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Cresco Lab Misses on Q4 Estimates, Cancels Pending Acquisition

By Eric Volkman - Apr 27, 2020 at 11:42PM

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The cannabis operator will not be buying the money assets of Tryke Companies after all.

Cresco Labs (CRLBF -2.72%) had a busy Monday, announcing both its latest quarterly results and the cancellation of a planned acquisition.

For the marijuana company's Q4 of fiscal 2019, which was unveiled after market close, headline revenue came in at $41.4 million. That was up 14% on a quarter-over-quarter basis, and 144% higher than the Q4 of fiscal 2018 tally. Net loss deepened more than ten-fold from the year-ago result, landing at $45.2 million.

Cresco did not provide a per-share amount for this deficit; according to the company's published shares outstanding count, this would be $0.15.

Marijuana bud burning.

Image source: Getty Images.

On average, analysts were anticipating $49.8 million in revenue, and a per-share loss of just over $0.02. As with many marijuana stocks, however, estimates for Cresco vary widely.

The company added that it expects to book $66.5 million in its Q1 of fiscal 2020, which ended March 31. It did not proffer any other guidance.

Earlier in the day, Cresco announced that it and privately held peer Tryke had mutually agreed to cancel a deal under which the former would acquire the latter's core assets. Tryke operates a small dispensary network of six stores in Nevada and Arizona under the brand name Reef, and has a line of its own products in addition to holding other cannabis assets.  

The deal was originally announced last September; Cresco was to pay around $282.5 million in a mix of cash and stock for Tryke. 

Cresco said that the Tryke arrangement "has been impacted by regulatory delays, a decline in capital markets, and now COVID-19, which brought additional risk to this transaction."

On Monday, Cresco's shares rose by 0.9%, lagging behind the broader stock market.

 

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