Cresco Labs, Inc. · CSE:CL
Cresco Labs — Q1 2024 Earnings Presentation
25 slides from Cresco Labs's earnings presentation, May 2024
Slide 1: Profitability and Growth from the Core
PROFITABILITY AND GROWTH FROM THE CORE
Slide 2: Disclaimer
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
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! $66M CRESCO _ . 36% LABS «© Investing in Exclusive SE Genetics, Technology and $184M Automation Net Revenue (1) Based on Q12024 B
Slide 4: Reviewing the Year of the Core
REVIEWING THE YEAR OF THE CORE Setting a New Standard for Ourselves Maintained Topline Revenue of $184 Million while divesting assets, growing retail revenue and offsetting price compression through strength in our core products. Q 1 2 O 2 4 Adjusted EBITDA Margin Expansion of >1,300 Basis Points th
Slide 5: Revenue, Gross Profit and Adjusted EBITDA Trends
-5% +7% +82% $194.2M $197.9M $99.7M 60 $54.8M 40 $190.6M $188.2M $184.3M $96.2M $53.2M 100 $92.6M $94.9M 60 $88.7M $49.0M 50 35 80 53.0% 55 $40.5M 29.1% 51.5% 40 28.8% 30 50.5% 25.7% 60 50 $29.3M 46.8% 30 25 45.7% 20.5% 40 45 20 20 15.1% 20 40 10 15 0 350 10 Q1 ’23 Q2 ’23 Q3 ’23 Q4 ’23 Q1 ’24 Q1 ’23
Slide 6: Operating Cash Flow and Free Cash Flow
+$33.2M +$50.0M 40 70 6 -47% 70 $36.5M $33.2M 60 5.0x 60 30 5 50 50 20 4 40 40 10 3 2.7x 30 30 0 2 20 20 -10 10 1 10 $3.3M -20 -$16.8M 0 0 0 Q1 2023 Q1 2024 Q1 2023 Q1 2024 Q1 2023 Q1 2024
Slide 7: 2024 Core Growth Priorities
2024 CORE GROWTH PRIORITIES Creating the Strongest and Most Valuable Cresco Labs CRESCO OO) HIGH ea] 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 Network
Slide 8: +180% +55% +110% $4.2B $1.4B $1.7B $1.1B $2.0B $0.5B 2023 26 2023 2026 2023
+180% +55% +110% $4.2B $1.4B $1.7B $1.1B $2.0B $0.5B 2023 2026 2023 2026 2023 2026
Slide 9: America's Leading Cannabis Brands
AMERICA’S LEADING CANNABIS BRANDS
Slide 10: Proven Depth in Wholesale
PROVEN DEPTH IN WHOLESALE Leading Wholesaler with the Most Popular Cannabis Brands in America LEADING PORTFOLIO OF BRANDS' EF 2° n (<) [.) FLORACAL {s) url FLORACAL FLORACAL riTeree FLORACAL [nd | Resco CRESCO G22D NEWS CRESCO 3 o Remedi ra) 6290 NEWS ©| HIGH snarate HIGH fe) SUPPLY HIGH ie ONS SUPP
Slide 11: Premier Cultivation: Cresco Exclusive Genetics
PREMIER CULTIVATION Investing in Leading Cultivation Techniques, Technology & Genetics %& | LEADING CAPABILITIES & EXCLUSIVE GENETICS Investing In Technology and Equipment Investing In Proprietary Genetics Library 1.5 Million More Grams of Flower Produced on In Ohio, Average Potency Increased 5% QoQ
Slide 12: Superior Manufacturing
SUPERIOR MANUFACTURING Winning with Quality Products and Innovative Infusion — Delivering Efficiency Through Automation INNOVATIVE INFUSION + LEADING AUTOMATION LIVE ROSIN INFUSION BOTANICAL INFUSION PATENTED PROCESS FAST ACTING TECH ae Featuring Floracal Live Rosin Gummies, Wonder Laugh Minis and G
Slide 13: Best-in-Class Brand Performance
BEST-IN-CLASS BRAND PERFORMANCE Newly Revamped Pre-Roll Portfolio, With Leading Infusion Capabilities | a IN ILLINOIS, PRE-ROLL MARKET SHARE IMPROVEMENT OF 800 BPS a a” . OE NEITIES —— CRESCO HIGH SUPPLY GOOD NEWS : FLORACAL © FLORACAL a a ss =a (1) Q12024 year-over-year market share improvement per
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 70 As of March 31, 2024 OUTPERFORMING INDUSTRY 1.29x Average Index-to-Fair-Share in Market As of March 31, 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 NON-CANNABIS PRODUCTS RETAIL MARKETING RETAIL OPERATIONS Sm AO > | DRIVING CUSTOMERS IN SELLING MORE MORE FREQUENTLY PER CUSTOMER 4% 11% Increase in Trips per Customer, Grams Per Ticket Sold, Q
Slide 17: Sunnyside.shop
SUNNYSIDE.SHOP An E-Commerce Platform Unlike Any Other - Unparalleled Proprietary Capabilities, Insights and Experience ONLINE ADOPTION 80% of Transactions Placed Online LOYAL SHOPPERS 305k+ Sunnyside Rewards Members As of March 31, 2024, based on internal and state data, CUSTOMER RETENTION 63% of Q
Slide 18: A Record Breaking 420!
A RECORD BREAKING 420! Sunnyside Tech Advantage Enabled the Largest Volume of Online Orders in a Single Day Sunnyside* 420 ONLINE ORDERS 19k A Single Day Record of 25 Orders Per Minute 420 GRAMS SOLD 218k Highest Ever, +6% to Prior Year SHOP EARLY As of March 31, 2024, based on internal and state da
Slide 19: 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 Today's Top AU Markets AU in '24 | avinas | As of March 31,2024 cA MI @ IL @ NY OH FL @ PA TOTAL Population #MM 39.5 10.1 12.8 7.0 20.2 11.8 21.5 13.0 135.9 Legal St
Slide 20: Our Commitments
OUR COMMITTMENTS Unwavering In Our Mission to Normalize and Professionalize Cannabis COMMITTED TO OUR COMMITTED TO OUR EMPLOYEES COMMUNITIES at ‘ 2 <= In 2023, 25% of our Employees Volunteered More than 5,600 Hours to our Communities. In 2023, 62% of our Employees Onboarded were Female or Minority.
Slide 21: Financial Results
FINANCIAL RESULTS
Slide 22: Financial Highlights: Capitalization Summary
FINANCIAL HIGHLIGHTS Capitalization Summary SHARES ANDING NET DEBT Share Class (# in millions) as of 03/31/2024 Balance ($Millions) as of 03/31/2024 Super Voting Shares 0.5 Debt Outstanding (ST) $21.7 Redeemable Units 95.5 Debt Outstanding (LT) 498.0 Subordinated Voting Shares 324.4 Long-term Leases
Slide 23: Reconciliation of Non-GAAP Measures
FINANCIAL HIGHLIGHTS Reconciliation of Non-GAAP Measures ADJUSTED GROSS PROFIT ADJUSTED EBITD. For the Three Months Ending 03/31/2024 For the Three Months Ending 03/31/2024 12024 Q1'2023 12024 Q1'2023 Revenue, net $184.3 194.2 Net (loss) ($2.1) ($27.8) Depreciation and amortization 15.3 13.0 Cost of
Slide 24: Reconciliation of Non-GAAP Measures
FINANCIAL HIGHLIGHTS Reconciliation of Non-GAAP Measures Adjusted SG&A For the Three Months Ending Free Cash Flow For the Three Months Ending 03/31/2024 03/31/2024 12024 112023 1'2024 12023 Selling, general and administrative $54.0 ng Net cash provided by (used in) $36.5 33 operating activities Adju
Slide 25: 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