6-K

UNITED STATES SECURITIES AND EXCHANGE COMMISSION Washington, D.C. 20549

FORM 6-K

Report of Foreign Private Issuer Pursuant to Rule 13a-16 or 15d-16

Under the Securities Exchange Act of 1934

For the month of November, 2024

000-56241

(Commission File Number)

Cresco Labs Inc. (Exact name of Registrant as specified in its charter)

600 W. Fulton Street, Suite 800 Chicago, IL 60661 (Address of principal executive offices)

Indicate by check mark whether the registrant files or will file annual reports under cover Form 20-F or Form 40-F.

Form 20-F ☐    Form 40-F ☒

Exhibit Index
Exhibit No.	Description
99.1	Unaudited Condensed Interim Consolidated Financial Statements for the three and nine months ended September 30, 2024 and 2023
99.2	Management Discussion and Analysis of Financial Condition and Results of Operations for the three and nine months ended September 30, 2024 and 2023
99.3	News Release dated November 8, 2024

SIGNATURES

Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned, thereunto duly authorized.

	CRESCO LABS INC.
Date: November 8, 2024	By:	/s/ Charles Bachtell
		Charles Bachtell
		Chief Executive Officer

Document

Exhibit 99.1

CRESCO LABS INC.

UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS

AS OF SEPTEMBER 30, 2024 AND FOR THE THREE AND NINE MONTHS ENDED

SEPTEMBER 30, 2024 AND 2023

(Expressed in United States Dollars)

CRESCO LABS INC.

INDEX TO UNAUDITED CONDENSED INTERIM CONSOLIDATED FINANCIAL STATEMENTS
Unaudited Condensed Interim Consolidated Financial Statements:
---	---
Balance Sheets as of September 30, 2024 and December 31, 2023	2
Statements of Operationsfor the three and nine months ended September 30, 2024 and September 30, 2023	3
Statements of ComprehensiveLoss for the three and nine months ended September 30, 2024 and September 30, 2023	4
Statements of Changes in Shareholders’ Equity for the three and nine months ended September 30, 2024 and September 30, 2023	5
Statements of Cash Flows for the nine months ended September 30, 2024 and September 30, 2023	7
Notes to theUnaudited Condensed Interim ConsolidatedFinancial Statements:
Note 1. Nature of Operations	9
Note 2. Summary of Significant Accounting Policies	9
Note 3. Inventory	12
Note 4. Property and Equipment	13
Note 5. Intangible Assets and Goodwill	14
Note 6. Share Capital	16
Note 7. Share-Based Compensation	19
Note 8. Loss Per Share	22
Note 9. Acquisitions	22
Note 10. Long-term Notes and Loans Payable, Net	24
Note 11. Revenues and Loyalty Programs	26
Note 12. Related Party Transactions	27
Note 13. Commitments and Contingencies	28
Note 14. Financial Instruments and Financial Risk Management	29
Note 15. Variable Interest Entities	37
Note 16. Segment Information	37
Note 17. Interest Expense, Net	38
Note 18. Provision for Income Taxes and Deferred Income Taxes	38
Note 19. Subsequent Events	39
Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Balance Sheets<br><br>As of September 30, 2024 and December 31, 2023<br><br>(In thousands of United States Dollars, except share amounts)
---			September 30, 2024		December 31, 2023
---	---	---	---	---
ASSETS			(audited)
Current assets:
Cash and cash equivalents	$	153,295	$	103,429
Restricted cash	3,260		5,091
Accounts receivable, net	54,562		51,070
Inventory, net	92,238		107,789
Loans receivable, short-term	532		1,421
Prepaid expenses	6,387		6,417
Other current assets	1,644		2,870
Total current assets	311,918		278,087
Non-current assets:
Property and equipment, net	352,327		368,308
Right-of-use assets	112,814		117,882
Intangible assets, net	295,646		296,966
Loans receivable, long-term	1,693		826
Investments	651		730
Goodwill	283,634		279,697
Deferred tax asset	16,918		11,547
Other non-current assets	7,331		4,424
Total non-current assets	1,071,014		1,080,380
TOTAL ASSETS	$	1,382,932	$	1,358,467
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	19,155	$	27,587
Accrued liabilities	60,481		69,079
Short-term borrowings	22,255		11,817
Income taxes payable	42,847		82,343
Current portion of lease liabilities	11,169		9,416
Deferred and contingent consideration, short-term	2,662		—
Total current liabilities	158,569		200,242
Non-current liabilities:
Long-term notes and loans payable, net	499,332		497,713
Lease liabilities	157,692		163,811
Deferred tax liability	40,887		40,457
Deferred and contingent consideration, long-term	7,689		6,577
Other long-term liabilities	153,396		21,600
Total non-current liabilities	858,996		730,158
TOTAL LIABILITIES	$	1,017,565	$	930,400
COMMITMENTS AND CONTINGENCIES (Note 13)
SHAREHOLDERS’ EQUITY
Super Voting Shares, no par value; 500,000 shares authorized, issued and outstanding at September 30, 2024 and December 31, 2023
Subordinate Voting Shares, no par value; Unlimited shares authorized; 330,047,170 and 320,757,119 issued and outstanding at September 30, 2024 and December 31, 2023, respectively
Proportionate Voting Shares1, no par value; Unlimited shares authorized; 17,661,736 and 18,949,596 issued and outstanding at September 30, 2024 and December 31, 2023, respectively
Special Subordinate Voting Shares2, no par value; 1,589 shares authorized, issued and outstanding at September 30, 2024 and December 31, 2023
Share capital	1,705,575		1,689,452
Additional paid-in-capital	99,222		82,927
Accumulated other comprehensive loss	(1,430)		(1,151)
Accumulated deficit	(1,346,483)		(1,265,536)
Equity of Cresco Labs Inc.	456,884		505,692
Non-controlling interests	(91,517)		(77,625)
TOTAL SHAREHOLDERS’ EQUITY	365,367		428,067
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,382,932	$	1,358,467

1Proportionate Voting Shares (“PVS”) presented on an “as-converted” basis to Subordinate Voting Shares (“SVS”) (1-to-200)

2Special Subordinate Voting Shares (“SSVS”) presented on an “as-converted” basis to SVS (1-to-0.00001)

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Statements of Operations<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023<br><br>(In thousands of United States Dollars, except share and per share amounts)
	Three Months Ended September 30,				Nine Months Ended September 30,
---	---	---	---	---	---	---	---	---
	2024		2023		2024		2023
Revenues, net	$	179,783	$	190,559	$	548,434	$	582,648
Costs of goods sold	86,345		96,919		268,006		316,428
Gross profit	93,438		93,640		280,428		266,220
Operating expenses:
Selling, general and administrative	64,775		71,905		190,222		230,149
Impairment loss	2,320		129,491		2,320		150,993
Total operating expenses	67,095		201,396		192,542		381,142
Income (loss) from operations	26,343		(107,756)		87,886		(114,922)
Other income (expense), net:
Interest expense, net	(15,016)		(11,764)		(42,900)		(46,488)
Other (expense) income, net	(5)		329		(58,657)		1,690
Total other expense, net	(15,021)		(11,435)		(101,557)		(44,798)
Income (loss) before income taxes	11,322		(119,191)		(13,671)		(159,720)
Income tax (expense) benefit	(19,016)		5,746		(47,257)		(25,000)
Net loss	$	(7,694)	$	(113,445)	$	(60,928)	$	(184,720)
Net income (loss) attributable to non-controlling interests, net of tax	2,847		2,127		9,138		(6,563)
Net loss attributable to Cresco Labs Inc.	$	(10,541)	$	(115,572)	$	(70,066)	$	(178,157)
Net loss per share - attributable to Cresco Labs Inc. shareholders:
Basic and diluted loss per share	$	(0.03)	$	(0.34)	$	(0.20)	$	(0.56)
Basic and diluted weighted-average shares outstanding	347,360,904		337,466,885		344,652,104		318,718,524

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

| Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Statements of Comprehensive Loss<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023<br><br>(In thousands of United States Dollars) | | --- || | Three Months Ended September 30, | | | | Nine Months Ended September 30, | | | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | | | 2024 | | 2023 | | 2024 | | 2023 | | | Net loss | $ | (7,694) | $ | (113,445) | $ | (60,928) | $ | (184,720) | | Foreign currency translation differences, net of tax | 166 | | (206) | | (279) | | 26 | | | Total comprehensive loss for the period | (7,528) | | (113,651) | | (61,207) | | (184,694) | | | Comprehensive income (loss) attributable to non-controlling interests, net of tax | 2,847 | | 2,127 | | 9,138 | | (6,563) | | | Total comprehensive loss attributable to Cresco Labs Inc. | $ | (10,375) | $ | (115,778) | $ | (70,345) | $ | (178,131) |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

| Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023<br><br>(In thousands of United States Dollars) | | --- || | Share capital | | Additional paid-in capital | | Accumulated other comprehensive (loss) income, net of tax | | Accumulated deficit | | Non-controlling interests | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Balance as of January 1, 2024 | $ | 1,689,452 | $ | 82,927 | $ | (1,151) | $ | (1,265,536) | $ | (77,625) | $ | 428,067 | | Exercise of stock options | 3 | | (1) | | — | | — | | — | | 2 | | | Share-based compensation | 4,419 | | 51 | | — | | — | | — | | 4,470 | | | Payable pursuant to tax receivable agreements | 3 | | — | | — | | — | | — | | 3 | | | Equity issuances | (200) | | — | | — | | — | | — | | (200) | | | Tax distributions to non-controlling interest holders | — | | (154) | | — | | — | | (8,766) | | (8,920) | | | Excess cash distributions to non-controlling interest holders | — | | — | | — | | — | | (1,082) | | (1,082) | | | Cresco LLC shares redeemed | 1,888 | | — | | — | | (2,889) | | 1,001 | | — | | | Foreign currency translation | — | | — | | (313) | | — | | — | | (313) | | | Net (loss) income | — | | — | | — | | (5,193) | | 3,138 | | (2,055) | | | Ending Balance as of March 31, 2024 | $ | 1,695,565 | $ | 82,823 | $ | (1,464) | $ | (1,273,618) | $ | (83,334) | $ | 419,972 | | Exercise of stock options | 11 | | (5) | | — | | — | | — | | 6 | | | Share-based compensation | 559 | | 2,762 | | — | | — | | — | | 3,321 | | | Employee taxes withheld on certain share-based payment arrangements | — | | (586) | | — | | — | | — | | (586) | | | Payable pursuant to tax receivable agreements | (365) | | — | | — | | — | | — | | (365) | | | Equity issuances related to acquisitions | 3,001 | | — | | — | | — | | — | | 3,001 | | | Tax distributions to non-controlling interest holders | — | | 15,939 | | — | | — | | (13,252) | | 2,687 | | | Excess cash distributions to non-controlling interest holders | — | | — | | — | | — | | (2,217) | | (2,217) | | | Cresco LLC shares redeemed | 5,504 | | — | | — | | (7,992) | | 2,488 | | — | | | Foreign currency translation | — | | — | | (132) | | — | | — | | (132) | | | Net (loss) income | — | | — | | — | | (54,332) | | 3,153 | | (51,179) | | | Ending Balance as of June 30, 2024 | $ | 1,704,275 | $ | 100,933 | $ | (1,596) | $ | (1,335,942) | $ | (93,162) | $ | 374,508 | | Share-based compensation | 1,300 | | 1,257 | | — | | — | | — | | 2,557 | | | Employee taxes withheld on certain share-based payment arrangements | — | | (136) | | — | | — | | — | | (136) | | | Tax distributions to non-controlling interest holders | — | | (2,832) | | — | | — | | (59) | | (2,891) | | | Excess cash distributions to non-controlling interest holders | — | | — | | — | | — | | (1,143) | | (1,143) | | | Foreign currency translation | — | | — | | 166 | | — | | — | | 166 | | | Net (loss) income | — | | — | | — | | (10,541) | | 2,847 | | (7,694) | | | Ending Balance as of September 30, 2024 | $ | 1,705,575 | $ | 99,222 | $ | (1,430) | $ | (1,346,483) | $ | (91,517) | $ | 365,367 |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

| Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders’ Equity<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023<br><br>(In thousands of United States Dollars) | | --- || | Share capital | | Additional paid-in capital | | Accumulated other comprehensive (loss) income, net of tax | | Accumulated deficit | | Non-controlling interests | | Total | | | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | --- | | Balance as of January 1, 2023 | $ | 1,617,093 | $ | 87,537 | $ | (1,393) | $ | (1,076,198) | $ | (39,356) | $ | 587,683 | | Share-based compensation | 4,483 | | 3,131 | | — | | — | | — | | 7,614 | | | Employee taxes withheld on certain share-based payment arrangements | — | | (93) | | — | | — | | — | | (93) | | | Equity issued related to settlement of acquisition related contingent consideration | 9,723 | | — | | — | | — | | — | | 9,723 | | | Tax distributions to non-controlling interest holders | — | | 3,017 | | — | | 787 | | (13,371) | | (9,567) | | | Excess cash distributions to non-controlling interest holders | — | | — | | — | | — | | (180) | | (180) | | | Cresco LLC shares redeemed | 3,465 | | — | | — | | (4,089) | | 624 | | — | | | Foreign currency translation | — | | — | | 7 | | — | | — | | 7 | | | Net loss | — | | — | | — | | (26,051) | | (1,761) | | (27,812) | | | Ending Balance as of March 31, 2023 | $ | 1,634,764 | $ | 93,592 | $ | (1,386) | $ | (1,105,551) | $ | (54,044) | $ | 567,375 | | Share-based compensation | 2,407 | | (1,211) | | — | | — | | — | | 1,196 | | | Employee taxes withheld on certain share-based payment arrangements | — | | (443) | | — | | — | | — | | (443) | | | Payable pursuant to tax receivable agreements | 60 | | — | | — | | — | | — | | 60 | | | Equity issued related to settlement of acquisition related contingent consideration | 37,515 | | — | | — | | — | | — | | 37,515 | | | Equity issuances and other adjustments | 2 | | — | | — | | 45 | | — | | 47 | | | Tax distributions to non-controlling interest holders | — | | 2,986 | | — | | — | | (13,894) | | (10,908) | | | Excess cash distributions to non-controlling interest holders | — | | — | | — | | — | | (4,624) | | (4,624) | | | Cresco LLC shares redeemed | 8,833 | | — | | — | | (11,933) | | 3,100 | | — | | | Foreign currency translation | — | | — | | 225 | | — | | — | | 225 | | | Net loss | — | | — | | — | | (36,534) | | (6,929) | | (43,463) | | | Ending Balance as June 30, 2023 | $ | 1,683,581 | $ | 94,924 | $ | (1,161) | $ | (1,153,973) | $ | (76,391) | $ | 546,980 | | Share-based compensation | 1,476 | | 2,461 | | — | | — | | — | | 3,937 | | | Employee taxes withheld on certain share-based payment arrangements | — | | (77) | | — | | — | | — | | (77) | | | Income tax reserve | — | | — | | — | | 363 | | — | | 363 | | | Payable pursuant to tax receivable agreements | (34) | | — | | — | | — | | — | | (34) | | | Equity issuances and other adjustments | — | | — | | — | | (45) | | — | | (45) | | | Tax distributions to non-controlling interest holders | — | | (4,824) | | — | | — | | (6,164) | | (10,988) | | | Excess cash distributions to non-controlling interest holders | — | | — | | — | | — | | (623) | | (623) | | | Cresco LLC shares redeemed | 894 | | — | | — | | (1,520) | | 626 | | — | | | Foreign currency translation | — | | — | | (206) | | — | | — | | (206) | | | Net (loss) income | — | | — | | — | | (115,572) | | 2,127 | | (113,445) | | | Ending Balance as of September 30, 2023 | $ | 1,685,917 | $ | 92,484 | $ | (1,367) | $ | (1,270,747) | $ | (80,425) | $ | 425,862 |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

| Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Statements of Cash Flows<br><br>For the Nine Months Ended September 30, 2024 and 2023<br><br>(In thousands of United States Dollars) | | --- || | Nine Months Ended September 30, | | | | | --- | --- | --- | --- | --- | | | 2024 | | 2023 | | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | Net loss | $ | (60,928) | $ | (184,720) | | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | Depreciation and amortization | 45,192 | | 42,260 | | | Amortization of operating lease assets | 5,165 | | 5,087 | | | Bad debt expense and provision expense for expected credit loss | 547 | | 7,909 | | | Share-based compensation expense | 10,459 | | 13,339 | | | Loss on investments | 78 | | 422 | | | (Gain) loss on changes in fair value of deferred consideration | (598) | | 1,204 | | | Tax receivable agreement expense | 60,667 | | — | | | Loss on inventory write-offs and provision | 1,891 | | 5,312 | | | Change in deferred taxes | 3,452 | | (25,537) | | | Accretion of discount and deferred financing costs on debt arrangements | 3,654 | | 3,256 | | | Foreign currency (gain) loss | (230) | | 67 | | | Loss on disposals of property and equipment | 737 | | (163) | | | Impairment loss | 2,320 | | 150,993 | | | Gain on lease termination | — | | (1,136) | | | Proceeds of contingent consideration in excess of costs over estimated earnings | 598 | | — | | | Loss on other adjustments to net income | 24 | | 321 | | | Changes in operating assets and liabilities: | | | | | | Accounts receivable | (3,883) | | (8,827) | | | Inventory | 9,135 | | 15,013 | | | Prepaid expenses and other assets | 190 | | 2,550 | | | Accounts payable and accrued liabilities | 3,554 | | 39,302 | | | Operating lease liabilities | (5,792) | | (20,900) | | | Income taxes payable | 26,762 | | 16,114 | | | NET CASH PROVIDED BY OPERATING ACTIVITIES | 102,994 | | 61,866 | | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | Purchases of property and equipment | (16,288) | | (50,567) | | | Purchase of intangibles | (3,711) | | (2,134) | | | Proceeds from tenant improvement allowances | 616 | | 1,447 | | | Payment of acquisition consideration, net of cash acquired | (3,230) | | — | | | Proceeds from disposals of property and equipment | 397 | | 5,060 | | | Payments of loans and advances | — | | (1,000) | | | NET CASH USED IN INVESTING ACTIVITIES | (22,216) | | (47,194) | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | Proceeds from exercise of stock options | 9 | | — | | | Proceeds from the issuance of long-term debt | — | | 20,175 | | | Payment of debt issuance costs | — | | (1,947) | | | Proceeds (payment) of acquisition-related contingent consideration | 705 | | (1,787) | | | Payment for equity transfer | (200) | | — | | | Tax distributions to non-controlling interest redeemable unit holders and other members | (22,077) | | (30,963) | | | Excess cash distributions to non-controlling interest redeemable unit holders and other members | (4,442) | | (5,427) | | | Principal payment of property, plant, and equipment vendor financing | (664) | | (486) | | | Principal payments on finance lease obligations | (2,775) | | (2,690) | | | NET CASH USED IN FINANCING ACTIVITIES | (29,444) | | (23,125) | | | Effect of exchange rate changes on cash and cash equivalents | (48) | | (41) | | | Net increase (decrease) in cash and cash equivalents | 51,286 | | (8,494) | | | Cash and cash equivalents and restricted cash, beginning of period | 108,520 | | 121,510 | | | Cash and cash equivalents, end of period | 153,295 | | 107,133 | | | Restricted cash, end of period | 3,260 | | 5,883 | | | Restricted cash included in other non-current assets, end of period | 3,251 | | — | | | Cash and cash equivalents and restricted cash, end of period | $ | 159,806 | $ | 113,016 || Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Statements of Cash Flows<br><br>For the Nine Months Ended September 30, 2024 and 2023<br><br>(In thousands of United States Dollars) | | --- || | Nine Months Ended September 30, | | | | | --- | --- | --- | --- | --- | | | 2024 | | 2023 | | | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | | CASH PAID DURING THE PERIOD FOR: | | | | | | Income tax, net | $ | 17,044 | $ | 34,424 | | Interest | 31,559 | | 30,679 | | | NON-CASH INVESTING AND FINANCING TRANSACTIONS: | | | | | | Issuance of shares under business combinations and acquisitions | $ | 3,001 | $ | — | | Non-cash consideration for business combination | — | | 47,238 | | | Non-controlling interests redeemed for equity | 3,489 | | 4,351 | | | Increase to net lease liability | — | | 1,472 | | | Receivable due from seller of previous acquisition | — | | 705 | | | Liability incurred to purchase property, equipment and intangibles | 1,189 | | 879 | | | Liability of property, plant and equipment purchased through vendor financing | 784 | | 963 | | | Purchase of property, plant and equipment through inventory | — | | 48 | | | Unpaid declared distributions to non-controlling interest redeemable unit holders | 2,891 | | 8,889 | | | Receivable related to financing lease transactions | 612 | | 612 | | | Liability incurred in accordance with tax receivable agreement | 84,457 | | 14,672 | |

The accompanying notes are an integral part of these unaudited condensed interim consolidated financial statements.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
NOTE 1. NATURE OF OPERATIONS
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Cresco Labs Inc. (“Cresco Labs” or the “Company”), formerly known as Randsburg International Gold Corp. was incorporated in the Province of British Columbia under the Company Act on July 6, 1990. The Company is one of the largest vertically-integrated multi-state cannabis operators in the United States licensed to cultivate, manufacture and sell retail and medical cannabis products primarily through Sunnyside*®, Cresco Labs’ national dispensary brand and third-party retail stores. Employing a consumer-packaged goods approach to cannabis, Cresco Labs’ house of brands is designed to meet the needs of all consumer segments and includes some of the most recognized and trusted national brands including Cresco®, High Supply®, Mindy’sTM, Good News®, RemediTM, Wonder Wellness Co.® and FloraCal® Farms. As of September 30, 2024, the Company operates in Illinois, Pennsylvania, Ohio, California, New York, Massachusetts, Michigan and Florida pursuant to applicable state and local laws and regulations. These include the Illinois Compassionate Use of Medical Cannabis Program Act and the Illinois Cannabis Regulation and Tax Act; the Pennsylvania Medical Marijuana Act; Chapters 3796 and 3780 of the Ohio Revised Code; the California Medicinal and Adult-Use Cannabis Regulation and Safety Act; the New York Marihuana Regulation and Taxation Act; Massachusetts General Laws Chapters 94G and 94I; the Michigan Medical Marihuana Act, the Michigan Medical Marihuana Facilities Licensing Act, the Michigan Regulation and Taxation of Marihuana Act, and the Michigan Marihuana Tracking Act; and Article X section 29 of the Florida Constitution and section 381.986, Florida Statues, respectively.

The Company trades on the Canadian Securities Exchange under the ticker symbol “CL,” on the Over-the-Counter Market under the ticker symbol “CRLBF” and on the Frankfurt Stock Exchange under the symbol “6CQ.”

The Company’s new corporate office is located at 600 W. Fulton Street, Suite 800, Chicago, IL 60661. The registered office is located at Suite 2500, 666 Burrard Street, Vancouver, BC V6C 2X8.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

(a)Basis of Preparation

The accompanying unaudited condensed interim consolidated financial statements of the Company have been prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Certain information and footnote disclosures normally included in financial statements prepared in accordance with GAAP have been condensed or omitted pursuant to Accounting Standards Codification 270 Interim Reporting. The financial data presented herein should be read in conjunction with the Company’s audited annual consolidated financial statements and accompanying notes as of and for the years ended December 31, 2023 and 2022 as filed on SEDAR+ and EDGAR. The Consolidated Balance Sheet for the year ended December 31, 2023 was derived from audited financial statements filed on SEDAR+ on March 15, 2024 and EDGAR on March 18, 2024. In the opinion of management, the unaudited financial data presented includes all adjustments necessary to present fairly the financial position, results of operations and cash flows for the interim periods presented. Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of results that may be expected for any other reporting period. These unaudited condensed interim consolidated financial statements include estimates and assumptions of management that affect the amounts reported. Actual results could differ from these estimates. Certain immaterial prior period amounts were reclassified to conform to the current presentation.

(b)Basis of Measurement

The accompanying unaudited condensed interim consolidated financial statements have been prepared on a going concern basis, under the historical cost convention, except for certain loans receivable, investments, and contingent considerations, which are recorded at fair value. Historical cost is generally based upon the fair value of the consideration given in exchange for assets acquired and the contractual obligation for liabilities incurred.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

(c)Functional and Presentation Currency

The Company’s functional currency and that of the majority of its subsidiaries is the United States (“U.S.”) dollar. The Company’s reporting currency is the U.S. dollar (“USD”). Foreign currency denominated assets and liabilities are remeasured into the functional currency using period-end exchange rates. Gains and losses from foreign currency transactions are included in Other income, net in the Unaudited Condensed Interim Consolidated Statements of Operations.

Assets and liabilities of foreign operations having a functional currency other than USD (e.g., Canadian dollar) are translated at the rate of exchange prevailing at the reporting date; revenues and expenses are translated at the monthly average rate of exchange during the period. Gains or losses on translation of foreign subsidiaries and net investments in foreign operations are included in Foreign currency translation differences, net of tax in the Unaudited Condensed Interim Consolidated Statements of Comprehensive Loss and Accumulated other comprehensive loss on the Consolidated Balance Sheets.

(d)Basis of Consolidation

The unaudited condensed interim consolidated financial statements include the accounts of the Company and its subsidiaries with intercompany balances and transactions eliminated upon consolidation. Subsidiaries are those entities over which the Company has the power over the investee, is exposed, or has rights, to variable involvement with the investee; and has the ability to use its power to affect its returns. The following are Cresco Labs’ wholly-owned or controlled entities as of September 30, 2024:

Entity	Location	Purpose	Percentage<br>Held
Cresco Labs Inc.	British Columbia, Canada	Parent Company
Cali-Antifragile Corp.	California	Holding Company	100%
River Distributing Co., LLC	California	Holding Company	100%
Sonoma's Finest fka FloraCal	California	Cultivation	100%
Cub City, LLC	California	Cultivation	100%
CRHC Holdings Corp.	Ontario, Canada	Holding Company	100%
Cannroy Delaware Inc.	Delaware	Holding Company	100%
Laurel Harvest Labs, LLC	Pennsylvania	Cultivation and Dispensary Facility	100%
JDRC Mount Joy, LLC	Illinois	Holding Company	100%
JDRC Scranton, LLC	Illinois	Holding Company	100%
Bluma Wellness Inc.	British Columbia, Canada	Holding Company	100%
Cannabis Cures Investments, LLC	Florida	Holding Company	100%
3 Boys Farm, LLC	Florida	Cultivation, Production and Dispensary Facility	100%
Farm to Fresh Holdings, LLC	Florida	Holding Company	100%
Cresco U.S. Corp.	Illinois	Holding Company	100%
Keystone Integrated Care, LLC	Pennsylvania	Dispensary	100%
Cresco Labs Michigan Management, LLC	Michigan	Holding Company	100%
MedMar Inc.	Illinois	Holding Company	100%
MedMar Lakeview, LLC	Illinois	Dispensary	88%
MedMar Rockford, LLC	Illinois	Dispensary	75%
Gloucester Street Capital, LLC	New York	Holding Company	100%
Valley Agriceuticals, LLC	New York	Cultivation, Production and Dispensary Facility	100%
Valley Agriceuticals Real Estate	New York	Holding Company	100%
JDRC Ellenville, LLC	Illinois	Holding Company	100%
CMA Holdings, LLC	Illinois	Holding Company	100%
BL Real Estate, LLC	Massachusetts	Holding Company	100%
BL Pierce, LLC	Massachusetts	Holding Company	100%
BL Uxbridge, LLC	Massachusetts	Holding Company	100%
BL Main, LLC	Massachusetts	Holding Company	100%
BL Burncoat, LLC	Massachusetts	Holding Company	100%
BL Framingham, LLC	Massachusetts	Holding Company	100%
BL Worcester, LLC	Massachusetts	Holding Company	100%
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
---
Entity	Location	Purpose	Percentage<br>Held
---	---	---	---
Cultivate Licensing LLC	Massachusetts	Holding Company	100%
Cultivate Worcester, Inc.	Massachusetts	Dispensary	100%
Cultivate Leicester, Inc.	Massachusetts	Cultivation, Production and Dispensary Facility	100%
Cultivate Framingham, Inc.	Massachusetts	Dispensary	100%
Cultivate Cultivation, LLC	Massachusetts	Cultivation and Production Entity	100%
CLVA, LLC	Virginia	Licensing	100%
High Road Holdings LLC	Delaware	Holding Company	100%
SPS Management, LLC	Delaware	Holding Company	100%
GoodNews Holdings, LLC	Illinois	Licensing Company	100%
Wonder Holdings, LLC	Illinois	Licensing Company	100%
JDRC Seed, LLC	Illinois	Educational Company	100%
CP Pennsylvania Holdings, LLC	Illinois	Holding Company	100%
Bay, LLC	Pennsylvania	Dispensary	100%
Bay Asset Management, LLC	Pennsylvania	Holding Company	100%
Ridgeback, LLC	Colorado	Holding Company	100%
Encanto Green Cross Dispensary, LLC	Arizona	Holding Company	100%
Cresco Labs Texas, LLC	Texas	Holding Company	100%
Cresco Labs, LLC	Illinois	Operating Entity	63%
Cresco Labs Ohio, LLC	Ohio	Cultivation, Production and Dispensary Facility	99%
Cresco Labs Notes Issuer, LLC	Illinois	Holding Company
Wellbeings, LLC	Delaware	CBD Wellness Product Development	100%
Cresco Labs SLO, LLC	California	Holding Company	100%
SLO Cultivation Inc.	California	Holding Company	80%
Cresco Labs Joliet, LLC	Illinois	Cultivation and Production Facility	100%
Cresco Labs Kankakee, LLC	Illinois	Cultivation and Production Facility	100%
Cresco Labs Logan, LLC	Illinois	Cultivation and Production Facility	100%
Cresco Labs PA, LLC	Illinois	Holding Company	100%
Cresco Yeltrah, LLC	Pennsylvania	Cultivation, Production and Dispensary Facility	100%
Strip District Education Center	Pennsylvania	Holding Company	100%
AFS Maryland, LLC	Maryland	Holding Company	100%
JDC Newark, LLC	Ohio	Holding Company	100%
Verdant Creations Newark, LLC	Ohio	Dispensary	100%
Strategic Property Concepts, LLC	Ohio	Holding Company	100%
JDC Marion, LLC	Ohio	Holding Company	100%
Verdant Creations Marion, LLC	Ohio	Dispensary	100%
Strategic Property Concepts 4, LLC	Ohio	Holding Company	100%
JDC Chillicothe, LLC	Ohio	Holding Company	100%
Verdant Creations Chillicothe, LLC	Ohio	Dispensary	100%
Strategic Property Concepts 5, LLC	Ohio	Holding Company	100%
JDC Columbus, LLC	Ohio	Holding Company	100%
Care Med Associates, LLC	Ohio	Dispensary	100%
Arizona Facilities Supply, LLC	Arizona	Holding Company	100%
Cresco Labs TINAD, LLC	Illinois	Holding Company	100%
TINAD, LLC	Illinois	Holding Company	100%
PDI Medical III, LLC	Illinois	Dispensary	100%
Cresco Labs Phoenix Farms, LLC	Illinois	Holding Company	100%
Phoenix Farms Partners, LLC	Illinois	Holding Company	100%
Phoenix Farms of Illinois Asset Management, LLC	Illinois	Holding Company	100%
Phoenix Farms of Illinois, LLC	Illinois	Dispensary	100%
JDC Elmwood, LLC	Illinois	Holding Company	100%
FloraMedex, LLC	Illinois	Dispensary	100%
Cresco Edibles, LLC	Illinois	Holding Company	100%
TSC Cresco, LLC	Illinois	Licensing	75%
Cresco HHH, LLC	Massachusetts	Cultivation, Production and Dispensary Facility	100%
Cresco Labs Nevada, LLC	Nevada	Holding Company	100%
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
---
Entity	Location	Purpose	Percentage<br>Held
---	---	---	---
Cresco Labs Missouri Management, LLC	Missouri	Holding Company	100%
JDRC Acquisitions, LLC	Illinois	Holding Company	100%
JDRC 7841 Grand LLC	Illinois	Holding Company	100%
JDRC Lincoln, LLC	Illinois	Holding Company	100%
JDRC Danville, LLC	Illinois	Holding Company	100%
JDRC Kankakee, LLC	Illinois	Holding Company	100%
JDRC Brookville, LLC	Illinois	Holding Company	100%
Cresco Labs Michigan, LLC1	Michigan	Cultivation and Production Facility	85%

1Legally, Cresco Labs Michigan, LLC is 85% owned by related parties within management of the Company.

Cresco U.S. Corp., which is wholly owned by the Company, is the sole manager of Cresco Labs, LLC; Cresco Labs, LLC is the sole owner and manager of Cresco Labs Notes Issuer, LLC. Therefore, the Company controls Cresco Labs Notes Issuer, LLC and has consolidated its results into the unaudited condensed interim consolidated financial statements.

Non-controlling interests (“NCI”) represent ownership interests in consolidated subsidiaries by parties that are not shareholders of the Company. They are shown as a component of total equity in the Consolidated Balance Sheets, and the share of income attributable to NCI is shown as Net income attributable to non-controlling interests, net of tax in the Unaudited Condensed Interim Consolidated Statements of Operations and in the Unaudited Condensed Interim Consolidated Statements of Comprehensive Loss. Changes in the parent company’s ownership that do not result in a loss of control are accounted for as equity transactions.

(e)Newly Adopted Accounting Pronouncements

The Company did not adopt any new accounting pronouncements during the three and nine months ended September 30, 2024.

(f)Reclassifications

The Company is presenting separately Additional paid-in-capital balances previously included in Share Capital on the Consolidated Balance Sheets and Unaudited Condensed Interim Consolidated Statements of Changes in Shareholders' Equity. The reclassifications had no effect on total shareholders' equity.

NOTE 3.     INVENTORY

Inventory as of September 30, 2024 and December 31, 2023, consisted of the following:

($ in thousands)	September 30, 2024		December 31, 2023
Raw materials	$	12,090	$	12,067
Raw materials - non-cannabis	14,678		17,937
Work-in-process	33,612		52,120
Finished goods	30,128		24,138
Finished goods - non-cannabis	1,730		1,527
Inventory, net	$	92,238	$	107,789

During the three months ended September 30, 2024 and 2023, the net impact to the inventory reserve was a decrease of $0.5 million and an increase of $2.7 million, respectively. During the nine months ended September 30, 2024 and 2023, the net impact to inventory reserve was an increase of $1.9 million and $5.3 million, respectively. The expense related to the change in inventory reserve is included in Cost of goods sold presented in the Unaudited Condensed Interim Consolidated Statements of Operations.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
NOTE 4.     PROPERTY AND EQUIPMENT
---

Property and equipment as of September 30, 2024 and December 31, 2023 consisted of the following:

($ in thousands)	September 30, 2024		December 31, 2023
Land and Buildings	$	209,009	$	207,194
Machinery and Equipment	43,399		41,928
Furniture and Fixtures	43,026		37,912
Leasehold Improvements	183,228		173,614
Website, Computer Equipment and Software	11,567		11,124
Vehicles	2,784		2,892
Construction In Progress	11,279		14,483
Total property and equipment, gross	504,292		489,147
Less: Accumulated depreciation	(151,965)		(120,839)
Property and equipment, net	$	352,327	$	368,308

As of September 30, 2024 and December 31, 2023, costs related to unfinished construction at the Company’s facilities and dispensaries were capitalized in construction in progress and not depreciated. Depreciation will commence when construction is completed and the facilities and dispensaries are available for their intended use. Land costs at each balance sheet date are included in Land and Buildings.

The following table reflects depreciation expense related to property and equipment for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Depreciation expense included in cost of goods sold and ending inventory	$	7,540	$	7,356	$	21,816	$	25,718
Depreciation expense included in selling, general and administrative expense	4,003		4,333		11,731		9,961
Total depreciation expense	$	11,543	$	11,689	$	33,547	$	35,679

As of September 30, 2024 and December 31, 2023, ending inventory includes $8.9 million and $12.8 million of capitalized depreciation, respectively. For the three months ended September 30, 2024 and 2023, $8.1 million and $8.4 million, respectively, of depreciation was recorded to Cost of goods sold, which includes $6.1 million and $4.9 million, respectively, for the same periods, related to depreciation capitalized to inventory in prior years.

For the nine months ended September 30, 2024 and 2023, $25.8 million and $24.5 million, respectively, of depreciation was recorded to Cost of goods sold, which includes $12.7 million and $9.8 million, respectively, related to depreciation capitalized to inventory in prior years.

During the nine months ended September 30, 2024, the Company sold $0.3 million of property and equipment and recorded a $0.1 million net gain on the sale. The gain is recorded in Other income, net in the Unaudited Condensed Interim Consolidated Statements of Operations.

During the second quarter of 2023, the Company recorded a $0.9 million net gain on the sale of a cultivation and

manufacturing facility in Florida. The gain is recorded in Other income, net on the Unaudited Condensed Interim Consolidated Statements of Operations.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
NOTE 5.     INTANGIBLE ASSETS AND GOODWILL
---

(a)Intangible Assets

Intangible assets consisted of the following as of September 30, 2024 and December 31, 2023:

	September 30, 2024
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Net
Definite-Lived Intangible Assets
Customer Relationships	$	31,300	$	(14,682)	$	16,618
Trade Names	2,100		(1,733)		367
Permit Application Costs	21,008		(18,013)		2,995
Other Intangibles1	6,013		(5,998)		15
Indefinite-Lived Intangible Assets
Licenses	275,651		—		275,651
Total Intangible Assets	$	336,072	$	(40,426)	$	295,646

1Other Intangibles include non-compete agreements and related amortization.

As of September 30, 2024, the remaining weighted-average amortization period for customer relationships acquired is 0.6 years. See Note 9 “Acquisitions” for additional information.

	December 31, 2023
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Net
Definite-Lived Intangible Assets
Customer Relationships	$	31,000	$	(11,623)	$	19,377
Trade Names	2,100		(1,680)		420
Permit Application Costs	17,351		(15,980)		1,371
Other Intangibles2	6,013		(5,886)		127
Indefinite-Lived Intangible Assets
Licenses	275,671		—		275,671
Total Intangible Assets	$	332,135	$	(35,169)	$	296,966

2Other Intangibles include non-compete agreements, non-solicitation agreements and related amortization.

The following table reflects the amortization expense related to definite-lived intangible assets for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Amortization expense included in cost of goods sold and ending inventory	$	873	$	1,171	$	2,360	$	2,817
Amortization expense included in selling, general and administrative expense	1,753		1,022		2,811		2,826
Total amortization expense	$	2,626	$	2,193	$	5,171	$	5,643
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
---

As of September 30, 2024 and December 31, 2023, ending inventory included $0.2 million and $1.0 million of capitalized amortization, respectively. For the three months ended September 30, 2024 and 2023, $1.1 million and $0.9 million of amortization expense was recorded to Cost of goods sold, which includes $0.5 million and $0.6 million, related to amortization capitalized to inventory in prior years. For the nine months ended September 30, 2024 and 2023, $2.7 million and $3.1 million of amortization expense was recorded to Cost of goods sold, which includes $1.0 million and $1.5 million, related to amortization capitalized to inventory in prior years.

The following table outlines the estimated amortization expense related to intangible assets for each of the next five years and thereafter:

($ in thousands)	Estimated Amortization Expense
2024	$	1,904
2025	5,868
2026	4,270
2027	3,281
2028	2,963
Thereafter	1,709
Total estimated amortization expense	$	19,995

(b)Goodwill

The changes in carrying amount of goodwill are as follows for the year ended December 31, 2023 and the nine months ended September 30, 2024:

($ in thousands)	Total
Balance at January 1, 2023	$	330,555
Impairment loss	(50,858)
Balance at December 31, 2023	279,697
Additions from acquisitions	3,637
Measurement period adjustments	300
Balance at September 30, 2024	$	283,634

(c)Impairment

During the third quarter of 2024, management determined it is more likely than not that the California reporting unit’s carrying value exceeded its fair value due to updated forecasts and projections for the reporting unit. As a result, $2.3 million of impairment charges reducing the carrying value of licenses was recognized in the Unaudited Condensed Interim Consolidated Statements of Operations.

During the third quarter of 2023, management determined it is more likely than not that the California, Florida and New York reporting units' carrying value exceeded their fair value due to updated forecasts and projections for the reporting units. As a result, $9.9 million, $79.4 million and $40.0 million, respectively, of impairment charges reducing the carrying value of goodwill and licenses were recognized in the Unaudited Condensed Interim Consolidated Statements of Operations.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

During the second quarter of 2023, management determined it is more likely than not that the Massachusetts reporting unit’s carrying value exceeded its fair value due to updated forecasts and projections for this reporting unit. As a result, a $21.5 million impairment charge reducing the carrying value of goodwill and licenses was recognized in the Unaudited Condensed Interim Consolidated Statements of Operation.

NOTE 6.     SHARE CAPITAL

(a)Authorized

The authorized share capital of the Company is outlined in the Company’s audited annual consolidated financial statements and accompanying notes as of and for the years ended December 31, 2023 and 2022, which were previously filed on SEDAR+ and EDGAR. There have been no changes in authorized share capital as of September 30, 2024.

(b)     Issued and Outstanding

As of September 30, 2024 and 2023, issued and outstanding shares and units consisted of the following:

(shares in thousands)	Redeemable<br><br>Units1	SVS2	PVS3	MVS4	SSVS5
Beginning balance, January 1, 2024	96,699	320,757	18,950	500	2
Stock options exercised	—	5	—	—	—
RSUs6 issued	—	2,137	—	—	—
Issuance of shares related to acquisitions	—	1,497	—	—	—
Cresco LLC redemptions	(3,894)	3,894	—	—	—
PVS converted to SVS	—	1,288	(1,288)	—	—
Issuances related to employee taxes on certain share-based payment arrangements	—	469	—	—	—
Ending Balance, September 30, 2024	92,805	330,047	17,662	500	2
Beginning balance, January 1, 2023	106,106	280,994	20,082	500	1
RSUs issued	—	1,426	—	—	—
Issuance of shares related to settlement of acquisition contingent consideration	—	27,091	—	—	—
Cresco LLC redemptions	(7,657)	7,657	—	—	—
PVS converted to SVS	—	662	(662)	—	—
Issuances related to employee taxes on certain share-based payment arrangements	—	344	—	—	—
Share issuances	—	—	—	—	1
Ending Balance, September 30, 2023	98,449	318,174	19,420	500	2

1 Redeemable units of Cresco Labs, LLC (“Redeemable Units”)

2 SVS includes shares pending issuance or cancellation

3 PVS presented on an “as-converted” basis to SVS (1-to-200)

4 Super Voting Shares (“MVS”)

5 SSVS presented on an “as-converted” basis to SVS (1-to-0.00001)

6 Restricted stock units (“RSUs”)

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

(i)     Issuance of Shares - Acquisitions

During the nine months ended September 30, 2024 and 2023, the Company issued shares in conjunction with certain acquisitions1 as follows:

(in thousands)	Acquisition date	SVS shares issued	Equity-based consideration
Nine Months Ended September 30, 2024
Keystone	April 24, 2024	1,497	$	3,001
Nine Months Ended September 30, 2023
Laurel Harvest - Contingent Consideration	December 9, 2021	27,091	$	47,238

1 Laurel Harvest, LLC (“Laurel Harvest”) and Keystone Integrated Care, LLC (“Keystone”)

(c)     Distribution to Non-controlling Interest Holders

Tax distributions are based off the tax rate determined by Cresco Labs Inc. (which is currently the highest U.S. individual income tax rates) applied to taxable income generated from the Cresco Labs, LLC partnership (i.e., not the whole Cresco group), which is the Company’s most significant distribution, and attributable to the NCI members. The Company has other tax and non-tax distributions that are calculated in accordance with each relevant operating agreement. As of September 30, 2024 and December 31, 2023, the Company had an asset of $2.3 million for tax-related distributions to 2024 and 2023 unit holders of Cresco Labs, LLC and other minority interest holders and an accrual of $15.2 million for tax-related distributions to the 2023 and 2022 unit holders of Cresco Labs, LLC, respectively. The accrual for tax-related distributions is recorded based on the year-to-date tax liability attributable to non-controlling interests and the quarterly distributions paid are based on the prior year liability, in accordance with the IRS safe harbor rules, which resulted in an asset as of September 30, 2024. These distributions will reduce non-controlling interest upon payment.

In accordance with the underlying operating agreements, the Company declared and paid required distribution amounts to 2024 and 2023 unit holders of Cresco Labs, LLC and other minority holders of $2.3 million and $26.5 million during the three and nine months ended September 30, 2024. Similarly, the Company declared and paid required tax distribution amounts to 2023 and 2022 unit holders of Cresco Labs, LLC and other minority interest holders of $6.2 million and $38.2 million during the three and nine months ended September 30, 2023.

(d)     Changes in Ownership and Non-controlling Interests

During the nine months ended September 30, 2024, redemptions of 3.9 million Redeemable Units occurred, which were converted into an equivalent number of SVS. These redemptions resulted in a decrease of 1.5% in non-controlling interest in Cresco Labs, LLC. There were no redemptions of Redeemable Units during the three months ended September 30, 2024.

During the three and nine months ended September 30, 2023, redemptions of 0.8 million and 7.7 million Redeemable Units occurred, respectively, which were converted into an equivalent number of SVS. During each respective period, these redemptions resulted in a decrease of 0.9% and 3.0% in non-controlling interest in Cresco Labs, LLC.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

For the nine months ended September 30, 2024, net (loss) income attributable to non-controlling interest includes the following amounts:

($ in thousands)	TSC Cresco, LLC				MedMar <br>Inc. (Lakeview)				MedMar <br>Inc. (Rockford)				Cresco <br>Labs <br>Ohio, LLC				SLO Cultivation<br>Inc.				Cresco Labs Michigan, LLC4				Cresco Labs, LLC1,3
Revenue	$	—			$	31,698			$	49,718			$	11,674			$	—			$	16,948			$	272,738
Gross profit	(397)				20,540				32,931				3,243				(99)				(32)				150,792
Net income (loss)	$	92			$	8,461			$	26,468			$	(3,857)			$	(56)			$	(5,134)			$	516
Net (loss) income allocated to NCI	$	52			$	1,049			$	6,619			$	(46)			$	(11)			$	(746)			$	2,221
NCI percentage as of September 30, 2024	25.0		%	1	12.4		%	2	25.0		%	2	1.2		%	1	20.0		%	1	15.0		%	1	36.7		%

1The NCI percentage reflects the NCI that exists at Cresco Labs, LLC. There is a further 36.7% NCI related to NCI for Cresco Labs Inc.

2The NCI percentage reflects the NCI that exists at Cresco Labs Inc.

3Includes the effect of LLC unit redemptions and other adjustments.

For the nine months ended September 30, 2023, net income (loss) attributable to non-controlling interest includes the following amounts:

($ in thousands)	TSC Cresco, LLC				MedMar <br>Inc. (Lakeview)				MedMar <br>Inc. (Rockford)				Cresco <br>Labs <br>Ohio, LLC				SLO Cultivation<br>Inc.				Cresco Labs Michigan, LLC				Cresco Labs, LLC1,3
Revenue	$	6,380			$	37,525			$	59,824			$	6,987			$	(180)			$	18,775			$	291,593
Gross profit	2,810				23,645				38,932				(484)				(2,498)				(836)				155,135
Net income (loss)	$	630			$	13,359			$	30,215			$	(4,646)			$	(1,700)			$	(1,764)			$	(31,183)
Net income (loss) allocated to NCI	$	157			$	1,657			$	7,554			$	(46)			$	(340)			$	(265)			$	(15,280)
NCI percentage as of September 30, 2023	25.0		%	1	12.4		%	2	25.0		%	2	1.0		%	1	20.0		%	1	15.0		%	1	39.0		%

1The NCI percentage reflects the NCI that exists at Cresco Labs, LLC. There is a further 39.0% NCI related to NCI for Cresco Labs Inc.

2The NCI percentage reflects the NCI that exists at Cresco Labs Inc.

3Includes the effect of LLC unit redemptions and other adjustments.

The effects of changes in the Company's ownership interests in less than 100% owned subsidiaries during the three and nine months ended September 30, 2024 and 2023 were as follows:

	Three months ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Net loss attributable to Cresco Labs Inc.	$	(10,541)	$	(115,572)	$	(70,066)	$	(178,157)
Changes in Cresco Labs Inc. equity due to redemptions of Cresco Labs, LLC shares:
Share Capital	—		894		7,392		13,192
Accumulated Deficit	—		(1,520)		(10,881)		(17,542)
Total change from net loss attributable to Cresco Labs Inc. and change in ownership interest in Cresco Labs, LLC.	$	(10,541)	$	(116,198)	$	(73,555)	$	(182,507)
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
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NOTE 7.     SHARE-BASED COMPENSATION
---

The Company has a share-based compensation plan (the “Plan”) for employees, board members and service providers. Under the Plan, stock options and RSUs issued have no voting rights and vest proportionately over periods ranging from the grant date to 5 years from the issuance date. Stock options exercised and RSUs issued are converted to SVS. Stock options expiration dates ranges from 8 years to 10 years after the grant date. During July 2024, the Plan was amended to increase the maximum number of shares that can be issued under the Plan to 10% of the issued and outstanding shares plus an additional 20 million shares. The calculation for the maximum number of shares that can be issued in under the Plan will remain in place until the 10% of the issued and outstanding shares is greater than 20 million shares, at that point the maximum number of shares issued under the plan shall not exceed 10% of the issued and outstanding shares.

(a)     Stock Options

On April 9, 2024, the Company commenced an offer for a one-time stock option exchange program (the “Option Exchange Program”) to certain employee option holders (“Eligible Participants”) who held certain underwater options and remained employed by the Company through the completion of the Option Exchange Program. Eligible Participants with an outstanding option that had an exercise price equal to or greater than $3.36 or 1.5 times the closing price on the expiration date, May 6, 2024, had the option to exchange their existing options for new options (“New Option”) that have an exercise equal to the higher of the closing price of the Company’s SVS as reported on the OTCQX market (the “OTC”) on the new option grant date. Eligible Participants had until May 6, 2024, to elect to exchange their existing shares. Pursuant to the Option Exchange Program, 266 eligible participants elected to exchange 3.9 million options for 2.2 million New Options. The Option Exchange Program was subject to a shareholder vote at the Annual General and Special Meeting. The meeting was held on July 10, 2024 and the Option Exchange Program was approved. On July 10, 2024, immediately following the shareholder approval, the Company granted 2.2 million New Options pursuant to the terms of the Option Exchange Program and the Plan. The exercise price of the New Options was $2.10, which was the closing price of the common stock on the OTC on May 6, 2024. The New Options received in exchange for any originally vested options have a new 1-year cliff vesting schedule and an 8-year contractual term. The New Options received in exchange for any originally unvested options have a new 2-year graded vesting schedule (with 50% vesting each year), and an 8-year contractual term.

The following table summarizes activity related to stock options outstanding as of and for the nine months ended September 30, 2024:

(Stock options and intrinsic value in thousands)	Number of stock options outstanding	Weighted-average exercise price		Weighted-average remaining contractual life (years)	Aggregate intrinsic value
Outstanding – January 1, 2024	24,103	$	4.45	6.60	$	328
Granted	4,623	1.49
Granted under the Option Exchange Program	2,237	2.10
Exercised	(5)	1.68
Forfeited	(2,288)	4.87
Cancelled under the Option Exchange Program	(3,887)	8.16
Outstanding - September 30, 2024	24,783	$	3.08	6.57	$	1,607
Exercisable - September 30, 2024	15,312	$	3.51	5.47	$	1,089
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
---

The fair value of stock options granted under the Plan during the nine months ended September 30, 2024 and September 30, 2023 was determined using the Black-Scholes option-pricing model with the following range of assumptions at the time of the grant:

	September 30, 2024	September 30, 2023
Risk-free annual interest rate	3.9% to 4.3%	3.7% to 3.9%
Expected annual dividend yield	0%	0%
Expected stock price volatility	80.3% to 84.4%	77.0% to 82.8%
Expected life of stock options	4.5 to 7.5 years	5.0 to 7.0 years
Forfeiture rate	9.9% to 34.0%	7.2% to 28.0%
Fair value at grant date	$0.94 to $1.55	$1.01 to $1.52
Stock price at grant date	$1.35 to $2.05	$1.50 to $2.01
Exercise price range	$1.35 to $2.10	$1.60 to $2.01

Volatility was estimated by using the average historical volatility of comparable companies from a representative group of direct and indirect peers of publicly traded companies, as the Company and the cannabis industry have minimal historical share price history available. An increase in volatility would result in an increase in fair value at grant date. The expected life, in years, represents the period of time that stock options issued are expected to be outstanding. The risk-free rate is based on U.S. treasury bills with a remaining term equal to the expected life of the stock options. The forfeiture rate is estimated based on historical forfeitures experienced by the Company.

(b)     Restricted Stock Units

The Company has an RSU program to provide employees an additional avenue to participate in the successes of the Company. The fair value of RSUs granted was determined by the fair value of the Company’s share price on the date of grant.

The following table summarizes activity related to RSUs outstanding as of and for the nine months ended September 30, 2024:

(Shares in thousands)	Number of RSUs outstanding	Weighted-average fair value
Outstanding – January 1, 2024	6,862	$	2.91
Granted	4,903	1.41
Vested and settled	(2,218)	2.83
Forfeited	(614)	2.27
Outstanding - September 30, 2024	8,933	$	2.15

(c)     Expense Attribution

(i)     Stock options

The following table sets forth the classification of share-based compensation expense related to stock options for the three and nine months ended September 30, 2024 and 2023:

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
	Three Months Ended September 30,				Nine Months Ended<br>September 30,
---	---	---	---	---	---	---	---	---
($ in thousands)	2024		2023		2024		2023
Cost of goods sold	$	152	$	220	$	779	$	948
Selling, general and administrative expense	1,043		1,796		3,818		4,884
Total share-based compensation expense for stock options	$	1,195	$	2,016	$	4,597	$	5,832

Unrecognized share-based compensation expense as of September 30, 2024 for unvested stock options was $4.5 million and will be recorded over the course of the next 4.4 years.

(ii)     RSUs

The following table sets forth the classification of share-based compensation expense related to RSUs for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,				Nine Months Ended<br>September 30,
($ in thousands)	2024		2023		2024		2023
Cost of goods sold	$	203	$	239	$	899	$	1,157
Selling, general and administrative expense	1,159		1,684		4,852		5,762
Total share-based compensation expense for RSUs	$	1,362	$	1,923	$	5,751	$	6,919

Unrecognized share-based compensation expense related to RSUs as of September 30, 2024 is $5.8 million and will be recognized over the course of the next 4.0 years.

(iii)     Capitalized Inventory

As of September 30, 2024 and December 31, 2023, ending inventory includes $0.6 million and $0.7 million, respectively, of capitalized share-based compensation expense related to both stock options and RSUs. For the three months ended September 30, 2024 and 2023, $0.6 million and $0.6 million, respectively, of share-based compensation expense was recorded to Cost of goods sold, which includes $0.5 million and $0.5 million, respectively, related to share-based compensation expense capitalized to inventory in prior periods. For the nine months ended September 30, 2024 and 2023, share-based compensation expense was $0.2 million and $2.7 million, respectively, recorded to Cost of goods sold, which includes $0.7 million and $1.4 million, respectively, related to compensation expense capitalized to inventory in prior periods

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
NOTE 8.     LOSS PER SHARE
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The following is a reconciliation for the calculation of basic and diluted loss per share for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended<br>September 30,				Nine Months Ended<br>September 30,
($ in thousands, except per share amounts)	2024		2023		2024		2023
Numerator:
Net loss	$	(7,694)	$	(113,445)	$	(60,928)	$	(184,720)
Less: Net income (loss) attributable to non-controlling interests, net of tax	2,847		2,127		9,138		(6,563)
Net loss attributable to Cresco Labs Inc.	$	(10,541)	$	(115,572)	$	(70,066)	$	(178,157)
Denominator:
Weighted-average basic and diluted shares outstanding	347,360,904		337,466,885		344,652,104		318,718,524
Loss per Share:
Basic and diluted loss per share	$	(0.03)	$	(0.34)	$	(0.20)	$	(0.56)

For the three and nine months ended September 30, 2024 and 2023, potentially dilutive shares were not included in the computation of diluted loss per common share due to the net loss during the periods. Potentially dilutive shares for the three and nine months ended September 30, 2024 and 2023, consisted of the following:

	Three Months Ended<br>September 30,		Nine Months Ended<br>September 30,
(shares in thousands)	2024	2023	2024	2023
Redeemable Units	92,805	98,888	92,805	102,003
Stock options	24,783	24,980	24,783	24,980
RSUs	8,933	7,432	8,933	7,432
Total potentially dilutive shares	126,521	131,300	126,521	134,415
NOTE 9.     ACQUISITIONS
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On April 24, 2024, the Company completed the acquisition of Keystone for 100% ownership interest. As part of the acquisition, the Company acquired two operating dispensaries in Pennsylvania, as well as the rights to open a new store under a third license in the future. As of September 30, 2024, the Company recorded estimates of the fair value of assets acquired and liabilities assumed. In connection with the Keystone acquisition, transaction costs of $0.6 million were recorded as Selling, general and administrative expense in the Unaudited Condensed Interim Consolidated Statements of Operations for the three and nine months ended September 30, 2024.

Balances are subject to change during the measurement period, which will conclude at the earlier of the date the Company receives the information it is seeking about the facts and circumstances that existed as of the acquisition date, learns that more information is not obtainable, or one year following the acquisition date. Any changes to the preliminary estimates of the fair value of the assets acquired and liabilities assumed will be recorded as adjustments to those assets and liabilities, and residual amounts will be allocated to goodwill. During the three months ended September 30, 2024, the Company recorded measurement period adjustments related to changes in the valuation of certain assets, which resulted in a $0.3 million increase in goodwill.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

The table below summarizes the total consideration and net identifiable assets and liabilities acquired in connection with the Keystone acquisition during the nine months ended September 30, 2024:

($ in thousands)	Amount
Total consideration:
Common shares issued	$	3,001
Cash	12
Payments of acquisition-related transaction costs on behalf of the acquiree	2,930
Payments	462
Contingent consideration	2,280
Total consideration	$	8,685
Net identifiable assets (liabilities) acquired
Cash	$	174
Inventory	250
Property and equipment	2,789
Other current assets	23
Customer relationships	300
Licenses	2,300
Total identifiable assets acquired	$	5,836
Accounts payable	$	(642)
Short-term liabilities	(446)
Total identifiable liabilities assumed	$	(1,088)
Purchase price allocation
Net identifiable assets acquired	$	4,748
Goodwill	3,937
Total consideration	$	8,685

The Company calculated, on a pro-forma basis, the combined results of the acquired entity as if the Keystone acquisition had occurred on January 1, 2024. These unaudited pro forma results are not necessarily indicative of either the actual consolidated results had the acquisition occurred as of January 1, 2024, or of the future operating results.

Total unaudited pro-forma Revenue and Net loss for the combined company for the nine months ended September 30, 2024, was $549.5 million and $61.0 million, respectively.

For the three months ended September 30, 2024, Revenue and Net income from the Keystone acquisition was $1.4 million and $0.4 million, respectively. For the nine months ended September 30, 2024, Revenue and Net income from the Keystone acquisition was $3.4 million and $0.7 million, respectively.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

(a)Deferred and Contingent Consideration

The following is a summary of Deferred and contingent consideration, short-term balances as of September 30, 2024 and December 31, 2023:

($ in thousands)	September 30, 2024		December 31, 2023
Valley Agriceuticals, LLC (“Valley Ag”) operating cash flows deferred consideration	$	408	$	—
Keystone	2,254		—
Total Deferred and contingent consideration, short-term	$	2,662	$	—

The following is a summary of Deferred and contingent consideration, long-term balances as of September 30, 2024 and December 31, 2023:

($ in thousands)	September 30, 2024		December 31, 2023
Valley Ag operating cash flows deferred consideration	$	7,470	$	6,577
Keystone	219		—
Total Deferred and contingent consideration, long-term	$	7,689	$	6,577

As of September 30, 2024, the total estimated liability related to the Valley Ag acquisition is $7.9 million. The liability is based on the present value of expected payments associated with the future cash flows of Valley Ag and the expected timing of those payments. As of September 30, 2024, the total estimated liability related to the Keystone acquisition is $2.5 million. The liability is based on the present value of expected payments associated with the future cash flows of Keystone and the expected timing of those payments.

During the three and nine months ended September 30, 2024, the Company recorded $1.2 million expense and $1.5 million of expense related to deferred and contingent considerations, respectively. For the three and nine months ended September 30, 2023, the Company recorded $2.3 million and $0.7 million of interest income related to deferred considerations, respectively. The expense is recorded in Interest expense, net in the Unaudited Condensed Interim Consolidated Statements of Operations. See Note 17 “Interest Expense, Net” for additional information.

NOTE 10.     LONG-TERM NOTES AND LOANS PAYABLE, NET

The following table represents the Company’s Long-term notes and loans payable, net balances as of September 30, 2024 and December 31, 2023:

($ in thousands)	September 30, 2024		December 31, 2023
Senior Loan	$	400,000	$	400,000
Mortgage Loans	19,878		20,160
Short-term borrowings and interest payable	19,805		9,813
Financing liability	94,277		95,698
Total borrowings and interest payable	$	533,960	$	525,671
Less: Unamortized debt issuance costs	(12,373)		(16,141)
Less: Short-term borrowings and interest payable	(19,805)		(9,813)
Less: Current portion of financing liability	(2,450)		(2,004)
Total Long-term notes and loans payable, net	$	499,332	$	497,713
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
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(a)Senior Loan

On August 12, 2021, the Company closed on an agreement for a senior secured term loan with an undiscounted principal balance of $400.0 million (as amended, the “Senior Loan”) and an original issue discount of $13.0 million. A portion of proceeds from the Senior Loan were used to retire the then existing term loan, with the remainder to fund capital expenditures and pursue other targeted growth initiatives within the U.S. cannabis sector.

The Senior Loan accrues interest at a rate of 9.5% per annum, payable in cash semi-annually and has a stated maturity of August 12, 2026. The Company’s effective interest rate for the Senior Loan is 11.0%. The Company capitalized $10.9 million of borrowing costs related to the Senior Loan, of which $7.0 million is payable upon principal repayment of the Senior Loan and thus, is reflected within Other long-term liabilities on the Consolidated Balance Sheets.

The Senior Loan is secured by a guarantee from substantially all material subsidiaries of the Company, as well as by a security interest in certain assets of the Company and such material subsidiaries. The Senior Loan contains negative covenants which restrict the actions of the Company and its subsidiaries during the term of the loan, including restrictions on paying dividends, making investments and incurring additional indebtedness. The Company is also subject to compliance with affirmative covenants, some of which may require management to exercise judgment. In addition, the Company is required to maintain a minimum cash balance of $50.0 million.

On September 22, 2023, the Company amended the Senior Loan pursuant to which certain terms of the original Senior Loan were modified and consent was provided for the Company to enter into the Mortgage Loans further discussed below.

On August 29 2024, the Company entered into a second amendment the Senior Secured Term Loan Agreement (the “Amended Loan Agreement”). Pursuant to the terms of the Amended Loan Agreement, the Company may from time-to-time purchase by assignment all or a portion of the lender’s loans, plus applicable accrued and unpaid interest, on the terms and conditions set forth in the Amended Loan Agreement. As of September 30, 2024, the Company had not repurchased any loans. See Note 19 “Subsequent Events” for additional information on a repurchase that occurred subsequent to the report date.

The Company may prepay in whole, or in part, the Senior Loan at any time prior to the stated maturity date, subject to certain conditions. Any prepayment of the outstanding principal amount may be subject to a prepayment premium as defined in the loan agreement, and would include all accrued and unpaid interest and fees. Interest expense is discussed in Note 17 “Interest Expense, Net.”

(b)Mortgage Loans

On September 26, 2023, JDRC Ellenville, LLC (“Ellenville”), an indirect subsidiary of the Company, entered into loan agreements to borrow an undiscounted principal amount of $25.3 million (the “Mortgage Loans”). Borrowings under the terms of the Mortgage Loans bear an initial interest rate of 8.4% per annum, which is equal to the Federal Home Loan Bank (“FHLB”) Five Year Classic Regular Advance Rate, plus a 375-basis point spread. The Mortgage Loans have an effective interest rate of 10.2%. The Mortgage Loans are secured by real estate in Ellenville, New York and improvements thereto, and converts to a permanent term loan on the conversion date of November 1, 2028. The Mortgage Loans contains certain affirmative and negative covenants which restrict the actions of Ellenville during the term of the loan.

As of September 30, 2024 and December 31, 2023, the full commitment amount was not fully drawn, as $5.1 million of the principal balance will be advanced to Ellenville as it completes the buildout of the Ellenville cultivation center. As of September 30, 2024 and December 31, 2023, the Company incurred $1.9 million and $2.0 million, respectively, in deferred financing fees reflected within Long-term notes and loans payable on the Consolidated Balance Sheets.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

During the three and nine months ended September 30, 2024, the Company capitalized interest of $0.4 million and $1.3 million, respectively, related to the loan as the build-out of the Ellenville facility is still underway. After completion, interest will be expensed as incurred.

(c)    Financing Liabilities

The Company has additional financing liabilities for which the incremental borrowing rates range from 11.3% to 17.5% with remaining terms between 5.3 and 15.8 years, consistent with the underlying lease liabilities. The interest expense associated with financing liabilities is discussed in Note 17 “Interest Expense, Net.”

NOTE 11.     REVENUES AND LOYALTY PROGRAMS

(a)Revenues

The following table represents the Company’s disaggregated revenue by source, due to the Company’s contracts with its customers, for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Wholesale	$	62,047	$	72,571	$	194,165	$	237,128
Dispensary	117,736		117,988		354,269		345,520
Total Revenues	$	179,783	$	190,559	$	548,434	$	582,648

The Company generates revenues, net of sales discounts, at the point in time the control of the product is transferred to the customer, as the Company has a right to payment and the customer has assumed significant risks and rewards of such product without any remaining performance obligation. Sales discounts were approximately 24.9% and 18.0% of gross revenue for the three months ended September 30, 2024 and 2023, respectively. Sales discounts were approximately 22.6% and 15.8% of gross revenue for the nine months ended September 30, 2024 and 2023, respectively. The Company does not enter into long-term sales contracts.

(b)Loyalty Programs

In the states of Illinois, New York, Florida, Ohio and Massachusetts; the Company has customer loyalty programs where retail customers accumulate points based on their level of spending. These points are recorded as a contract liability until customers redeem their points for discounts on cannabis products as part of an in-store sales transaction. Loyalty points may be redeemed by customers for $0.03 for each point off of future purchases. The Company records a performance obligation as a reduction of revenue that ranges between $0.01 and $0.02 per loyalty point, inclusive of breakage expectations in respective markets.

Upon redemption, the loyalty program obligation is relieved, and the offset is recorded as revenue. As of September 30, 2024 and December 31, 2023, there were 30.3 million and 71.2 million points outstanding, respectively. The contract liability totaled $0.5 million and $1.2 million, respectively, which is included in Accrued liabilities within the Consolidated Balance Sheets. The Company expects outstanding loyalty points to be redeemed within one year. Loyalty points generally expire after six months of no spend activity.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
NOTE 12.     RELATED PARTY TRANSACTIONS
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(a)Transactions with Key Management Personnel and Certain Board Members

Related parties, including key management personnel and certain board members, hold 81.3 million Redeemable Units of Cresco Labs, LLC, which accounts for a deficit of $83.0 million in non-controlling interests as of September 30, 2024. During the three months ended September 30, 2024, the Company did not make any required tax distribution payments to unit holders of Cresco Labs, LLC which includes related parties, key management personnel and certain board members. During the nine months ended September 30, 2024, 69.8% of required tax distribution payments to unit holders of Cresco Labs, LLC were made to related parties including to key management personnel and certain board members. During the three and nine months ended September 30, 2023, 86.4% and 71.3%, respectively, of required tax distribution payments to holders of Cresco Labs, LLC were made to related parties including to key management personnel and certain board members.

(b)Related Parties – Leases

For the three and nine months ended September 30, 2024 and 2023, the Company had lease liabilities for real estate lease agreements in which the lessors have a minority interest in MedMar Inc. (“MedMar”). The lease liabilities were incurred in January 2019 and May 2020 and expire in 2027 through 2030.

The Company has liabilities for real estate leases and other financing agreements in which the lessor is Clear Heights Properties where Dominic Sergi, former MVS shareholder, is Chief Executive Officer. The liabilities were incurred by entering into operating leases, finance leases and other financing transactions with terms that will expire in 2030. For the three and nine months ended September 30, 2024, the Company received $0.3 million in tenant improvement allowance reimbursements, while no reimbursements were received during the nine months ended September 30, 2023. The Company expects to receive further reimbursements of $0.4 million within the next twelve months.

Below is a summary of the expense resulting from the related party lease liabilities for the three and nine months ended September 30, 2024 and 2023:

		Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	Classification	2024		2023		2024		2023
Operating Leases
Lessor has minority interest in MedMar	Rent expense	$	73	$	73	$	217	$	217
Lessor is an MVS shareholder1	Rent expense	—		296		98		832
Finance Leases
Lessor has minority interest in MedMar	Depreciation expense	$	76	$	76	$	229	$	229
Lessor has minority interest in MedMar	Interest expense	54		62		166		187
Lessor is an MVS shareholder1	Depreciation expense	—		22		8		67
Lessor is an MVS shareholder1	Interest expense	—		17		5		53

1Lessor no longer a MVS shareholder as of March 31, 2024

Additionally, below is a summary of the ROU assets and lease liabilities attributable to related party leases as of September 30, 2024 and December 31, 2023:

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
	September 30, 2024				December 31, 2023
---	---	---	---	---	---	---	---	---
($ in thousands)	ROU Asset		Lease Liability		ROU Asset		Lease Liability
Operating Leases
Lessor has minority interest in MedMar	$	1,194	$	1,251	$	1,294	$	1,345
Lessor is an MVS shareholder1	—		—		5,332		5,429
Finance Leases
Lessor has minority interest in MedMar	$	1,499	$	2,003	$	1,729	$	2,210
Lessor is an MVS shareholder1	—		—		583		502

1Lessor no longer a MVS shareholder as of March 31, 2024.

The Company had other financing liabilities controlled by a former MVS holder; however, as of March 31, 2024, that related party is no longer an MVS holder and thus, the Company did not have any financing liabilities with related parties. During the three and nine months ended September 30, 2023, the Company recorded interest expense of $0.1 million and $0.2 million on those financing liabilities with related parties. As of December 31, 2023, the Company had $1.4 million of financing liabilities with related parties.

NOTE 13.     COMMITMENTS AND CONTINGENCIES

(a)Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. The Company accrues for estimated costs for a contingency when a loss is probable and can be reasonably estimated. No material loss contingencies were accrued as of September 30, 2024. As of September 30, 2024 and December 31, 2023, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s results of operations, financial positions or cash flows. There are also no proceedings in which any of the Company’s directors, officers or affiliates are an adverse party or has a material interest adverse to the Company’s interest.

In February 2024, the Company received a demand letter on behalf of former and current Cresco employees. The demand letter alleges the Company violated certain laws around regulations related to employee compensation. The demand letter proposed, and the parties have agreed, to mediate the potential claims. As of September 30, 2024, the matter was still pending, and the Company reasonably estimates the possible loss that may result from this matter at $0.8 million. This estimated possible loss is based upon currently available information and is subject to significant judgment, a variety of assumptions, and known and unknown uncertainties.

(b)Contingencies

The Company’s operations are subject to a variety of federal, state, and local regulations. Failure to comply with one or more of those regulations could result in fines, restrictions on the Company’s operations, suspension or revocation of permits or licenses, or other disciplinary actions (collectively, “Disciplinary Actions”) that could adversely affect the Company’s financial position and results of operations. While management believes that the Company is in substantial compliance with state and local regulations as of September 30, 2024 and December 31, 2023, and through the date of filing of these financial statements, these regulations continue to evolve and are subject to differing interpretations and enforcement. As a result, the Company may be subject to Disciplinary Actions in the future.

(c)Commitments

As of September 30, 2024 and December 31, 2023, the Company had total commitments of $5.5 million and $2.3 million, respectively, related to material construction projects.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

The Company also has employment agreements with key management personnel which include severance in the event of termination with additional equity and/or compensation benefits totaling approximately $3.4 million and $3.1 million as of September 30, 2024 and December 31, 2023, respectively.

NOTE 14.     FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

Financial Instruments

The Company’s financial instruments are held at amortized cost (adjusted for impairments or expected credit losses (“ECLs”), as applicable) or fair value. The carrying values of financial instruments held at amortized cost approximate their fair values as of September 30, 2024 and December 31, 2023, due to their nature and relatively short maturity dates. Financial assets and liabilities with embedded derivative features are carried at fair value.

Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements. The three levels of hierarchy are:

•Level 1 – Unadjusted quoted prices in active markets for identical assets or liabilities;

•Level 2 – Inputs other than quoted prices that are observable for the asset or liability, either directly or indirectly; and

•Level 3 – Inputs for the asset or liability that are not based on observable market data.

There have been no transfers into or out of Level 3 for the periods ended September 30, 2024 and December 31, 2023.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

The following tables summarize the Company’s financial instruments as of September 30, 2024 and December 31, 2023:

	September 30, 2024
($ in thousands)	Amortized Cost		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	153,295	$	—	$	—	$	—	$	153,295
Restricted cash1	6,511		—		—		—		6,511
Security deposits2	4,068		—		—		—		4,068
Accounts receivable, net	54,562		—		—		—		54,562
Loans receivable, short-term	532		—		—		—		532
Loans receivable, long-term	1,693		—		—		—		1,693
Investments	—		51		—		600		651
Financial Liabilities:
Accounts payable	$	19,155	$	—	$	—	$	—	$	19,155
Accrued liabilities	60,481		—		—		—		60,481
Short-term borrowings	22,255		—		—		—		22,255
Current portion of lease liabilities	11,169		—		—		—		11,169
Deferred and contingent consideration, short-term	—		—		—		2,662		2,662
Lease liabilities	157,692		—		—		—		157,692
Deferred and contingent consideration, long-term	—		—		—		7,689		7,689
Long-term notes and loans payable, net	499,332		—		—		—		499,332
Other long-term liabilities3	153,396		—		—		—		153,396

1Restricted cash balances include various escrow accounts related to investments, acquisitions and facility licensing requirements, which are included in “Restricted cash” and “Other non-current assets” on the Unaudited Condensed Interim Consolidated Balance Sheets.

2Security deposits are included in “Other non-current assets” on the Unaudited Condensed Interim Consolidated Balance Sheets.

3Other long-term liabilities includes tax receivable agreement liabilities, income tax payable related to uncertain tax positions, deferred financing fees on our Senior Loan and escrow amounts related to a previous acquisition.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
	December 31, 2023
---	---	---	---	---	---	---	---	---	---	---
($ in thousands)	Amortized Cost		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	103,429	$	—	$	—	$	—	$	103,429
Restricted cash1	5,091		—		—		—		5,091
Security deposits2	4,408		—		—		—		4,408
Accounts receivable, net	51,070		—		—		—		51,070
Loans receivable, short-term	1,421		—		—		—		1,421
Loans receivable, long-term	826		—		—		—		826
Investments	—		49		81		600		730
Financial Liabilities:
Accounts payable	$	27,587	$	—	$	—	$	—	$	27,587
Accrued liabilities	69,079		—		—		—		69,079
Short-term borrowings	11,817		—		—		—		11,817
Current portion of lease liabilities	9,416		—		—		—		9,416
Lease liabilities	163,811		—		—		—		163,811
Deferred consideration, long-term	—		—		—		6,577		6,577
Long-term notes and loans payable, net	497,713		—		—		—		497,713
Other long-term liabilities3	21,600		—		—		—		21,600

1Restricted cash balances include various escrow accounts related to investments, acquisitions and facility licensing requirements, which are included in “Restricted cash” on the Consolidated Balance Sheets.

2Security deposits are included in “Other non-current assets” on the Consolidated Balance Sheets.

3Other long-term liabilities includes Tax receivable agreement liabilities and deferred financing fees on our Senior Loan.

The following table presents a rollforward of the balance sheet amounts measured at fair value on a recurring basis and classified as Level 3. The classification of an item as Level 3 is based on inputs for assets or liabilities that are not based on observable market data.

Three and Nine Months Ended September 30, 2024
Level 3 Fair Value Measurements
($ in thousands)	Deferred and contingent consideration, short-term		Deferred and contingent consideration, long-term
Balance as of December 31, 2023	$	—	$	6,577
Change in fair value recorded in Interest expense, net	—		304
Balance as of March 31, 2024	$	—	$	6,881
Additions1	—		2,304
Change in fair value recorded in Interest expense, net	—		25
Balance as of June 30, 2024	$	—	$	9,210
Change in fair value recorded in Interest expense, net	169		972
Other2	2,493		(2,493)
Balance as of September 30, 2024	$	2,662	$	7,689

1See Note 9 “Acquisitions” for additional details related to the Keystone contingent consideration.

2Other relates to reclassifications from long-term to short-term due to expected timing of payment.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
Three and Nine Months Ended September 30, 2023
---
Level 3 Fair Value Measurements
($ in thousands)	Deferred consideration,<br>contingent<br>consideration,<br>and other<br>payables,<br>short-term		Deferred consideration, long-term
Balance as of December 31, 2022	$	47,821	$	7,770
Change in fair value recorded in Interest expense, net	1,555		—
Payments1	(10,000)		—
Other2	1,658		(1,658)
Balance as of March 31, 2023	$	41,034	$	6,112
Change in fair value recorded in Interest expense, net	1,134		—
Change in fair value recorded in Other income, net	—		341
Payments1	(40,072)		—
Balance as of June 30, 2023	$	2,096	$	6,453
Change in fair value recorded in Interest expense, net	(1,078)		—
Change in fair value recorded in Other income, net	—		(1,253)
Other2	(1,018)		1,018
Balance as of September 30, 2023	$	—	$	6,218

1See Note 6 “Share Capital” for additional details related to payments.

2Other relates to reclassifications from long-term to short-term due to expected timing of payment.

(a)Loans receivable, short-term

The following is a summary of Loans receivable, short-term balances and valuation classifications (discussed further below) as of September 30, 2024 and December 31, 2023:

($ in thousands)	Valuation<br>classification	September 30, 2024		December 31, 2023
Short-term loans receivable - Kurvana, net of ECL	Amortized cost	$	532	$	493
Short-term loans receivable - Spark’d, net of ECL	Amortized cost	—		928
Total Loans receivable, short-term		$	532	$	1,421

During the second quarter of 2023, the Company issued a $1.0 million short-term loan receivable to 280EZ LLC, an Illinois limited liability company (d/b/a Spark’d). The short-term loan receivable has a one-year term and interest accruing at 9.5% per annum, paid on a monthly basis. At the inception of the loan, an ECL determination was made. During the second quarter of 2024, the Company entered into an amended agreement with Spark’d, extending the term to three-years payable on June 16, 2027. The entire balance of the Spark’d loan was reclassified to loans receivable, long-term.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

(b)Loans receivable, long-term

($ in thousands)	Valuation<br>classification	September 30, 2024		December 31, 2023
Long-term loans receivable - Illinois Incubator, net of ECL	Amortized cost	$	826	$	826
Long-term loans receivable - Spark’d, net of ECL	Amortized cost	867		—
Total Loans receivable, long-term		$	1,693	$	826

Pursuant to the Illinois Cannabis Regulation and Tax Act, the Company has issued $0.3 million in loans to an Illinois company which has secured a Craft Grower License to operate in the state and $1.0 million in loans to groups that have been identified by the state of Illinois as having the opportunity to receive Conditional Adult Use Dispensing Organization Licenses. One (1) $0.1 million loan related to the Craft Grower License matures on July 20, 2026. The remaining loans of $1.2 million mature on July 20, 2027. The loans are measured at amortized cost and bear no interest.

During both the three and nine months ended September 30, 2024 and 2023, the Company recorded losses on provision on short-term and long-term loans receivable of $0.1 million and $0.3 million, respectively.

(c)Investments

The Company currently has investments in three entities: 420 Capital Management, LLC (“420 Capital”), a cannabis investment company; IM Cannabis Corp. (“IMC”), a pharmaceutical manufacturer that specializes in cannabis and OLD PAL LLC (“Old Pal”), a cannabis operator/licensor. 420 Capital and Old Pal investments are held at fair value and are classified as equity securities without a readily determinable fair value. The IMC investment is classified as a marketable security with a readily determinable fair value. During the nine months ended September 30, 2024, the Company wrote off its remaining investment balance of $0.1 million in Lighthouse Strategies, LLC.

Financial Risk Management

The Company is exposed in varying degrees to a variety of financial instrument-related risks. The Board of Directors and Company management mitigate these risks by assessing, monitoring, and approving the Company’s risk management processes:

(a)Credit and Banking Risk

Credit risk is the risk of a potential loss to the Company if a customer or a third-party to a financial instrument fails to meet its contractual obligations. The maximum credit exposure as of September 30, 2024 and December 31, 2023 is the carrying amount of cash, accounts receivable and loans receivable. The Company does not have significant credit risk with respect to its growth in its key retail markets, as payment is typically due upon transferring the goods to the customer at our dispensaries, which currently accept only cash and debit cards. Additionally, the Company does not have significant credit risk with respect to its loan counterparties as the interest rate on the Senior Loan is not variable and therefore, is not materially impacted by interest rate increases enacted by the Federal Reserve. The interest rate on our Mortgage Loans is based on the FHLB Five Year Classic Regular Advance Rates which matures every five (5) years and does not pose a significant credit risk. Although all deposited cash is placed with U.S. financial institutions in good standing with regulatory authorities, changes in U.S. federal banking laws related to the deposit and holding of funds derived from activities related to the cannabis industry have passed the U.S. House of Representatives but were not voted on within the U.S. Senate, and would need to be reintroduced by Congress. Given that current U.S. federal law provides that the production and possession of cannabis is illegal, there is a strong argument that banks cannot accept or deposit funds from

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

businesses involved with the cannabis industry, leading to an increased risk of legal actions against the Company and forfeitures of the Company’s assets.

The Company’s aging of Accounts receivables as of September 30, 2024 and December 31, 2023 was as follows:

($ in thousands)	September 30, 2024		December 31, 2023
0 to 60 days	$	38,423	$	41,820
61 to 120 days	10,820		8,117
120 days +	14,259		9,097
Total accounts receivable, gross	63,502		59,034
Allowance for doubtful accounts	8,940		7,964
Total accounts receivable, net	$	54,562	$	51,070

As of September 30, 2024, the Company had two customers that accounted for $16.6 million or 26.1% of the Company’s gross accounts receivable balance. As of December 31, 2023, one customer accounted for $7.2 million or 12.2% of the Company’s gross accounts receivable balance.

For the three and nine months ended September 30, 2024, the Company recorded a recovery on provision of $0.7 million and $1.2 million, respectively. An additional recovery on provision of $0.6 million was recorded compared to $0.9 million in bad debt expense related to invoice write-offs was recorded for the same three and nine month periods. For the three and nine months ended September 30, 2023, the Company recorded an ECL of $1.2 million and $4.0 million, respectively. An additional $2.0 million and $3.6 million in bad debt expense related to invoice write-offs was recorded for the same respective three and nine month periods.

(b)Asset Forfeiture Risk

Because the cannabis industry remains illegal under U.S. federal law, any property owned by participants in the cannabis industry, which are either used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owner of the property was never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture.

(c)Liquidity Risk

The accompanying unaudited condensed interim consolidated financial statements have been prepared assuming that the Company will continue as a going concern. For the nine months ended September 30, 2024, the Company has generated positive cash flows from operations and implemented certain cost cutting measures, which are expected to improve cash from operations.

Liquidity risk is the risk that the Company will not be able to meet its financial obligations associated with financial liabilities. The Company primarily manages liquidity risk through the management of its capital structure by ensuring that it will have sufficient liquidity to settle obligations and liabilities when due. As of September 30, 2024, the Company had working capital (defined as current assets less current liabilities) of $153.3 million. The Company also expects to be able to continue to raise debt or equity based capital, or sell certain assets, if needed, to fund operations and the expansion of its business.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

In addition to the commitments outlined in Note 13 “Commitments and Contingencies,” the Company has the following contractual obligations as of September 30, 2024:

($ in thousands)	< 1 Year		1 to 3 Years		3 to 5 Years		> 5 Years		Total
Accounts payable & Accrued liabilities	$	74,279	$	—	$	—	$	—	$	74,279
Deferred and contingent consideration, short-term	2,662		—		—		—		2,662
Operating leases liabilities	29,363		59,160		59,107		140,028		287,658
Finance lease liabilities	4,995		10,332		10,277		14,494		40,098
Deferred and contingent consideration, long-term	—		7,689		—		—		7,689
Short-term borrowings and Long-term notes and loans payable	33,612		428,627		29,801		110,646		602,686
Tax receivable agreement liability	5,357		10,891		11,329		56,880		84,457
Other long-term liabilities	—		8,510		—		—		8,510
Total obligations as of September 30, 2024	$	150,268	$	525,209	$	110,514	$	322,048	$	1,108,039

(d)Market Risk

(i)Currency Risk

The operating results and balance sheet of the Company are reported in USD. As of September 30, 2024 and December 31, 2023, the Company’s financial assets and liabilities are primarily in USD. However, from time to time, some of the Company’s financial transactions are denominated in currencies other than USD. The results of the Company’s operations are subject to currency transaction and translation risks. During the three and nine months ended September 30, 2024, the Company recorded loss on foreign currency exchange of $0.2 million and gain on foreign currency exchange of $0.2 million, respectively. The Company recorded $0.2 million a gain on foreign currency exchanges and a $0.1 million loss on foreign currency exchange during the three and nine months ended September 30, 2023, respectively.

As of September 30, 2024 and December 31, 2023, the Company had no hedging agreements in place with respect to foreign exchange rates. The Company has not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.

(ii) Interest Rate Risk

Interest rate risk is the risk that the fair value or future cash flows of a financial instrument will fluctuate because of changes in market interest rates. An increase or decrease in the Company’s incremental borrowing rate would result in an associated increase or decrease in deferred considerations and interest expense, net. The Company’s Amended Senior Loan accrues interest at a rate of 9.5% per annum and has an effective interest rate of 11.0%. The Company’s Mortgage Loans accrue interest at a rate of 8.4% per annum and have an effective interest rate of 10.2%.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

(iii)Price Risk

Price risk is the risk of variability in fair value due to movements in equity or market prices. The Company is subject to price risk related to deferred and contingent considerations that are valued based on the Company’s own stock price. An increase or decrease in stock price would result in an associated increase or decrease to deferred and contingent considerations with a corresponding change to Other income, net.

(iv)Tax Risk

Tax risk is the risk of changes in the tax environment that would have a material adverse effect on the Company’s business, results of operations and financial condition. Currently, state-licensed marijuana businesses are assessed a comparatively high effective federal tax rate due to Internal Revenue Code (“IRC”) Section 280E, which bars businesses from deducting all expenses except their cost of goods sold when calculating federal tax liability. Any increase in tax levies resulting from additional tax measures may have a further adverse effect on the operations of the Company, while any decrease in such tax levies will be beneficial to future operations. See Note 18 “Provision for Income Taxes and Deferred Income Taxes” for the Company’s disclosure of uncertain tax positions.

(v)Regulatory Risk

Regulatory risk pertains to the risk that the Company’s business objectives are contingent, in part, upon the compliance of regulatory requirements. Due to the nature of the industry, the Company recognizes that regulatory requirements are more stringent and punitive in nature. Any delays in obtaining, or failure to obtain regulatory approvals can significantly delay operational and product development and can have a material adverse effect on the Company’s business, results of operations and financial condition. The Company is cognizant of the advent of regulatory changes occurring in the cannabis industry on the city, state, and national levels. Although the regulatory outlook on the cannabis industry has been moving in a positive trend, any unforeseen regulatory changes could have a material adverse impact on the goals and operations of the Company’s business.

(vi) Economic Risk

The Company’s business, financial condition and operating results may be negatively impacted by challenging global economic conditions. A global economic slowdown would cause disruptions and extreme volatility in global financial markets, increased rates of default and bankruptcy and declining consumer and business confidence, which can lead to decreased levels of consumer spending. These macroeconomic developments could negatively impact the Company’s business, which depends on the general economic environment and levels of consumer spending. As a result, the Company may not be able to maintain its existing customers or attract new customers, or the Company may be forced to reduce the price of its products. The Company is unable to predict the likelihood of the occurrence, duration, or severity of such disruptions in the credit and financial markets or adverse global economic conditions. Any general or market-specific economic downturns could have a material adverse effect on our business, financial condition and operating results.

(vii) Inflation Risk

The Company has experienced increased inflationary pressures, including increased cultivation costs, distribution costs, and operating expenses, which have adversely impacted our operating results. The Company anticipates inflationary pressures to continue throughout 2024. The Company maintains strategies to mitigate the impact of higher raw material, energy, and commodity costs, which include cost reduction, sourcing and other actions, which may help to offset a portion of the adverse impact.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
NOTE 15.     VARIABLE INTEREST ENTITIES
---

The following table presents the summarized financial information about the Company’s consolidated variable interest entities (“VIEs”) before eliminations, which are included in the Consolidated Balance Sheets as of September 30, 2024 and December 31, 2023. All of these entities were determined to be VIEs as the Company possesses the power to direct activities through written agreements and is subject to the risks and rewards as a primary beneficiary:

	September 30, 2024		December 31, 2023
($ in thousands)	Cresco Labs Michigan, LLC		Cresco Labs Michigan, LLC
Current assets	$	14,927	$	15,485
Non-current assets	80,895		75,622
Current liabilities	(1,330)		(1,476)
Non-current liabilities	(134,617)		(124,793)
Non-controlling interests	828		258
Deficit attributable to Cresco Labs Inc.	39,297		34,904

The following table presents the summarized financial information about the Company’s consolidated VIEs before eliminations, which are included in the Unaudited Condensed Interim Consolidated Statements of Operations for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,				Nine Months Ended September 30,
	2024		2023		2024		2023
($ in thousands)	Cresco Labs Michigan, LLC		Cresco Labs Michigan, LLC		Cresco Labs Michigan, LLC		Cresco Labs Michigan, LLC
Revenue	$	5,337	$	8,304	$	16,948	$	18,775
Net loss attributable to non-controlling interests	(233)		(108)		(746)		(265)
Net loss attributable to Cresco Labs Inc.	(1,353)		(396)		(4,388)		(4,468)
Net loss	(1,586)		(503)		(5,134)		(4,732)
NOTE 16.     SEGMENT INFORMATION
---

The Company operates in one segment, the cultivation, manufacturing, distribution, and sale of cannabis. The Chief Executive Officer, President, and Chief Financial Officer of the Company have been identified as the Chief Operating Decision Makers (“CODMs”) and manage the Company’s operations as a whole. For the purpose of evaluating financial performance and allocating resources, the CODMs review certain financial information presented on a consolidated basis accompanied by information disaggregated by wholesale and retail customers and geographic region. For both the three and nine months ended September 30, 2024 and 2023, the Company generated 100.0% of its revenue in the U.S.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023
NOTE 17.     INTEREST EXPENSE, NET
---

Interest expense, net consisted of the following for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Interest expense – notes and loans payable	$	(9,711)	$	(9,711)	$	(28,922)	$	(33,864)
Interest expense – financing activities	(2,875)		(2,923)		(8,680)		(8,822)
Accretion of debt discount and amortization of deferred financing fees	(1,261)		(1,128)		(3,654)		(3,257)
Interest expense – leases	(786)		(871)		(2,374)		(2,691)
Interest income	771		564		2,265		1,482
Other interest (expense) income1	(1,154)		2,305		(1,535)		664
Interest expense, net	$	(15,016)	$	(11,764)	$	(42,900)	$	(46,488)

1For the three months ended September 30, 2024 the Company recorded interest expense of $1.0 million and $0.2 million related to Valley Ag operating cash flows deferred consideration and Keystone contingent consideration, respectively, compared to $2.3 million of interest income related to the Valley Ag operating cash flows deferred consideration for the three months ended September 30, 2023. For the nine months ended September 30, 2024, the Company recorded interest expense of $1.3 million and of $0.2 million, related to Valley Ag operating cash flows deferred consideration and Keystone contingent consideration, respectively. For the nine months ended September 30, 2023 the Company recorded $1.2 million of interest income related to the Valley Ag operating cash flows deferred consideration and $0.8 million of interest expense related to Laurel Harvest deferred consideration. See Note 9 “Acquisitions” for additional information related to deferred and contingent considerations.

See Note 10 “Long-term Notes and Loans Payable, Net” for additional information on Interest expense – notes and loans payable, Accretion of debt discount and amortization of deferred financing fees, and Interest expense – financing activities.

NOTE 18.     PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES

As the Company operates in the cannabis industry, the Company is subject to the limits of IRC Section 280E for U.S. federal income tax purposes as well as some state income tax purposes. Under IRC Section 280E, the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E. Additionally, certain states including Arizona, California, Illinois, Maryland, Massachusetts, Michigan, New York, and Pennsylvania do not conform to IRC Section 280E and, accordingly, the Company generally deducts all operating expenses on its income tax returns in these states.

During the second quarter of 2024, the Company recorded the following significant tax and tax-related items due to uncertain tax positions that its operations are not subject to IRC Section 280E and therefore intends to deduct such expenses with a related uncertain tax liability offsetting such deductions.

•The Company’s tax receivable agreement liability increased by $61.1 million recorded in Other long-term liabilities on the Consolidated Balance Sheets, which was materially driven by this change.

•The Company recorded $25.8 million in Other long-term liabilities on the Consolidated Balance Sheets.

The Company is treated as a United States corporation for U.S. federal income tax purposes under IRC Section 7874 and is subject to U.S. federal income tax on its worldwide income. However, for Canadian tax purposes the Company, regardless of any application of IRC Section 7874, is treated as a Canadian resident company, as defined in the Income Tax Act (Canada), for Canadian income tax purposes. As a result, the Company is subject to taxation both in Canada and the United States.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three and Nine Months Ended September 30, 2024 and 2023

Additionally, the Company recorded an increase to its tax receivable agreement liability by $8.8 million due to normal course exchange activity and the impact of the state of Pennsylvania effectively decoupling from the application of IRC Section 280E beginning for taxable years commencing after December 31, 2023.

During the three months ended September 30, 2024, the Company recorded an additional $14.9 million in Other long-term liabilities on the Consolidated Balance Sheets. No additional material adjustments to the tax receivable agreement liability were recorded.

Provision for income taxes consists of the following for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,						Nine Months Ended September 30,
($ in thousands)	2024			2023			2024			2023
Income (loss) before income taxes	$	11,322		$	(119,191)		$	(13,671)		$	(159,720)
Income tax expense (benefit)	19,016			(5,746)			47,257			25,000
Effective tax rate	168.0		%	4.8		%	(345.7)		%	(15.7)		%
NOTE 19.     SUBSEQUENT EVENTS
---

The Company has evaluated subsequent events through November 8, 2024, which is the date on which these financial statements were issued.

On October 25 2024, the Company repurchased $40.0 million principal amount of our Senior Loan and paid $0.3 million of accrued interest. There were no prepayment penalties or exit fees due on this repurchase. The purpose of this transaction is to reduce the Company’s Senior Loan balance and annual cash interest cost at an amount less than what would have been due at maturity.

39

Document

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE AND NINE MONTHS ENDED SEPTEMBER 30, 2024 AND 2023

This management discussion and analysis (“MD&A”) of the financial condition and results of operations of Cresco Labs Inc. (the “Company,” “Cresco Labs,” “we,” or “our”) is dated November 8, 2024 and has been prepared for the three and nine months ended September 30, 2024 and 2023. It is supplemental to, and should be read in conjunction with, the Company’s audited Consolidated Financial Statements and accompanying notes as of and for the years ended December 31, 2023 and 2022, which were previously filed on SEDAR+ and EDGAR, and the Company's unaudited condensed interim consolidated financial statements and accompanying notes as of and for the three and nine months ended September 30, 2024 and 2023. The Company’s financial statements are prepared in accordance with generally accepted accounting principles in the United States of America (“GAAP”). Financial information presented in this MD&A is presented in United States (“U.S.”) dollars (“USD” or “$”) unless otherwise indicated.

The Company has provided certain supplemental non-GAAP financial measures in this MD&A. Where the Company has provided such non-GAAP financial measures, we have also provided a reconciliation to the most comparable GAAP financial measure. Please see the information under the heading “Non-GAAP Financial Measures” for additional information on the Company’s use of non-GAAP financial measures.

This MD&A contains certain “forward-looking statements” and certain “forward-looking information” as defined under applicable U.S. securities laws and Canadian securities laws. Please refer to the discussion of forward-looking statements and information set out under the heading “Cautionary Statement Regarding Forward-Looking Information,” located at the beginning of the Company’s Annual Information Form for the year ended December 31, 2023, filed on SEDAR+ and EDGAR. As a result of many factors, the Company’s actual results may differ materially from those anticipated in these forward-looking statements and information. Please refer to the discussion of risks and uncertainties set out under the heading “Risk Factors,” located within the Company’s Annual Information Form for the year ended December 31, 2023, filed on SEDAR+ and EDGAR.

OVERVIEW OF THE COMPANY

Cresco Labs was incorporated in the Province of British Columbia on July 6, 1990 and is licensed to cultivate, manufacture and sell cannabis and cannabis-based products. As of September 30, 2024, the Company operates in and/or has subsidiaries located in California, Florida, Illinois, Massachusetts, Michigan, New York, Ohio and Pennsylvania.

Cresco Labs is primarily engaged in the business of cultivating medical-grade cannabis, manufacturing medical- grade products derived from cannabis cultivation, and distributing such products to medical or adult-use consumers in legalized cannabis markets. Cresco Labs exists to provide high-quality and consistent cannabis-based products to consumers. Cresco Labs’ business focuses on regulatory compliance while working to develop condition-specific strains of cannabis and non-invasive delivery methods (alternatives to smoke inhalation) to provide controlled-dosage medicinal cannabis relief to qualified patients and consumers in legalized cannabis markets. As of September 30, 2024, the Company was operating three (3) adult-use and medical cannabis cultivation and manufacturing centers, five (5) adult-use and medical dispensary locations and five (5) adult-use dispensary locations in Illinois; two (2) medical cannabis growing and processing facilities and seventeen (17) medical dispensary locations in Pennsylvania; one (1) adult-use and medical cannabis cultivation and processing center and five (5) adult-use and medical dispensary locations in Ohio; one (1) adult-use and medical cannabis cultivation facility in California; three (3) adult-use and medical cannabis cultivation and manufacturing centers, one (1) medical dispensary location, one (1) adult-use dispensary location and two (2) adult-use and medical dispensary locations in Massachusetts; one (1) medical cannabis manufacturing facility and three (3) medical dispensary locations in New York; one (1) adult-use and medical cannabis facility and processing center in Michigan; and one (1) medical cannabis cultivation and manufacturing facility and thirty-three (33) medical dispensary locations in Florida.

For additional information on wholly-owned or effectively controlled subsidiaries and affiliates of Cresco Labs, refer to Note 2 “Summary of Significant Accounting Policies” under the heading “Basis of Consolidation” of the Company’s Unaudited Condensed Interim Consolidated Financial Statements for the three and nine months ended September 30, 2024 and 2023.

The Company operates its dispensaries under the brand, Sunnyside*®1. Our Sunnyside*dispensaries are home for a judgement-free cannabis shopping experience, where all are welcome to explore, discover and purchase a wide array of high-quality products. As of September 30, 2024, the Company operated ten (10) Sunnyside* dispensaries in Illinois, seventeen (17) Sunnyside* dispensaries in Pennsylvania, five (5) Sunnyside* dispensaries in Ohio, four (4) Sunnyside* dispensaries in Massachusetts, three (3) Sunnyside* dispensaries in New York, and thirty-three (33) Sunnyside* dispensaries in Florida. The Company's portfolio of owned cannabis consumer-packaged goods includes Cresco®1, High Supply®2, Mindy’sTM, Good News®2, RemediTM, Wonder Wellness Co.®2, and FloraCal® Farms2. The Company distributes and markets these products both to third-party licensed retail cannabis stores across the U.S. and to Cresco Labs’ owned retail stores.

Cresco Labs’ new corporate headquarters is located at 600 W. Fulton Street, Suite 800, Chicago, IL 60661 and the registered office is located at Suite 2500, 666 Burrard Street, Vancouver, BC V6C 2X8. The Company employs approximately 3,000 people across the organization as of September 30, 2024.

CORPORATE STRUCTURE

Set forth below is the condensed organization chart of the Company as of November 8, 2024.

				Super Voting Shareholders1<br><br>Thomas Manning<br><br>Robert M. Sampson<br><br>Charles Bachtell<br><br>Brian McCormack
Holders of Subordinate<br><br>Voting Shares					Holders of Proportionate<br><br>Voting Shares
				Cresco Labs Inc.<br><br>[British Columbia]
Holders of Cresco Units						Operating Subsidiaries
		Cresco Corp. Voting Shares
				Cresco U.S. Corp.<br><br>[Illinois]
Cresco <br>Redeemable Units
				Cresco <br>Non-Redeemable Units		Operating Subsidiaries
				Cresco Labs, LLC<br><br>[Illinois]
1 Super Voting Share<br><br>ownership percentages:<br><br>• Thomas Manning - 26.75%<br><br>• Robert M. Sampson - 26.66%<br><br>• Charles Bachtell - 26.59%<br><br>• Brian McCormack - 20.00%			Cresco Labs Notes Issuer, LLC<br><br>[Illinois]
	Operating Subsidiaries

RECENT DEVELOPMENTS

On October 25 2024, the Company repurchased $40.0 million principal amount of our Senior Loan and paid $0.3 million of accrued interest. There were no prepayment penalties or exit fees due on this repurchase. The purpose of this transaction is to reduce the Company’s Senior Loan balance and annual cash interest cost at an amount less than what would have been due at maturity.

On September 12, 2024, the Company announced the retirement of its Chief Financial Officer, Dennis Olis, and planned transition and appointment of Sharon Schuler to succeed as the next Chief Financial Officer.

On August 29 2024, the Company entered into a second amendment the Senior Secured Term Loan Agreement (the“Amended Loan Agreement”). Pursuant to the terms of the Amended Loan Agreement, the Company may from time to time purchase by assignment all or a portion of the lender’s loans, plus applicable accrued and unpaid interest, on the terms and conditions set forth in the Amended Loan Agreement.

On August 6, 2024, following the passage of Issue 2 in November 2023, adult-use cannabis sales began in Ohio following the Division of Cannabis Control issuing certificates of operation to cultivators, processors, testing labs, and an initial group of dispensaries. The Company’s five (5) dispensaries have all been granted certificates of operation to serve both patients and adult-use customers and are operational.

On April 30, 2024, the U.S. Drug Enforcement Administration (“DEA”) publicly recommended that cannabis be rescheduled from a Schedule I controlled substance to a Schedule III controlled substance. The DEA recommendation was reviewed by the White House Office of Management and Budget (“OMB”). Subsequent to OMB’s review, the DEA proposal was published in the federal register; and the formal rule making process began during which the DEA received public comment on its rescheduling plan. After the close of the public comment period, the DEA scheduled a hearing before an Administrative Law Judge (“ALJ”) on December 2, 2024, to consider differing expert opinions on the rescheduling of cannabis. On October 31, 2024, shortly after DEA Administrator Anne Milgram signed off on over two dozen witnesses to participate in the rescheduling hearing, Chief Administrative Law Judge John Mulrooney issued a preliminary order signaling the information provided on those set to testify was insufficient and requesting additional details and potential availability for a formal hearing in January or February 2025. The order from the DEA ALJ says that selected participants must provide such details by November 12, 2024. An initial hearing will still take place on December 2, 2024, but the judge said no testimony or evidence will be taken at the time. Following the anticipated formal hearing in early 2025, the DEA is expected to publish its final rule.

On April 24, 2024, the Company successfully finalized its acquisition of Keystone Integrated Care, LLC for aggregate total consideration of $8.7 million which includes a mix of $3.4 million in cash consideration, $3.0 million of equity and $2.3 million in deferred consideration. Prior to the acquisition, Keystone Integrated Care, LLC operated two (2) dispensaries in Pittsburgh and Greensburg, and held a third dispensary license. With the additional license, the Company has the opportunity to open one (1) more dispensary within the Commonwealth, further expanding our presence and reach and bringing the total number of dispensaries added to three (3).

On April 9, 2024, the Company commenced an offer for a one-time stock option exchange program (the “Option Exchange Program”) to certain employee option holders (“Eligible Participants”) who held certain underwater options and remained employed by the Company through the completion of the Option Exchange Program. The Option Exchange Program was approved by the Company’s shareholders at the Annual General and Special Meeting held on July 10, 2024. Eligible Participants with an outstanding option that had an exercise price equal to or greater than the higher of $3.36 or 1.5 times the closing price at the expiration date, May 6, 2024, had the option to exchange their existing options for a new option that has an exercise price equal to the higher of the closing price of the Company’s SVS as reported on the OTCQX market (the “OTC”) on the new option grant date or the trading day preceding the new option grant date. Eligible Participants had until May 6, 2024, to elect to exchange their existing shares.

On February 9, 2024, the Company announced that as part of a transfer of Super Voting Shares (“MVS”) by both a current and former director of the Company: (a) Thomas J. Manning acquired from Dominic Sergi 100,000 MVS and from Charles Bachtell 33,760 MVS; and (b) Robert M. Sampson acquired from Charles Bachtell 33,308 MVS. Each purchase and sale of MVS was completed for aggregate consideration of $1.00, which were effected in accordance with the Company’s articles. MVS carry enhanced voting power but have no economic rights. After giving effect to the transactions described above, as of September 30, 2024:

•Mr. Bachtell owns or controls, (a) 132,932 MVS (representing approximately 26.59% of the outstanding MVS) and (b) voting securities of the Company representing approximately 19.78% of the votes attaching to all classes of outstanding shares of the Company.

•Mr. Manning owns or controls, (a) 133,760 MVS (representing approximately 26.75% of the outstanding MVS) and (b) voting securities of the Company representing approximately 19.79% of the votes attaching to all classes of outstanding shares of the Company; and

•Mr. Sampson owns or controls, (a) 133,308 MVS (representing approximately 26.66% of the outstanding MVS) and (b) voting securities of the Company representing approximately 19.74% of the votes attaching to all classes of outstanding shares of the Company.

On February 1, 2024, the Company announced the promotion of Greg Butler to the position of President.

COMPONENTS OF OUR RESULTS OF OPERATIONS

Revenue

For the three months ended September 30, 2024 and 2023, 65.5% and 61.9%, respectively, of our revenue was derived from Company-owned retail dispensary locations. Revenue from the wholesale of cannabis products represents the remaining 34.5% and 38.1%, respectively, for the same periods. For the nine months ended September 30, 2024 and 2023, 64.6% and 59.3%, respectively, of our revenue was derived from Company-owned retail dispensary locations. Revenue from the wholesale of cannabis products represents the remaining 35.4% and 40.7%, respectively, for the same periods.

Gross profit

Gross profit is calculated as revenue less cost of goods sold (“COGS”). COGS includes the direct and indirect costs attributable to the cultivation and production of the products sold and is comprised of the following:

•Direct and indirect labor costs: Include all salaries, benefits, and taxes for all employees at the cultivation and manufacturing facilities.

•Direct supplies: Include direct material costs for maintenance of the plant, supplies and nutrients, production expenses including inventory purchases, packaging costs, and equipment used to process marijuana.

•Facility expenses: The facility expenses for the cultivation operations are the cost for the facility, utilities, property taxes, maintenance, and costs associated with monitoring the security systems.

•Other operating expenses: Include all costs associated with the facility itself, including insurance, community benefit fees, professional services related to licenses and compliance, uniforms, employee training programs, tracking and inventory management systems, product testing, business development, information technology, license renewal fees, and certain excise taxes.

In addition to market fluctuations, cannabis costs are affected by various state regulations that limit the sourcing and procurement of cannabis products. The changes in regulatory environments may create fluctuations in gross profit over comparative periods. Additionally, gross profit may include the cost of inventory required to be marked to fair value as part of purchase accounting in a business combination.

Selling, general and administrative expenses (“SG&A”)

SG&A consist of salary and benefit costs of employees, consulting and professional fees, advertising and marketing, legal, accounting fees, office and retail operation costs, share-based compensation, certain excise taxes, technology, insurance, security, travel and entertainment, and rent expense. SG&A is a component of Total operating expenses as discussed in the “Selected Financial Information” section below.

For the three and nine months ended September 30, 2024 and 2023, SG&A was comprised of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Payroll and employee costs	$	31,534	$	31,077	$	95,872	$	109,924
Facility expenses	3,994		4,584		12,373		15,570
Depreciation and amortization	5,702		5,942		16,313		14,560
Excise taxes	1,326		3,633		7,096		11,606
Share-based compensation	2,202		3,479		8,670		10,646
Rental fees	3,201		3,185		9,708		9,945
Consulting and professional fees	2,658		2,718		7,512		8,586
Legal	1,104		2,184		2,842		8,240
Selling and marketing expenses	3,739		2,923		8,201		7,680
Computer and software expense	1,918		2,548		5,792		7,111
Business insurance	1,350		2,590		3,714		7,047
Finance and investor relations expenses	856		726		1,854		1,797
Accounting	1,073		1,203		3,593		3,793
Travel and employee expenses	889		623		2,012		2,320
Other expenses	3,229		4,490		4,670		11,324
Total SG&A	$	64,775	$	71,905	$	190,222	$	230,149

Other (expense) income, net

Other (expense) income, net consists mainly of reoccurring gains (losses) on investments, foreign currency, as well as ad hoc expenses, such as gain (loss) on lease termination, and gain (loss) on disposition of assets. These gains (losses) do not generally correlate to revenue (expense). Other (expense) income, net is added to Interest expense, net, sum to Total other expense, net discussed in the “Selected Financial Information” section below.

For the three and nine months ended September 30, 2024 and 2023, Other (expense) income, net consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Realized loss on financial instruments	$	—	$	—	$	(81)	$	—
Loss on provision - loan receivable	(127)		(62)		(262)		(257)
Unrealized (loss) gain on investments held at fair value	(13)		(123)		3		(422)
(Loss) gain on disposal of assets	(182)		11		(658)		352
Tax receivable agreement expense	3		—		(60,667)		—
(Loss) gain on foreign currency	(189)		205		230		(67)
Gain on lease termination	—		—		—		1,263
Gain on legal settlement	—		—		266		—
Gain on exit operations	—		—		125		—
Gain from insurance proceeds	380		—		1,324		—
Escrow receipt on prior acquisition	29		—		598		—
Other income, net	94		298		465		821
Other (expense) income, net	$	(5)	$	329	$	(58,657)	$	1,690

Interest expense, net

Interest expense, net consists mainly of interest on notes and loans payable, financing activities, leases, accretion of debt discount, amortization of deferred financing fees, and interest income. Interest expense, net is included in Total other expense, net discussed in the “Selected Financial Information” section below.

For the three and nine months ended September 30, 2024 and 2023, Interest expense, net consisted of the following:

	Three Months Ended September 30,				Nine Months Ended September 30,
($ in thousands)	2024		2023		2024		2023
Interest expense – notes and loans payable	$	(9,711)	(9,711)		$	(28,922)	$	(33,864)
Interest expense – financing activities	(2,875)		(2,923)		(8,680)		(8,822)
Accretion of debt discount and amortization of deferred financing fees	(1,261)		(1,128)		(3,654)		(3,257)
Interest expense – leases	(786)		(871)		(2,374)		(2,691)
Interest income	771		564		2,265		1,482
Other interest (expense) income	(1,154)		2,305		(1,535)		664
Interest expense, net	$	(15,016)	$	(11,764)	$	(42,900)	$	(46,488)

Income Taxes

The Company is classified for U.S. federal income tax purposes as a U.S. corporation under Section 7874 of the Internal Revenue Code (“IRC”). The Company is subject to income taxes in the jurisdictions in which it operates and, consequently, income tax expense is a function of the allocation of taxable income by jurisdiction and the various activities that impact the timing of taxable events. As the Company operates in the cannabis industry, the Company is subject to the limits of IRC Section 280E for U.S. federal income tax purposes as well as state income tax purposes. Under IRC Section 280E, the Company is only allowed to deduct expenses directly related to the cost of goods sold. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under IRC Section 280E.

However, beginning in 2024, the Company is taking an uncertain tax position that its operations are not subject to IRC 280E and therefore intends to deduct such expenses with a related uncertain tax liability offsetting such deductions.

Additionally, certain states including Arizona, California, Illinois, Maryland, Massachusetts, Michigan, Pennsylvania, and New York do not conform to IRC Section 280E and, accordingly, the Company generally deducts all operating expenses on its income tax returns in these states.

SELECTED FINANCIAL INFORMATION

The Company reports results of operations of its affiliates from the date that control commences, either through the purchase of the business through a management agreement or through other arrangements that grant such control. The following selected financial information includes only the results of operations after the Company established control of its affiliates. Accordingly, the information included below may not be representative of the results of operations if such affiliates had included their results of operations for the entire reporting period.

Summary of Unaudited Quarterly Results

($ in thousands)	2024						2023								2022
	Q3		Q2		Q1		Q4		Q3		Q2		Q1		Q4
Revenues, net	$	179,783	$	184,356	$	184,295	$	188,237	$	190,559	$	197,887	$	194,202	$	199,580
Income (loss) from operations	26,343		32,380		29,163		27,099		(107,756)		(10,752)		3,586		(143,479)
Net (loss) income attributable to Cresco Labs Inc.	(10,541)		(54,332)		(5,193)		2,635		(115,572)		(36,534)		(26,051)		(161,337)
Basic and Diluted EPS	$	(0.03)	$	(0.16)	$	(0.02)	$	0.01	$	(0.34)	$	(0.12)	$	(0.09)	$	(0.54)

Three Months Ended September 30, 2024 Compared to the Three Months Ended September 30, 2023

The following tables set forth selected consolidated financial information for the periods indicated that are derived from our Unaudited Condensed Interim Consolidated Financial Statements and the respective accompanying notes prepared in accordance with GAAP.

The selected unaudited consolidated financial information set out below may not be indicative of the Company’s future performance:

	Three Months Ended September 30,
($ in thousands)	2024		2023		Change	% Change
Revenues, net	$	179,783	$	190,559		(5.7)	%
Cost of goods sold	86,345		96,919		(10,574)	(10.9)	%
Gross profit	93,438		93,640		(202)	(0.2)	%
Selling, general and administrative	64,775		71,905		(7,130)	(9.9)	%
Impairment loss	2,320		129,491		(127,171)	(98.2)	%
Total operating expenses	67,095		201,396		(134,301)	(66.7)	%
Total other expense, net	(15,021)		(11,435)		(3,586)	31.4	%
Income tax (expense) benefit	(19,016)		5,746		(24,762)	nm
Net loss1	$	(7,694)	$	(113,445)		(93.2)	%

All values are in US Dollars.

1Net loss includes amounts attributable to non-controlling interests.

Revenues, net

Revenue for the three months ended September 30, 2024, decreased $10.8 million, or 5.7%, compared to the three months ended September 30, 2023. The decrease in revenue was primarily driven by price compression and increased competition in Illinois and Michigan markets compared to the prior year period. The decrease was offset by increased volume and pricing in Florida as well as retail growth in Pennsylvania and Ohio compared to the prior year period.

COGS and Gross profit

COGS for the three months ended September 30, 2024, decreased $10.6 million, or 10.9%, compared to the three months ended September 30, 2023. The decrease was primarily attributable to lower sales in Illinois and reduced operations in California and Arizona.

Gross profit decreased by $0.2 million, or 0.2%, for the three months ended September 30, 2024, compared to the three months ended September 30, 2023. The decrease in gross profit was primarily driven by lower sales in Illinois and reduced operations in California and Arizona. As a percentage of revenue, net, gross profit was 52.0% and 49.1% for the three months ended September 30, 2024 and September 30, 2023, respectively. The increase in gross profit as a percentage of revenue, net was driven by a higher percentage of total sales generated from higher margin states and production related efficiencies.

Total operating expenses

Total operating expenses for the three months ended September 30, 2024 decreased $134.3 million, or 66.7% compared to the three months ended September 30, 2023. The decrease was primarily attributable to an impairment taken in the prior year.

Total other expense, net

Total other expense, net for the three months ended September 30, 2024 increased $3.6 million, or 31.4%, compared to the three months ended September 30, 2023. The increase was primarily driven by mark-to-market adjustments related to deferred and contingent considerations.

Provision for income taxes

Income tax expense for the three months ended September 30, 2024 increased $24.8 million, compared to the three months ended September 30, 2023. The increase was primarily due to an increase in expense related to uncertain tax positions.

Net loss

Net loss for the three months ended September 30, 2024 decreased $105.8 million compared to the three months ended September 30, 2023. The change is primarily driven by lower operating expenses.

Nine Months Ended September 30, 2024 Compared to the Nine Months Ended September 30, 2023

The following tables set forth selected consolidated financial information for the periods indicated that are derived from our Unaudited Condensed Interim Consolidated Financial Statements and the respective accompanying notes prepared in accordance with GAAP.

The selected consolidated financial information set out below may not be indicative of the Company’s future performance:

	Nine Months Ended September 30,
($ in thousands)	2024		2023		Change	% Change
Revenues, net	$	548,434	$	582,648		(5.9)	%
Costs of goods sold	268,006		316,428		(48,422)	(15.3)	%
Gross profit	280,428		266,220		14,208	5.3	%
Selling, general and administrative	190,222		230,149		(39,927)	(17.3)	%
Impairment loss	2,320		150,993		(148,673)	(98.5)	%
Total operating expenses	192,542		381,142		(188,600)	(49.5)	%
Total other expense, net	(101,557)		(44,798)		(56,759)	126.7	%
Income tax expense	(47,257)		(25,000)		(22,257)	89.0	%
Net loss1	$	(60,928)	$	(184,720)		(67.0)	%

All values are in US Dollars. 1Net loss includes amounts attributable to non-controlling interests.

Revenues, net

Revenue for the nine months ended September 30, 2024 decreased $34.2 million, or 5.9%, compared to the nine months ended September 30, 2023. The decrease in revenue was primarily driven by increased competition and price promotions in Illinois and Massachusetts, reduced operations in California, along with exiting the Arizona market as compared to the prior year period. This was offset by retail growth in Florida and Pennsylvania driven by new store openings and pricing improvements.

COGS and Gross profit

COGS for the nine months ended September 30, 2024 decreased $48.4 million, or 15.3%, compared to the nine months ended September 30, 2023. The decrease was primarily attributable to lower sales in Illinois and reduced operations in California, Arizona and Maryland.

Gross profit increased by $14.2 million, or 5.3%, for the nine months ended September 30, 2024, compared to the nine months ended September 30, 2023. The increase in gross profit was primarily driven by the restructure of the California operations and production related efficiencies. As a percentage of Revenue, net, gross profit was 51.1% and 45.7% for the nine months ended September 30, 2024 and September 30, 2023, respectively. The increase in gross profit as a percentage of revenue, net was driven by a higher percentage of total sales generated from higher margin states and production related efficiencies related to reduced California, Arizona and Maryland operations.

Total operating expenses

Total operating expenses for the nine months ended September 30, 2024 decreased $188.6 million, or 49.5% compared to the nine months ended September 30, 2023. The decrease was primarily attributable to an impairment taken in the prior year, reductions in payroll and employee costs, including share-based compensation due to restructuring activities.

Total other expense, net

Total other expense, net for the nine months ended September 30, 2024 increased $56.8 million, or 126.7%, compared to the nine months ended September 30, 2023. The increase was primarily driven by an increase in tax receivable agreement expense.

Provision for income taxes

Income tax expense for the nine months ended September 30, 2024 increased $22.3 million, or 89.0%, compared to the nine months ended September 30, 2023. The increase was primarily due to an increase in expense related to uncertain tax positions, offset by certain states decoupling from IRC Section 280E.

Net loss

Net loss for the nine months ended September 30, 2024 decreased $123.8 million compared to the nine months ended September 30, 2023. The decrease in net loss was primarily driven by lower operating expenses and increased gross profit.

NON-GAAP FINANCIAL MEASURES

Earnings before interest, taxes, depreciation, and amortization (“EBITDA”) and Adjusted EBITDA (defined below) are non-GAAP financial measures and do not have standardized definitions under GAAP and may not be comparable to similar measures presented by other issuers. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspectives and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for, or as an alternative to and should only be considered in conjunction with, the GAAP financial measures presented herein. Accordingly, the Company has included below reconciliations of the supplemental non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with GAAP.

	Three Months Ended September 30,							Nine Months Ended September 30,
($ in thousands)	2024		2023		Change	% Change		2024		2023		Change	% Change
Net loss1	$	(7,694)	$	(113,445)		(93.2)	%	$	(60,928)	$	(184,720)		(67.0)	%
Depreciation and amortization	14,932		15,297		(365)	(2.4)	%	45,192		42,260		2,932	6.9	%
Interest expense, net	15,016		11,764		3,252	27.6	%	42,900		46,488		(3,588)	(7.7)	%
Income tax expense (benefit)	19,016		(5,746)		24,762	nm		47,257		25,000		22,257	89.0	%
EBITDA (non-GAAP)	$	41,270	$	(92,130)		(144.8)	%	$	74,421	$	(70,972)		(204.9)	%
Other income (expense), net	5		(329)		334	(101.5)	%	58,657		(1,690)		60,347	nm
Fair value mark-up for acquired inventory	123		—		123	100.0	%	123		—		123	100.0	%
Adjustments for acquisition and other non-core costs	4,759		7,942		(3,183)	(40.1)	%	12,358		27,135		(14,777)	(54.5)	%
Impairment loss	2,320		129,491		(127,171)	(98.2)	%	2,320		150,993		(148,673)	(98.5)	%
Share-based compensation	2,791		4,072		(1,281)	(31.5)	%	10,459		13,339		(2,880)	(21.6)	%
Adjusted EBITDA (non-GAAP)	$	51,268	$	49,046		4.5	%	$	158,338	$	118,805		33.3	%

All values are in US Dollars.

1Net loss includes amounts attributable to non-controlling interests.

Adjusted EBITDA, a non-GAAP financial measure, excludes depreciation and amortization; interest expense, net; income taxes; Other income (expense), net; share-based compensation; and adjustments for acquisition and other non-core costs. Non-core costs include non-operating costs, such as costs related to restructuring, loss on sale of assets, unique legal expenses and other expenses that are mostly one-time in nature. Adjusted EBITDA was $51.3 million for the three months ended September 30, 2024, compared to $49.0 million for the three months ended September 30, 2023. The increase in adjusted EBITDA of $2.2 million is primarily due to a decrease in operating expenses due to cost control initiatives. Adjusted EBITDA was $158.3 million for the nine months ended September 30, 2024, compared to $118.8 million for the nine months ended September 30, 2023. The increase in adjusted EBITDA of $39.5 million is primarily driven by a reduction in payroll and employee costs due to restructuring activities, along with a decrease in operating expenses due to cost control initiatives.

LIQUIDITY AND CAPITAL RESOURCES

Overview

Our primary sources of liquidity are cash and cash equivalents from the operations of our business and debt and equity offerings. Our principal uses of cash include working capital related items, capital expenditures, debt, and tax related payments. Additionally, we may use cash for acquisitions and other investing or financing activities.

As of September 30, 2024, the Company held $153.3 million in Cash and cash equivalents and $6.5 million in Restricted cash, included in both Restricted cash and Other non-current assets on the Unaudited Condensed Interim Consolidated Balance Sheets compared to $103.4 million in Cash and Cash equivalents and $5.1 million in Restricted cash at December 31, 2023.

The Company is generally able to access private and/or public financing through, but not limited to, institutional lenders, such as the Senior Loan of $400.0 million, effective August 12, 2021, and amended on September 22, 2023. JDRC Ellenville, LLC (“Ellenville”), an indirect subsidiary of the Company, entered into a $25.3 million loan on September 26, 2023, secured by real estate and improvements thereto. In addition, the Company has received and has access to private loans through individual investors and private and public equity raises. See “Recent Developments” for additional information on the repurchase of a portion of the Senior Loan.

The Company expects cash on hand and cash flows from operations, along with the private and/or public financing options discussed above, will be adequate to meet capital requirements and operational needs for the next twelve months. We cannot guarantee this will be the case, or that our assumptions regarding revenues and expenses underlying this belief will be accurate. If, in the future, we require more liquidity than contemplated, we may need to raise additional funds through debt and/or equity offerings. Adequate funds may not be available when needed or may not be available on terms favorable to us. If additional funds are raised by issuing equity securities, dilution to existing shareholders may result. If we raise additional funds by obtaining loans from third parties, the terms of those financing arrangements may include negative covenants or other restrictions on our business that could impair our operational flexibility and would also require us to fund additional interest expense. If funding is insufficient at any time in the future, we may be unable to develop or enhance our products or services, take advantage of business opportunities, or respond to competitive pressures, any of which could have a material adverse effect on our business, financial condition, and results of operations.

Cash Flows

Operating Activities

Net cash provided by operating activities was $103.0 million for the nine months ended September 30, 2024, a increase of $41.1 million compared to $61.9 million of net cash provided during the nine months ended September 30, 2023. The $41.1 million increase was primarily attributable to production efficiencies, along with reductions in payroll and employee costs due to restructuring activities, overall cost control initiatives, and a reduction in our income taxes payable related to our updated position on 280E.

Investing Activities

Net cash used in investing activities was $22.2 million for the nine months ended September 30, 2024, a decrease of $25.0 million compared to $47.2 million during the nine months ended September 30, 2023. The decrease in net cash used in investing activities was primarily driven by a decrease in capital expenditures, partially offset by an increase in operating license intangibles expenditures, acquisition related considerations, and proceeds from disposals.

Financing Activities

Net cash used in financing activities was $29.4 million for the nine months ended September 30, 2024, an increase of $6.3 million compared to $23.1 million for the nine months ended September 30, 2023. The increase was primarily driven by proceeds from issuance of loan term debt in the prior year, offset by decreases in distributions to non-controlling interest redeemable unit holders and other members, including related parties and acquisition related contingent consideration transactions in the current period.

OFF-BALANCE SHEET ARRANGEMENTS

The Company does not have any off-balance sheet arrangements that have, or are reasonably likely to have a current or future effect on financial performance or financial condition, including without limitation, such considerations as liquidity and capital resources.

CONTRACTUAL OBLIGATIONS

The Company has the following contractual obligations as of September 30, 2024:

($ in thousands)	< 1 Year		1 to 3 Years		3 to 5 Years		> 5 Years		Total
Accounts payable & Accrued liabilities	$	74,279	$	—	$	—	$	—	$	74,279
Deferred and contingent consideration, short-term	2,662		—		—		—		2,662
Operating leases liabilities	29,363		59,160		59,107		140,028		287,658
Finance lease liabilities	4,995		10,332		10,277		14,494		40,098
Deferred and contingent consideration, long-term	—		7,689		—		—		7,689
Short-term borrowings and Long-term notes and loans payable	33,612		428,627		29,801		110,646		602,686
Tax receivable agreement liability	5,357		10,891		11,329		56,880		84,457
Other long-term liabilities	—		8,510		—		—		8,510
Total obligations as of September 30, 2024	$	150,268	$	525,209	$	110,514	$	322,048	$	1,108,039

RELATED PARTY TRANSACTIONS

See Note 12 “Related Party Transactions” in the Unaudited Condensed Interim Consolidated Financial Statements for the Company’s disclosures on related party transactions.

FINANCIAL INSTRUMENTS AND FINANCIAL RISK MANAGEMENT

The Company is exposed in varying degrees to a variety of financial instrument related risks. The Board of Directors and Company management mitigate these risks by assessing, monitoring, and approving the Company’s risk management processes. See Note 14 “Financial Instruments and Financial Risk Management” in the Unaudited Condensed Interim Consolidated Financial Statements for the Company’s disclosures on financial instruments and financial risk management.

SUMMARY OF OUTSTANDING SHARE AND SHARE-BASED DATA

Cresco Labs has the following securities issued and outstanding, as of September 30, 2024:

Securities	Number of Shares<br><br>(in thousands)
Super Voting Shares	500
Subordinate Voting Shares1	330,047
Proportionate Voting Shares2	17,662
Special Subordinate Voting Shares3	2
Redeemable Units4	92,805

1 SVS includes shares pending issuance or cancellation

2 PVS presented on an “as-converted” basis to SVS (1-to-200)

3 SSVS presented on an “as-converted” basis to SVS (1-to-0.00001)

4 Redeemable units of Cresco Labs, LLC (“Redeemable Units”)

FEDERAL REGULATORY ENVIRONMENT

In accordance with the Canadian Securities Administrators Staff Notice 51-352 – Issuers with U.S. Marijuana-Related Activities (“Staff Notice 51-352”), information regarding the current U.S. federal regulatory environment is disclosed in the Company’s 2023 Annual MD&A filed on SEDAR+ and EDGAR under the heading “Federal Regulatory Environment,” which section is incorporated by reference herein. The Company will evaluate, monitor and reassess the disclosures contained herein, and incorporated by reference herein, and any related risks, on an ongoing basis and the same will be supplemented, amended and communicated to investors in public filings, including in the event of government policy changes or the introduction of new or amended guidance, laws or regulations regarding marijuana regulation.

THE STATES IN WHICH WE OPERATE, THEIR LEGAL FRAMEWORK AND HOW IT AFFECTS OUR BUSINESS

The Company currently derives a substantial portion of its revenues from the cannabis industry in certain U.S. states, which industry is illegal under U.S. federal law. As of November 8, 2024, the Company believes its operations are in material compliance with all applicable local laws, regulations, and licensing requirements in the states in which we operate.

In accordance with Staff Notice 51-352, information regarding the states that the Company operates in, their legal frameworks and how it affects the Company's business, is disclosed in the Company’s 2023 Annual MD&A filed on SEDAR+ and EDGAR under the heading, “The States in Which We Operate, Their Legal Framework and How It Affects Our Business,” which section is incorporated by reference herein.

For more information about risks related to the U.S. marijuana operations, refer to the discussion of risks and uncertainties set out under the heading “Risk Factors,” located within the Company’s Annual Information Form for the year ended December 31, 2023, filed on SEDAR+ and EDGAR. Additional information relating to the Company, including the Company’s Annual Information Form for the year ended December 31, 2023, is available on SEDAR+ at www.sedarplus.ca.

15

Document

Cresco Labs

Page 1 of 9

Exhibit 99.3

Cresco Labs Underlines the Successful Strategy Focused on Cash Flow with Third Quarter 2024 Financial Results

Record quarterly operating cash flow of $49 million and year to date operating cashflow of $103 million, an increase of 66% from the prior year period

CHICAGO – November 8, 2024 – Cresco Labs Inc. (CSE: CL) (OTCQX: CRLBF) (FSE: 6CQ) (“Cresco Labs” or the “Company”), the industry leader in branded cannabis products with a portfolio of America’s most popular brands and the operator of Sunnyside dispensaries, today released its financial and operating results for the third quarter ended September 30, 2024. All financial information presented in this release is reported in accordance with U.S. GAAP and in U.S. dollars, unless otherwise indicated, and is available on the Company’s investor website, here.

Third Quarter 2024 Highlights

•Third quarter revenue of $180 million.

•Gross profit of $93 million. Adjusted gross profit1 of $95 million; and an Adjusted gross margin1 of 53% of revenue, a 250 bps improvement year-over-year.

•SG&A of $57 million. Reduced Adjusted SG&A1 by 6% year-over-year to $53 million, or 30% of revenue.

•Net loss of $8 million.

•Third quarter Adjusted EBITDA1 of $51 million, up 5% year-over-year; and Adjusted EBITDA margin1 of 29%, a 280 bps improvement year-over-year.

•Record third quarter operating cash flow of $49 million and Free Cash Flow1 of $43 million.

•Retained the No. 1 share position in Illinois, Pennsylvania and Massachusetts and improved to a top 3 position in Ohio2.

Management Commentary

“Our focus remains the same, win in strategic markets with a brand portfolio consumers love, provide best-in-class retail operations and maintain a relentless pursuit of financial strength. Our Q3 results underline the success of this strategy with $180 million in revenue at 29% adjusted EBITDA margin1, and most importantly $49 million of operating cashflow, our highest ever.

“So far this year, we’ve generated $103 million in operating cashflow, enabling us to reinvest in our core, and to explore new markets and growth verticals, all while improving our balance sheet and paying down debt.

“While we’re disappointed that the Florida initiative didn’t reach the super majority threshold it needed to pass, we still saw substantial bipartisan majority support at 56% for cannabis legalization. For the first time ever, we had two presidential candidates that both supported broad federal cannabis reform. We look forward to working with the incoming administration to follow through on its commitment to developing a commonsense approach to cannabis laws including the passage of SAFE banking, rescheduling, and the fact that no one should be arrested for personal cannabis use,” said Charlie Bachtell, Cresco Labs CEO and co-founder.

1 See “Non-GAAP Financial Measures” at the end of this press release for more information regarding the Company’s use of non-GAAP financial measures.

2 According to BDSA.

Cresco Labs

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Exhibit 99.3

Balance Sheet, Liquidity and Other Financial Information

•As of September 30, 2024, current assets were $312 million, including cash, cash equivalents and restricted cash of $157 million. The Company had senior secured term loan debt, net of discount and issuance costs, of $390 million and a mortgage loan, net of discount and issuance costs of $18 million.

•On October 25, 2024, the Company repurchased $40 million principal amount of our Senior Loan and paid $0.3 million of accrued Interest. There were no prepayment penalties or exit fees due on this repurchase.

•Total shares on a fully converted basis to Subordinate Voting Shares were 474,731,040 as of September 30, 2024.

Conference Call and Webcast

The Company will host a conference call and webcast to discuss its financial results on Friday, November 8, 2024, at 8:30am Eastern Time (7:30am Central Time). The conference call may be accessed via webcast or by dialing 1-833-470-1428 (US Toll Free) or 1-404-975-4839 (US Local), providing access code 435112. Archived access to the webcast will be available for one year on Cresco Labs’ investor website.

Consolidated Financial Statements

The financial information reported in this press release is based on unaudited management prepared financial statements for the quarter ended September 30, 2024. These financial statements have been prepared in accordance with U.S. GAAP. The Company expects to file its unaudited condensed interim consolidated financial statements for the quarter ended September 30, 2024, on SEDAR+ and EDGAR on or about November 8, 2024. Accordingly, such financial information may be subject to change. All financial information contained in this press release is qualified in its entirety with reference to such financial statements. While the Company does not expect there to be any material changes between the information contained in this press release and the consolidated financial statements it files on SEDAR+ and EDGAR, to the extent that the financial information contained in this press release is inconsistent with the information contained in the Company’s financial statements, the financial information contained in this press release shall be deemed to be modified or superseded by the Company’s filed financial statements. The making of a modifying or superseding statement shall not be deemed an admission, for any purposes, that the modified or superseded statement, when made, constituted a misrepresentation for purposes of applicable securities laws. Further, the reader should refer to the additional disclosures in the Company’s audited financial statements for the year ended December 31, 2023, previously filed on SEDAR+ and EDGAR.

Cresco Labs references certain non-GAAP financial measures throughout this press release, which may not be comparable to similar measures presented by other issuers. Please see the “Non-GAAP Financial Measures” section below for more detailed information.

Non-GAAP Financial Measures

This release reports its financial results in accordance with U.S. GAAP and includes certain non-GAAP financial measures that do not have standardized definitions under U.S. GAAP. The non-GAAP measures include: Earnings before interest, taxes, depreciation and amortization (“EBITDA”); Adjusted EBITDA; Adjusted EBITDA margin; Adjusted gross profit; Adjusted gross profit margin; Adjusted selling, general and administrative expenses (“Adjusted SG&A”), Adjusted SG&A margin; and Free Cash Flow are non-GAAP financial measures and do not have standardized definitions under U.S. GAAP. The Company

Cresco Labs

Page 3 of 9

Exhibit 99.3

defines these non-GAAP financial measures as follows: EBITDA as net loss (income) before interest, taxes, depreciation and amortization; Adjusted EBITDA as EBITDA less other (expense) income, net, fair value mark-up for acquired inventory, adjustments for acquisition and non-core costs, impairment and share-based compensation; Adjusted EBITDA Margin as Adjusted EBITDA divided by revenues, net; Adjusted gross profit as gross profit less fair value mark-up for acquired inventory and adjustments for acquisition and non-core costs; Adjusted gross profit margin as Adjusted gross profit divided by revenues, net; Adjusted SG&A as SG&A less adjustments for acquisition and non-core costs; Adjusted SG&A margin as Adjusted SG&A divided by revenues, net; and Free Cash Flow as Net cash provided by operating activities less purchases of property and equipment and proceeds from tenant improvement allowances. The Company has provided the non-GAAP financial measures, which are not calculated or presented in accordance with U.S. GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with U.S. GAAP and may not be comparable to similar measures presented by other issuers. These supplemental non-GAAP financial measures are presented because management has evaluated the financial results both including and excluding the adjusted items and believe that the supplemental non-GAAP financial measures presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measures should not be considered superior to, as a substitute for or as an alternative to, and should only be considered in conjunction with, the U.S. GAAP financial measures presented herein. Accordingly, the Company has included below reconciliations of the supplemental non-GAAP financial measures to the most directly comparable financial measures calculated and presented in accordance with U.S. GAAP.

About Cresco Labs Inc.

Cresco Labs’ mission is to normalize and professionalize the cannabis industry through a CPG approach to building national brands and a customer-focused retail experience, while acting as a steward for the industry on legislative and regulatory-focused initiatives. As a leader in cultivation, production and branded product distribution, the Company is leveraging its scale and agility to grow its portfolio of brands that include Cresco, High Supply, FloraCal, Good News, Wonder Wellness Co., Mindy’s and Remedi, on a national level. The Company also operates highly productive dispensaries nationally under the Sunnyside brand that focus on building patient and consumer trust and delivering ongoing education and convenience in a wonderfully traditional retail experience. Through year-round policy, community outreach and SEED initiative efforts, Cresco Labs embraces the responsibility to support communities through authentic engagement, economic opportunity, investment, workforce development and legislative initiatives designed to create the most responsible, respectable and robust cannabis industry possible. Learn more about Cresco Labs’ journey by visiting www.crescolabs.com or following the Company on Facebook, X or LinkedIn.

Forward-Looking Statements

This press release contains “forward-looking information” within the meaning of applicable Canadian securities legislation and may also contain statements that may constitute “forward-looking statements” within the meaning of the safe harbor provisions of the United States Private Securities Litigation Reform Act of 1995 (collectively, “forward-looking statements”). Such forward-looking statements are not representative of historical facts or information or current condition, but instead represent only the Company’s beliefs regarding future events, plans or objectives, many of which, by their nature, are inherently uncertain and outside of the Company’s control. Generally, such forward-looking statements can be identified by the use of forward-looking terminology such as, ‘may,’ ‘will,’ ‘should,’ ‘could,’ ‘would,’ ‘expects,’ ‘plans,’ ‘anticipates,’ ‘believes,’ ‘estimates,’ ‘projects,’ ‘predicts,’ ‘potential’ or ‘continue’ or the negative of those forms or other comparable terms. The Company’s forward-looking

Cresco Labs

Page 4 of 9

Exhibit 99.3

statements involve known and unknown risks, uncertainties and other factors which may cause the Company’s actual results, performance or achievements to be materially different from any future results, performance or achievements expressed or implied by the forward-looking statements, including but not limited to those risks discussed under “Risk Factors” in the Company’s Annual Information Form for the year ended December 31, 2023, filed on SEDAR+ and EDGAR, other documents filed by the Company with Canadian securities regulatory authorities; and other factors, many of which are beyond the control of the Company. Readers are cautioned that the foregoing list of factors is not exhaustive. Because of these uncertainties, you should not place undue reliance on the Company’s forward-looking statements. No assurances are given as to the future trading price or trading volumes of Cresco Labs’ shares, nor as to the Company’s financial performance in future financial periods. The Company does not intend to update any of these factors or to publicly announce the result of any revisions to any of the Company’s forward-looking statements contained herein, whether as a result of new information, any future event or otherwise. Except as otherwise indicated, this press release speaks as of the date hereof. The distribution of this press release does not imply that there has been no change in the affairs of the Company after the date hereof or create any duty or commitment to update or supplement any information provided in this press release or otherwise.

Cresco Labs

Page 5 of 9

Exhibit 99.3

Cresco Labs Inc.
Financial Information and Non-GAAP Reconciliations
(All amounts expressed in thousands of U.S. Dollars)
Unaudited Consolidated Statements of Operations
For the Three Months Ended September 30, 2024, June 30, 2024 and September 30, 2023
	For the Three Months Ended
($ in thousands)	September 30,<br>2024			June 30,<br>2024			September 30,<br>2023
Revenues, net	$	179,783		$	184,356		$	190,559
Cost of goods sold	86,345			89,578			96,919
Gross profit	93,438			94,778			93,640
Gross profit %	52.0		%	51.4		%	49.1		%
Operating expenses:
Selling, general and administrative	56,871			54,355			62,484
Share-based compensation	2,202			2,854			3,479
Depreciation and amortization	5,702			5,189			5,942
Impairment loss	2,320			—			129,491
Total operating expenses	67,095			62,398			201,396
Income (loss) from operations	26,343			32,380			(107,756)
Other (expense) income, net:
Interest expense, net	(15,016)			(13,813)			(11,764)
Other (expense) income, net	(5)			(59,508)			329
Total other expense, net	(15,021)			(73,321)			(11,435)
Income (loss) before income taxes	11,322			(40,941)			(119,191)
Income tax (expense) benefit	(19,016)			(10,238)			5,746
Net loss1	$	(7,694)		$	(51,179)		$	(113,445)
1 Net loss includes amounts attributable to non-controlling interests.
Cresco Labs
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Page 6 of 9

Exhibit 99.3

Cresco Labs Inc.
Unaudited Reconciliation of Gross Profit to Adjusted Gross Profit (Non-GAAP)
For the Three Months Ended September 30, 2024, June 30, 2024 and September 30, 2023
	For the Three Months Ended
($ in thousands)	September 30,<br>2024			June 30,<br>2024			September 30,<br>2023
Revenues, net	$	179,783		$	184,356		$	190,559
Cost of goods sold1	86,345			89,578			96,919
Gross profit	$	93,438		$	94,778		$	93,640
Fair value mark-up for acquired inventory	123			—			—
Cost of goods sold adjustments for acquisition and other non-core costs	1,783			1,881			2,602
Adjusted gross profit (Non-GAAP)	$	95,344		$	96,659		$	96,242
Adjusted gross profit % (Non-GAAP)	53.0		%	52.4		%	50.5		%
1 Production (cultivation, manufacturing and processing) costs related to products sold during the period.
Cresco Labs Inc.
---	---	---	---	---
Summarized Consolidated Statements of Financial Position
As of September 30, 2024 and December 31, 2023
($ in thousands)	September 30, 2024		December 31, 2023
	(unaudited)
Cash, cash equivalents and restricted cash (current)	$	156,555	$	108,520
Other current assets	155,363		169,567
Property and equipment, net	352,327		368,308
Intangible assets, net	295,646		296,966
Goodwill	283,634		279,697
Other non-current assets	139,407		135,409
Total assets	$	1,382,932	$	1,358,467
Total current liabilities	$	158,569	$	200,242
Total non-current liabilities	858,996		730,158
Total shareholders’ equity	365,367		428,067
Total liabilities and shareholders’ equity	$	1,382,932	$	1,358,467
Cresco Labs
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Page 7 of 9

Exhibit 99.3

Cresco Labs Inc.
Unaudited Reconciliation of SG&A to Adjusted SG&A (Non-GAAP)
For the Three Months Ended September 30, 2024, June 30, 2024 and September 30, 2023
	For the Three Months Ended
($ in thousands)	September 30,<br>2024			June 30,<br>2024			September 30,<br>2023
Selling, general and administrative	$	56,871		$	54,355		$	62,484
Adjustments for acquisition and other non-core costs	3,427			1,633			5,457
Adjusted SG&A (Non-GAAP)	$	53,444		$	52,722		$	57,027
Adjusted SG&A % (Non-GAAP)	29.7		%	28.6		%	29.9		%
Cresco Labs Inc.
---	---	---	---	---	---	---	---	---	---
Unaudited Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP)
For the Three Months Ended September 30, 2024, June 30, 2024 and September 30, 2023
	For the Three Months Ended
($ in thousands)	September 30,<br>2024			June 30,<br>2024			September 30,<br>2023
Net loss1	$	(7,694)		$	(51,179)		$	(113,445)
Depreciation and amortization	14,932			14,930			15,297
Interest expense, net	15,016			13,813			11,764
Income tax expense (benefit)	19,016			10,238			(5,746)
EBITDA (Non-GAAP)	$	41,270		$	(12,198)		$	(92,130)
Other expense (income), net	5			59,508			(329)
Fair value mark-up for acquired inventory	123			—			—
Adjustments for acquisition and other non-core costs	4,759			3,129			7,942
Impairment loss	2,320			—			129,491
Share-based compensation	2,791			3,471			4,072
Adjusted EBITDA (Non-GAAP)	$	51,268		$	53,910		$	49,046
Adjusted EBITDA % (Non-GAAP)	28.5		%	29.2		%	25.7		%
1 Net loss includes amounts attributable to non-controlling interests.
Cresco Labs
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Page 8 of 9

Exhibit 99.3

Cresco Labs Inc.
Unaudited Summarized Consolidated Statements of Cash Flows
For the Three Months Ended September 30, 2024, June 30, 2024 and September 30, 2023
( in thousands)	September 30,<br>2024		June 30,<br>2024		September 30,<br>2023
Net cash provided by operating activities	$	49,363	$	17,160	$	40,622
Net cash used in investing activities	(6,269)		(10,270)		(12,476)
Net cash (used in) provided by financing activities	(2,464)		(15,831)		10,052
Effect of foreign currency exchange rate changes on cash and cash equivalents	(25)		(10)		7
Net change in cash and cash equivalents and restricted cash	$	40,605	$	(8,951)	$	38,205
Cash and cash equivalents and restricted cash, beginning of period	119,201		128,152		74,811
Cash and cash equivalents and restricted cash, end of period	$	159,806	$	119,201	$	113,016

All values are in US Dollars.

Cresco Labs Inc.
Unaudited Reconciliation of Operating Cash Flow to Free Cash Flow (Non-GAAP)
For the Three Months Ended September 30, 2024, June 30, 2024 and September 30, 2023
	For the Three Months Ended
($ in thousands)	September 30,<br>2024		June 30,<br>2024		September 30,<br>2023
Net cash provided by operating activities	$	49,363	$	17,160	$	40,622
Purchases of property and equipment	(6,072)		(6,434)		(12,452)
Proceeds from tenant improvement allowances	32		106		733
Free Cash Flow (Non-GAAP)	$	43,323	$	10,832	$	28,903
Cresco Labs
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Page 9 of 9

Exhibit 99.3

Contacts

Media

Jason Erkes, Cresco Labs

Chief Communications Officer

[email protected]

312-953-2767

Investors

TJ Cole, Cresco Labs

SVP, Corporate Development & Investor Relations

[email protected]

For general Cresco Labs inquiries:

312-929-0993

[email protected]