Cresco Labs stock is down over 8% today despite the company receiving approval for three new cultivation facilities in Illinois.
First Such Approval in Illinois
Cresco Labs Inc (CSE:CL) (OTCQX:CRLBF) confirmed this morning that it had received regulatory approval from the Illinois Department of Agriculture to grow adult-use cannabis at three sites located in Joliet, Kankakee, and Lincoln. Once completed, the three sites will represent a combined cultivation space of 630,000 square feet. This approval is also the first of its kind handed out by the state of Illinois, where recreational cannabis will be legalized on January 1, 2020. However, it was not enough to halt Cresco Labs stock from sliding, as shares fell across the board.
“The approval of our cultivation facilities is a key milestone in our preparation for the legalization of recreational cannabis in Illinois on January 1, 2020. As the only operator with three cultivation facilities in Illinois – the maximum number allowed in the state – we will have the scale and capacity to effectively capitalize on the dramatic increase in demand for cannabis expected next year. We continue to have the leading share of the Illinois medical-use cannabis market," said CEO Charlie Bachtell. Cresco Labs stock is currently valued at $5.38.
Cresco Labs Stock Boosted By SAFE Act
The announcement comes just days after the passage of the SAFE Banking Act through the US House of Representatives, a landmark piece of legislation that will allow for banks in the US to offer their services to cannabis companies without fear of legal repercussions. Cresco Labs stock jumped 5% after SAFE made it through the House and could be one of the major beneficiaries from the legislation due to its strong position in the US, broad product portfolio, and distribution network.
Despite positive news for the company on the legislative side, Cresco Labs stock has been on the slide in recent weeks following a series of acquisitions. The most recent of these was Tryke Companies, which saw Cresco shares drop over 8% due to a relatively light asset portfolio for a $282.5 million USD deal. Investors will be hoping that the newly approved Illinois facilities will help turn Cresco Labs stock around once they come online early next year.
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