NATERA Plant-Based Foods Offered at Sealand Quality Foods – Investing News Network

Third Quarter 2021 Financial Highlights 1

Financial Outlook

The Company reaffirms the previously provided guidance of:

Management Commentary

Q3 was another outstanding quarter at Cresco Labs and a very strong start to the second half of the year. During the quarter, we replenished our balance sheet with non-dilutive capital, we closed a transformative acquisition in Massachusetts creating our third top three market share in a billion-dollar market, we announced several new deals to drive market depth, and we made massive improvements in bottom-line profitability as infrastructure investments began to bear fruit, said Charles Bachtell, Co-Founder and CEO of Cresco Labs. We are very proud of the record performance during a challenging quarter and continue to find that our differentiated strategy, localized for each individual state market, positions us to out-compete in both the current environment and long term. With many more growth initiatives up ahead, 2022 is set to be another record year, and we couldnt be more excited for whats to come as we continue driving strategic breadth, depth and execution.

Capital Markets and M&A Activity

SEED Social Equity and Education Development Program

Balance Sheet, Liquidity, and Other Financial Information 1

1 Note that the quarterly review process is still underway until financial results have been filed on SEDAR and EDGAR, and accordingly final results could change. Please see Consolidated Financial Statements section below for more information.

2 See Non-GAAP Financial Measures at the end of this press release for more information regarding the Companys use of non-GAAP financial measures.

Conference Call and Webcast

The Company will host a conference call and webcast to discuss its financial results and provide investors with key business highlights on Thursday, November 11, 2021, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 1-844-200-6205 (US Toll Free), 1-646-904-5544 (US Local), +1 929-526-1599 (Other) and providing access code 886856. Archived access to the webcast will be available for one year on the Cresco Labs investor relations website.

Consolidated Financial Statements

The financial information reported in this press release is based on unaudited management prepared financial statements for the three and nine months ended September 30, 2021. These financial statements have been prepared in accordance with U.S. GAAP. This release contains certain preliminary financial results for third quarter of 2021, including Cost of goods sold; Gross profit; Depreciation and amortization; Impairment loss; Interest expense, net; Other income (expense), net; Income tax recovery (expense); Net loss; Inventory, net; Property and equipment, net; Intangibles, net; Goodwill; and Deferred, contingent consideration and other payables, short-term. These preliminary results for the three months ended September 30, 2021 are provided prior to completion of all internal and external reviews and therefore are subject to adjustment until the filing of the Companys quarterly financial statements, which the Company expects to file on SEDAR during the week of November 15, 2021. The review of the unaudited consolidated financial statements for the three and nine month periods ended September 30, 2021 by the Companys auditors is currently in process. 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 Companys financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Companys 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 Companys audited financial statements for the year ended December 31, 2020, prepared under International Financial Reporting Standards (IFRS) and 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 of this press release for more detailed information.

U.S. GAAP Financial Reporting

Beginning with the quarter ended March 31, 2021, the Company has prepared its financial statements, including all comparative figures, in compliance with U.S. GAAP instead of IFRS. Changes to comparative figures for prior periods reflect their presentation in accordance with U.S. GAAP and is not a change in the Companys underlying performance as previously reported under IFRS.

Non-GAAP Financial Measures

EBITDA, Adjusted EBITDA, and Adjusted gross profit are non-GAAP measures and do not have standardized definitions under U.S. GAAP. The Company has provided these 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 believes 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. The Company has not quantitatively reconciled its guidance for forward-looking non-GAAP metrics to their most comparable U.S. GAAP measures because the Company does not provide specific guidance for the various reconciling items as certain items that impact these measures have not occurred, are out of the Companys control, or cannot be reasonably predicted. Accordingly, a reconciliation to the most comparable U.S. GAAP financial metric is not available without unreasonable effort. Please note that the unavailable reconciling items could significantly impact the Companys results.

About Cresco Labs Inc.

Cresco Labs is one of the largest vertically integrated, multistate 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, Cresco Reserve, High Supply, Mindys Edibles, Good News, Remedi, Wonder Wellness Co. and FloraCal Farms. 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 industrys 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 http://www.crescolabs.com .

Forward Looking Statements

This press release contains forward-looking information within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute forward-looking statements within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Companys beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Companys control. Generally, such forward-looking information or forward-looking statements can be identified by the use of forward-looking terminology such as, may, will, should, could, would, expects, plans, anticipates, believes, estimates, projects, predicts, potential or continue or the negative of those forms or other comparable terms. The Companys forward-looking statements involve known and unknown risks, uncertainties and other factors which may cause the Companys actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to those risks discussed under Risk Factors in the Companys Annual Information Form for the year ended December 31, 2020 filed on March 26, 2021, and other documents filed by the Company with Canadian securities regulatory authorities; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Companys forward-looking statements. No assurances are given as to the future trading price or trading volumes of Cresco Labs shares, nor as to the Companys financial performance in future financial periods. The Company does not intend to update any of these factors or to publicly announce the result of any revisions to any of the Companys forward-looking statements contained herein, whether as a result of new information, any future event or otherwise. Except as otherwise indicated, this press release speaks as of the date hereof. The distribution of this press release does not imply that there has been no change in the affairs of the Company after the date hereof or create any duty or commitment to update or supplement any information provided in this press release or otherwise.

Cresco Labs Inc.

Financial Information and Non-GAAP Reconciliations

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

Unaudited Consolidated Statements of Operations

For the Three Months Ended September 30, 2021, June 30, 2021, and September 30, 2020

For the Three Months Ended

($ in thousands)

September 30, 2021 2

June 30, 2021

September 30, 2020

Revenue

$

215,483

$

209,975

$

153,298

Cost of goods sold

107,162

108,994

76,454

Gross profit

108,321

100,981

76,844

Gross profit %

50.3

%

48.1

%

50.1

%

Operating expenses:

Selling, general and administrative

69,520

71,605

44,830

Share-based compensation

6,083

8,814

2,764

Depreciation and amortization

5,787

5,690

4,315

Impairment loss

290,949

Total operating expenses

372,339

86,109

51,909

(Loss) income from operations

$

(264,018

)

$

14,872

$

24,935

Other (expense) income:

Interest expense, net

(13,577

)

(11,481

)

(8,762

)

Other income (expense), net

1,735

12,725

(354

)

Loss from equity method investments

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NATERA Plant-Based Foods Offered at Sealand Quality Foods - Investing News Network