American cannabis operator Cresco Labs (CSE: CL) is eyeing sales from out-of-state residents in Illinois’ surging legal pot market.
The Chicago-based weed company said Monday it received city approval to open one of only two adult-use dispensaries in the Windy City’s tourist-friendly downtown core.
Cresco Labs noted that its Sunnyside pot shop will be open in the city’s high traffic Central District, which draws most of the 55 million tourists that visit Chicago annually. The dispensary will be close to one of America’s busiest shopping districts, the Magnificent Mile, and major tourist attractions like the DuSable Bridge.
Last week, the Illinois Department of Finance reported adult-use cannabis sales in February totaled US$35 million, with US$9.2 million coming from out-of-state residents. In January, sales reached just over US$39 million, while out-of-state sales came in at US$8.6 million.
“Earning the right to operate in this highly coveted location is both a privilege and a significant opportunity for Cresco,” CEO Charlie Bachtell said in a statement.
“Cresco has a long history of being first to market in new jurisdictions. Our ability to execute quickly and efficiently in a highly regulated, complex industry has always been a core strength of the company.”
Cresco leads Illinois legal cannabis market
Considering a limited number of dispensaries open across Illinois and ongoing supply shortages, Cresco said the state’s recreational market is proving to be robust while hitting US$74 million in sales in the first two months.
Once the market matures, Cresco expects Illinois to reach US$2 billion to US$4 billion in annual legal pot sales.
Cresco said it will continue to lead Illinois by market share because it’s almost finished boosting cultivation to 243,000 square feet.
The company currently sells to 100 per cent of licensed dispensaries in Illinois and it said the increased supply will help it maintain its wholesale distribution lead as retailers are hungry to fill the void of product shortages.
Cresco said its three production facilities can be expanded to a total of 630,000 square feet, the largest capacity footprint allowed in the state.
The new Sunnyside pot store will be Cresco’s sixth Illinois location, and the company said it has an additional four pending licences, including another in downtown Chicago.
In total, the company says it operates in 18 production facilities across 11 U.S. states.
However, shares of Cresco dropped 18 per cent Monday on the Canadian Securities Exchange in line with a broader global market selloff on the day.
Top image via Cresco Labs