Cresco Labs Inc.
02/02/2026 | Press release | Distributed by Public on 02/02/2026 05:03
Current Report by Foreign Issuer (Form 6-K)
No securities regulatory authority has expressed an opinion about these securities and it is an offence to claim otherwise.
This prospectus supplement (the "Prospectus Supplement"), together with the accompanying short form base shelf prospectus dated October 3, 2025 (the "Prospectus") to which it relates, as amended or supplemented, and each document incorporated by reference into this Prospectus Supplement and the Prospectus, as amended or supplemented, constitutes a public offering of these securities only in those jurisdictions where they may be lawfully offered for sale and therein only by persons permitted to sell such securities.
The offering of the securities described in this Prospectus Supplement has not been and will not be registered under the U.S. Securities Act of 1933, as amended (the "U.S. Securities Act"), or the securities laws of any state of the United States. Accordingly, these securities may not be offered, sold or delivered, directly or indirectly, in the United States of America, its territories, possessions or the District of Columbia (the "United States"), or to a U.S. person (as such term is defined in Regulation S under the U.S. Securities Act) (a "U.S. Person") unless exemptions from the registration requirements of the U.S. Securities Act and any applicable state securities laws are available. This Prospectus Supplement together with the Prospectus does not constitute an offer to sell or a solicitation of an offer to buy any of these securities within the United States or to, or for the account or benefit of, any U.S. Person. See "Plan of Distribution".
Information has been incorporated by reference in this Prospectus Supplement and the Prospectus from documents filed with securities commissions or similar authorities in Canada. Copies of the documents incorporated herein by reference may be obtained on request without charge from Cresco Labs Inc. at 600 W. Fulton Street, Suite 800, Chicago, IL 60661, telephone 312-929-0993 and are also available electronically at www.sedarplus.com.
PROSPECTUS SUPPLEMENT
(TO THE SHORT FORM BASE SHELF PROSPECTUS DATED OCTOBER 3, 2025)
| New Issue | January 29, 2026 | |||||||||||||
CRESCO LABS INC.
Up to C$140,000,000 of Subordinate Voting Shares
This Prospectus Supplement of Cresco Labs Inc. ("Cresco" or the "Corporation"), together with the Prospectus, qualifies for distribution up to C$140,000,000 of subordinate voting shares (the "Subordinate Voting Shares") of the Corporation (the "Offering"). The Corporation has entered into an equity distribution agreement dated January 29, 2026 (the "Equity Distribution Agreement") with Haywood Securities Inc. (the "Agent") relating to the Subordinate Voting Shares offered by this Prospectus Supplement and the accompanying Prospectus. In accordance with the terms of the Equity Distribution Agreement, and except as noted below, the Corporation may distribute up to C$140,000,000 of Subordinate Voting Shares from time to time through the Agent, as agent for the distribution of the Subordinate Voting Shares pursuant to the Offering. See "Plan of Distribution".
The issued and outstanding Subordinate Voting Shares are listed and posted for trading on the Canadian Securities Exchange (the "CSE") under the symbol "CL." On January 28, 2026, the last trading day prior to the date of this Prospectus Supplement, the closing price per Subordinate Voting Share on the CSE was $1.47. The Corporation has given notice to the CSE to list the Subordinate Voting Shares offered by this Prospectus Supplement and the Prospectus on the CSE. Listing will be subject to the Corporation fulfilling all of the listing requirements of the CSE.
Investing in securities of the Corporation is speculative and involves a high degree of risk and should only be made by persons who can afford the total loss of their investment. A prospective purchaser should therefore review this Prospectus Supplement and the Prospectus, as amended or supplemented, and the documents incorporated by reference herein and therein, as amended or supplemented, in their entirety and carefully consider the risk factors described or referenced under "Risk Factors" herein, in the Prospectus and in the annual information form of the Corporation incorporated by reference in the Prospectus at the relevant time and the risks otherwise described in this Prospectus Supplement, the Prospectus and the documents incorporated by reference herein and therein, prior to investing in any Subordinate Voting Shares offered hereby.
Purchasing Subordinate Voting Shares may subject investors to tax consequences in Canada. Investors should consult their own tax advisors with respect to their own particular circumstances.
Sales of Subordinate Voting Shares, if any, under this Prospectus Supplement and the Prospectus are anticipated to be made in transactions that are deemed to be "at-the-market distributions" as defined in National Instrument 44-102 Shelf Distributions ("NI 44-102"), involving sales made directly on the CSE or any other recognized Canadian "marketplace" within the meaning of National Instrument 21-101 Marketplace Operation upon which the Subordinate Voting Shares are listed, quoted or otherwise traded (a "Marketplace"). The Subordinate Voting Shares will be distributed at market prices prevailing at the time of the sale of such Subordinate Voting Shares. As a result, prices may vary as between purchasers and during the period of distribution. There is no minimum amount of funds that must be raised under the Offering. This means that the Offering may terminate after only raising a small portion of the offering amount set out above, or none at all. An investor will not be entitled to a return of its investment if only a portion of the disclosed maximum offering amount set out above is in fact raised. See "Plan of Distribution".
Pursuant to the terms of the Equity Distribution Agreement, the Corporation will compensate the Agent for its services in acting as agent in the sale of the Subordinate Voting Shares pursuant to the Offering in an amount equal to 2.5% of the gross proceeds from sales of the Subordinate Voting Shares made on the CSE or another Marketplace. The Corporation estimates that the total expenses that it will incur for the Offering, excluding compensation payable to the Agent under the terms of the Equity Distribution Agreement, will be approximately US$250,000. See "Plan of Distribution".
No underwriter of the Offering, and no person or company acting jointly or in concert with an underwriter, may, in connection with the distribution, enter into any transaction that is intended to stabilize or maintain the market price of the Subordinate Voting Shares, including selling an aggregate number or principal amount of Subordinate Voting Shares that would result in the underwriter creating an over-allocation position in the Subordinate Voting Shares. See "Plan of Distribution".
Further particulars concerning the attributes of the Subordinate Voting Shares are set out under "Description of Share Capital of the Corporation - Subordinate Voting Shares" in the Prospectus, which provides for the issuance from time to time over a 25-month period of Subordinate Voting Shares, debt securities, subscription receipts, warrants and units.
The directors, chief executive officer and chief financial officer of the Corporation reside outside of Canada and each has appointed Bennett Jones LLP, 3400 One First Canadian Place, Toronto, Ontario, M5X 1A4, as his or her agent for service of process in Canada. Baker Tilly US, LLP, 205 N Michigan Ave, Suite 2800, Chicago, IL 606601, the auditor of the Corporation, is incorporated, continued or otherwise organized under the laws of a jurisdiction outside of Canada. Purchasers are advised that it may not be possible for investors to enforce judgments obtained in Canada against any person or company that resides outside of Canada or is incorporated, continued or otherwise organized under the laws of a foreign jurisdiction, even if the party has appointed an agent for service of process.
The Corporation's head office is located at 600 W. Fulton Street, Suite 800, Chicago, IL 60661 and its registered office is located at Suite 2500, 666 Burrard Street, Vancouver, BC, V6C 2X8.
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This Prospectus qualifies the distribution of securities of an entity that currently directly derives a substantial portion of its revenues from the cannabis industry in certain U.S. states, which industry is illegal under U.S. federal law. The Corporation is directly involved (through its licensed subsidiaries) in both the adult-use and medical cannabis industry in the States of California, Florida, Illinois, Kentucky, Massachusetts, Michigan, New York, Ohio, and Pennsylvania, as permitted within such states under applicable state law which states have regulated such industries.
The cultivation, sale and use of cannabis is illegal under United States federal law pursuant to the Controlled Substance Act (21 U.S.C. §811) (the "CSA"). The United States federal government regulates drugs through the CSA, which places controlled substances, including cannabis, in a schedule. Other than industrial hemp, cannabis is classified as a Schedule I drug. Under United States federal law, a Schedule I drug or substance has a high potential for abuse, no accepted medical use in the United States, and a lack of accepted safety for the use of the drug under medical supervision. Under the CSA, the policies and regulations of the United States federal government and its agencies are that cannabis has no medical benefit and a range of activities including cultivation and the personal use of cannabis is prohibited. The United States Food and Drug Administration has not approved cannabis for the treatment of any disease or condition. The agency has, however, approved one cannabis-derived drug product, Epidiolex, for the treatment of seizures associated with Lennos-Gastaut syndrome or Dravet syndrome.
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Despite the current state of the federal law and the CSA, over three quarters of U.S. states, Washington D.C., and the territories of Puerto Rico, the U.S. Virgin Islands, the Northern Mariana Islands and Guam have laws and/or regulations that recognize, in one form or another, legitimate medical uses for cannabis and consumer use of cannabis. The states of Alaska, Arizona, California, Colorado, Connecticut, Delaware, Illinois, Maine, Maryland, Massachusetts, Michigan, Minnesota, Missouri, Montana, Nevada, New Jersey, New Mexico, New York, Ohio, Oregon, Rhode Island, Vermont, Virginia, Washington, and the District of Columbia, have legalized adult-use of cannabis. Adult-use sales have not yet begun in Virginia. Additionally, although the District of Columbia voters passed a ballot initiative in November 2014, no adult-use operations exist yet because of a prohibition on using funds for regulation within a federal appropriations amendment to local District spending powers. However, there is no guarantee that state laws legalizing and regulating the sale and use of cannabis will not be repealed or overturned, or that local governmental authorities will not limit the applicability of state laws within their respective jurisdictions.
Accordingly, in the U.S., cannabis is largely regulated at the state level. State laws that permit and regulate the production, distribution and use of cannabis for adult-use or medical purposes are in direct conflict with the CSA. Although certain states authorize medical or adult-use cannabis production and distribution by licensed or registered entities, under United States federal law, the possession, use, cultivation, and transfer of cannabis and any related drug paraphernalia is illegal and any such acts are criminal acts. The Supremacy Clause of the United States Constitution establishes that the United States Constitution and federal laws made pursuant to it are paramount and in case of conflict between federal and state law, the federal law shall apply.
On April 17, 2025, Rep. Joyce (R-OH), Max Miller (R-OH), and Dina Titus (D-NV) introduced the Tenth Amendment Through Entrusting States (STATES) 2.0 Act. This legislation aims to federally legalize cannabis by allowing states, Washington, D.C., U.S. territories, and tribal nations to determine how to regulate cannabis within their own jurisdictions. Key provisions of the STATES 2.0 Act include removing cannabis from the CSA while still supporting states that choose to maintain prohibition policies; providing federal tax relief to state-sanctioned cannabis businesses by allowing them to deduct ordinary business expenses-effectively removing their classification as "drug traffickers" under Section 280E of the Internal Revenue Code of 1986 as amended (the "Code"); and permitting interstate cannabis commerce, including transportation through jurisdictions that have opted to prohibit cannabis.
On April 17, 2025, Rep. Joyce (R-OH) and House Democratic Leader Hakeem Jeffries (D-NY) reintroduced bipartisan legislation titled the PREPARE Act. The bill aims to establish a fair, honest, and transparent process to guide the development of effective federal cannabis regulations. Under the legislation, the Attorney General would be directed to establish a "Commission on the Federal Regulation of Cannabis" to advise on regulatory development, modeled after existing federal and state alcohol frameworks. The bill calls on federal regulators to create a regulatory and revenue framework that ensures the safe production and consumption of cannabis while respecting the unique needs, rights, and laws of individual states, and to present this framework to Congress within one year. Additionally, the PREPARE Act seeks to build on bipartisan efforts to address the injustices of the war on cannabis-particularly those affecting minority, low-income, and veteran communities. It would also expand research access for medical professionals, provide protections for the hemp industry (including cross-pollination prevention), and help ensure cannabis remains an adult-use product except in cases of physician-prescribed treatment for minors.
Introduced April 29, 2025, Evidence-Based Drug Policy Act of 2025 by Reps. Dina Titus (D-NV) and Ilhan Omar (D-MN) removes federal barriers that prevent the Office of National Drug Control Policy from funding or sponsoring research on cannabis and other Schedule I substances such as MDMA and psilocybin.
In late June 2025, The U.S. House of Representatives approved amendments to a spending bill that would authorize U.S. Department of Veterans Affairs (VA) doctors to issue medical marijuana recommendations to military veterans and support psychedelics research and access. One of the accepted proposals from Reps. Mast (R-FL) and Joyce (R-OH)-who are both co-chairs of the Congressional Cannabis Caucus-would increase veterans' access to state medical marijuana programs and eliminate a current VA directive barring the department's doctors from issuing cannabis recommendations.
Also in late June 2025, a Republican-led House Appropriations subcommittee included language in the 2026 spending bill that would effectively prohibit most THC-containing hemp products, impose testing and labeling requirements, and grant states oversight on retail sales-though this would restrict rather than expand access. On November 12, 2025, President Donald Trump signed into law legislation, as part of broader bill to reopen the government following a government shutdown, which clarifies and narrows the definition of hemp under federal law. The law, which will be effective 365 days following its enactment, limits total THC to 0.4 mg per container of hemp product.
On December 18, 2025, President Trump signed Executive Order 14370 "Increasing Medical Marijuana and Cannabidiol Research". The order directs federal agencies to accelerate the process of rescheduling marijuana from a Schedule I to a Schedule III substance under the CSA. This action represents a significant shift in federal policy associated with cannabis-related activities. Key aspects include the recognizing and improving knowledge of medical uses of marijuana and cannabidiol for patients and doctors, removing barriers to research, improving access to cannabidiol products, and delivering on promises to help improve healthcare for all Americans. As of the date of this Prospectus Supplement, marijuana remains a Schedule I substance under the CSA and the timing of directed rescheduling is uncertain.
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For additional information, see "Federal Regulatory Environment" in the Annual MD&A (as defined herein), which is incorporated by reference herein.
The Corporation's objective is to capitalize on the opportunities presented as a result of the changing regulatory environment governing the cannabis industry in the United States. Accordingly, there are a number of significant risks associated with the business of the Corporation. Until the CSA is amended with respect to medical and/or adult-use cannabis (and as to the timing or scope of any such potential amendments there can be no assurance), there is a significant risk that federal authorities may enforce current U.S. federal law, and the business of the Corporation may be deemed to be producing, cultivating, extracting, distributing/transporting, or dispensing cannabis or aiding or abetting or otherwise engaging in a conspiracy to commit such acts in violation of federal law in the United States. If the U.S. federal government begins to enforce U.S. federal laws relating to cannabis in states where the sale and use of cannabis is currently legal, or if existing applicable state laws are repealed or curtailed, the Corporation's business, results of operations, financial condition and prospects would be materially adversely affected.
In light of the political and regulatory uncertainty surrounding the treatment of United States cannabis-related activities, on February 8, 2018, the Canadian Securities Administrators published CSA Staff Notice 51-352 - (Revised) Issuers with U.S. Marijuana-Related Activities ("Staff Notice 51-352") setting out the Canadian Securities Administrator's disclosure expectations for specific risks facing issuers with cannabis-related activities in the United States. Staff Notice 51-352 includes additional disclosure expectations that apply to all issuers with United States cannabis-related activities, including those with direct and indirect involvement in the cultivation and distribution of cannabis, as well as issuers that provide goods and services to third parties involved in the United States cannabis industry.
For these reasons, the Corporation's investments in the United States cannabis market may subject the Corporation to heightened scrutiny by regulators, stock exchanges, clearing agencies and other United States and Canadian authorities. There are a number of risks associated with the business of the Corporation. See the section entitled "Risk Factors" herein and within the AIF (as defined herein).
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TABLE OF CONTENTS - PROSPECTUS SUPPLEMENT
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IMPORTANT NOTICE ABOUT INFORMATION IN THIS PROSPECTUS SUPPLEMENT AND THE PROSPECTUS |
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| CAUTIONARY STATEMENTS REGARDING FORWARD-LOOKING STATEMENTS | |||||
| MEANING OF CERTAIN REFERENCES AND CURRENCY PRESENTATION | |||||
| MARKET AND INDUSTRY DATA | |||||
| DOCUMENTS INCORPORATED BY REFERENCE | |||||
| THE CORPORATION | |||||
| CONSOLIDATED CAPITALIZATION | |||||
| USE OF PROCEEDS | |||||
| PLAN OF DISTRIBUTION | |||||
| ELIGIBILITY FOR INVESTMENT | |||||
| CERTAIN CANADIAN FEDERAL INCOME TAX CONSIDERATIONS | |||||
| CERTAIN UNITED STATES FEDERAL INCOME TAX CONSIDERATIONS | |||||
| PRIOR SALES | |||||
| TRADING PRICE AND VOLUME | |||||
| RISK FACTORS | |||||
| TRANSFER AGENT AND REGISTRAR | |||||
| AUDITORS | |||||
| INTEREST OF EXPERTS | |||||
| EXEMPTION | |||||
| PURCHASERS' STATUTORY RIGHTS | |||||
| CERTIFICATE OF THE CORPORATION | |||||
| CERTIFICATE OF THE AGENT | |||||
TABLE OF CONTENTS - PROSPECTUS
| ABOUT THIS SHORT FORM BASE SHELF PROSPECTUS | 1 | ||||
| ENFORCEMENT OF CIVIL LIABILITIES | 1 | ||||
| MEANING OF CERTAIN REFERENCES AND CURRENCY PRESENTATION | 1 | ||||
| WHERE YOU CAN FIND MORE INFORMATION | 1 | ||||
| MARKET AND INDUSTRY DATA | 2 | ||||
Cresco Labs Inc. published this content on February 02, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on February 02, 2026 at 11:04 UTC. If you believe the information included in the content is inaccurate or outdated and requires editing or removal, please contact us at [email protected]