Cresco Labs Bets On Cannabis Rescheduling, Q1 Revenue And Profitability Weaken

Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) reported its first-quarter revenue decreased 6.37% sequentially and 8.74% year-over-year to $151.3 million. Net loss for the quarter totaled $17 million, compared to a $15.2 million loss in the same quarter of last year.

Despite weaker revenue, the company continues to ramp up its operations by expanding operations in key U.S. cannabis markets and entering new states.

“After the quarter, we have added 11 dispensaries to our platform across Pennsylvania and Ohio, expanding our scaled footprint in core markets,” the company’s management said in a press release. ”We’ve shifted Kentucky from the investment phase into revenue generation with our first harvest in April, and we have added meaningful long-term optionality by being awarded a conditional medical license in Texas.” 

Like other cannabis operators, Cresco welcomed the Trump Administration’s plan to reclassify medical marijuana as Schedule III, which could remove Section 280E restrictions on its medical business. Attorney General Blanche also launched a faster review of marijuana’s broader classification, with hearings scheduled to start on June 29, 2026.

“We look forward to the hearings on the general rescheduling of cannabis on June 29th,” the management said. “We’ve built the operational foundation and balance sheet discipline to capture immediate benefits of rescheduling, while positioning Cresco to capitalize on the broader path to normalization.”

Q1 2026 Financial Highlights

• Gross profit reached $75.4 million, with an adjusted gross margin of 50.7%, down from $78.6 million in the prior year’s period.
• Adjusted EBITDA came in positive at $32.9 million, representing a strong 21.7% EBITDA margin. That’s down from an adjusted EBITDA gain of $36.2 million in the first quarter of fiscal 2025.
• Selling, general, and administrative expenses were reduced to 36% of revenue, reflecting ongoing cost discipline.
• As of March 31, 2026, Cresco held $67 million in cash and restricted cash and had roughly $329 million in debt. Total assets were about $1.2 billion.

CRLBF Price Action

Cresco’s shares traded 8.18% lower at $1.01 per share at the time of writing on Friday.