Marijuana multistate operator Cresco Labs is selling off its California assets as part of a strategic effort to preserve cash as the cannabis industry’s struggles continue, the company announced Monday.
The Chicago-based company said it is currently negotiating with prospective buyers for its California-based cultivation, manufacturing and distribution operations as $400 million in debt comes due next year.
According to public disclosure forms filed in Canada, where Cresco Labs is listed on the Canadian Securities Exchange (CSE), Cresco’s holdings in California include:
Cresco plans to keep its FloraCal brand, which it will continue to produce and market across the United States.
“Capital is increasingly precious in this environment, and our focus is on deploying it where it earns the strongest return,” Cresco co-founder and CEO Charlie Bachtell said in a statement Monday.
“While California is the largest cannabis market in the world, the structural challenges – ranging from fragmented retail to price compression and the illicit market – combined with our lack of scaled footprint in the state make it extremely difficult to generate sustainable profitability.”
Latest MSO to exit California marijuana market
Cresco’s exit from California follows other major cannabis companies’ departure from the state.
New York-based Curaleaf Holdings and Tallahassee, Florida-headquartered Trulieve Cannabis had both wound down California operations as of 2023.
Bachtell said leaving the California market will allow Cresco to reallocate capital and resources to the company’s core markets and build out new markets where it can grow and increase shareholder value.
Cresco’s fortunes mirror those of other marijuana MSOs.
Shares in company stock traded as high as $15.86 at an industrywide peak in February 2021 before crashing hard.
Shares traded at $0.59 Tuesday, about even with recent averages.
California remains largest marijuana market but is declining
The move comes as cannabis sales in California continue to decline and excise taxes rise.
Cannabis sales in the state dropped from $5.1 billion in 2023 to $4.6 billion in 2024, according to state data.
During the first quarter of 2025, California recorded sales of $944.6 million, down from more than $1 billion during the same period in 2024.
California increased the excise tax on cannabis from 15% to 19% on July 1.
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