The company said it will focus on its core markets for future growth.
Chicago-based Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) posted a $113.4 million loss for the third quarter this year as company revenue continued to trend downward, the multistate operator reported in its quarterly financials.
The financial hit was primarily due to a one-time impairment charge of $129 million, Cresco said in a statement, but net revenues were also down both sequentially and year-over-year. For Q3, Cresco pulled in $190.5 million, down from $197.8 million in Q2 and from $210.4 million a year prior.
The quarter brought losses for 2023 to $183 million thus far, following its $215.8 million in losses for 2022.
While Cresco also slashed operating expenses by $40 million and increased its retail transactions by 17%, the overall approach has not translated yet to profitability for shareholders.
Cresco noted that it will continue to streamline operations in U.S. markets that it has found to not be advantageous, such as Arizona, where it finished divesting in October. The company also suffered a setback in July when its blockbuster merger with Columbia Care was canceled.
Refocusing on Cresco’s “core” markets, which includes Florida, Illinois, Massachusetts and Pennsylvania, has been a strategy for several months now. Cresco also opened two more dispensaries in Florida, which brings its total of Sunnyside-branded cannabis shops to 70 nationwide.
CEO Charles Bachtell said the quarter demonstrated the company’s “ability to drive solid performance” through difficult times.
“Cresco Labs is leaner and more productive than ever,” Bachtell said, pointing to operating cash flow of $41 million in the most recent quarter, which he said was “almost double what we generated” in the first two quarters of 2023.
Bachtell also raised again the possibility of federal marijuana reform, which could have enormous financial benefits for companies such as Cresco – such as federal tax savings if rescheduling happens – and said that this month’s cannabis legalization vote in Ohio is another symbolic reminder that “change is inevitable.”
“Until that change comes, we’re improving every aspect of our business to best position ourselves for both today’s environment and for the future,” Bachtell said.
At the end of September, Cresco had $1.3 billion in total assets, including $113 million in cash, against $973.2 million in total liabilities.
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