Marijuana Stock That Could Be a Millionaire MakerIt's no longer a surprise when U.S. cannabis companies report an outstanding quarter. The marijuana boom that started amid the coronavirus pandemic lifted both revenue and earnings for pot companies, and the continuing expansion of state marijuana legalization has kept the momentum going. Though the federal ban on marijuana poses some difficulties, that is not stopping companies from expanding.
Cresco has also benefited from the growing Illinois market. Its second quarter, ended June 30, saw a whopping 123% year-over-year increase in revenue to $210 million. The company's retail revenue, generated from 33 stores during the quarter, grew to $101 million, up 157% year over year. Much of the credit goes to its Sunnyside retail platform. Cresco has 11 Sunnyside stores in Illinois.
The company reported adjusted earnings before interest, taxes, depreciation, and amortization, or EBITDA, of $45 million and net income of $2.7 million for the quarter, compared with a loss of $41 million in Q2 2020. Though Cresco doesn't have a large national presence yet, it is in a stable financial position to continue expanding as more states legalize marijuana. It ended the second quarter with cash and cash equivalents of $131 million and term loan debt (net of issuance costs) of $189.4 million.
Cresco has already reached half a billion dollars in revenue in the first half of 2021 and is also profitable. With marijuana sales rising, I wouldn't be surprised if Cresco manages to generate $1 billion or more revenue by year-end. That revenue growth will boost profits as well. So imagine the growth when federal legalization happens. Wall Street analysts have huge expectations for CL. In the past three years Cresco's shares have gained 165%, while the industry benchmark, the Horizons Marijuana Life Sciences ETF, has fallen 48%.
Analysts see upside of 97% for Cresco in the next 12 months.