Shares of Cresco Labs Inc (OTCMKTS:CRLBF) caught a fresh bounce on Tuesday. The company just received word that its acquisition target, Gloucester Street Capital, was just cited in an announcement put out by Jushi Holdings Inc. (OTCQX: JUSHF), a globally-focused, multi-state cannabis and hemp operator, wherein Jushi announced the closing of the sale of its 16.5% ownership interest in Gloucester.
This is a complex state of affairs, but it’s important to disentangle that complexity. Gloucester happens to be the parent company of Valley Agriceuticals and owner of one of ten New York licensed medical cannabis operators. Cresco moved to acquire Gloucester to gobble up those tasty assets. To complete that acquisition, Jushi’s position in Gloucester had to be divested. That has now happened.
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 saw its acquisition of Gloucester gain further traction as that company was divested as a holding by another party (Jushi) as a necessary step toward moving everything forward.
“We made this decision to monetize the investment made in Gloucester in the best interest of our shareholders, returning over three times our initial investment in approximately a year and a half,” stated Jim Cacioppo, CEO and Chairman of Jushi. “New York remains a key market for Jushi. We maintain our New York State Industrial hemp-CBD processor license and are moving forward with our US$5 million investment in a high-tech hemp processing operation facility In New York with approximately 65,000 square feet.”
That has helped drive some fresh positive vibes in Cresco shares. The broad pot space may be finding some traction overall, which is likely the more important factor. But successfully integrating Gloucester will continue to develop the CRLBF story.
Earning a current market cap value of $407M, CRLBF has a significant war chest ($89.8M) of cash on the books, which compares with 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%. We will update the story again soon as further details emerge. 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.