Cresco Labs (OTCMKTS:CRLBF) is one of the few US pot stocks that have performed exceptionally this year reporting growth in revenue despite the impact of the COVID-19 pandemic.
Cresco’s YoY Q1 2020 revenue grew 215%
In the first quarter, the company saw a 215% YoY growth in revenue to $66.4 million which is an indication that demand for pot in the US is rising. In Q4 the company had also reported revenue growth in Q4 2019. Cresco has benefitted from the legalization of marijuana in various states such as Illinois. The state legalized recreational pot at the beginning of the year and sales have been increasing astoundingly and in April adult pot sales were $37.3 million.
The company’s management considers Illinois a key market that they see growing to a $1 billion industry in a year. Although regulatory bottlenecks in Nevada and Massachusetts constricted the company’s growth in Q1 it nevertheless continued to drive growth and focus in markets where demand was high such as Illinois, California, and Pennsylvania markets.
Cresco reports profit in Q1
Profitability has been elusive for most pot stocks but Cresco Labs has now reported a profit in two consecutive quarters. In Q1 it reported adjusted EBITDA of $3.2 million compared to $138,000 loss in Q1 2019 and in Q4 2019 the company reported a $2.8 million profit. Management is holding for increased profitability in the second quarter considering markets look strong.
Smaller pot stocks may be facing liquidity issues but that is not a problem for Cresco which has announced expansion plans across the US. Cresco ended Q1 with a solid balance sheet and it had $68.6 million in cash and investments. In Q1 through a partnership with Verdant Creation, the company said that it will acquire four more dispensaries in Ohio taking its number to fives. Last month, it opened its first recreational use location in Chicago and the sixth store in Illinois.