CHICAGO–(BUSINESS WIRE)–PRESS RELEASE–Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ), a vertically integrated, multi-state operator and the number one U.S. wholesaler of branded cannabis products, today released its financial results for the three months ended March 31, 2022. 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.

First Quarter 2022 Financial Highlights

First quarter revenue of $214 million, up 20% year-over-yearGross profit excluding fair value mark-up for acquired inventory of $113 million, or 53% of revenue, an increase of 29% year-over-yearFirst quarter adjusted EBITDA of $51 million, or 24% of revenue, an increase of 45% year-over-yearWholesale revenue of $95 million, maintained position as #1 seller of branded cannabis products in U.S. with leading share in the flower, concentrates, and vape categoriesRetail revenue increased 44% year-over-year, to $119 million, or $2.5 million per average store open in the quarter and same-store-sales increased 9% year-over-yearEnded the quarter with $179 million of cash on handOpened four new retail stores, three in Florida and one in Pennsylvania, bringing the company’s total retail footprint to 50Launched branded product portfolio in Florida, including High Supply, Good News® Remedi and Sunnyside* Chews

Management Commentary

“Q1 was a solid quarter for the Cresco Labs team in a challenging environment for all consumer product categories. While our 10-state footprint saw a cumulative sequential contraction of 4.5%, we held or took market share in most of our states and outperformed the markets with our 2% decline. We understand that an emerging industry’s growth trajectory is rarely linear, especially a highly regulated industry with a fragmented state-by-state structure, conflicting federal and state laws, and the addition of general macro pressures. Notwithstanding, we continue to execute with a clear and focused strategy to obtain market leadership with a portfolio of cannabis brands consumers love and a plan to get them on as many shelves as possible. The strategy remains constant, and the Columbia Care acquisition announced in the quarter simply fits these stated priorities hand-in-glove. We are pairing the best consumer brands with a broad, deep and strategic footprint,” said Charles Bachtell, co-founder and CEO of Cresco Labs.

“The first quarter showed the resilience and strength of the business we have built over the past few years. We remain focused on playing the long game and building a business that will be a lasting leader in the cannabis industry under any regulatory outcome. The compliance-focused foundation of both Cresco Labs and Columbia Care is helping ensure a smooth progression towards deal approval through a reasonable and manageable regulatory process. We recently crossed our first milestone by passing the federal HSR review process on May 16 and we do not expect state regulatory approvals to be an issue for our closing timeline,” Bachtell concluded.

Balance Sheet, Liquidity, and Other Financial Information

As of March 31, 2022, current assets were $400 million, including cash and cash equivalents of $179 million. The company had working capital of $69 million and senior secured term loan debt, net of discount and issuance costs, of $378 million.Total shares on a fully converted basis were 439,870,970 as of March 31, 2022.

Social Equity and Education Development Program

Over the past few months, The Sentence of Michael Thompson documentary has been accepted into eight film festivals and has won a Clio Award, Audience Choice Award at the South by Southwest Film Festival, and Best Documentary Short Film Award at the RiverRun International Film Festival. The short film was produced by the company’s Cresco brand and 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. This is all in furtherance of the company’s mission to leverage its platform to drive awareness and action toward cannabis legalization and criminal justice reform.

Capital Markets and M&A Activity

On March 23, 2022, the company announced a definitive arrangement agreement whereby Cresco will acquire Columbia Care in an all-stock transaction. Please click here for additional details.On May 16, 2022, the company announced the expiration of the 30-day waiting period under the HSR in connection with the proposed Columbia Care transaction.