Cresco Labs (CL) Q1 2026 earnings summary

Executive summary

• Q1 2026 established a growth baseline with $151.3M in revenue, $77M adjusted gross profit, $33M adjusted EBITDA (21.7% margin), and a net loss of $17M, reflecting efficiency gains and cost discipline.

• Maintained leading wholesale and retail market share in multiple billion-dollar cannabis markets, supported by a strong brand portfolio and 77 operating retail locations as of March 31, 2026.

• Strategic expansion included acquiring or opening 11 dispensaries in Pennsylvania and Ohio, with further organic growth in Kentucky and a new license in Texas.

• Wholesale and retail operations outperformed state averages, with Sunnyside dispensaries 30% more productive than state averages.

• Federal rescheduling of medical cannabis to Schedule III is expected to benefit operations, especially through removal of 280E tax constraints.

Financial highlights

• Q1 2026 net revenue was $151.3M, with adjusted gross profit of $76.7M (50.7% margin) and adjusted EBITDA of $32.9M (21.7% margin).

• Net loss for Q1 2026 was $17M.

• Adjusted SG&A was $51M (33.7% of revenue); SG&A expenses were $54M (36.0% of revenue).

• Cash, cash equivalents, and restricted cash totaled $67M at quarter end.

• Free cash flow for Q1 2026 was negative $13.2M.

Outlook and guidance

• Q2 revenue expected to increase ~10% sequentially, driven by new dispensaries and market stabilization.

• Gross margins anticipated between 48%-50%; Adjusted EBITDA margin expected near 21%.

• SG&A to rise modestly with new store openings and M&A.

• Kentucky and Texas expected to provide long-term growth, with Kentucky's contributions ramping up as patient enrollment grows.

• Management expects to benefit from the reclassification of medical marijuana to Schedule III, eliminating Section 280E tax impacts.