Cresco Labs Inc.

Q1 2026 revenue was $151 million. Adjusted gross profit was $77 million and adjusted EBITDA was $33 million. Adjusted gross margin was 51%, adjusted SG&A was $51 million, or 34% of revenue, and adjusted EBITDA was 22% of revenue. Year-over-year changes were not stated in the prepared remarks. For Q2, management expects revenue to increase approximately 10% sequentially, gross margin to be 48% to 50%, and adjusted EBITDA margin to be near 21%.

CEO Charles Bachtell said Cresco started 2026 with a plan to build growth from a scaled base while keeping margin and cost discipline, and he said Q1 delivered on those priorities. He emphasized strengthening leadership in core states, expanding into attractive new markets, and using rescheduling as an important step toward normalization and better industry economics. His tone was upbeat but measured: he repeatedly said it is still early on federal changes and that Cresco is in learning mode, while stressing confidence in the company’s positioning.

CFO Sharon Schuler said Q1 was the baseline quarter because of the California exit, Michigan disruption, and the timing of growth initiatives that will show up later in the year. She cited $151 million of revenue, 51% adjusted gross margin, $51 million of adjusted SG&A, and $33 million of adjusted EBITDA, and noted the company ended the quarter with $67 million in cash and restricted cash. She said Cresco used $6 million in operating cash flow and invested $11 million in capex and acquisitions, mostly for Kentucky, and guided Q2 revenue up about 10% sequentially with gross margin at 48% to 50% and EBITDA margin near 21%.

Analysts focused on Pennsylvania, asking why Cresco pursued the 9-store acquisition and how ready the state is for adult-use. Management said the deal deepens an already leading position, adds retail scale, and positions the company well for a likely adult-use catalyst, while noting there is some excess capacity but not enough for full adult-use maturity. Questions also centered on rescheduling and 280E relief; management said it is too early to know the final outcome, but they are watching for Treasury and IRS guidance and will adapt as clarity emerges. On Michigan, management said the market is still weak because the tax has not fully flowed through the system, inventory bought ahead of the tax is still moving, and the state’s low pricing may eventually lead to consolidation and better stability.