Cresco Labs Inc (CSE:CL) (OTCQX:CRLBF) has emerged as one of the more promising companies in the cannabis industry in recent times, and Monday proved to be a particularly eventful day for the company.
Cresco released its financial results for Q4 2019 on Monday after the closure of markets, and the overall revenues for the period came in at $41.4 million. That reflected a rise of as much as 14% on a sequential basis and when compared to the year-ago period, it reflects the growth of 144%. While the news on the revenue front might have been good, Cresco’s losses mounted as much as ten times on year on year basis.
Net losses deepened to $45.2 million for the quarter, and the company did not provide the loss per share amount either. Analysts had expected revenues of $49.8 million for the period. Cresco also announced that it expects the Q1 2020 revenues to be $66.5 million. Earlier on Monday, Cresco announced that its plans to acquire the core assets of Tyke now stands canceled. The company had agreed on a deal back in September 2019. The deal was worth $282.5 million, which was to be paid out in both cash and stock.
While the company’s mounting losses might be a bit alarming for investors, it should be noted that Cresco Labs could well prove to be a winner once demand rises following the end of the coronavirus crisis. Earlier this month, the company completed the building of a cultivation plant that spans across an area of 180000 square feet. At this point in time, the total area that can be used for cultivation by Cresco stands at 630000 square feet in Illinois alone. There is a lot of room for Cresco to boost its production capabilities significantly and take advantage of any major demand boost in a post-coronavirus world.