Cresco Labs Shifts to Own Distribution in California to Increase Profitability and Reduce Third Party Distribution | Business
CHICAGO – (BUSINESS WIRE) – Sep 30, 2021–
Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (“Cresco Labs” or “the Company”), a vertically integrated multi-state operator and America’s leading wholesaler of branded cannabis products, today announced the decision to exit agreements under which Cresco Labs served as the exclusive distributor of certain third-party branded products in California. The move marks the final step in Cresco Labs’ multi-year strategy to increase profitability and move to private label distribution in the world’s largest and most competitive cannabis market.
“California became a founding state for Cresco Labs in early 2020, as we began leveraging the Continuum distribution platform to bring a portfolio of leading brands to California retailers. Through partnerships with top performing brands like Kings Garden, we have achieved significant scale and penetration in the state. The advancement of our distribution strategy has led the FloraCal brand to now consistently rank among the top 15 flower brands in California and Cresco Liquid Live Resin among the top 10 living resin brands ”, said Charlie Bachtell, CEO and co-founder of Cresco Laboratories. “As we continue to implement localization strategies tailored to the market dynamics of each state, this decision will allow us to put our weight in our rapidly growing private label portfolio in California, while increasing the margins of profitability of our overall activity. Operating in California has been key for Cresco Labs to become the industry’s number one wholesaler, and we look forward to continuing our momentum in the state.
The Company will continue to partner with a small group of leading brands in California. The phasing out of most third-party brands results in lower sales forecast for the fourth quarter of 2021, and as a result, the Company adjusts its revenue guidance for the fourth quarter of 2021 to a range of $ 235 million to $ 245 million. The Company reiterates its forecast of adjusted EBITDA for the fourth quarter of at least 30% and gross margins above 50%.
About Cresco Labs Inc.
Cresco Labs is one of the largest vertically integrated multi-state cannabis operators in the United States, with a mission to standardize and professionalize the cannabis industry. Employing a consumer packaged goods (“CPG”) approach, Cresco Labs is the largest wholesaler of branded cannabis products in the United States. Its brands are designed to meet the needs of all consumer segments and include some of the most recognized and trusted national brands. including Cresco, High Supply, Mindy’s Edibles, Good News, Remedi, Wonder Wellness Co. and FloraCal Farms. Sunnyside, the national dispensary brand of Cresco Labs, is a wellness-focused retailer created to build confidence, education and convenience for existing and new cannabis users. Recognizing that the cannabis industry is on its way to becoming one of the top job creators in the country, Cresco Labs manages the industry’s largest social equity and educational development initiative, SEED, which has been established. to ensure that all members of society have the skills, knowledge and opportunity to work and own businesses in the cannabis industry. Learn more about Cresco Labs on www.crescolabs.com.
This press release contains “forward-looking information” within the meaning of applicable Canadian securities laws and may also contain statements which may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. These forward-looking information and forward-looking statements are not representative of historical facts or information or the current state of affairs, but only represent the Company’s beliefs regarding future events, plans or objectives, many of which by their nature , are inherently uncertain. and outside the control of the Company. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terms such as “may”, “will”, “should”, “could”, “would”, “expect”, ” plans ”,“ anticipates ”,“ believes ”,“ estimates ”,“ projects ”,“ predicts ”,“ potential ”or“ continue ”or the negative of these or other comparable terms. The forward-looking statements of the Company involve known and unknown risks, uncertainties and other factors which may cause the actual results, performance or achievements of the Company to be materially different from the future results, performance or achievements expressed or underperformed. understood by forward-looking statements, including but not limited to the risks described under “Risk Factors” in the Company’s Annual Information Form for the year ended December 31, 2020 filed on March 26, 2021, and others documents filed by the Company with Canadian securities regulators; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the above list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Company’s forward-looking statements. No assurance is given as to the future price or trading volumes of Cresco Labs shares, or as to the financial performance of the Company in future financial periods. The Company does not intend to update any of these factors or publicly announce the outcome of any revision of any of the Company’s forward-looking statements contained in this document, whether at the following new information, any future event or otherwise. Unless otherwise indicated, this press release is valid as of the date hereof. The distribution of this press release does not imply that there has been no change in the affairs of the Company after the date hereof nor does it create an obligation or commitment to update or supplement any information provided. in this press release or otherwise.