Cresco Labs closed a Series D funding round last week, capturing $100 million in private investment and notching the “second largest private funding round in U.S. cannabis history.”
“This round—the success of this round and the pace at which it moved, the excitement that we received from the investor community—was exciting to see,” Cresco Labs CEO Charlie Bachtell tells Cannabis Business Times. “It really substantiates that we’re doing the right things here at Cresco Labs. It also fortified our belief that multi-state operators—top-tier companies in the U.S. space—are going to be sought after by the investor community.”
The company had raised $85 million through close associates and family offices in recent years, but this Series D round was the first time Cresco had worked with a broker to facilitate the funding (Beacon, based in Toronto). What that means for the company is that Cresco was able to attract institutional investors—often growth-oriented funds that in some cases have already become acquainted with the nascent cannabis industry in the U.S. and elsewhere.
“They were very, very receptive to our story,” Bachtell says. “It was very encouraging.”
For Cresco, this funding round comes at a time of great consolidation in the cannabis industry, leaving open many opportunities for multi-state expansion for the well-capitalized companies at the top of the market. With a footprint in some of the newer medical cannabis markets (Ohio, Pennsylvania) and maturing markets (Illinois, Arizona), Bachtell sees Cresco as being positioned for more expansion as the industry normalizes and regulations become more consistent—especially in those newer medical markets east of the Mississippi River. (Cresco also holds vertically integrated licenses in California and Nevada.)
“The programs themselves are strong, and then it was Cresco’s ability to execute that the investor community really responded to,” Bachtell says. “Showing them that we were the first operator to become operational [in a market like Pennsylvania]—we get to market faster, and, again, being able to execute on plan and develop market penetration and market capture—those were the things that really resonated with the investors. [This round touted] the health and robustness of the programs, but then also Cresco’s ability to execute and have a significant role in these markets.”
Top photo courtesy of Cresco Labs