Cresco Labs Inc: Giant Opportunity Ahead for This Pot Stock?

Why This Pot Stock Deserves a Look

If you want a piece of the action in the fast-growing cannabis industry, Cresco Labs Inc (OTCMKTS:CRLBF, CNSX:CL) stock deserves a serious look.

Now, I know what you are thinking. Cresco stock is listed on the Canadian Securities Exchange and also happens to trade over the counter in the U.S. Since there are pot companies that already listed on major U.S. stock exchanges, why are we still talking about an over-the-counter pot stock?

Well, the first thing to note is that, while Cresco doesn’t trade on a major exchange, it is actually one of the largest vertically integrated multi-state operators in the U.S.

The company, founded in 2013, now has operations in 11 states. Cresco runs 18 production facilities that span a total of 1.2 million square feet. (Source: “Cresco Labs,” Cresco Labs Inc, last accessed March 10, 2020.)

Another reason why Cresco Labs Inc deserves investor attention right now is its recent progress in opening new dispensaries.

In particular, the company has just received special use approval from the Zoning Board of Appeals for its dispensary located in the prestigious River North neighborhood of Chicago. (Source: “Cresco Labs Announces Zoning Approval for Chicago Dispensary in Prized River North Area,” Cresco Labs Inc, last accessed March 9, 2020.)

Note that this dispensary is one of two licenses Cresco won in the Central District in Chicago’s lottery last November. At the same time, the River North location will be one of the only two city-approved adult-use dispensaries in all of downtown Chicago. The dispensary will be under Cresco’s “Sunnyside” brand, marking the company’s sixth Sunnyside location in the state of Illinois.

“Earning the right to operate in this highly coveted location is both a privilege and a significant opportunity for Cresco,” said Cresco Labs’ co-founder and chief executive officer Charlie Bachtell. “The Dispensary is minutes from the Magnificent Mile, one of the busiest shopping districts in the United States. On a personal note, it is also minutes from Cresco’s corporate headquarters, and I couldn’t be more excited about Sunnyside potentially having a flagship dispensary in this neighborhood.” (Source: Ibid.)

Mind you, this would just be a start. Cresco Labs Inc has licenses to open another four dispensaries and also plans to have locations in the Gold Coast neighborhood of Chicago, Danville, Illinois, and South Beloit, Illinois.

Cresco Labs Inc: Capitalizing on a New Market

If you’ve been following the cannabis industry, you’ll know why Illinois represents a major opportunity.

There are now 11 states (and D.C.) where recreational marijuana is legal, and Illinois is the latest state to join the club.

Lawmakers passed the Illinois Cannabis Regulation and Tax Act in May 2019. Sales of recreational pot began in the state on January 1, 2020.

And even though Illinois is still a nascent market for cannabis, it has already delivered some very impressive numbers.

According to the Illinois Department of Financial and Professional Regulation, adult-use cannabis sales totaled $39.2 million in the state in January 2020. (Source: “Pritzker Administration Announces First Month Sales Totals for Adult Use Cannabis,” Illinois Department of Financial and Professional Regulation, February 3, 2020.)

Things remained strong in February, as Illinois’ statewide recreational pot sales came in at $34.8 million. (Source: “Pritzker Administration Announces Second Month Sales Totals for Adult Use Cannabis,” Illinois Department of Financial and Professional Regulation, March 4, 2020.)

So, in just the first two months after legalization, Illinois has generated a whopping $74.0 million in adult-use cannabis sales.

And the state still has plenty of potential. According to a study by Freedman & Koski, Illinois’ adult-use cannabis market could reach up to $2.6 billion in annual revenue. (Source: “A Snapshot of Demand for Adult-Use Cannabis in Illinois,” Freedman & Koski, last accessed March 10, 2020.)

The best part is, Cresco Labs Inc is already a part of Illinois’ cannabis boom.

On January 1—the first day of recreational pot sales in the state—the company served more than 3,100 customers at its five Sunnyside dispensaries located in Lakeview, Elmwood Park, Champaign, Buffalo Grove, and Rockford, Illinois. The average ticket price was $135.00. (Source: “Cresco Labs Makes History on January 1st With First Sale of Adult-Use Cannabis in Illinois at Its Sunnyside* Lakeview Dispensary,” Cresco Labs Inc, January 2, 2020.)

Analyst Take

Of course, the stock market is still filled with uncertainty at the moment, and it’s hard to say what CRLBF stock’s next move could be. But with a strong presence in a booming sector, Cresco Labs Inc could churn out some very impressive growth rates down the road.