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Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ), a constituent in the munKNEE American Cannabis MSO Stocks Index, released its financial results yesterday for the second quarter ended June 30, 2023.

Q2 Financial Highlights

(The information below compares Q2 2023 with Q1 2023 and all figures are in U.S. dollars.)

• Revenue: UP 1.9% to $197.9M
• Gross Profit: UP 0.9% to $86.7M
  • Gross Profit Margin: DOWN to 43.8% from 44.2%
• Adj. EBITDA: UP 38.2% to $40.5M
  • as a % of Revenue: UP to 20.4% from 151%
• Net Profit (Loss): UP 56.5% to $(43.5)M*
  • *includes impairment loss of $(21.5)M
  • DOWN 20.9% excluding impairment charge

Q2 Operating Highlights

• Maintained:
  • the No. 1 share position in Illinois, Pennsylvania and Massachusetts.
  • the No. 1 bestselling portfolio of branded flower and branded concentrates,
  • the No. 3 portfolio of branded vapes, and
  • the No. 4 portfolio of branded edibles.
• Opened five (5) Sunnyside stores in Florida and Pennsylvania,
• Increased:
  • nationwide store count to 68.
  • branded equivalized unit volume by 19% year-over-year.
  • retail transactions by 11% year-over-year.

Management Commentary

Charles Bachtell, CEO, and Co-Founder, said:

• “Our Year-of-the-Core commitment to rationalizing and optimizing our core markets, core stores, core brands and core products is reflected in our Q2 results with growth in our top line, gross margin, Adjusted EBITDA and operating cash flow.
• With our focus on driving scale and efficiencies across the entire organization, we’ve been accomplishing more with less – leading to a 38% sequential improvement in Adjusted EBITDA.
• We maintained our industry leadership with the #1 portfolio of both branded flower and branded concentrates, #3 portfolio of branded vapes and #4 portfolio of branded edibles.
• We’re pleased to see improved profitability and cash flow in our core markets, which positions us well for the capital-efficient growth and expansion opportunities that lie ahead.
• Our results are just starting to reflect the decisions we made earlier this year to support our Year-of-the-Core priorities, with much more to come”.

Stock Performance

Despite improved operations in Q2 and since, Cresco's stock price was DOWN 40.6% YTD as of yesterday but is UP 6.7% in early morning trading today. 

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