Cresco Laboratories Inc., (CSE CL) (OTCQX CRLBF), has agreed to manage a Kentucky cultivation site. It signed an agreement to provide management services in Kentucky with a Tier 3 cultivation license, which allows it to run and manage a facility up to 25 square feet. This will make it one of just two licensees in Kentucky who hold Tier 3 cultivation licences.
“I am looking forward to showing Kentucky’s residents why Cresco Labs portfolio is the top choice both in medical markets such as Pennsylvania, and adult use markets such as Illinois. Charlie Bachtell is the CEO of Cresco Labs. “The Cultivation Licence allows us to build a modern cultivation facility up to 25,000 sq. ft. of canopy. This will allow us to provide the high quality and scale that we’re known for”, said Charlie Bachtell. The last two years have been spent on strengthening the foundation and increasing cash flow. Kentucky represents our first in a series of opportunities for us to reinvest the free cash flow into growth initiatives with a high ROIC as we expand further into new markets.
This program has only been launched since the start of this year. It includes a maximum of 115,000 square feet of approved canopy space and 48 retail licenses, with industry analysts forecasting the market to generate over $135 million in revenue by 2026, growing to over $228 million by 2028.
Green Market Report wrote last month that Kentucky hauled in approximately $27.5 million in application fees during its two-month application window, according to state officials. The licensing process used a lottery system to award business permits, which proved controversial as several local businesses were not selected.
The Governor said that despite a company such as Cresco accepting to act as a manager, these arrangements still lead to locals being hired.
Cresco Labs is expected to report earnings on Wednesday, March 12th. Yahoo Finance’s average analyst forecast predicts revenue of 172.1 million dollars for the fourth quarter. Pablo Zuanic began coverage on the company with an Overweight ranking last year. In his article, he wrote: “Cresco is the MSO with the highest potential for growth (excluding Trulieve) and it trades on a discount to Curaleaf, Green Thumb, and Verano (in accordance with Trulieve and Verano). He did not set a target price.
Zuanic has said that Cresco is the brand with the largest portfolio, measured by its market share. It also runs one of best performing dispensary chains.