Cresco Labs, Inc. · CSE:CL
Cresco Labs — Q3 2024 Earnings Presentation
24 slides from Cresco Labs's earnings presentation, November 2024
Slide 1: Profitability and Growth from the Core
PROFITABILITY AND GROWTH FROM THE CORE
Slide 2: Forward-looking information disclaimer
This presentation contains “forward-looking information” within the meaning of applicable Canadian securities legislation and "forward-looking statements" within the meaning of the United States Private Securities Litigation Reform Act of 1995. Such forward-looking information and forward-looking st
Slide 3: Well-Positioned to Create Value
WELL-POSITIONED TO CREATE VALUE Leading Portfolio of Brands and Dispensaries that Outperform the Market © Leading Portfolio of Brands * #1 Market Share in IL, PA and MA’ Sey CRESCO 4 + A (35%) LABS Investing in Exclusive Genetics, Technology and $180 Automation Net Revenue oi #/ iu Se (2) As of Sept
Slide 4: Reviewing the Year of the Core
REVIEWING THE YEAR OF THE CORE Setting a New Standard for Ourselves Topline Revenue of $180 Million, strong brand performance and retail productivity helping to offset price compression Q 3 2 0) 2 4 Adjusted EBITDA Margin Expansion of ~280 Basis Points Year- Over-Year through operational efficiencie
Slide 5: Revenue, gross profit and adjusted EBITDA trends
-6% -3% +5% $190.6M $188.2M $184.3M $184.4M $96.2M $99.7M $96.7M 60 40 $179.8M 100 $94.9M $93.4M 60 $54.8M $53.2M $53.9M $51.3M 50 $49.0M 35 80 53.0% 52.4% 53.0% 55 51.5% 29.1% 28.8% 29.2% 28.5% 50.5% 40 30 60 50 25.7% 30 25 40 45 20 20 20 40 10 15 0 350 10 Q3 ’23 Q4 ’23 Q1 ’24 Q2 ’24 Q3 ’24 Q3 ’23
Slide 6: Operating cash flow and leverage
+$41.1M +$74.6M 4.0 -1.0x 70 $103.0M 90 $87.3M 70 3.6x 3.5 60 80 60 3.0 70 2.6x 50 50 60 2.5 $61.9M 40 50 40 2.0 40 30 30 1.5 30 20 20 1.0 20 $12.7M 10 0.5 10 10 0 0 0.0 0 Q3 ’23 YTD Q3 ’24 YTD Q3 ’23 YTD Q3 ’24 YTD Q3 2023 Q3 2024
Slide 7: 2024 Core Growth Priorities
2024 CORE GROWTH PRIORITIES Creating the Strongest and Most Valuable Cresco Labs CRESCO oon HIGH rea] SUPPLY s) MINDY’S — FLORACAL’ @®Remedi § wor STRATEGIC FOOTPRINT Maximize Adult-Use Conversions INDUSTRY LEADING BRANDS Win with Independent Dispensaries HIGHLY PRODUCTIVE RETAIL Expand Retail Netwo
Slide 8: Market growth opportunity 2023 to 2026
+180% +55% +110% $1.8B $2.3B $4.1B $1.1B $2.0B $0.5B 2023 2026 2023 2026 2023 2026
Slide 9: Tax Strategy
TAX STRATEGY Revised Tax Position that Will Normalize Taxes and Drive Material Cash Flow Generation CASH IMPACT An Estimated $70M+ Annual Cash Benefit For 2023 and beyond, the Company intends to file Due to Expected Lower Tax Expense taxes as a normal business, resulting in an estimated annualized c
Slide 10: America's Leading Cannabis Brands
AMERICA’S LEADING CANNABIS BRANDS
Slide 11: Proven Depth in Wholesale
iu] PROVEN DEPTH IN WHOLESALE Leading Wholesaler with the Most Popular Cannabis Brands in America LEADING PORTFOLIO OF BRANDS' Eb (s) i) (<,) () FLORACAL s) i FLORACAL FLORACAL MINDY’S FLORACAL [a4 FF CRESCO CRESCO G22 NEWS CRESCO + o Remedi ra) 6290 NEWS Ole Ghs wonder | HIGH ° SUPPLY HIGH Reece SU
Slide 12: Premier Cultivation
PREMIER CULTIVATION Investing in Leading Cultivation Techniques, Technology & Genetics LEADING CAPABILITIES & EXCLUSIVE GENETICS Investing In Technology and Equipment Investing In Proprietary Genetics Library Smart Investments In Ohio, With 106% Increase In Grams Ongoing In-House Breeding Program Wi
Slide 13: Superior Manufacturing
SUPERIOR MANUFACTURING Winning with Quality Products and Innovative Infusion — Delivering Efficiency Through Automation : : INNOVATIVE INFUSION, LEADING AUTOMATION & LIMITED TIME OFFERINGS EFFECTS-ENHANCING BARREL-STYLE PATENTED LIMITED TIME ADDITIVES PRE-ROLLS PROCESS OFFERINGS Featuring Wonder Sle
Slide 14: Highly Productive Retailer
HIGHLY PRODUCTIVE RETAILER
Slide 15: Proven Depth in Retail
PROVEN DEPTH IN RETAIL Driving Best-In-Class Retail Productivity to Deliver Sustained Growth at Scale STORE COUNT 72 As of September 30, 2024 OUTPERFORMING INDUSTRY 1.4x Average Index-to-Fair-Share in Market As of September 30, 2024, based on internal and state data. CRESCOLABS 5
Slide 16: Outperforming in Our Markets
OUTPERFORMING IN OUR MARKETS Delivering Growth and Delighting Shoppers through Premier Retail Capabilities te | RETAIL MARKETING RETAIL OPERATIONS YO? 2a SELLING MORE GROWING BASKETS WITH PER CUSTOMER BETTER ASSORTMENT DRIVING CUSTOMERS IN MORE FREQUENTLY 21% Increase in Trips per Customer, Q3 2024
Slide 17: Sunnyside.shop
SUNNYSIDE.SHOP An E-Commerce Platform Unlike Any Other - Unparalleled Proprietary Capabilities, Insights DIGITAL SHOPPER 76% Of Q3 2024 Customers Were Digital Shoppers SHOPPER LOYALTY +7% Sunnyside Rewards Member Growth QoQ to +356K members As of September 30, 2024, based on internal and state data,
Slide 18: State-by-State Asset Summary
STATE-BY-STATE ASSET SUMMARY Strong Positions in Markets That Matter - Driving Share Leadership Today and Capturing Growth of Tomorrow As of June 30, 2024 CA MI g IL g MA NY @OH FL g PA TOTAL Population ¥MM 39.5 10.1 12.8 7.0 20.2 1.8 21.5 13.0 135.9 Legal Status AU/M Both Both Both Both Both! Both!
Slide 19: Our Commitments
OUR COMMITMENTS Unwavering In Our Mission to Normalize and Professionalize Cannabis i SL 2 COMMITTED TO OUR COMMITTED TO OUR EMPLOYEES COMMUNITIES 2024 YTD, Our Employees Have Volunteered More than 5,600 Hours to our Communities. 2024 YTD, 61% of our Employees Onboarded were Female or Minority. As o
Slide 20: Financial Results
FINANCIAL RESULTS
Slide 21: Financial Highlights: Capitalization Summary
FINANCIAL HIGHLIGHTS Capitalization Summary SHARES O ANDING NET DE Share Class (# in millions) Balance ($ in Millions) as of 09/30/2024 as of 09/30/2024 Super Voting Shares 0.5 Debt Outstanding (ST) $22.2 Redeemable Units 92.8 Debt Outstanding (LT) 499.3 Subordinated Voting Shares 330.0 Long-term Le
Slide 22: Reconciliation of Non-GAAP Measures
FINANCIAL HIGHLIGHTS Reconciliation of Non-GAAP Measures ADJUSTED GROSS PROFIT ADJUSTED EBITDA For the Three Months Ending September 30 For the Three Months Ending September 30 ($ in Millions) Q3 2024 Q3 2023 ($ in Millions) Q3 2024 Q3 2023 Revenue, net $179.8 $190.6 Net income (loss) ($7.7) ($113.4
Slide 23: For the Three Months Ending September 30 ($ in Millions) For the Three and
For the Three Months Ending September 30 For the Three and Nine Months ($ in Millions) Ending September 30 ($ in Millions)
Slide 24: Thank You
THANK YOU INVESTORS TJ Cole - SVP, Corporate Development & Investor Relations [email protected] MEDIA Jason Erkes - Chief Communications Officer [email protected] FOR GENERAL INQUIRIES 312-929-0993 [email protected] CRESCOLABS