6-K - CRLBF - Equibles

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 May, 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 months ended March 31, 2024 and 2023
99.2	Management Discussion and Analysis of Financial Condition and Results of Operations for the three months ended March 31, 2024 and 2023
99.3	News Release dated May 15, 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: May 15, 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 AND FOR THE THREE MONTHS ENDED

MARCH 31, 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:
---	---
ConsolidatedBalance Sheets as of March 31, 2024 and December 31, 2023	2
ConsolidatedStatements of Operationsfor the three months ended March 31, 2024 and March 31, 2023	3
ConsolidatedStatements of ComprehensiveLoss for the three months ended March 31, 2024 and March 31, 2023	4
ConsolidatedStatements of Changes in Shareholders’ Equity for the three months ended March 31, 2024 and March 31, 2023	5
ConsolidatedStatements of Cash Flows for the three months ended March 31, 2024 and March 31, 2023	6
Notes to theUnaudited Condensed Interim ConsolidatedFinancial Statements:
Note 1. Nature of Operations	7
Note 2. Summary of Significant Accounting Policies	7
Note 3. Inventory	10
Note 4. Property and Equipment	11
Note 5. Intangible Assets and Goodwill	12
Note 6. Share Capital	13
Note 7. Share-Based Compensation	16
Note 8. Loss Per Share	18
Note 9. Long-term Notes and Loans Payable, Net	18
Note 10. Revenues and Loyalty Programs	20
Note 11. Related Party Transactions	20
Note 12. Commitments and Contingencies	21
Note 13. Financial Instruments and Financial Risk Management	22
Note 14. Variable Interest Entities	29
Note 15. Segment Information	30
Note 16. Interest Expense, Net	30
Note 17. Provision for Income Taxes and Deferred Income Taxes	30
Note 18. Subsequent Events	31
Cresco Labs Inc.<br><br>Unaudited Condensed Interim Consolidated Balance Sheets<br><br>As of March 31, 2024 and December 31, 2023<br><br>(In thousands of United States Dollars, except share amounts)
---			March 31,		December 31,
---	---	---	---	---
	2024		2023
ASSETS
Current assets:
Cash and cash equivalents	$	123,155	$	103,429
Restricted cash	1,746		5,091
Accounts receivable, net	49,828		51,070
Inventory, net	98,390		107,789
Loans receivable, short-term	1,432		1,421
Prepaid expenses	7,588		6,417
Other current assets	2,944		2,870
Total current assets	285,083		278,087
Non-current assets:
Property and equipment, net	359,984		368,308
Right-of-use assets	117,298		117,882
Intangible assets, net	298,069		296,966
Loans receivable, long-term	826		826
Investments	666		730
Goodwill	279,697		279,697
Deferred tax asset	10,732		11,547
Other non-current assets	7,710		4,424
Total non-current assets	1,074,982		1,080,380
TOTAL ASSETS	$	1,360,065	$	1,358,467
LIABILITIES AND SHAREHOLDERS’ EQUITY
Current liabilities:
Accounts payable	$	17,403	$	27,587
Accrued liabilities	61,921		69,079
Short-term borrowings	21,670		11,817
Income taxes payable	98,060		82,343
Current portion of lease liabilities	10,100		9,416
Total current liabilities	209,154		200,242
Non-current liabilities:
Long-term notes and loans payable, net	497,999		497,713
Lease liabilities	163,254		163,811
Deferred tax liability	40,976		40,457
Deferred consideration, long-term	6,881		6,577
Other long-term liabilities	21,829		21,600
Total non-current liabilities	730,939		730,158
TOTAL LIABILITIES	$	940,093	$	930,400
COMMITMENTS AND CONTINGENCIES (Note 12)
SHAREHOLDERS’ EQUITY
Super Voting Shares, no par value; 500,000 shares authorized, issued and outstanding at March 31, 2024 and December 31, 2023
Subordinate Voting Shares, no par value; Unlimited shares authorized; 324,397,801 and 320,757,119 issued and outstanding at March 31, 2024 and December 31, 2023, respectively
Proportionate Voting Shares1, no par value; Unlimited shares authorized; 17,780,624 and 18,949,596 issued and outstanding at March 31, 2024 and December 31, 2023, respectively
Special Subordinate Voting Shares2, no par value; 1,589 shares authorized, issued and outstanding at March 31, 2024 and December 31, 2023
Share capital	1,695,565		1,689,452
Additional paid-in-capital	82,823		82,927
Accumulated other comprehensive loss	(1,464)		(1,151)
Accumulated deficit	(1,273,618)		(1,265,536)
Equity of Cresco Labs Inc.	503,306		505,692
Non-controlling interests	(83,334)		(77,625)
TOTAL SHAREHOLDERS’ EQUITY	419,972		428,067
TOTAL LIABILITIES AND SHAREHOLDERS’ EQUITY	$	1,360,065	$	1,358,467

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

2 Special 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 Months Ended March 31, 2024 and 2023<br><br>(In thousands of United States Dollars, except share and per share amounts)
	Three Months Ended March 31,
---	---	---	---
		2024		2023
Revenues, net		$	184,295	$	194,202
Costs of goods sold		92,083		108,322
Gross profit		92,212		85,880
Operating expenses:
Selling, general and administrative		63,049		82,294
Total operating expenses		63,049		82,294
Income from operations		29,163		3,586
Other income (expense), net:
Interest expense, net		(14,071)		(15,548)
Other income, net		856		959
Total other expense, net		(13,215)		(14,589)
Income (loss) before income taxes		15,948		(11,003)
Income tax expense		(18,003)		(16,809)
Net loss		$	(2,055)	$	(27,812)
Net income (loss) attributable to non-controlling interests, net of tax		3,138		(1,761)
Net loss attributable to Cresco Labs Inc.		$	(5,193)	$	(26,051)
Net loss per share - attributable to Cresco Labs Inc. shareholders:
Basic and diluted loss per share		$	(0.02)	$	(0.09)
Basic and diluted weighted-average number of shares outstanding		341,631,554		304,708,692

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

| Cresco Labs Inc. Unaudited Condensed Interim Consolidated Statements of Comprehensive Loss For the Three Months Ended March 31, 2024 and 2023 (In thousands of United States Dollars) | | --- || | Three Months Ended March 31, | | | | --- | --- | --- | --- | | | | 2024 | | 2023 | | | Net loss | | $ | (2,055) | $ | (27,812) | | Foreign currency translation differences, net of tax | | (313) | | 7 | | | Total comprehensive loss for the period | | (2,368) | | (27,805) | | | Comprehensive income (loss) attributable to non-controlling interests, net of tax | | 3,138 | | (1,761) | | | Total comprehensive loss attributable to Cresco Labs Inc. | | $ | (5,506) | $ | (26,044) |

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 Months Ended March 31, 2024 and 2023<br><br>(In thousands of United States Dollars)
	Share capital		Additional paid-in capital		Accumulated other comprehensive loss, 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 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
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

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

| Cresco Labs Inc. Unaudited Condensed Interim Consolidated Statements of Cash Flows For the Three Months Ended March 31, 2024 and 2023 (In thousands of United States Dollars) | | --- || | Three Months Ended March 31, | | | | | --- | --- | --- | --- | --- | | | 2024 | | 2023 | | | CASH FLOWS FROM OPERATING ACTIVITIES: | | | | | | Net loss | $ | (2,055) | $ | (27,812) | | Adjustments to reconcile net loss to net cash provided by operating activities: | | | | | | Depreciation and amortization | 15,331 | | 12,961 | | | Amortization of operating lease assets | 1,964 | | 1,685 | | | Bad debt expense (recovery) and provision expense for expected credit loss | (263) | | 2,945 | | | Share-based compensation expense | 4,197 | | 7,062 | | | Loss on investments | 63 | | 37 | | | Loss on changes in fair value of deferred consideration | — | | 1,204 | | | Loss on inventory write-offs and provision | 4,900 | | 1,460 | | | Change in deferred taxes | 941 | | (987) | | | Accretion of discount and deferred financing costs on debt arrangements | 1,180 | | 1,044 | | | Foreign currency (gain) loss | (298) | | 31 | | | (Gain) loss on sale of assets | (110) | | 66 | | | Gain on lease termination | — | | (1,135) | | | Loss on other adjustments to net income | 24 | | 92 | | | Changes in operating assets and liabilities: | | | | | | Accounts receivable | 1,959 | | 3,817 | | | Inventory | 2,681 | | 297 | | | Prepaid and other assets | (1,285) | | 1,687 | | | Accounts payable and other accrued liabilities | (6,909) | | 20,132 | | | Operating lease liabilities | (1,908) | | (6,868) | | | Income taxes payable | 16,059 | | (14,448) | | | NET CASH PROVIDED BY OPERATING ACTIVITIES | 36,471 | | 3,270 | | | CASH FLOWS FROM INVESTING ACTIVITIES: | | | | | | Purchases of property and equipment | (3,782) | | (20,546) | | | Purchase of intangibles | (2,770) | | (603) | | | Proceeds from tenant improvement allowances | 478 | | 437 | | | Proceeds from sale and disposals of assets | 397 | | 44 | | | NET CASH USED IN INVESTING ACTIVITIES | (5,677) | | (20,668) | | | CASH FLOWS FROM FINANCING ACTIVITIES: | | | | | | Proceeds from exercise of stock options | 2 | | — | | | Payment of acquisition-related contingent consideration | — | | (277) | | | Payment for equity transfer | (200) | | — | | | Excess cash distributions to non-controlling interest redeemable unit holders and other members | (1,082) | | (180) | | | Tax distributions to non-controlling interest redeemable unit holders and other members | (8,766) | | (12,403) | | | Principal payment of property, plant, and equipment vendor financing | (218) | | — | | | Principal payments on finance lease obligations | (885) | | (775) | | | NET CASH USED IN FINANCING ACTIVITIES | (11,149) | | (13,635) | | | Effect of exchange rate changes on cash and cash equivalents | (13) | | (25) | | | Net increase (decrease) in cash and cash equivalents | 19,632 | | (31,058) | | | Cash and cash equivalents and restricted cash, beginning of period | 108,520 | | 121,510 | | | Cash and cash equivalents, end of period | 123,155 | | 88,799 | | | Restricted cash, end of period | 1,746 | | 1,653 | | | Restricted cash included in other non-current assets, end of period | 3,251 | | — | | | Cash and cash equivalents and restricted cash, end of period | $ | 128,152 | $ | 90,452 | | SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION: | | | | | | CASH PAID DURING THE PERIOD FOR: | | | | | | Income tax, net | $ | 1,003 | $ | 32,242 | | Interest | 3,708 | | 3,911 | | | NON-CASH INVESTING AND FINANCING TRANSACTIONS: | | | | | | Non-cash consideration for business combination | $ | — | $ | 9,723 | | Non-controlling interests redeemed for equity | 1,001 | | 624 | | | Increase to net lease liability | — | | 394 | | | Receivable due from seller of previous acquisition | 705 | | 705 | | | Liability incurred to purchase property, equipment and intangibles | 1,104 | | 10,069 | | | Liability of property, plant and equipment purchased through vendor financing | 830 | | 1,655 | | | Unpaid declared distributions to non-controlling interest redeemable unit holders | 10,322 | | 9,948 | | | Receivable related to financing lease transactions | 612 | | 612 | | | Liability incurred in accordance with tax receivable agreement | 14,509 | | 1,053 | |

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 Months Ended March 31, 2024 and 2023
NOTE 1. NATURE OF OPERATIONS
---

Cresco Labs Inc. (“Cresco Labs” or the “Company”), formerly known as Randsburg International Gold Corp. (“Randsburg”) 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 March 31, 2024, the Company operates in Illinois, Pennsylvania, Ohio, California, New York, Massachusetts, Michigan and Florida pursuant to the Illinois Compassionate Use of Medical Cannabis Program Act and the Illinois Cannabis Regulation and Tax Act; the Pennsylvania Medical Marijuana Act; the Ohio Medical Marijuana Control Program; the California Medicinal and Adult-Use Cannabis Regulation and Safety Act; the New York Marihuana Regulation and Taxation Act; the Massachusetts Regulation and Taxation of Marijuana Act, the Massachusetts Act for the Humanitarian Medical Use of Marijuana and the Massachusetts Act to Ensure Safe Access to Marijuana; the Michigan Medical Marihuana Act, the Michigan Medical Marihuana Facilities Licensing Act, the Michigan Regulation and Taxation of Marihuana Act, the Michigan Marihuana Tracking Act and the Florida Compassionate Medical Cannabis Act, 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 months ended March 31, 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 Months Ended March 31, 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 re-measured 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 Unaudited Condensed Interim 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 March 31, 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%
High Road Holdings LLC	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%
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 Months Ended March 31, 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%
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	62%
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 Michigan Management, LLC	Michigan	Holding Company	100%
Cresco Labs Missouri Management, LLC	Missouri	Holding Company	100%
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023
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Entity	Location	Purpose	Percentage<br>Held
---	---	---	---
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, LLC (a)	Michigan	Cultivation and Production Facility	85%
(a) Legally, Cresco Labs Michigan, LLC is 85% owned by Cresco U.S. Corp.

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 Unaudited Condensed Interim 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 months ended March 31, 2024.

(f)Reclassifications

The Company is presenting separately Additional paid-in-capital balances previously included in Share Capital on the Unaudited Condensed Interim Consolidated 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 March 31, 2024 and December 31, 2023, consisted of the following:

($ in thousands)	March 31, 2024		December 31, 2023
Raw materials	$	13,919	$	12,649
Raw materials - non-cannabis	13,157		17,937
Work-in-process	40,262		51,538
Finished goods	29,476		24,138
Finished goods - non-cannabis	1,576		1,527
Total Inventory	$	98,390	$	107,789

The Company wrote off $4.9 million and $1.5 million of inventory during the three months ended ended March 31, 2024 and 2023, respectively. These write-offs are 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 Months Ended March 31, 2024 and 2023
NOTE 4. PROPERTY AND EQUIPMENT
---

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

($ in thousands)	March 31, 2024		December 31, 2023
Land and Buildings	$	203,461	$	207,194
Machinery and Equipment	43,084		41,928
Furniture and Fixtures	38,787		37,912
Leasehold Improvements	179,148		173,614
Website, Computer Equipment and Software	11,054		11,124
Vehicles	2,776		2,892
Construction In Progress	13,197		14,483
Total property and equipment, gross	491,507		489,147
Less: Accumulated depreciation	(131,523)		(120,839)
Property and equipment, net	$	359,984	$	368,308

As of March 31, 2024 and December 31, 2023, costs related to 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 months ended March 31, 2024 and 2023 :

($ in thousands)	March 31, 2024		March 31, 2023
Depreciation expense included in cost of goods sold and ending inventory	$	7,271	$	9,215
Depreciation expense included in selling, general and administrative expense	4,040		2,670
Total depreciation expense	$	11,311	$	11,885

As of March 31, 2024 and December 31, 2023, ending inventory includes $11.0 million and $12.8 million of capitalized depreciation, respectively. For the three months ended March 31, 2024 and 2023, $9.1 million and $7.6 million, respectively, of depreciation was recorded to Cost of goods sold, which includes $7.4 million and $4.7 million, respectively, related to depreciation capitalized to inventory in prior years.

During the three months ended March 31, 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 (expense), net in the Consolidated Statements of Operations.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023
NOTE 5. INTANGIBLE ASSETS AND GOODWILL
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(a)Intangible Assets

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

	March 31, 2024
($ in thousands)	Gross Carrying Amount		Accumulated Amortization		Net
Definite-Lived Intangible Assets
Customer Relationships	$	30,999	$	(12,599)	$	18,400
Trade Names	2,100		(1,697)		403
Permit Application Costs	20,070		(16,565)		3,505
Other Intangibles(a)	6,013		(5,923)		90
Indefinite-Lived Intangible Assets
Licenses	275,671		—		275,671
Total Intangible Assets	$	334,853	$	(36,784)	$	298,069

(a) Other Intangibles include non-compete agreements and related amortization.

	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 Intangibles(b)	6,013		(5,886)		127
Indefinite-Lived Intangible Assets
Licenses	275,671		—		275,671
Total Intangible Assets	$	332,135	$	(35,169)	$	296,966

(b) Other 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 months ended March 31, 2024 and 2023:

($ in thousands)	March 31, 2024		March 31, 2023
Amortization expense included in cost of goods sold and ending inventory	$	791	$	882
Amortization expense included in selling, general and administrative expense	720		1,014
Total amortization expense	$	1,511	$	1,896

As of March 31, 2024 and December 31, 2023, ending inventory included $0.9 million and $1.0 million of capitalized amortization, respectively. During the three months ended March 31, 2024 and 2023, the Company recorded $0.8 million and $1.1 million, respectively, of amortization expense to Costs of goods sold, including $0.7 million and $0.8 million, respectively, related to amortization 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 Months Ended March 31, 2024 and 2023

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
2024	$	4,825
2025	5,260
2026	4,270
2027	3,281
2028	2,963
Thereafter	1,799
Total estimated amortization	$	22,398

(b)Goodwill

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

($ in thousands)	Total
Balance at January 1, 2023	$	330,555
Impairment loss	(50,858)
Balance at December 31, 2023	279,697
Balance at March 31, 2024	$	279,697
NOTE 6. SHARE CAPITAL
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(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 March 31, 2024.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

(b) Issued and Outstanding

As of March 31, 2024 and 2023, issued and outstanding shares and units consisted of the following:

(shares in thousands)	Redeemable<br> Units	SVS1	PVS2	MVS3	SSVS4
Beginning balance, January 1, 2024	96,699	320,757	18,950	500	2
Options exercised	—	1	—	—	—
RSUs issued	—	1,277	—	—	—
Cresco LLC redemptions	(1,194)	1,194	—	—	—
PVS converted to SVS	—	1,169	(1,169)	—	—
Ending balance, March 31, 2024	95,505	324,398	17,781	500	2
Beginning balance, January 1, 2023	106,106	280,994	20,082	500	1
RSUs issued	—	797	—	—	—
Issuance of shares related to acquisitions	—	5,013	—	—	—
Cresco LLC redemptions	(1,800)	1,800	—	—	—
PVS converted to SVS	—	180	(180)	—	—
Issuances related to employee taxes on certain share-based payment arrangements	—	226	—	—	—
Ending balance, March 31, 2023	104,306	289,010	19,902	500	1

1 SVS includes shares pending issuance or cancellation

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

3 Super Voting Shares (“MVS”)

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

(i) Issuance of Shares - Acquisitions

During the three months ended March 31, 2023, the Company issued shares in conjunction with the Laurel Harvest, LLC (“Laurel Harvest”) acquisition as follows:

(in thousands)	Acquisition date	SVS shares issued	Equity-based consideration
Three Months Ended March 31, 2023
Laurel Harvest - Contingent Consideration	December 9, 2021	5,013	$	9,723

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 March 31, 2024 and December 31, 2023, the Company accrued for tax-related distributions to 2024 and 2023 unit holders of Cresco Labs, LLC and other minority interest holders of $15.4 million and $15.2 million, respectively. 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 $9.8 million during the three months ended March 31, 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 $13.6 million during the three months ended March 31, 2023.

(d) Changes in Ownership and Non-controlling Interests

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

During the three months ended March 31, 2024 and 2023, redemptions of 1.2 million and 1.8 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 0.5% and 0.7% in non-controlling interest in Cresco Labs, LLC. There were no changes to the ownership of any other non-controlling interests during the three months ended March 31, 2024 and 2023.

For the three months ended March 31, 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	$	—			$	11,164			$	16,883			$	2,325			$	—			$	6,153			$	92,264
Gross profit	(332)				7,439				11,437				497				—				483				49,501
Net income (loss)	$	(135)			$	4,357			$	8,644			$	(1,552)			$	12			$	(1,190)			$	(651)
Net (loss) income allocated to NCI	$	(5)			$	540			$	2,162			$	(18)			$	2			$	(166)			$	623
NCI percentage as of March 31, 2024	25.0		%	1	12.4		%	2	25.0		%	2	1.2		%	1	20.0		%	1	15.0		%	1	37.8		%

1 The NCI percentage reflects the NCI that exists at Cresco Labs, LLC. There is a further 37.8% NCI related to NCI for Cresco Labs Inc.

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

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

4 As of June 30, 2023, Cresco Labs Michigan, LLC net assets grew to a balance that exceeded the life-to-date capital contributions made by Cresco Labs Inc. As a result, the Company began recording NCI related to Cresco Labs Michigan, LLC.

For the three months ended March 31, 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, LLC1,3
Revenue	$	2,414			$	11,968			$	19,831			$	2,231			$	(154)			$	99,967
Gross profit	1,218				6,980				12,661				93				(1,620)				51,990
Net income (loss)	$	3,042			$	2,046			$	8,005			$	(1,301)			$	(582)			$	(9,483)
Net income (loss) allocated to NCI	$	760			$	254			$	2,001			$	(13)			$	(116)			$	(4,647)
NCI percentage as of March 31, 2023	25.0		%	1	12.4		%	2	25.0		%	2	1.2		%	1	20.0		%	1	41.3		%

1 The NCI percentage reflects the NCI that exists at Cresco Labs, LLC. There is a further 41.3% NCI related to NCI for Cresco Labs Inc.

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

3 Includes 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 months ended March 31, 2024 and 2023 were as follows:

($ in thousands)	March 31, 2024		March 31, 2023
Net loss attributable to Cresco Labs Inc.	$	(5,193)	$	(26,051)
Changes in Cresco Labs Inc. equity due to redemptions of Cresco Labs, LLC shares:
Share Capital	1,888		3,465
Accumulated Deficit	(2,889)		(4,089)
Total change from net loss attributable to Cresco Labs Inc. and change in ownership interest in Cresco Labs, LLC.	$	(6,194)	$	(26,675)
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 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 restricted stock units (“RSUs”) issued have no voting rights and vest proportionately over periods ranging from the grant date to 4 years from the issuance date. Stock options exercised and RSUs issued are converted to SVS. Stock options expire 10 years after the grant date. The maximum number of shares issued under the Plan shall not exceed 10% of the issued and outstanding shares.

Stock Options

A summary of the status of the stock options outstanding consisted of the following:

(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	3,811	1.46
Exercised	(1)	1.81
Forfeited	(664)	3.72
Outstanding - March 31, 2024	27,249	$	4.06	6.81	$	4,096
Exercisable - March 31, 2024	17,936	$	4.15	5.91	$	2,246

The fair value of stock options granted under the Plan during the three months ended March 31, 2024 and 2023, was

determined using the Black-Scholes option-pricing model with the following range of assumptions at the time of the grant:

	March 31, 2024	March 31, 2023
Risk-free annual interest rate	3.9% to 4.1%	3.7% to 3.9%
Expected annual dividend yield	0%	0%
Expected stock price volatility	80.3% to 83.2%	78.2% to 80.2%
Expected life of stock options	5.5 to 7.0 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	$1.10 to $1.37
Stock price at grant date	$1.35 to $2.05	$1.60 to $1.83
Exercise price range	$1.35 to $2.05	$1.60 to $1.83

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 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 options. The forfeiture rate is estimated based on historical forfeitures experienced by the Company.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

RSUs

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.

A summary of outstanding RSUs is provided below as of the three months ended March 31, 2024:

(Shares in thousands)	Number of RSUs outstanding	Weighted-average fair value
Outstanding – January 1, 2024	6,862	$	2.91
Granted	4,034	1.36
Vested and settled	(885)	1.54
Forfeited	(209)	2.73
Outstanding - March 31, 2024	9,802	$	2.18

Expense Attribution

The following table sets forth the classification of share-based compensation expense related to options awards for the three months ended March 31, 2024 and 2023:

($ in thousands)	March 31, 2024		March 31, 2023
Cost of goods sold	$	414	$	802
Selling, general and administrative expense	1,467		3,353
Total share-based compensation expense for option awards	$	1,881	$	4,155

Unrecognized share-based compensation expense as of March 31, 2024 for unvested option awards was $5.5 million and will be recorded over the course of the next four years.

The following table sets forth the classification of share-based compensation expense related to RSU awards for three months ended March 31, 2024 and 2023:

($ in thousands)	March 31, 2024		March 31, 2023
Cost of goods sold	$	442	$	692
Selling, general and administrative expense	2,147		2,770
Total share-based compensation expense for RSU awards	$	2,589	$	3,462

Unrecognized share-based compensation expense related to RSU awards as of March 31, 2024 is $8.1 million and will be recognized over the course of the next four years.

As of March 31, 2024 and December 31, 2023, ending inventory includes $0.9 million and $0.7 million, respectively, of capitalized compensation expense related to both options and RSUs. For the three months ended March 31, 2024 and 2023, $0.6 million and $0.9 million, respectively, of compensation expense was recorded to Cost of goods sold, which includes $0.4 million and $0.6 million, respectively, related to compensation expense capitalized to inventory in prior years.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 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:

		March 31, 2023
( in thousands, except shares and per share amounts)
Numerator:
Net loss	(2,055)	$	(27,812)
Less: Net income (loss) attributable to non-controlling interests, net of tax		(1,761)
Net loss attributable to Cresco Labs Inc.	(5,193)	$	(26,051)
Denominator:
Weighted-average basic and diluted shares outstanding		304,708,692
Loss per Share:
Basic and diluted loss per share	(0.02)	$	(0.09)

All values are in US Dollars.

For the three months ended March 31, 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 as of March 31, 2024 and 2023, consisted of the following:


(shares in thousands)	2024	2023
Redeemable Units	95,505	104,793
Options	27,249	27,708
RSUs	9,802	8,375
Total potentially dilutive shares	132,556	140,876
NOTE 9. LONG-TERM NOTES AND LOANS PAYABLE, NET
---

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

($ in thousands)	March 31, 2024		December 31, 2023
Senior Loan	$	400,000	$	400,000
Mortgage Loans	20,060		20,160
Short-term borrowings and interest payable	19,523		9,813
Financing liability	95,019		95,698
Total borrowings and interest payable	$	534,602	$	525,671
Less: Unamortized debt issuance costs	(14,933)		(16,141)
Less: Short-term borrowings and interest payable	(19,523)		(9,813)
Less: Current portion of financing liability	(2,147)		(2,004)
Total Long-term notes and loans payable, net	$	497,999	$	497,713
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 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 Unaudited Condensed Interim Consolidated Balance Sheet.

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.

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 16.

(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 March 31, 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. The Company incurred $2.0 million in deferred financing fees reflected within Long-term notes and loans payable on the Unaudited Condensed Interim Consolidated Balance Sheet.

During the three months ended March 31, 2024, the Company capitalized interest of $0.4 million related to the loan as the build-out of the Ellenville facility is still underway. After completion, interest will be expensed as incurred.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

The Company has additional financing liabilities for which the incremental borrowing rates range from 11.3% to 17.5% with remaining terms between 5.8 and 16.3 years, consistent with the underlying lease liabilities. The interest expense associated with financing liabilities is discussed in Note 16.

NOTE 10. 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 months ended March 31, 2024 and 2023:

($ in thousands)	March 31, 2024		March 31, 2023
Wholesale	$	66,311	$	82,419
Dispensary	117,984		111,783
Total Revenues	$	184,295	$	194,202

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 19.9% and 13.2% of gross revenue for the three months ended March 31, 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 March 31, 2024 and December 31, 2023, there were 55.8 million and 71.2 million points outstanding, respectively. The contract liability totaled $0.9 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.

NOTE 11. RELATED PARTY TRANSACTIONS

(a)Transactions with Key Management Personnel and Certain Board Members

Related parties, including key management personnel and certain board members, hold 84.0 million Redeemable Units of Cresco Labs, LLC, which accounts for a deficit of $77.7 million in Non-controlling interests as of March 31, 2024. During the three months ended March 31, 2024 and 2023, 81.5% and 78.0%, 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 months ended March 31, 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.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

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. During the three months ended March 31, 2024 the Company received tenant improvement allowance reimbursements of $0.3 million. During the three months ended March 31, 2023 the Company received no tenant improvement allowance reimbursements. 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 months ended March 31, 2024 and 2023:

($ in thousands)	Classification	March 31, 2024		March 31, 2023
Operating Leases
Lessor has minority interest in MedMar	Rent expense	$	73	$	73
Lessor is an MVS shareholder1	Rent expense	98		296
Finance Leases
Lessor has minority interest in MedMar	Depreciation expense	$	76	$	76
Lessor has minority interest in MedMar	Interest expense	57		63
Lessor is an MVS shareholder1	Depreciation expense	8		22
Lessor is an MVS shareholder1	Interest expense	5		19

1 Lessor no longer a MVS shareholder for the three months ended March 31, 2024.

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

	March 31, 2024				December 31, 2023
($ in thousands)	ROU Asset		Lease Liability		ROU Asset		Lease Liability
Operating Leases
Lessor has minority interest in MedMar	$	1,261	$	1,316	$	1,294	$	1,345
Lessor is an MVS shareholder1	—		—		5,332		5,429
Finance Leases
Lessor has minority interest in MedMar	$	1,652	$	2,143	$	1,729	$	2,210
Lessor is an MVS shareholder1	—		—		583		502

1 Lessor 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 months ended March 31, 2023, the Company recorded interest expense of $0.1 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 12. 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. As of March 31, 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

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

any of the Company’s directors, officers or affiliates are an adverse party or has a material interest adverse to the Company’s interest.

(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 March 31, 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 March 31, 2024 and December 31, 2023, the Company had total commitments of $4.3 million and $2.3 million, respectively, related to material construction projects.

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 March 31, 2024 and December 31, 2023, respectively.

NOTE 13. 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 March 31, 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 March 31, 2024 and December 31, 2023.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

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

	March 31, 2024
($ in thousands)	Amortized Cost		Level 1		Level 2		Level 3		Total
Financial Assets:
Cash and cash equivalents	$	123,155	$	—	$	—	$	—	$	123,155
Restricted cash1	4,997		—		—		—		4,997
Security deposits2	4,342		—		—		—		4,342
Accounts receivable, net	49,828		—		—		—		49,828
Loans receivable, short-term	1,432		—		—		—		1,432
Loans receivable, long-term	826		—		—		—		826
Investments	—		66		—		600		666
Financial Liabilities:
Accounts payable	$	17,403	$	—	$	—	$	—	$	17,403
Accrued liabilities	61,921		—		—		—		61,921
Short-term borrowings	21,670		—		—		—		21,670
Current portion of lease liabilities	10,100		—		—		—		10,100
Lease liabilities	163,254		—		—		—		163,254
Deferred consideration, long-term	—		—		—		6,881		6,881
Long-term notes and loans payable, net	497,999		—		—		—		497,999
Other long-term liabilities3	21,829		—		—		—		21,829

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, 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 Months Ended March 31, 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 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 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 Months Ended March 31, 2024
Level 3 Fair Value Measurements
($ in thousands)	Investments		Deferred consideration, long-term
Balance as of December 31, 2023	$	600	$	6,577
Change in fair value recorded in Interest expense, net	—		304
Balance as of March 31, 2024	$	600	$	6,881
Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023
---
Three Months Ended March 31, 2023
---	---	---	---	---
Level 3 Fair Value Measurements
($ in thousands)	Investments		Deferred<br>consideration,<br>and other<br>payables,<br>short-term		Deferred consideration, long-term
Balance as of December 31, 2022	$	660	$	47,821	$	7,770
Change in fair value recorded in Interest expense, net	—		1,555		—
Payments	—		(10,000)		—
Other1	—		1,658		(1,658)
Balance as of March 31, 2023	$	660	$	41,034	$	6,112

1Other relates to reclassifications from long-term to short-term due to expecting 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 March 31, 2024 and December 31, 2023:

($ in thousands)	Valuation<br>classification	March 31, 2024		December 31, 2023
Short-term loans receivable - Kurvana, net of ECL	Amortized cost	$	506	$	493
Short-term loans receivable - 280E, net of ECL	Amortized cost	926		928
Total Loans receivable, short-term		$	1,432	$	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.

(b)Loans receivable, long-term

($ in thousands)	Valuation<br>classification	March 31, 2024		December 31, 2023
Long-term loans receivable - Illinois Incubator, net of ECL	Amortized cost	$	826	$	826
Total Loans receivable, long-term		$	826	$	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 months ended March 31, 2024 and 2023, the Company recorded losses on provision on both short-term and long-term loans receivable of $0.1 million.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

(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 three months ended March 31, 2024, the Company wrote off its remaining investment balance of $0.1 million in Lighthouse Strategies, LLC.

(d)Deferred Consideration, short-term

During the first quarter of 2023, the Company made a payment of $10.0 million related to the Laurel Harvest acquisition. The payment was comprised of a stock issuance valued at $9.7 million and cash payments of $0.3 million.

(e)Deferred Consideration, long-term

The total estimated liability related to the Valley Agriceuticals, LLC (“Valley Ag”) acquisition is $6.9 million. The long-term 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.

During the three months ended March 31, 2024, the Company recorded $0.3 million of expense related to our long-term deferred consideration. During the three months ended March 31, 2023, the Company recorded $1.6 million of expense related to both short-term and long-term deferred considerations. The expense is recorded in Interest expense, net in the Unaudited Condensed Interim Consolidated Statements of Operations. See Note 16 for additional information.

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 March 31, 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 our Amended 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 businesses involved with the cannabis industry, leading to an increased risk of legal actions against the Company and forfeitures of the Company’s assets.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

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

($ in thousands)	March 31, 2024		December 31, 2023
0 to 60 days	$	41,886	$	41,820
61 to 120 days	5,463		8,117
120 days +	10,553		9,097
Total accounts receivable, gross	57,902		59,034
Allowance for doubtful accounts	8,074		7,964
Total accounts receivable, net	$	49,828	$	51,070

As of March 31, 2024, the Company had no customers that accounted for 10% or more of the gross accounts receivable balance. As of December 31, 2023, one customer accounted for $7.2 million or 12% of the Company’s gross accounts receivable balance.

For the three months ended March 31, 2024 and 2023, the Company recorded a recovery on provision of $0.1 million and recorded an ECL of $2.3 million, respectively. An additional $0.4 million and $0.6 million in bad debt expense related to invoice write-offs was recorded for the same respective three 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 three months ended March 31, 2024, the Company has generated positive cash flows from operations and implemented certain cost cutting measures, which are expected to improve cash from operations. Net loss for the three months ended March 31, 2024, decreased $25.8 million compared to the three months ended March 31, 2023.

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 March 31, 2024, the Company had working capital (defined as current assets less current liabilities) of $75.9 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 Months Ended March 31, 2024 and 2023

In addition to the commitments outlined in Note 12, the Company has the following contractual obligations as of March 31, 2024:

($ in thousands)	< 1 Year		1 to 3 Years		3 to 5 Years		> 5 Years		Total
Accounts payable & Accrued liabilities	$	77,832	$	—	$	—	$	—	$	77,832
Operating leases liabilities	21,671		59,073		59,136		162,235		302,115
Finance lease liabilities	3,674		10,166		10,357		18,337		42,534
Deferred consideration, long-term	—		6,881		—		—		6,881
Short-term borrowings and Long-term notes and loans payable	29,686		428,095		29,522		122,013		609,316
Tax receivable agreement liability	1,492		2,192		2,123		8,702		14,509
Other long-term liabilities	—		8,813		—		—		8,813
Total obligations as of March 31, 2024	$	134,355	$	515,220	$	101,138	$	311,287	$	1,062,000

(d)Market Risk

(i)Currency Risk

The operating results and balance sheet of the Company are reported in USD. As of March 31, 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 months ended March 31, 2024, the Company recorded $0.3 million in foreign currency exchange gains. The Company recorded immaterial foreign currency exchange losses during the three months ended March 31, 2023.

As of March 31, 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%.

(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 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 considerations with a corresponding change to Other income, net.

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

(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 17 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 operation 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.

NOTE 14. 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 Unaudited Condensed Interim Consolidated Balance Sheets as of March 31, 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:

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023
	March 31, 2024		December 31, 2023
---	---	---	---	---
($ in thousands)	Cresco Labs Michigan, LLC		Cresco Labs Michigan, LLC
Current assets	$	16,384	$	15,485
Non-current assets	76,926		75,622
Current liabilities	(1,126)		(1,476)
Non-current liabilities	(128,454)		(124,793)
Non-controlling interests	424		258
Deficit attributable to Cresco Labs Inc.	35,846		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 months ended March 31, 2024 and 2023:

	March 31, 2024		March 31, 2023
($ in thousands)	Cresco Labs Michigan, LLC		Cresco Labs Michigan, LLC
Revenue	$	6,153	$	4,757
Net loss attributable to non-controlling interests	(166)		—
Net loss attributable to Cresco Labs Inc.	(1,024)		(2,945)
Net loss	(1,190)		(2,945)
NOTE 15. 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 by wholesale and retail customers and geographic region. For both the three months ended March 31, 2024 and 2023, the Company generated 100.0% of its revenue in the U.S.

NOTE 16. INTEREST EXPENSE, NET

Interest expense, net consisted of the following for the three months ended March 31, 2024 and 2023:

($ in thousands)	March 31, 2024		March 31, 2023
Interest expense – notes and loans payable	$	(9,606)	$	(9,500)
Interest expense – financing activities	(2,915)		(2,959)
Accretion of debt discount and amortization of deferred financing fees	(1,180)		(1,044)
Interest expense – leases	(797)		(935)
Interest income	748		462
Other interest expense1	(321)		(1,572)
Interest expense, net	$	(14,071)	$	(15,548)

1During the three months ended March 31, 2023, the Company recorded interest expense of $1.2 million and $0.4 million related to Laurel Harvest deferred consideration and Valley Ag operating cash flows deferred consideration, respectively. See Note 13 for additional information.

See Note 9 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 17. PROVISION FOR INCOME TAXES AND DEFERRED INCOME TAXES

As the Company operates in the cannabis industry, the Company is subject to the limits of Internal Revenue Code (“IRC”) Section 280E for U.S. federal income tax purposes as well as some state income tax purposes. Under IRC

Cresco Labs Inc.<br><br>Notes to the Unaudited Condensed Interim Consolidated Financial Statements<br><br>For the Three Months Ended March 31, 2024 and 2023

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. However, certain states including California, Illinois, Massachusetts, Michigan 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.

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.

Provision for income taxes consists of the following for the three months ended March 31, 2024 and 2023:

($ in thousands)	March 31, 2024			March 31, 2023
Income (loss) before income taxes	$	15,948		$	(11,003)
Income tax expense	18,003			16,809
Effective tax rate	112.9		%	(152.8)		%
NOTE 18. SUBSEQUENT EVENTS
---

The Company has evaluated subsequent events through May 15, 2024, which is the date on which these financial statements were issued.

On April 24, 2024, the Company finalized its acquisition of Keystone Integrated Care, LLC for an aggregate total consideration of $9.8 million which includes a mix of initial cash consideration, deferred consideration and equity. 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. The Company is in the process of determining the fair value of the acquired assets and liabilities.

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 is pending approval by the Company’s shareholders at the Annual General and Special Meeting. 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.

The stock option exchange is considered a modification of those options exchanged. Any incremental compensation expense will be measured as the excess, if any, of the fair value of each new option granted measured as of the date the new options are granted, over the fair value of the eligible options surrendered, measured immediately prior to the grant of the new options. The incremental compensation expense will be recognized ratably over the remaining requisite service period of the new options subject to continued employment with the Company. Unrecognized compensation cost associated with the stock options surrendered will be recognized in future periods subject to continued employment with the Company. The Company is continuing to evaluate the incremental compensation cost associated with the Option Exchange Program, and expects the impact to be immaterial.

Document

Exhibit 99.2

MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS FOR THE THREE MONTHS ENDED MARCH 31, 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 May 15, 2024 and has been prepared for the three months ended March 31, 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 months ended March 31, 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 March 31, 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 March 31, 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 fifteen (15) medical dispensary locations in Pennsylvania; one (1) medical cannabis cultivation and processing center and five (5) 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 four (4) 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 months ended March 31, 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. During the first quarter of 2024, the Company opened one (1) Sunnyside* dispensary in Pennsylvania. As of March 31, 2024, the Company operated ten (10) Sunnyside* dispensaries in Illinois, fifteen (15) dispensaries in Pennsylvania, five (5) dispensaries in Ohio, four (4) dispensaries in Massachusetts, four (4) dispensaries in New York and thirty-three (33) dispensaries in Florida. In April 2024, the Company acquired two (2) medical dispensaries in Pennsylvania from Keystone Integrated Care, LLC. Please see “Recent Developments” for additional information related to this acquisition. 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 2,800 people across the organization as of March 31, 2024.

1The Sunnyside*® (inclusive of the stand-alone asterisk mark) and Cresco® brands maintain federal trademark registrations for websites pertaining to medical cannabis and cannabis educational services, as well as multiple state trademark registrations.

2 The High Supply®, Good News®, Wonder Wellness Co.® and FloraCal® Farms brands maintain federal trademark registrations for apparel and multiple state trademark registrations.

CORPORATE STRUCTURE

Set forth below is the condensed organization chart of the Company as of May 15, 2024.

RECENT DEVELOPMENTS

On April 30, 2024, the U.S. Drug Enforcement Administration’s (“DEA”) recommendation that cannabis be rescheduled from a Schedule I controlled substance to a Schedule III controlled substance became public. The DEA’s recommendation will be reviewed by the White House Office of Management and Budget (“OMB”). Once OMB’s review is complete and the DEA’s proposal is published in the federal register, a formal rule making process will begin during which the DEA will receive public comment on its rescheduling plan. After the public comment period and review by an administrative law judge, the DEA would publish its final rule. The effects of rescheduling cannabis to a Schedule III controlled substance include that Internal Revenue Service Code Section 280E would no longer apply to the legal U.S. cannabis industry.

On April 24, 2024, the Company successfully finalized its acquisition of Keystone Integrated Care, LLC for an aggregate total consideration of $9.8 million. This strategic move has added another dispensary license to our portfolio, enabling the operation of three (3) more dispensaries across Pennsylvania. Prior to the acquisition, Keystone Integrated Care, LLC had established two (2) operational dispensaries in Pittsburgh and Greensburg. The Company has the opportunity to open one (1) more dispensary within the Commonwealth, further expanding our presence and reach.

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:

•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 19.89% 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 19.88% 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 19.86% of the votes attaching to all classes of outstanding shares of the Company.

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

COMPONENTS OF OUR RESULTS OF OPERATIONS

Revenue

For the three months ended March 31, 2024 and 2023, approximately 64.0% and 57.6%, respectively, of our revenue was derived from Company-owned retail dispensary locations. Revenue from the wholesale of cannabis products represents the remaining 36.0% and 42.4%, respectively, for the same periods.

Gross profit

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

•Direct 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, packaging costs and equipment used to process marijuana.

•Facility expenses: The facility expenses for the cultivation operations is 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 added to Total operating expenses discussed in the “Selected Financial Information” section below.

For the three months ended March 31, 2024 and 2023, SG&A was comprised of the following:

($ in thousands)	March 31, 2024		March 31, 2023
Payroll and employee costs	$	32,230	$	40,234
Facility expenses	4,231		5,802
Depreciation and amortization	5,422		4,273
Excise taxes	2,590		3,712
Share-based compensation	3,614		6,124
Rental fees	3,292		3,436
Consulting and professional fees	2,706		2,012
Legal	810		2,490
Selling and marketing expenses	1,741		2,492
Computer and software expense	1,937		2,480
Business insurance	1,085		2,510
Finance and investor relations expenses	482		480
Accounting	1,670		1,912
Travel and employee expenses	527		864
Other expenses	712		3,473
Total SG&A	$	63,049	$	82,294

Other income, net

Other 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. Other 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 months ended March 31, 2024 and 2023, Other income, net consisted of the following:

($ in thousands)	March 31, 2024		March 31, 2023
Realized loss on financial instruments	$	(81)	$	—
Loss on provision - loan receivable	(67)		(59)
Unrealized gain (loss) on investments held at fair value	18		(37)
Gain (loss) on disposal of assets	110		(66)
Gain (loss) on foreign currency	298		(31)
Gain on lease termination	—		1,135
Gain on legal settlement	266		—
Gain on exit operations	125		—
Other income, net	187		17
Other income, net	$	856	$	959

Interest expense, net

Interest expense, net consists mainly of interest on notes and loans payable, financings 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.

Interest expense, net consisted of the following for the three months ended March 31, 2024 and 2023:

($ in thousands)	March 31, 2024		March 31, 2023
Interest expense – notes and loans payable	$	(9,606)	$	(9,500)
Interest expense – financing activities	(2,915)		(2,959)
Accretion of debt discount and amortization of deferred financing fees	(1,180)		(1,044)
Interest expense – leases	(797)		(935)
Interest income	748		462
Other interest expense	(321)		(1,572)
Interest expense, net	$	(14,071)	$	(15,548)

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, certain states including California, Illinois, Massachusetts, Michigan 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
	Q1		Q4		Q3		Q2		Q1		Q4		Q3	Q2
Revenues, net	$	184,295	$	188,237	$	190,559	$	197,887	$	194,202	$	199,580	210,484	218,226
Income (loss) from operations	29,163		27,099		(107,756)		(10,752)		3,586		(143,479)		16,240	22,677
Net (loss) attributable to Cresco Labs Inc.	(5,193)		2,635		(115,572)		(36,534)		(26,051)		(161,337)		(9,788)	(13,541)
Basic and Diluted EPS	$	(0.02)	$	0.01	$	(0.34)	$	(0.12)	$	(0.09)	$	(0.54)

All values are in US Dollars.

Three Months Ended March 31, 2024 Compared to the Three Months Ended March 31, 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:

	Three Months Ended March 31,
($ in thousands)	2024		2023		Change	% Change
Revenues, net	$	184,295	$	194,202		(5.1)	%
Costs of goods sold	92,083		108,322		(16,239)	(15.0)	%
Gross profit	92,212		85,880		6,332	7.4	%
Total operating expenses	63,049		82,294		(19,245)	(23.4)	%
Total other expense, net	(13,215)		(14,589)		1,374	(9.4)	%
Income tax expense	(18,003)		(16,809)		(1,194)	7.1	%
Net loss1	$	(2,055)	$	(27,812)		(92.6)	%

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

Revenues, net

Revenue for the three months ended March 31, 2024 decreased $9.9 million, or 5.1%, compared to the three months ended March 31, 2023. The decrease in revenue was primarily driven by increased competition in the Pennsylvania wholesale and Ohio retail markets, price promotions in Illinois, reduced operations in California, along with exiting the Arizona and Maryland markets as compared to the prior year period. This was partially offset by retail growth in Florida and Pennsylvania driven by new store openings and increased market share due to higher quality flower and better cultivation yields.

COGS and Gross profit

COGS for the three months ended March 31, 2024 decreased $16.2 million, or 15.0%, compared to the three months ended March 31, 2023. The decrease was primarily attributable to reduced operations in California, along with exiting the Arizona and Maryland markets.

Gross profit increased by $6.3 million, or 7.4%, for the three months ended March 31, 2024, compared to the three months ended March 31, 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 50.0% and 44.2% for the three months ended March 31, 2024 and March 31, 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 expenses for the three months ended March 31, 2024 decreased $19.2 million, or 23.4% compared to the three months ended March 31, 2023. The decrease was primarily attributable to reductions in payroll and employee costs, including incentive compensation due to restructuring activities, lower bad debt expense due to increased collections in the Illinois market.

Total other expense, net

Total other expense, net for the three months ended March 31, 2024 decreased $1.4 million, or 9.4%, compared to the three months ended March 31, 2023. The decrease in expense was primarily driven by additional interest expense taken in 2023 related deferred consideration attributable to the Laurel Harvest acquisition.

Provision for income taxes

Income tax expense for the three months ended March 31, 2024, increased $1.2 million, or 7.1%, compared to the three months ended March 31, 2023. The increase was primarily due to an increase in gross profit.

Net loss

Net loss for the three months ended March 31, 2024, decreased $25.8 million compared to the three months ended March 31, 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.


( in thousands)	2024		2023		Change	% Change
Net loss1	$	(2,055)	$	(27,812)		(92.6)	%
Depreciation and amortization	15,331		12,961		2,370	18.3	%
Interest expense, net	14,071		15,548		(1,477)	(9.5)	%
Income tax expense	18,003		16,809		1,194	7.1	%
EBITDA (non-GAAP)	$	45,350	$	17,506		159.1	%
Other income, net	(856)		(959)		103	(10.7)	%
Adjustments for acquisition and other non-core costs	4,470		5,671		(1,201)	(21.2)	%
Share-based compensation	4,197		7,062		(2,865)	(40.6)	%
Adjusted EBITDA (non-GAAP)	$	53,161	$	29,280		81.6	%

All values are in US Dollars.

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

Adjusted EBITDA (non-GAAP)

Adjusted EBITDA, a non-GAAP financial measure, excludes depreciation and amortization; interest expense, net; income taxes; other income, 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 $53.2 million for the three months ended March 31, 2024, compared to $29.3 million for the three months ended March 31, 2023. The increase in adjusted EBITDA of $23.9 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 March 31, 2024, the Company held $123.2 million in Cash and cash equivalents and $5.0 million in restricted cash, included in both Restricted cash and Other non-current assets on the Unaudited Condensed Interim Consolidated Balance Sheets compared to December 31, 2023, where the Company held $103.4 million in cash and cash equivalents and $5.1 million in restricted cash.

The Company is generally able to access private and/or public financing through, but not limited to, institutional lenders, such as the Amended 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.

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 $36.5 million for the three months ended March 31, 2024, an increase of $33.2 million compared to $3.3 million during the three months ended March 31, 2023. The $33.2 million increase was primarily attributable to production efficiencies, along with reductions in payroll and employee costs due to restructuring activities, and overall cost control initiatives.

Investing Activities

Net cash used in investing activities was $5.7 million for the three months ended March 31, 2024, a decrease of $15.0 million compared to $20.7 million during the three months ended March 31, 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.

Financing Activities

Net cash used in financing activities was $11.1 million for the three months ended March 31, 2024, a decrease of $2.5 million compared to $13.6 million for the three months ended March 31, 2023. The decrease was primarily driven by a decrease in distributions to non-controlling interest redeemable unit holders and other members, including related parties.

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 March 31, 2024:

($ in thousands)	< 1 Year		1 to 3 Years		3 to 5 Years		> 5 Years		Total
Accounts payable & Accrued liabilities	$	77,832	$	—	$	—	$	—	$	77,832
Operating leases liabilities	21,671		59,073		59,136		162,235		302,115
Finance lease liabilities	3,674		10,166		10,357		18,337		42,534
Deferred consideration, long-term	—		6,881		—		—		6,881
Long-term notes payable and loans payable and Short-term borrowings	29,686		428,095		29,522		122,013		609,316
Tax receivable agreement liability	1,492		2,192		2,123		8,702		14,509
Other long-term liabilities	—		8,813		—		—		8,813
Total obligations as of March 31, 2024	$	134,355	$	515,220	$	101,138	$	311,287	$	1,062,000

RELATED PARTY TRANSACTIONS

See Note 11 “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 13 “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 March 31, 2024:

Securities	Number of Shares<br><br>(in thousands)
Super Voting Shares	500
Subordinate Voting Shares1	324,398
Proportionate Voting Shares2	17,781
Special Subordinate Voting Shares3	2
Redeemable Shares	95,505

1SVS includes shares pending issuance or cancellation

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

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

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 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 May 15, 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 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.

Document

Cresco Labs	Exhibit 99.3

Page 1 of 8

Cresco Labs Reports Continued Trend of Financial Improvement with First Quarter 2024 Financial Results

Over 10x year-over-year increase in operating cash flow

CHICAGO – May 15, 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 first quarter ended March 31, 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.

First Quarter 2024 Highlights

•First quarter revenue of $184 million, flat year-over-year, excluding the impact from strategic divestitures aimed to drive profitability.

•Gross profit of $92 million. Adjusted gross profit1 of $95 million up 7% year-over-year; and an Adjusted gross margin1 of 51% of revenue, a 580 bps improvement.

•SG&A of $54 million. Reduced Adjusted SG&A1 by 24% year-over-year to $52 million, or 28% of revenue.

•First quarter income before income taxes of $16 million, net loss of $2 million.

•First quarter Adjusted EBITDA1 of $53 million, up 82% year-over-year; and Adjusted EBITDA margin1 of 29%, a 1,380 bps improvement.

•$36 million in operating cash flow up 1,000% year-over-year. $33 million in Free Cash Flow1.

•Retained the No. 1 share position in Illinois, Pennsylvania and Massachusetts2.

Management Commentary

“I want to thank the Cresco team for taking our learnings from the Year-of-the-Core, making them a part of our DNA and producing such a strong start to 2024. The continued development of our teams’ capabilities and our relentless focus on efficient execution is leading to very strong performance across our retail and branded product business resulting in a 10x increase in operating cash flow year-over-year. This is just the start, with upcoming adult use catalysts in Ohio and potential catalysts in Florida and Pennsylvania we have the ability to generate significant operating leverage and additional cash flow going forward.

I also want to thank the team for continuing Cresco’s leadership on cannabis reform. The recently announced potential federal rescheduling will fundamentally change the future for cannabis and all of its stakeholders. The team is fulfilling our vision of being the most important company in cannabis and leading the development of the most responsible, respectable and robust industry possible,” said Charles Bachtell, CEO of Cresco Labs.

Balance Sheet, Liquidity and Other Financial Information

•As of March 31, 2024, current assets were $285 million, including cash, cash equivalents and restricted cash of $125 million. The Company had senior secured term loan debt, net of discount and issuance costs, of $387 million and a mortgage loan, net of discount and issuance costs of $18 million.

•Total shares on a fully converted basis to Subordinate Voting Shares were 475,235,515 as of March 31, 2024.

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	Exhibit 99.3

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Conference Call and Webcast

The Company will host a conference call and webcast to discuss its financial results on Wednesday, May 15, 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 897519. 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 March 31, 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 March 31, 2024, on SEDAR+ and EDGAR on or about May 15, 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 (“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 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 income, net, 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 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 (used in) 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

Cresco Labs	Exhibit 99.3

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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 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

Cresco Labs	Exhibit 99.3

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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

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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 March 31, 2024, December 31, 2023 and March 31, 2023
	For the Three Months Ended
($ in thousands)	March 31, 2024			December 31, 2023			March 31, 2023
Revenues, net	$	184,295		$	188,237		$	194,202
Cost of goods sold	92,083			92,091			108,322
Gross profit	92,212			96,146			85,880
Gross profit %	50.0		%	51.1		%	44.2		%
Operating expenses:
Selling, general and administrative	54,013			56,767			71,897
Share-based compensation	3,614			2,278			6,124
Depreciation and amortization	5,422			9,978			4,273
Impairment loss	—			24			—
Total operating expenses	63,049			69,047			82,294
Income from operations	29,163			27,099			3,586
Other income (expense), net:
Interest expense, net	(14,071)			(14,331)			(15,548)
Other income, net	856			50			959
Total other expense, net	(13,215)			(14,281)			(14,589)
Income (loss) before income taxes	15,948			12,818			(11,003)
Income tax expense	(18,003)			(7,950)			(16,809)
Net (loss) income1	$	(2,055)		$	4,868		$	(27,812)
1 Net (loss) income includes amounts attributable to non-controlling interests.
Cresco Labs Inc.
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Unaudited Reconciliation of Gross Profit to Adjusted Gross Profit (Non-GAAP)
For the Three Months Ended March 31, 2024, December 31, 2023 and March 31, 2023
	For the Three Months Ended
($ in thousands)	March 31, 2024			December 31, 2023			March 31, 2023
Revenues, net	$	184,295		$	188,237		$	194,202
Cost of goods sold1	92,083			92,091			108,322
Gross profit	$	92,212		$	96,146		$	85,880
Cost of goods sold adjustments for acquisition and other non-core costs	2,662			3,576			2,819
Adjusted gross profit (Non-GAAP)	$	94,874		$	99,722		$	88,699
Adjusted gross profit % (Non-GAAP)	51.5		%	53.0		%	45.7		%
1 Production (cultivation, manufacturing and processing) costs related to products sold during the period.
Cresco Labs	Exhibit 99.3
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Cresco Labs Inc.
Summarized Consolidated Statements of Financial Position
As of March 31, 2024 and December 31, 2023
($ in thousands)	March 31, 2024		December 31, 2023
	(unaudited)
Cash, cash equivalents and restricted cash	$	124,901	$	108,520
Other current assets	160,182		169,567
Property and equipment, net	359,984		368,308
Intangible assets, net	298,069		296,966
Goodwill	279,697		279,697
Other non-current assets	137,232		135,409
Total assets	$	1,360,065	$	1,358,467
Total current liabilities	$	209,154	$	200,242
Total non-current liabilities	730,939		730,158
Total shareholders’ equity	419,972		428,067
Total liabilities and shareholders’ equity	$	1,360,065	$	1,358,467
Cresco Labs Inc.
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Unaudited Reconciliation of SG&A to Adjusted SG&A (Non-GAAP)
For the Three Months Ended March 31, 2024, December 31, 2023 and March 31, 2023
	For the Three Months Ended
($ in thousands)	March 31, 2024			December 31, 2023			March 31, 2023
Selling, general and administrative	$	54,013		$	56,767		$	71,897
Adjustments for acquisition and other non-core costs	2,297			2,242			4,041
Adjusted SG&A (Non-GAAP)	$	51,716		$	54,525		$	67,856
Adjusted SG&A % (Non-GAAP)	28.1		%	29.0		%	34.9		%
Cresco Labs	Exhibit 99.3
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Cresco Labs Inc.
Unaudited Reconciliation of Net Income to Adjusted EBITDA (Non-GAAP)
For the Three Months Ended March 31, 2024, December 31, 2023 and March 31, 2023
	For the Three Months Ended
($ in thousands)	March 31, 2024		December 31, 2023		March 31, 2023
Net (loss) income1	$	(2,055)	$	4,868	$	(27,812)
Depreciation and amortization	15,331		20,252		12,961
Interest expense, net	14,071		14,331		15,548
Income tax expense	18,003		7,950		16,809
EBITDA (Non-GAAP)	$	45,350	$	47,401	$	17,506
Other income, net	(856)		(50)		(959)
Adjustments for acquisition and other non-core costs	4,470		4,434		5,671
Impairment loss	—		24		—
Share-based compensation	4,197		3,017		7,062
Adjusted EBITDA (Non-GAAP)	$	53,161	$	54,826	$	29,280
1 Net (loss) income includes amounts attributable to non-controlling interests.
Cresco Labs Inc.
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Unaudited Summarized Consolidated Statements of Cash Flows
For the Three Months Ended March 31, 2024, December 31, 2023 and March 31, 2023

( in thousands)	March 31, 2024		December 31, 2023		March 31, 2023
Net cash provided by (used in) operating activities	36,471		$	(3,301)	$	3,270
Net cash (used in) provided by investing activities	(5,677)		2,609		(20,668)
Net cash used in financing activities	(11,149)		(3,782)		(13,635)
Effect of foreign currency exchange rate changes on cash and cash equivalents	(13)		(22)		(25)
Net change in cash and cash equivalents and restricted cash	$	19,632	$	(4,496)	$	(31,058)
Cash and cash equivalents and restricted cash, beginning of period	108,520		113,016		121,510
Cash and cash equivalents and restricted cash, end of period	$	128,152	$	108,520	$	90,452

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 March 31, 2024, December 31, 2023 and March 31, 2023
	For the Three Months Ended
($ in thousands)	March 31, 2024		December 31, 2023		March 31, 2023
Net cash provided by (used in) operating activities	$	36,471	$	(3,301)	$	3,270
Purchases of property and equipment	(3,782)		(4,818)		(20,546)
Proceeds from tenant improvement allowances	478		1,147		437
Free Cash Flow (Non-GAAP)	$	33,167	$	(6,972)	$	(16,839)
Cresco Labs	Exhibit 99.3
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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]