Cresco Labs Q3 Revenue Drops 3% Sequentially

Company remains the #1 seller of branded cannabis products

CHICAGO-May 24, 2023-(BUSINESS WIRE)–Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), a vertically integrated, multi-state operator (“MSO”) and the cannabis industry’s No. 1 producer of branded products, today released its financial and operating results for the first quarter ended March 31, 2023. All financial information presented in this release is reported in accordance with U.S. GAAP and in U.S. dollars, unless otherwise indicated, and is available on the Company’s new Investor website, here.

First Quarter 2023 Financial Highlights

1According to BDSA

2 See “Non-GAAP Financial Measures” at the end of this press release for more information regarding the Company’s use of non-GAAP financial measures.

Management Commentary

“We are pleased with our first quarter results. Our team generated $194 million of sales. Our revenue performance was solid across our footprint, with some softening in Illinois that caused sequential decline in revenue as well as much of the margin pressure. Our team’s relentless prioritization of providing the highest perceived value to the consumer is paying off, evidenced by Cresco Labs maintaining industry wholesale leadership with the number one selling portfolio of branded products and an incredibly productive retail platform. Our branded products reached the shelves of 1,600 dispensaries across our 10-state wholesale footprint and our Sunnyside dispensaries rang up almost 1.2 million orders,” said Charles Bachtell, CEO of Cresco Labs.

After attending the first ever Senate hearing on the SAFE Banking Act, I’m encouraged by the progress at the federal level to resolve the industry’s unique banking challenges. I’m also energized by continued cannabis acceptance and normalization at the state level, with Missouri and Connecticut launching adult use sales, Kentucky passing medical cannabis and Delaware plus potentially Minnesota legalizing cannabis.

We are investing wisely and rationalizing and optimizing everything we do to generate profitable revenue expansion, drive healthy margins, generate more cash and strengthen our balance sheet. At Cresco Labs, we’re optimizing for the company we are today while also preparing for the industry of tomorrow.

Balance Sheet, Liquidity and Other Financial Information

Corporate Social Responsibility

Capital Markets and M&A Activity

Conference Call and Webcast

The Company will host a conference call and webcast to discuss its financial results on Wednesday, May 24, 2023, at 8:30 a.m. Eastern Time (7:30 a.m. Central Time). The conference call may be accessed via webcast or by dialing 1-833-470-1428 (US Toll Free), 1-404-975-4839 (US Local), providing access code 448673. Archived access to the webcast will be available for one year on Cresco Labs’ Investor website.

Consolidated Financial Statements

The financial information reported in this press release is based on unaudited management prepared financial statements for the quarter ended March 31, 2023. These financial statements have been prepared in accordance with U.S. GAAP. The Company expects to file its unaudited condensed interim consolidated financial statements for the quarter ended March 31, 2023, on SEDAR on or about May 24, 2023. Accordingly, such financial information may be subject to change. All financial information contained in this press release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes between the information contained in this press release and the consolidated financial statements it files on SEDAR, to the extent that the financial information contained in this press release is inconsistent with the information contained in the Company’s financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Company’s filed financial statements. The making of a modifying or superseding statement shall not be deemed an admission for any purposes that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company’s audited financial statements for the year ended December 31, 2022, previously filed on SEDAR.

Cresco Labs references certain non-GAAP financial measures throughout this press release, which may not be comparable to similar measures presented by other issuers. Please see the “Non-GAAP Financial Measures” section below for more detailed information.

Non-GAAP Financial Measures

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”), Adjusted EBITDA and Adjusted gross profit are non-GAAP financial measures and do not have standardized definitions under U.S. GAAP. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with U.S. GAAP and may not be comparable to similar measures presented by other issuers. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the U.S. GAAP financial measures presented herein. Accordingly, the Company has included below reconciliations of the supplemental non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

About Cresco Labs Inc.

Cresco Labs is one of the largest vertically integrated, multi-state cannabis operators in the United States, with a mission to normalize and professionalize the cannabis industry. Employing a consumer-packaged goods (“CPG”) approach, Cresco Labs is the largest wholesaler of branded cannabis products in the U.S. Its brands are designed to meet the needs of all consumer segments and comprised of some of the most recognized and trusted national brands including Cresco®, High Supply®, Mindy’s™, Good News®, Remedi™, Wonder Wellness Co.® and FloraCal®, Sunnyside*®, Cresco Labs’ national dispensary brand, is a wellness-focused retailer created to build trust, education and convenience for both existing and new cannabis consumers. Recognizing that the cannabis industry is poised to become one of the leading job creators in the country, Cresco Labs operates the industry’s largest Social Equity and Educational Development initiative, SEED™, which was established to ensure that all members of society have the skills, knowledge and opportunity to work and own businesses in the cannabis industry. Learn more about Cresco Labs at www.crescolabs.com.

Cresco Labs Inc.

Financial Information and Non-GAAP Reconciliations

(All amounts expressed in thousands of U.S. Dollars)

Original Press Release

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