Cresco Labs Reports Q2 2025 Financial Results

CHICAGO – Cresco Labs Inc. released its Q2 2025 financial results, revealing a mix of operational stability, revenue headwinds, and a pivotal debt restructuring.

The company reported revenues of $164 million, down 11% from $184 million in Q2 2024, reflecting intensified competition and selective asset divestitures. Gross profit remained flat at $83 million, with an adjusted gross margin of 50.6%, compared to 52% in the prior year, indicating sustained production efficiency despite market pressures. Selling, general, and administrative expenses (SG&A) decreased to $51 million (31.4% of revenue) from $54 million, underscoring disciplined cost management.

Cresco Labs recorded a net loss of $14 million, incorporating $9 million in non-cash impairment charges related to California assets classified as held for sale. Adjusted EBITDA was $41 million, yielding a 25% margin, a decline from $54 million and a 29% margin in Q2 2024. Operating cash flow fell to $9 million from $17 million year-over-year, signaling constrained liquidity amid a challenging operating environment.

Cresco’s Q2 2025 balance sheet indicated current assets of $315 million, including $147 million in cash and cash equivalents. Total debt comprised a $354 million senior secured term loan and an $18 million mortgage loan, both net of discounts and issuance costs. A cornerstone achievement was securing a commitment for a $325 million term loan to refinance existing debt, extending maturities and enhancing financial flexibility. This move reduces near-term repayment pressures and aligns with the company’s strategy to navigate a consolidating market.

Cresco Labs retained its leading market share in key states like Illinois, Pennsylvania, and Massachusetts, reinforcing its competitive edge in high-value markets. The company’s focus on operational efficiency and a streamlined footprint positions it to pursue mergers and acquisitions, particularly in states with favorable regulatory and growth dynamics. However, the 11% revenue decline highlights vulnerabilities in oversaturated markets, necessitating cautious expansion.

Management’s emphasis on “opportunistic yet disciplined” growth suggests a measured approach to capital deployment. CEO Charlie Bachtell noted that the refinanced debt structure “creates a stronger foundation to execute against both near-term priorities and long-term growth opportunities,” signaling confidence in leveraging industry consolidation.

Integrally, Cresco Labs’ Q2 2025 results reflect a delicate balance between operational resilience and market-driven challenges. The company’s ability to maintain gross margins and reduce SG&A highlights effective cost controls, but the revenue decline and lower EBITDA signal persistent competitive pressures. The debt refinancing is a strategic win, providing runway to capitalize on M&A opportunities. However, investors should monitor Cresco’s ability to convert its market leadership and financial flexibility into sustainable growth, particularly as regulatory shifts and market rationalization reshape the sector’s trajectory.