The rescheduling tax benefit is a one-time catalyst that masks underlying operational weakness. Monitor the CFO transition and whether the company can sustain revenue growth in a competitive pricing environment. The $50M revolver provides liquidity for acquisitions, but cash burn from operations ($9.8M in H1 2026 vs. $39.3M in H1 2025) is a concern.
Price Chart
Executive Summary
Cresco Labs reported Q2 2026 revenue of $173.3M (+5.9% YoY) and net income of $15.4M, swinging from a -$13.9M loss in Q2 2025. The improvement was driven by a $19.0M income tax benefit from the April 2026 federal rescheduling of medical cannabis to Schedule III, which eliminated IRC Section 280E for medical operations. However, operating income fell to $13.4M from $16.1M, and H1 2026 revenue declined 1.4% YoY to $324.7M, with price compression in Illinois and Michigan. The CFO is departing, and the company closed a $50M revolver in June 2026. The rescheduling tax benefit is a one-time catalyst, but underlying operating trends remain mixed with declining wholesale revenue and rising SG&A costs.
Key Facts
- Q2 2026 revenue of $173.3M, up 5.9% YoY from $163.6M.
- Net income of $15.4M vs. -$13.9M loss in Q2 2025, driven by $19.0M income tax benefit from medical cannabis rescheduling.
- H1 2026 revenue declined 1.4% YoY to $324.7M from $329.4M.
- Operating income fell to $13.4M in Q2 2026 from $16.1M in Q2 2025.
- Adjusted EBITDA of $39.5M in Q2 2026 vs. $40.9M in Q2 2025.
- CFO Sharon Schuler stepping down; Mark Stortz named interim CFO.
- Closed $50M Revolving Credit Facility on June 5, 2026 at 7.99% interest.
- Cash and cash equivalents of $32.9M as of June 30, 2026, down from $57.9M at Dec 31, 2025.
- Total shares on fully converted basis: 506.8M as of June 30, 2026.
Financial Impact
Q2 2026 net income of $15.4M vs. -$13.9M loss YoY, driven by $19.0M tax benefit. Revenue grew 5.9% YoY but H1 revenue declined 1.4%. Adjusted EBITDA fell 3.3% YoY to $39.5M.
Risk Factors
- CFO departure creates leadership uncertainty during a critical period of federal regulatory change.
- H1 2026 revenue decline of 1.4% YoY and operating income compression signal competitive headwinds.
- Cash burn: operating cash flow fell to $9.8M in H1 2026 from $39.3M in H1 2025.
- Adult-use cannabis rescheduling remains uncertain; broader rescheduling hearings concluded but outcome pending.
- High debt load: $419.6M in long-term notes and loans payable with 12.5% interest on $325M term loan.
Market Snapshot
Investment Themes
Documents Analyzed
This report is based on 7 SEC documents filed with EDGAR.
| Document | Accession Number |
|---|---|
| 6-K Filing (Primary) | 0001832928-26-000010 |
| Document: q22026mda.htm | 0001832928-26-000010 |
| Document: q22026pressrelease.htm | 0001832928-26-000010 |
| Document: q22026form6-k.htm | 0001832928-26-000010 |
| Document: 0001832928-26-000010-index-headers.html | 0001832928-26-000010 |
| Document: 0001832928-26-000010-index.html | 0001832928-26-000010 |
| Document: 0001832928-26-000010.txt | 0001832928-26-000010 |
Track record builds as more directional reports settle.
Filters
| Type | Now | ||||
|---|---|---|---|---|---|
Oct 13, 2026 14d ago | 6-K | $0.6260 | awaiting T+60 | awaiting T+60 | $0.6130 (−2.08%) |
Sep 30, 2026 27d ago | 6-K | $0.6390 | awaiting T+60 | awaiting T+60 | $0.6130 (−4.07%) |
Aug 6, 2026 11w ago | 6-K | $0.7200 | awaiting T+60 | awaiting T+60 | $0.6130 (−14.86%) |
May 8, 2026 24w ago | 6-K | $1.03 $0.7001 | ▲ +32.03% | ▲ +36.87% | $0.6130 (+40.49%) |
US Market Status
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