Cresco Labs (CSE: CL), (OTCQX CRLBF), released their financial results for fourth quarter and the year ending December 31 2024. Although revenues decreased, the company reported better profits and free cash flow.
Fourth quarter results
In the fourth quarter, revenues dropped sequentially to $176m compared with the revenue for the third-quarter of $179m. Also, it fell compared to the $188m revenue for last year’s fourth quarter.
Cresco Laboratories reported net profit of $0.4 million with a cash flow free of $27.4 million. The net income was $0.4 million. This is an improvement on the $7.6-million loss reported in the third quarter. However, it’s still lower than $4.8-million earned by Cresco Labs last year.
The full-year result
Cresco Labs’ revenue for the entire year 2024 was $724 millions, a decrease from revenue in 2023 of $770million. It was said that the decline in revenue is due to the company focusing more on core markets and exiting low-margin companies. In a company presentation, the company informed investors that 35% of revenue was from wholesale and 65% came from retail. Cresco stated that retail productivity and strong brand performance help offset price compression.
The company did report a record cash flow operating of $132 millions and a cash free flow 114 million. Cresco’s net loss was $60 million. This included non-cash, one-off charges totaling $66 millions, related to expected benefits for its new 280E status, first described in 2024 second quarter.
“In 2024, the team executed with discipline—streamlining operations, prioritizing profitability, and generating record free cash flow,” said Charlie Bachtell, Cresco Labs CEO and co-founder. Our foundation has never been stronger. We have $132 million operating cash flow and a brand that is the leader in its core markets. Retail productivity also outperforms industry standards. By 2025, our goal is to increase the strategic deployment of capital in order to maximize growth for years to come. The approach is simple: Execute at the top level, generate money, and reinvest into high-ROI investments.
Cresco labs, with only 10 stores in Illinois, is almost as successful in Florida. In Pennsylvania’s medical-only marketplace, Cresco Labs has managed to achieve respectable sales figures with 17 stores.
Cresco had $294m in current assets as of December 31st 2024. This includes cash, equivalents of cash and $141m of restricted cash. Investors were informed that the company had secured senior term loans, net discount and issue costs, totaling $352 million, and mortgage loans, net discount and issue costs, amounting to $18 million.
The future
Cresco’s landscape has been reduced and it has chosen to concentrate on its core markets rather than trying to cover a wide range of states. Having said that, the company recently announced its plans to enter another medical-only market – Kentucky. According to the company, it has signed a Managed Services Agreement in Kentucky with a Tier 3 license. This makes them one of just two companies that hold Kentucky’s Tier 3 licenses. Cresco Labs is entitled to run and manage cultivation facilities with a canopy up to 25,000 sq. ft. This deal positions the company strategically at the forefront for Kentucky’s rapidly growing cannabis market. According to industry analysts, the Kentucky marijuana market will be worth over $135 million dollars by 2026. By 2028, it is expected to reach $228 million.
“Kentucky is our first of these new market expansions—a strategic addition backed by clear regulations. We are one of two cultivators in Kentucky with a canopy of up to 25,000 sq. ft., which is more than 20 percent of the total state allocation. This allows us to scale efficiently, serve patients quickly, and reinvest in our operations—just as we have in Illinois, Pennsylvania, and Ohio. “Congratulations to Cresco on an incredible 2024. Let’s go in 2025!”