CHICAGO, March 23, 2022 – PRESS RELEASE – Cresco Labs Inc., a vertically integrated multistate operator and the No. 1 U.S. wholesaler of branded cannabis products, released its financial results for the three months and year ended Dec. 31, 2021. All financial information presented in this release is reported in accordance with U.S. Generally Accepted Accounting Principles (“U.S. GAAP”) and in U.S. dollars, unless otherwise noted, and all comparisons to prior quarters and the prior year are made on an as-converted basis under U.S. GAAP.

The Company announced today it has entered into a definitive arrangement agreement pursuant to which Cresco Labs will acquire all of the issued and outstanding shares of Columbia Care.

Fiscal Year 2021 Financial Highlights

Record revenue of $822 million, an increase of 73% year-over-yearGross profit excluding fair value mark-up for acquired inventory of $430 million, or 52% of revenue, and up 104% year-over-yearRecord adjusted EBITDA1 of $194 million, an increase of 219% year-over-yearEnded the year with over $224 million of cash on hand

Fourth Quarter 2021 Financial Highlights

Record fourth quarter revenue of $218 million, up 34% year-over-yearRecord fourth quarter adjusted EBITDA1 of $57 million, or 26% of revenue, an increase of 90% year-over-yearWholesale revenue of $101 million, maintained position as No. 1 seller of branded cannabis products in U.S. with leading share in the flower, concentrates, and vape categoriesRetail revenue increased 10% sequentially, to $117 million, an average of $2.8 million per storeSame-store-sales increased 28% year-over-year, 1% sequentiallyExcluding California, revenue grew 6% sequentiallyRecord cash flow from operations of $38 million

See “Non-GAAP Financial Measures” at the end of the full press release for more information regarding the company’s use of non-GAAP financial measures.

Management Commentary

“This has been an incredible year of growth and margin expansion for Cresco Labs. We generated $822 million in annual revenue, representing 73% annual growth. Adjusted EBITDA1 more than tripled as the investments we’ve made in the business start to bear fruit. We ended the year with 46 retail stores, more than double where we were at the end of last year. The Cresco Labs family expanded from approximately 2,300 employees to approximately 3,500, as we grew both organically and integrated five acquisitions,” said Charles Bachtell, co-founder and CEO of Cresco Labs.

“As we all saw, there was a slowing of market growth in the fourth quarter, and we were not immune to this. The good news is our plan is working—consumers love our brands, we maintained our leadership as the No. 1 wholesaler of branded cannabis, and we were the most productive retailer in the industry. We competed very well, gaining or maintaining share in seven of our 10 states. We remain focused on driving growth for our shareholders through optimizing operations to drive margins and market share and by opening up new markets in which to sell our leading brands. With many more growth initiatives ahead, 2022 is set to be another record year as we continue to drive strategic breadth, depth and execute on our plan.”

Balance Sheet, Liquidity, and Other Financial Information

As of Dec. 31, 2021, current assets were $422 million, including cash and cash equivalents of $224 million. The company had working capital of $133 million and senior secured term loan debt, net of discount and issuance costs, of $377 million.Total shares on a fully converted basis were 435,123,721 as of Dec. 31, 2021.

Summary of Cresco Labs’ 2021 Social Equity and Education Development Program

On Dec. 8, 2021, the company won the Silver Social Justice Film & Video Documentary award for “The Sentence of Michael Thompson” from the Clio Cannabis Awards. The trailer documentary film aims to help people truly understand the gravity of the impact of injustice on the lives of people adversely impacted by the war on drugs.The company launched the Illinois Cannabis Education Center through Cresco’s SEED initiative to demonstrate its ongoing commitment to providing education and workforce development opportunities to members of communities adversely impacted by the war on drugs.

Capital Markets and M&A Activity

On Nov. 25, 2021, the company closed the previously announced acquisition of Bay LLC d/b/a Cure Pennsylvania (“Cure Penn”), a Pennsylvania retail operator with three operational dispensaries.On Dec. 10, 2021, the company closed the previously announced acquisition of Laurel Harvest Labs LLC (“Laurel Harvest”), a vertically integrated Pennsylvania operator.On March 23, 2021, the company announced a definitive arrangement agreement whereby Cresco will acquire Columbia Care in an all-stock transaction.

The full 2021 financial results for the fourth quarter and full year are viewable here.