Cresco Labs (OTC:CRLBF) was founded in 2013 and has quickly grown to become one of the largest marijuana companies in the United States. It already has 19 dispensaries in nine states, 16 cultivation and manufacturing sites, and over 30 cannabis shop licenses. The company’s most profitable product is the top marijuana brand in California. Despite its modest beginnings, the company has already achieved net income parity. It also offers a particular advantage over other marijuana businesses in the industry. Let’s take a look at why Cresco Labs is a great pot producer to include in your collection.
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Cresco Labs’ secret ingredient
Cresco Labs’ wholesale components set it apart from regular dispensary networks. More than 830 shops around the US sell the company’s branded dried cannabis, edibles, and wellness items. Wholesale accounts for over 60% of Cresco Labs’ total revenue. Its revenue climbed by more than fourfold year over year in Q3 2020, to $153 million. Simultaneously, the company’s operational income less non-cash expenses (EBITDA) surged by over 15 times to $46.4 million. During the quarter, the company was also able to break even.
In addition, Cresco Labs is making a significant foray into the Massachusetts and Florida sectors. Bluma Wellness, a marijuana grower, was purchased for $213 million in January. Bluma has the second-highest per-store smokable flower sales in Florida, trailing only Trulieve Cannabis (OTC:TCNNF), which has a 50 percent market share in the state’s medical marijuana market. Furthermore, residential deliveries account for approximately 15% of Bluma’s revenue. Within 24 to 48 hours, the company’s fleet of cars delivers cannabis to consumers’ doorsteps.
Cresco Labs also announced the acquisition of Cultivate, a cannabis grower and merchant, in March. In terms of recreational cannabis sales in Massachusetts, the acquisition objective is first. Following the completion of both transactions, the new Cresco Labs will have access to a total of 33 stores, 47 licenses, and 20 manufacturing facilities.
The company already had a staggering $741.6 million in net assets before the deals, so it’s unlikely to run into any liquidity concerns in the future. Cresco is also profitable and has a strong footing in the cannabis business in the United States. The company’s operations might reach up to 160 million people, or 60 percent of the adult population of the country.
So, what’s the final word?
The stock’s pricing is my favorite component of Cresco Labs. The pot grower is currently selling for only 7 times revenue. When you consider that U.S. marijuana companies like Curaleaf (OTC:CURLF), Jushi Holdings (OTC:JUSHF), Trulieve, and Green Thumb Industries (OTC:GTBIF) sell for 12 to 15 times sales, that’s a steal. Even better, Cresco Labs has a significant distribution revenue stream and is growing at a quicker rate than the companies listed above. As a result, I strongly advise marijuana investors searching for growth stocks at a reasonable price to include Cresco Labs in their portfolios.

This post is the author’s own view, which may differ from a Motley Fool premium advice service’s “official” recommendation position. We’re a mishmash! Questioning an investing theory, even our own, encourages us to think critically about investing and make decisions that will make us smarter, happier, and wealthier.
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