Chicago-based and Canadian listed Cresco Labs Inc (CSE: CL) announced today it’s Q4 financial results, among the last wave of cannabis companies to issue their earnings reports.
As one of the largest multistate operators in the United States, investors were quite impressed by the company’s financial figures which indicated a profitable fourth quarter.
Revenue had increased by 33 percent in comparison to the previous quarter, while year-over-year revenue between 2017 and 2018 had jumped 411 percent. For Q4 2018, total revenues came in at $17 million, while full-year figures were around $43.3 million.
The company’s total assets as of fiscal year-end totaled just under $320 million, with around $131 million of that coming from cash or cash equivalents. Full year net income came in at $3.9 million, as opposed to 2017 which saw the company’s net losses exceed $4 million.
“We completed 2018 with another quarter of positive pre-tax income that reflected continued strong execution across all areas of our operations,” said Charles Bachtell, Co-founder and CEO of Cresco. “We continue to successfully enter new markets with beneficial regulatory structures, increase our production and processing capacity, and expand the distribution for our unique and sophisticated ‘house of brands.’ Our ability to offer compelling products to all major segments of the cannabis market and achieve high levels of market penetration is generating strong growth in revenue and significant improvement in our gross margin.”
Arguably the strongest aspect of the financial report was Cresco Lab’s ended the quarter on a profitable note, concluding Q4 2018 with $7.3 million in profit – around 42.8 percent of overall revenues.
In comparison to the same time last year, Cresco lost $0.1 million, a massive improvement that is mainly attributed to increased operational efficiencies as Cresco scales its businesses, cultivation capacity, as well as lowered operating costs on a per gram basis.
At this stage in the cannabis market, investors are looking for something more than just revenue growth figures.
Specifically, they are expecting companies to show some inkling of profitability, something that most companies have failed to report. Cresco stands out in the marketplace precisely for this reason, with shares jumping as a result.
“Building on our momentum from 2018, we have already made incredible progress this year in building Cresco Labs’ leadership position in the cannabis industry,” added Bachtell. “The definitive agreement signed with Origin House earlier this month is a transformational deal for Cresco that creates a cannabis industry powerhouse with the premier distribution platform in the United States serving the greatest number of dispensaries in the country. Combined with our recent entrance into the Florida market, Cresco has built the largest and most strategic footprint of any cannabis company in the United States. We anticipate that 2019 will be a highly productive year in establishing Cresco as the first national brand in the cannabis industry, capitalizing on the strong growth we are seeing in large markets across the country, and creating additional value for our shareholders.”
In response to the good financial results, shares of Cresco Labs shot up 8 percent in today’s trading session. The company’s stock price has almost tripled since December 2018 when it first debuted on the public markets.