The breakouts continue in the cannabis patch, with Cresco Labs Inc (OTCMKTS:CRLBF) representing the latest version on Thursday. The stock popped above its 50-day MA on strong volume, on its way to one of its best weeks of the year. The last major catalyst for the company was its release of unaudited financial results for the second quarter ended June 30, 2019, including Q2 revs of $29.9 million, revs up 253% year-over-year and 42% quarter-over-quarter, and pro forma revenue up 55% q/q to $52.7 million.
“We delivered an outstanding quarter that reflects the leading positions we have established in some of the most attractive markets in the cannabis industry,” said Charles Bachtell, Co-founder and CEO of Cresco Labs. “We are seeing accelerating revenue growth driven primarily by market share gains and strong trends in registered patients in our established markets of Illinois and Pennsylvania, as well as our expanded presence and distribution in California. As we scale our operations in our established markets, we are seeing the positive impact on gross profit margin that we projected. The higher revenue and margins helped to drive a substantial increase in Adjusted EBITDA compared to the prior quarter.”
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 its unaudited financial results for the second quarter ended June 30, 2019, including Q2 revs of $29.9 million, revs up 253% year-over-year and 42% quarter-over-quarter, and pro forma revenue up 55% q/q to $52.7 million.
We’ve witnessed 25% tacked on to share pricing for the stock in the past month. Furthermore, the stock has benefitted from a jump in recent trading volume to the tune of 13% over what the stock has registered over the longer term.
“While our increasing profitability demonstrates our ability to effectively execute and leverage the attractive model we have developed, we continue to operate with a long-term perspective and make investments to position Cresco Labs to lead the cannabis industry in the years to come. We are transforming the retail cannabis experience with the national rollout of our Sunnyside* dispensaries, expanding into the CBD market with the launch of our WellBeings product line, and expanding our cultivation and retail operations in Illinois to capitalize on adult-use legalization beginning in 2020. As we continue to capitalize on the strong organic growth trends in our current markets and complete our pending acquisitions of Origin House and VidaCann, we expect to deliver continued improvement in revenue and profitability, resulting in further value being created for our shareholders,” said Mr. Bachtell.
At this time, carrying a capital value in the market of $521M, CRLBF has a significant war chest ($79.9M) of cash on the books, which stands against about $41.2M in total current liabilities. CRLBF is pulling in trailing 12-month revenues of $90.4M. In addition, the company is seeing recent top-line growth, with sequential quarterly revenues growing at 42.9%. You can bet we will update this one again as new information comes into view. 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.