Cannabis retailer Cresco Labs Inc. said Thursday its second-quarter loss widened on a $61 million charge related to its tax position, as revenue remained about flat.
Cresco Labs said it lost $51.18 million in the quarter, after losing $2.06 million in the year-ago period.
The company did not provide figures for loss per share. Second-quarter revenue edged up to $184.36 million from $184.3 million in the year-ago period, and came in below the FactSet consensus estimate of $184.8 million.
Cresco Labs stock rose 1.3% on Thursday.
Cresco Labs said it expects to recognize $65 million in cash savings in 2024 based on its projected tax impact, but it took the $61 million charge to cover its tax position.
If the federal government lowers the classification of cannabis to Schedule III as proposed, the 280E tax rules that prohibit cannabis companies from taking standard business deductions would no longer apply.
Cresco Labs Chief Executive Charles Bachtell said the “pace of [cannabis] reform challenges even the most patient of us.”
While the company now maintains that the 280E rules no longer apply to its business, the tax position remains uncertain.
The company “intends to update its tax position going forward to file as a normal business,” Cresco Labs said.
Cresco Labs’ stock is up 8% so far in 2024, compared to a 3% drop by the AdvisorShares Pure U.S. Cannabis EFT
