Chicago-based marijuana producer Cresco Labs reported its fourth quarter financial results on Monday and revealed a net loss of $45.2 million, widening from a net loss of $4.4 million a year ago. The company did not provide per-share figures.
While the company posted a net loss, revenue for the quarter grew to $41.4 million from $17 million in the year-ago quarter. This was up 144% year-over-year and 14% quarter-over-quarter. The company said it had $49.1 million in cash and equivalents at the end of December.
Charlie Bachtell, Co-founder and CEO of Cresco Labs stated, “2019 was a pivotal year for Cresco, as we achieved several major milestones that will have a profound impact on the future success of both our organization and the industry. Throughout the year, we diligently executed the plan laid out for shareholders, delivering strong financial and operational performance and setting the foundation for profitable growth in 2020. We have continued to act as stewards of this industry, successfully leading efforts that resulted in the passage of adult-use legislation in Illinois, and worked side by side with our state administrations to help cannabis achieve ‘essential’ status amid the COVID-19 pandemic. Backed by a strong balance sheet and a world-class leadership team, I am confident in our ability to manage through the current COVID-19 crisis and know that we will emerge from it as a stronger, more profitable company.”
Mr. Bachtell continued, “Our vision is to be the most important company in this industry, while generating sustainable, industry-leading returns on invested capital. Based on evidence from other mature consumer product industries, the highest long-term returns will go to companies that: have a strategic geographic footprint; are dominant players in their chosen markets; own a durable and differentiated brand portfolio; and have the distribution expertise and infrastructure to get those brands onto third-party shelves efficiently. This is Cresco’s strategy. The success we have had in Illinois and Pennsylvania already has proven that we are following the right plan – going deep and focusing on getting our brand portfolio onto third-party shelves. Building on our success last year, in 2020 we are focused on: expanding our market-leading position in Illinois and Pennsylvania; integrating our newest assets and turning California into a center of profitable growth; and building a scalable foundation in other important states. By achieving success in these focus areas, we expect to transition the Company from Adjusted EBITDA positive to cashflow positive progressively through the year.”
The company also revealed on Monday that it had reached an agreement to terminate its acquisition of Tryke Companies, citing COVID-19, a decline in the capital markets and regulatory delays as reasons.
Terminating this deal with give Cresco around $55 million in cash. There is a $1.3 million termination fee to be paid in stock.
Cresco has said that amid the coronavirus pandemic it continues to operate all of its dispensaries with expanded hours using curbside pickup, online ordering and delivery.
Disclaimer: We have no position in Cresco Labs Inc. (OTCMKTS: CRLBF) and have not been compensated for this article.
