Cresco Labs (CSE: CL) announced on Thursday that it is exiting exclusive distributorship agreements of certain third-party branded products in California. This results in the cannabis operator lowering its revenue guidance for Q4 2021 to be between $235 million and $245 million.
“As we continue to implement localization strategies tailored to each state’s market dynamics, this decision will enable us to put our full weight behind our rapidly growing owned-brand portfolio in California, while also expanding profitability margins for our overall business,” said Cresco Labs CEO Charlie Bachtell.
Aside from shifting towards owned-brand distribution, increasing profitability is also one of the strategies that led to the company’s decision.
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However, the firm reiterated that its Q4 2021 guidance for adjusted EBITDA and gross margins still remain at 30% and over 50%, respectively. It will also continue partnering with a small group of brands in the US state.
Cresco Labs last traded at $11.99 on the CSE.
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