Is It Time to Take a Close Look at Cresco Labs Inc. (OTC US:CRLBF) Again?

Cresco Labs Inc. (OTC US:CRLBF) has been in a downward grind along with most of the big North American cannabis MSO’s over the past year. But the action could be coming to a head before long given how undervalued some of these names have become on a basic price-to-forward-sales basis. To help drive the story, the company also just announced that flower and pre-rolls from Khalifa Kush are available for sale at Cookies stores throughout California.

According to the release, Cresco Labs has an exclusive cultivation and product collaboration agreement with multi-platinum-selling, GRAMMY and Golden Globe Award-nominated recording artist Wiz Khalifa’s cannabis brand. Through the partnership, the Company’s FloraCal Farms and Continuum distribution platform will be the sole producer and distributor, respectively, of premium branded products featuring Khalifa Kush’s signature “KK” strain in California. An expanded line is expected to arrive at additional retail partners throughout the year.

Cresco Labs Inc. (OTC US:CRLBF) trumpets itself as a company that manufactures and sells medical cannabis products in the United States. It offers cannabis dry flower; vaporizer forms of cannabis; cannabis oil in capsule, oral and sublingual solutions; cannabis in topical; and other cannabis products.

The company also provides cannabis infused edibles, including chocolate and toffee confections, fruit-forward gummies, and hard sweet and chews. Cresco Labs Inc. sells its products under the Cresco brand. In addition, it operates a Hope Heal Health dispensary in Fall River, Bristol County, Massachusetts.

According to the release, “Cresco Labs is one of the largest vertically integrated multistate cannabis operators in the United States, with a mission to normalize and professionalize the cannabis industry. Employing a consumer-packaged goods (“CPG”) approach, Cresco Labs is the largest wholesaler of branded cannabis products in the U.S. Its brands are designed to meet the needs of all consumer segments and comprised of some of the most recognized and trusted national brands including Cresco, High Supply, Mindy’s Edibles, Good News, Remedi, Wonder Wellness Co. and FloraCal Farms. Sunnyside, Cresco Labs’ national dispensary brand, is a wellness-focused retailer created to build trust, education, and convenience for both existing and new cannabis consumers. Recognizing that the cannabis industry is poised to become one of the leading job creators in the country, Cresco Labs operates the industry’s largest Social Equity and Educational Development initiative, SEED, which was established to ensure that all members of society have the skills, knowledge and opportunity to work and own businesses in the cannabis industry.”

As noted above, CRLBF just announced that flower and pre-rolls from Khalifa Kush are available for sale at Cookies stores throughout California.

“Wiz Khalifa has been a longtime advocate for cannabis legalization, with a namesake OG strain beloved by many in other states. Today, we’re thrilled to bring his brand to cannabis lovers and his fans in California,” said David Gacom, West Region Regional President at Cresco Labs. “We’re focused on bringing a curated portfolio of leading brands to California retailers, and Khalifa Kush is a natural addition with its focus on delivering top quality cannabis. We’re excited to work with the talented Khalifa Kush team to grow its cannabis and commercialize its products.”

We’ve witnessed sideways movement in shares of CRLBF over the past week of action, but that move comes in the context of a larger bearish trend. Market participants may want to pay attention to this stock. CRLBF is a stock with a past that has featured a litany of sudden rips to the upside. What’s more, the stock has benefitted from a jump in recent trading volume.

Currently trading at a market capitalization of $1.6 billion, CRLBF has a significant war chest ($322.8M) of cash on the books, which must be weighed relative to about $265.1M in total current liabilities. CRLBF is pulling in trailing 12-month revenues of $966.8M. In addition, the company is seeing major top-line growth, with y/y quarterly revenues growing at 32.9%. As more color becomes clear on the name, we will review the situation and update our take.