MJ Biz
Marijuana multistate operator Cresco Labs is selling off its California assets as part of a strategic effort to preserve cash as the cannabis industry’s struggles continue, the company announced Monday.
The Chicago-based company said it is currently negotiating with prospective buyers for its California-based cultivation, manufacturing and distribution operations as $400 million in debt comes due next year.
According to public disclosure forms filed in Canada, where Cresco Labs is listed on the Canadian Securities Exchange (CSE), Cresco’s holdings in California include:
- Sonoma’s Finest fka FloraCal California Cultivation, which holds distribution, processor, and medium indoor cultivation permits.
- Cub City, which holds a small indoor cultivation and a nursery permit in Sonoma County.
Cresco plans to keep its FloraCal brand, which it will continue to produce and market across the United States.
“Capital is increasingly precious in this environment, and our focus is on deploying it where it earns the strongest return,” Cresco co-founder and CEO Charlie Bachtell said in a statement Monday.
“While California is the largest cannabis market in the world, the structural challenges – ranging from fragmented retail to price compression and the illicit market – combined with our lack of scaled footprint in the state make it extremely difficult to generate sustainable profitability.”
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Cresco Labs is latest cannabis MSO to exit California market
