After abandoning its proposed $2 billion acquisition of Columbia Care (now The Cannabist) this summer, Illinois-based multistate player Cresco Labs has doubled down on its core markets and pulled back from lower-priority areas.

The company says the strategy is bearing fruit, as it beat estimates with $191 million in revenue for the quarter ended in September.

While sales were down 3.7% sequentially and 9.5% from a year ago, adjusted EBITDA climbed 21% sequentially to $49 million, as margins improved. The company credited retail growth with driving its performance, as it opened two new Sunnyside stores in Florida, bringing its retail footprint to 70 stores nationwide.

While Cresco continues to realign, the company maintains strong market share in several key states, holding the no.-1 share position in Pennsylvania, Illinois, and Massachusetts, according to data from tracker BDSA. Additionally, Cresco pointed to the strength of its branded products, which were up 28% to reach a unit volume of 20 million. Cresco says it also maintained its position as the cannabis industry’s no.-1 portfolio of branded flower and concentrates and no.-4 for its branded vapes and edibles.

The realignment has seen the company scale back in California and exit Arizona in order to focus resources on the markets above while also exploring potential opportunities moving forward in states like New Jersey, Maryland, and Ohio, the latter of which recently became the latest domino to fall in the Eastern U.S. when voters approved a legalization ballot measure earlier this month. Amid the revamp, the company posted a non-cash impairment charge of $129 million in the third quarter, resulting in a net loss of $113 million.

While challenges remain amid a period of retrenchment for cannabis across the U.S., Cresco says it’s headed in the right direction with a leaner, more cost-effective approach. It’s expecting sales to be down mid single digits sequentially in the fourth quarter.

“Our third quarter results demonstrate our ability to drive solid performance, with strong gains to our margin and operating cash flow, by continuing to execute on a strategy where we win in our core markets and with our core stores, core brands, and core products,” said CEO Charlie Bachtell. “Cresco Labs is leaner and more productive than ever. We generated $191 million of revenue, with strong growth in retail and good performance in our core helping to balance the impact of strategic divestitures.”—Shane English