Cresco Labs Announces California Exit to Refocus on Long-Term Growth Opportunities

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In a July 21, 2025, news release (1), Cresco Labs announced it would be departing the California cannabis market. As part of the restructuring plan, the company intends to sell its operations in the state in order to focus on long-term growth opportunities.

“Capital is increasingly precious in this environment, and our focus is on deploying it where it earns the strongest return,” stated Charlie Bachtell, CEO and Co-founder of Cresco Labs, in the press release. “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. Exiting California allows us to reallocate capital and resources to our core markets and build out new markets where we see clear pathways for growth and shareholder value.”

The assets for sale include cultivation and manufacturing facilities, along with certain distribution operations. Cresco Labs is currently conferring with prospective buyers. The transaction is anticipated to be finalized over the coming quarters. On July 17, the company announced it would report second quarter financial results and business highlights through a conference call on August 7, 2025 (2).

The Cresco brand portfolio includes Cresco, High Supply, FloraCal, Good News, Wonder Wellness Co., Mindy’s, and Remedi, on a national scale, and it operates Sunnyside dispensaries. The company stated it plans to keep ownership of the brand FloraCal and continue its production and marketing in the US.

As noted in the press release, the mission of the company 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.”

Cresco Labs is not the only company to divest business operations from a state cannabis market. Last month, cannabis company TerrAscend announced a strategic withdrawal from Michigan, aiming to divest or sell all Michigan assets, including four cultivation and processing facilities, twenty retail dispensaries, and real estate (3).

The company had also stated the decision to exit the market was based on a plan to focus on markets in other states with potential for stronger financial growth, including New Jersey, Maryland, Pennsylvania, and Ohio, where it currently operates dispensaries.

References

1. Cresco Labs. Cresco Labs Announces Strategic Restructuring and Plans to Divest California Operations https://investors.crescolabs.com/news/news-details/2025/Cresco-Labs-Announces-Strategic-Restructuring-and-Plans-to-Divest-California-Operations/default.aspx (accessed July 23, 2025).
2. Cresco Labs. Cresco Labs to Report Second Quarter 2025 Financial Results on August 7, 2025 https://investors.crescolabs.com/news/news-details/2025/Cresco-Labs-to-Report-Second-Quarter-2025-Financial-Results-on-August-7-2025/default.aspx (accessed July 23, 2025).
3. McEvoy, E. TerrAscend Exits Michigan Market, Will Refocus on Growth in Northeast States https://www.cannabissciencetech.com/view/terrascend-exits-michigan-market-will-refocus-on-growth-in-northeast-states (accessed July 23, 2025).