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Wednesday, November 25, 2020

Cresco Labs Inc (OTCMKTS:CRLBF) Takes an Important Step

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Shares of Cresco Labs Inc (OTCMKTS:CRLBF) had an interesting session on Monday, possibly staking out a key area of technical real estate, holding key range support at recent range lows, and springing higher with gusto. To further flesh out the narrative, the company just announced that “shareholders representing 205,172,192 common shares have entered into voluntary lock-up agreements with the company, representing 97% of the shares subject to the initial lock-up and 80% of the total issued subordinate voting shares (on an as-if converted basis).”

According to the release, “Included among the Shareholders are all of the Company’s founders, its entire executive management team and board of directors, as well as several of the largest outside investors in Cresco. The voluntary lock-up Agreements stipulate that these shareholders will not, subject to limited exception, offer to sell, contract to sell, lend, pledge or otherwise dispose of any Cresco securities, or enter into any transaction to such effect, directly or indirectly, in addition to other restrictions until December 3rd, 2019 when a portion of the shares will be released followed by the remainder of the shares being released by June 3, 2020.”

CRESCO LABS ORD (OTCMKTS:CRLBF) trumpets itself as a company that manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.

The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand.

In addition, it operators a Hope Heal Health dispensary in Fall River, Bristol County, Massachusetts.

The company was formerly known as Cresco Labs, LLC and changed its name to Cresco Labs Inc. in November 2018. Cresco Labs Inc. is headquartered in Chicago, Illinois.

According to the release, “Cresco Labs, based in Chicago, is a leading U.S. cannabis company with experienced management, access to capital and a demonstrated growth strategy. As a differentiated grower, processor and retailer of premium cannabis operating in ten states, the company focuses on entering highly regulated markets with outsized demand potential and high barriers to entry. Its impressive speed-to-market gives Cresco a distinct competitive advantage as it replicates its model to expand its national footprint. Cresco’s proven ability to execute is complemented by a cutting-edge brand strategy spearheaded by several of the brightest minds in consumer marketing in the nation. Cresco’s products are tailored to all major consumer segments: everyday cannabis, medicinally focused, connoisseur grade, and chef inspired edibles by James Beard Award-winning pastry chef Mindy Segal. Learn more about Cresco Labs at crescolabs.com.”

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As noted above, CRLBF just announced that shareholders representing 205,172,192 common shares have entered into voluntary lock-up agreements with the company, representing 97% of the shares subject to the initial lock-up and 80% of the total issued subordinate voting shares (on an as-if converted basis).

Even in light of this news, CRLBF has had a rough past week of trading action, with shares sinking something like -3% in that time. That said, chart support is nearby and we may be in the process of constructing a nice setup for some movement back the other way. In addition, the stock has seen a growing influx of trading interest, with the stock’s recent average trading volume running 12% over the long run average.

Charlie Bachtell, CEO & Co-Founder of Cresco, commented, “The lock-up agreements announced today reflect the continued confidence that Cresco’s management, board and outside shareholders have in the future of the Company. Our ability to deliver on the vision we have for building Cresco into one of the most important company’s in the U.S. cannabis industry has instilled a high level of trust among our investors that we can continue executing on plan, responsibly manage the increase of the Company’s liquidity and continue to preserve and create long-term shareholder value.”

At this time, carrying a capital value in the market of $1.29B, CRLBF has virtually no cash on the books, which must be weighed relative to about $188K in total current liabilities. The company is pre-revenue at this point. As more color becomes clear on the name, we will review the situation and update our take. Sign-up for continuing coverage on shares of $CRLBF stock, as well as other hot stock picks, get our free newsletter today and get our next breakout pick!

Disclosure: we hold no position in $CRLBF, either long or short, and we have not been compensated for this article.

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