

Silver Still At 90:1, What If It Snaps Back To 15:1? | Glenn Jessome – Silver Tiger

Why This Gold Run Could Be Bigger | Roger Rosmus – Goliath Resources

Majors Don’t Want to Be Left Out of This Gold Run | Mike Bennett – Altamira Gold Corp

Recommended

Japan Gold Concludes Barrick Alliance After $23 Million In Spend, Discussions Ongoing With Potential New Partners

Sage Potash Outlines US$502 Million NPV For Flagship Sage Plains Project

Related News

Haywood Initiates Coverage On Cresco Labs With $14.00 Price Target

Last week, Haywood Securities initiated coverage on Cresco Labs (CSE: CL) with a C$14.00 price...

Wednesday, November 4, 2020, 01:59:00 PM

Can Cresco Labs Afford Origin House?

Last night, Cresco Labs (CSE: CL) made it known to the public that the waiting...

Wednesday, October 23, 2019, 02:28:22 PM

Cresco Labs Reports 2021 Financials: $821.7 Million In Revenue, $296.8 Million Net Loss

Cresco Labs (CSE: CL) released its Q4 and full-year 2021 financials, highlighting what it deems a...

Wednesday, March 23, 2022, 10:32:00 AM

Cresco Labs: Canaccord Maintains Price Target Following FY2020 Results

Last week, Cresco Labs (CSE: CL) reported their fourth quarter and full-year 2020 financial results....

Monday, March 29, 2021, 11:44:00 AM

Cresco Labs Reports $215 Million Net Loss For 2022

Cresco Labs (CSE: CL) saw its revenues in 2022 increase 3% over the prior year....

Thursday, March 16, 2023, 09:57:10 AM