Why Cresco Labs Inc (OTCMKTS:CRLBF) Should be Back on the Radar

Why Cresco Labs Inc (OTCMKTS:CRLBF) Should be Back on the Radar

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The principle drama with Cresco Labs Inc (OTCMKTS:CRLBF) has been on the M&A side, with the company moving to acquire Origin Labs (OTC:ORHOF), and needing to recently manage a key divestiture to appease regulators. That process has taken its toll on shares, with the stock dropping in a grinding trend over the past 6 weeks. To help flag that dynamic, the company just unveiled Sunnyside, a new dispensary brand created to accelerate industry growth and shift people’s expectations and perceptions around shopping for cannabis from intimidation and doubt to curiosity and acceptance through a new retail and marketing approach.

According to the release, “Sunnyside is more than a dispensary—it’s a wellness-based retailer offering a holistic experience for anyone who considers, or would consider, cannabis to be an integral part of their personal wellness program. It aims to educate today’s diverse users on cannabis’ many positive benefits and provides one of the widest ranges of cannabis brands. A more sophisticated and familiar shopping destination that combines high-end design from healthcare, retail and hospitality, Sunnyside* elevates the value dispensaries can add to a community with a bright, welcoming aesthetic and convenient shopping whether in-store or online.”

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 unveiled Sunnyside, a new dispensary brand created to accelerate industry growth and shift people’s expectations and perceptions around shopping for cannabis from intimidation and doubt to curiosity and acceptance through a new retail and marketing approach.

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 company has seen a jump in recent trading volume to the tune of 12% beyond what we have been seeing over the larger time frame.

“To unlock the full potential of the U.S. cannabis industry, we must evolve the retail experience to delight both current and prospective users,” said Cresco Labs’ CEO and co-founder Charlie Bachtell. “Many of today’s dispensaries service the needs of traditional cannabis consumers. As the cultural landscape progresses, we’re building a modern, yet familiar store environment built on wellness, education and customer service to rapidly bring in new users and welcome them to cannabis.”

Now commanding a market cap of $464M, CRLBF has a significant war chest ($151.5M) of cash on the books, which is balanced by about $49.5M in total current liabilities. One should also note that debt has been growing over recent quarters. CRLBF is pulling in trailing 12-month revenues of $50.4M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 25%. 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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