Cresco Labs Stock Tumbling ahead of Earnings

Cresco Labs (CRLBF) is set to report its Q2 earnings on August 21 after the market closes. The company’s stock fell 5.3% yesterday.

Sushree Mohanty - Author

Aug. 16 2019, Published 6:21 p.m. ET

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Cresco Labs (CRLBF) is set to report its Q2 earnings on August 21 after the market closes. The company’s stock fell 5.3% yesterday. Cresco stock gained momentum last week when it announced that it received regulatory approval for its New York marijuana license deal.

The company received approval to acquire one of only 10 vertically integrated licenses in New York. To learn more, read Cresco Labs Lands New York Deal before Earnings.

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Piper Jaffray rated Cresco Labs a “buy”

A report in Daily Marijuana Observer this week said that Piper Jaffray senior research analyst Michael Lavery initiated coverage on Cresco Labs stock. After he gave a “buy” rating to the stock, CRLBF soared, rising almost 17%.

Cresco Labs announced the listing of shares

On August 13, Cresco Labs announced that its euro-denominated shares would be listed on the Frankfurt Stock Exchange (or FSE). Its shares will trade under the symbol “6CQ.” Currently, Cresco’s shares are listed on the Canadian Securities Exchange under the ticker symbol “CL.” It is also listed on the OTCQX under the symbol “CRLBF.”

With respect to this development, Cresco Labs CEO and co-founder Charlie Bachtell noted, “We believe that the FSE listing will make it easier for European institutional and retail investors to pursue an investment in Cresco Labs and participate in our continued success in creating shareholder value.”

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An obstacle for Cresco?

Yesterday, Times of CBD mentioned in an article that Cresco Labs and Green Thumb Industries (GTI) could face some challenges with respect to licensing in Illinois. The state of Illinois said it would allow only 55 medical marijuana providers to sell recreational marijuana.

Licenses and regulations are critical to the marijuana industry. However, the growth of medical marijuana is leading to the easing of regulations. To learn more, read Joe Biden Wants to Reform Cannabis Laws.

As the 2020 presidential election draws closer, both Republicans and Democrats are promising reforms to pass multiple bills to favor cannabis regulations. Stay tuned as we cover this ongoing development.

Analysts’ estimate for CRLBF’s Q2 earnings

Analysts expect Cresco’s second-quarter revenue to reach approximately $28.8 billion. Plus, analysts also expect Cresco to report EPS of -$0.01 in Q2 2019.

Currently, only nine analysts cover Cresco Labs stock. Three analysts recommended a “strong buy” for the stock for the next 12 months, and six rated it a “buy.”

Stock performance: Cresco and its peers

Cresco Labs stock has gained 24.6% year-to-date. Since its inception in December 2018, it has gained 54.9%. After Canopy Growth reported weaker results, it took a toll on the entire cannabis sector, suppressing stock prices yesterday.

Canopy Growth suffered the most, with huge losses of 14.3% yesterday. Cresco Labs was down 5.3%. Aurora Cannabis (ACB), Cronos (CRON), CannTrust (CTST), and Aphria (APHA) fell 5.7%, 8.8%, 6.6%, and 7.6%, respectively.

For in-depth insight into the cannabis sector, please read Cannabis Industry: What’s the Next Phase?


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