U.S. multistate weed firm Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) is keeping investors happy by continuing to bump up revenues and keep EBITDA margins high.
For the third quarter ended Sept. 30, with preliminary results reported Thursday, the company said revenue rose to US$215.5 million, a nearly 3-per-cent rise quarter-over-quarter and over 40 per cent year-over-year.
But the company took a hit in the period, recording a non-cash impairment charge of US$291 million. Cresco says the expense was related to ramping down its third-party distribution business in California.
Adjusted earnings before interest, taxes, depreciation and amortization (EBITDA) was US$56.4 million, or 26 per cent of revenue, up 24 per cent in the quarter.
Cresco said it hit records for net wholesale revenue and retail revenue, reaching US$109.3 million and US$106.2 million (from 37 stores) respectively.
The company reported a net loss of US$263.5 million. It ended the quarter with a cash position of US$252.8 million.
Cresco projects fourth-quarter revenue between US$235 million and US$245 million, as well as an EBITDA margin of at least 30 per cent by the end of 2021.
Company stock is up over 11 per cent since market open Thursday to C$12.20 on the Canadian Securities Exchange.
In August, the firm increased a senior secured term loan by US$200 million, and made a deal to acquire Blair Wellness, a Baltimore, Maryland medical cannabis dispensary.
In September it closed the acquisition of Cultivate Licensing and BL Real Estate, a vertically integrated Massachusetts operator. It also bought a retail operator in Pennsylvania.
And in October it made a deal to buy Laurel Harvest Labs, a Pennsylvania clinical registrant and vertically integrated operator.
CEO Charles Bachtell praised an “outstanding” quarter.
“During the quarter, we replenished our balance sheet with non-dilutive capital, we closed a transformative acquisition in Massachusetts creating our third top three market share in a billion-dollar market, we announced several new deals to drive market depth, and we made massive improvements in bottom-line profitability as infrastructure investments began to bear fruit,” he said in a statement.
Cresco said its summer social justice initiative raised over US$250,000, and supported expungements for over 1,000 people with cannabis-related records.