Trulieve Cannabis Corp.
Trulieve Cannabis Corp.
11/05/2026 | Press release | Distributed by Public on 11/05/2026 05:21
Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)
Management's Discussion and Analysis of Financial Condition and Results of Operations.
This "Management's Discussion and Analysis of Financial Condition and Results of Operations" of Trulieve Cannabis Corp., together with its consolidated subsidiaries ("Trulieve," the "Company," "we," "our," or "us") should be read in conjunction with the accompanying unaudited condensed consolidated financial statements and the related notes included elsewhere within this Quarterly Report and the Audited Consolidated Financial Statements and the related Notes thereto and "Item 7. Management's Discussion and Analysis of Financial Condition and Results of Operations" contained in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025 (our "2025 Form 10-K").
This discussion contains forward-looking statements and involves numerous risks and uncertainties, including but not limited to those described in the "Risk Factors" section of this Quarterly Report and in "Part I, Item 1A. Risk Factors" in our 2025 Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. You should read "Cautionary Note Regarding Forward-Looking Statements" and "Risk Factors" contained herein and in our 2025 Form 10-K. See "Cautionary Note Regarding Forward-Looking Statements" in "Part II. Other Information" of this Quarterly Report. You should consider our forward-looking statements in light of the risks discussed in "Item 1A. Risk Factors" in "Part II. Other Information" of this Quarterly Report and our unaudited condensed consolidated financial statements, related notes and other financial information appearing elsewhere in this Quarterly Report, and the risks discussed in "Item 1A, Risk Factors" of the 2025 Form 10-K and our other filings with the SEC.
Overview
Trulieve Cannabis Corp. was incorporated under the laws of the State of Delaware in August 2026 following a redomestication from the jurisdiction of the Province of British Columbia, Canada. The Company's shares of Class A subordinate voting common stock (the "Subordinate Voting Shares") are listed for trading on the New York Stock Exchange ("NYSE") under the symbol "TRLV".
Trulieve is a vertically integrated medical cannabis company and multi-state operator with operations in four states. Headquartered in Tallahassee, Florida, we are the largest medical cannabis retailer in the United States with over 200 dispensaries and 3.5 million square feet of cultivation and production capacity.
Following federal rescheduling of medical marijuana under the Controlled Substances Act (the "CSA") from Schedule I to Schedule III in April 2026, we applied to register all of our state licensed medical operations with the Drug Enforcement Administration ("DEA") in Florida, Georgia, Pennsylvania, and West Virginia. As outlined in the rescheduling final order by the Department of Justice ("DOJ"), our state licensed operations are deemed federally lawful while application reviews are pending. In October 2026, the DEA published a list of all timely applications and all of the Company's applications were included. As part of the application process, the required DEA site inspections have been substantially completed. As of the date of this filing, we've received DEA registrations for substantially all of our dispensary locations.
The Company operates in highly regulated markets that require expertise in cultivation, manufacturing, and retail. We have developed proficiencies in each of these functional areas and are passionate about expanding access to regulated cannabis products through advocacy, education and expansion of our distribution network. We are committed to delivering exceptional customer experiences through elevated service and high-quality branded products. We aim to be the brand of choice for medical customers in all of the markets that we serve.
All of the states in which we operate have developed programs to permit the use of cannabis products for medicinal purposes to treat specific conditions and diseases, which we refer to as medical cannabis. Trulieve operates its business through its owned subsidiaries which hold licenses in the states in which they operate. In Texas, Trulieve was granted conditional approval for a dispensing organization license under the Texas Compassionate Use Program. In recent months we have been working with regulatory authorities as part of the due diligence process required to attain a final license. Our initial investment in production capacity is completed and ready for inspection. Pending regulatory approval, we plan to ramp production and retail capacity to serve all 11 regions in Texas.
As of September 30, 2026, we operated the following:
| State | Number of Dispensaries | Number of Cultivation and Processing Facilities | ||||||||||||
| Florida | 170 | 5 | ||||||||||||
| Pennsylvania | 21 | 3 | ||||||||||||
| West Virginia | 10 | 1 | ||||||||||||
| Georgia | 7 | 1 | ||||||||||||
| Total | 208 | 10 | ||||||||||||
Regional Hub Structure
Trulieve's production, retail, and distribution areas are organized into regional hubs whereby teams and assets are aggregated in order to effectively pair national structure and support with localized operations tailored to each market. Trulieve has established medical cannabis operations in two hubs: Southeast and Northeast. Our regional hubs are anchored by cornerstone markets in Florida and Pennsylvania. In the Southeast, Trulieve cultivates, processes, and manufactures all cannabis products sold in our dispensaries in Florida and Georgia. The Georgia medical marijuana program expanded on July 1, 2026 with the removal of the low-THC cap on products and new qualifying conditions for patients and product form factors allowed. Additionally, Trulieve supplies licensed independent pharmacies in Georgia with approved medical cannabis products to be dispensed to registered patients. In the Northeast, we have achieved varying percentages of vertical integration with cultivation and processing operations to support our retail and wholesale businesses in Pennsylvania and West Virginia. Our investments in vertically integrated operations afford us ownership of the entire supply chain, which mitigates third-party risks and allows us to completely control product quality and brand experience. Trulieve employs an in-house quality team as well as testing laboratories in select markets, both of which allow us to more tightly control product quality.
Cultivation and Manufacturing of Cannabis Products
Trulieve produces high quality cannabis flower and uses a variety of processes to transform biomass into products sold through our retail and wholesale distribution network. With a focus on replicable, scalable operations, we have developed design standards, standard operating procedures, and training protocols that are employed across cultivation sites to achieve a high level of consistency and quality. The modular nature of our standard designs enables quick and incremental additions to capacity where appropriate. In Florida, where demand is high enough to support larger scale production, our state-of-the-art 750,000 square foot automated indoor cultivation facility affords us greater flexibility on pricing, promotional cadence, and assortment by enabling production of high potency and high-quality products at lower costs.
We utilize various extraction techniques including supercritical ethanol extraction, carbon dioxide extraction, hydrocarbon extraction, and mechanical separation. We have invested in light hydrocarbon extraction, which typically offers higher yields than other extraction methods and allows for concentrates that preserve the natural ratios of cannabinoids, terpenes, and other target compounds to better replicate the flower experience. Ethanol extraction and carbon dioxide extraction techniques offer different benefits than hydrocarbon extraction and are each used for specific purposes, such as production of oil for use in manufactured goods and targeted extraction of specific compounds. In addition, we employ distillation, purification, and manufacturing technologies to further refine extracts and transform them into a wide variety of finished products.
Distribution of Branded Product through Branded Retail
Distribution of branded products through our branded retail locations is a core driver of our long-term strategy. We have developed and acquired a curated portfolio of our own branded retail products that we cultivate, manufacture and distribute in over 200 Trulieve retail locations. By providing customers with consistent high-quality products and outstanding experiences, we aim to garner a large and loyal customer base across our distribution network.
Trulieve brands include premium tier brands Avenue, Cultivar Collection, and Muse; Modern Flower, Momenta, and Sweet Talk, and value tier brands Co2lors, and Roll One. Established relationships with brand partners allow for the sale of partner-branded products in select markets and retail locations, providing our customers with access to a greater
variety and specialty brands. Brand partnerships include arrangements with Alien Labs, Bellamy Brothers, Binske, Black Buddha, Black Tuna, Blue River, Connected, DeLisioso, Khalifa Kush, Love's Oven, Miami Mango, Moxie, Redemption Cannabis, Seed Junky and Sunshine Cannabis.
In September 2026, the Company entered into a license agreement ("License Agreement") with Connected International, Inc. ("Connected"), which includes, among other things, exclusive rights to use genetics, trademarks and proprietary know-how to cultivate, manufacture, market, and commercialize Alien Labs and Connected branded products in Florida and Texas. The licenses granted are perpetual, irrevocable, royalty-free and fully paid-up, subject to the terms of the License Agreement. The License Agreement provides Trulieve with the right of first refusal for exclusive licensing rights in additional markets and supports the expansion of Connected brands through additional products and geographies. The Company anticipates this planned product and geographic expansion to drive immediate revenue growth in these markets. The Company plans to introduce Alien Labs and Connected branded products in Texas, subject to final licensure and regulatory approvals.
Customer Experience
Since inception, Trulieve has prioritized creating exceptional customer experiences, developing the business to center around the Trulieve philosophy of "Customers First". This customer-centric approach permeates our culture and informs strategic decision making.
Our goal is to foster brand loyalty by providing customers with industry-leading branded products and superior service in an appealing, approachable setting. We accomplish this by creating and reinforcing positive customer experiences. Customer feedback informs our approach across all aspects of the customer journey including products, service, and messaging. We track various metrics including overall satisfaction, net promoter, and customer effort scores. We employ and continuously refine numerous training programs to provide our associates with the resources they need to deliver outstanding customer experiences across the entire Trulieve platform. We offer specialized management training and incentives to reward positive outcomes so there is continuous reinforcement of customer experience best practices.
Customer Engagement
Trulieve's customer engagement activities are designed to foster deep connections with medical patients and customers in person and online. Through educational events, local partnerships and charitable giving, Trulieve supports community activity while raising awareness for the many benefits of cannabis.
Community engagement is rooted in our commitment to four pillars of purpose: helping patients, serving veterans, assisting seniors, and promoting restorative justice. Compassionate outreach to patients and physicians includes personalized consultations, educational workshops, and resources to empower patients, physicians, and caregivers with knowledge about wellness strategies and treatment options. Trulieve is committed to serving unique patient populations including veterans and seniors. We partner with veteran organizations to raise awareness of the need for access to medical cannabis to directly address issues such as post-traumatic stress disorder, chronic pain, and mental health. Our advocacy efforts include raising awareness about veterans' healthcare needs and supporting initiatives that expand access to medical cannabis. We provide tailored educational resources to address common concerns about cannabis use in older adults, including potential benefits for age-related conditions, helping seniors make informed decisions to enhance their overall well-being. Recognizing the need for restorative justice within the cannabis industry, Trulieve works alongside advocacy groups and partner brands to aid those disproportionately affected by cannabis prohibition.
Investments in Infrastructure and Technology
We have made significant investments in developing and deploying technology and data platforms designed to support scaled operations and growth in customers served and units sold. Marketing technology enables personalized customer communication, allows seamless product browsing and online reservation, and creates exceptional experiences throughout the customer journey. We interact with customers and physicians through a variety of methods including email, mobile app, social media, online chat, text and telephone. In all markets, Trulieve offers a customer rewards program featuring fully stackable and portable points as appropriate within existing regulatory frameworks. Through our customer data platform, we can analyze data to discern customer preferences, patterns, and trends which inform our product mix and allocation, promotional strategies, and outreach. Investments in our enterprise-grade platforms enable greater sophistication across production, retail, and wholesale operations and numerous support functions including accounting and finance, human resources, legal and compliance. We believe infrastructure and data capabilities are prerequisites for long term success in an increasingly competitive and integrated commerce environment.
Investment in Harvest
On June 3, 2026, the Company completed a transaction pursuant to which the Company ceased to control its former indirect wholly-owned subsidiary, Harvest Enterprises, LLC ("Harvest"), which holds the Company's former mixed-use cannabis operations (the "Deconsolidation Transaction"), other than businesses the transfer of which is subject to regulatory approval, which businesses will, automatically and without any action on the part of the Company or any other party, transfer to Harvest upon the receipt of regulatory approval, ceased to be a consolidated subsidiary.
As further described below, as a result of the implementation of the Deconsolidation Transaction, an indirect wholly-owned subsidiary of the Company ("Company Subsidiary") holds non-voting and non-participating units (the "Non-Voting Units") in the capital of Harvest. The Non-Voting Units do not carry voting rights or rights to receive dividends, do not provide the Company with the ability to direct the business, operations or activities of Harvest, or provide other rights upon dissolution of Harvest, and are only convertible into Class B units of Harvest (the "Common Units") following the date that the New York Stock Exchange permits the listing of companies that consolidate the financial statements of companies that cultivate, distribute or possess marijuana (as defined in 21 U.S.C. 802) for non-medical uses in the United States (the "Stock Exchange Permissibility Date").
In connection with the Deconsolidation Transaction, among other things:
1)Harvest and its members (including Company Subsidiary), entered into a limited liability company agreement, dated June 3, 2026 (the "LLC Agreement"), which provides for, among other things, three classes of units (the "Units"): the Class A units (the "Voting Units"), the Common Units and the Non-Voting Units. The Harvest Investor (as defined below) holds all of the Voting Units, which provide for standard voting and dividend rights, including rights upon dissolution of Harvest. The Common Units also provide for standard voting and dividend rights, including rights upon dissolution of Harvest. The LLC Agreement provides that upon conversion of all of the Non-Voting Units into Common Units, the Voting Units will be equal to no less than 10% of the total issued and outstanding Units following such issuance. Accordingly, in no circumstances will Company Subsidiary, at the time of such conversions, own more than 90% of the Units. In addition, pursuant to the terms of the LLC Agreement, Company Subsidiary has the right to appoint one member to the Harvest board of managers (the "Harvest Board") and the Harvest Investor has the right to appoint two members to the Harvest Board.
2)Harvest and the Company entered into a Class A Unit Purchase Agreement (the "Class A Unit Purchase Agreement") with an independent third party investor, Whitley Holding 05192026, LLC (the "Harvest Investor"), dated June 3, 2026, pursuant to which, among other things, the Harvest Investor made an investment in Harvest and acquired Voting Units representing a 10% economic ownership interest in Harvest for approximately $14.8 million (the "Harvest Investment"). In connection with the Harvest Investment, the Harvest Investor appointed two managers to the Harvest Board and Company Subsidiary appointed one manager to the Harvest Board.
3)The Company, Company Subsidiary and Harvest entered into a protection agreement, dated June 3, 2026, to provide for certain covenants in order to preserve the value of the Non-Voting Units held by Company Subsidiary until such time as the Non-Voting Units are converted into Common Units in accordance with their terms, provided that, such conversion shall only be permitted following the Stock Exchange Permissibility Date, but does not provide the Company or Company Subsidiary with the ability to direct the business, operations or activities of Harvest.
In connection with the Deconsolidation Transaction, the Company and Harvest entered into a management services agreement (the "MSA"), pursuant to which, among other things, a subsidiary of the Company agreed to provide certain consulting, advisory and administrative support services to Harvest. The MSA provides for reimbursement of the Company's costs incurred in providing such services plus a 5% margin, together with a fixed quarterly management fee. Each of the parties to the MSA has the ability to terminate the MSA at any time upon 90 days' notice.
Harvest conducts mixed-use cannabis businesses in Arizona, Connecticut, Maryland, and Ohio. Harvest operates 34 Trulieve branded dispensaries in addition to cultivation and production capacity across these markets. Following the Deconsolidation Transaction, the Company accounts for its investment in Harvest under the equity method of accounting and no longer consolidates Harvest's assets, liabilities, results of operations, or cash flows.
Competitive Conditions and Position
The markets in which we operate are highly competitive markets with relatively high barriers to entry given the limited quantity of licenses available and the highly regulated nature of the cannabis industry. See "-Regulatory Overview" in Item 1-Business in our 2025 Form 10-K for additional information regarding the impact of regulation on our business. We compete directly with cannabis producers and retailers within single-state operating markets, as well as those that operate across several U.S. state markets.
The vast majority of both manufacturing and retail competitors in our markets are either localized businesses with operations in a single state market or regional players. Other multi-state cannabis operators compete directly in several of our operating markets. Aside from this direct competition, out-of-state operators that are sufficiently capitalized to enter those markets through acquisitions are also part of the competitive landscape. Increased competition by larger and better financed competitors could materially affect our business, financial condition and results of operations.
We face additional competition from new entrants. If the number of consumers of medical cannabis in our markets increases, the demand for products will increase and we expect that competition will become more intense as current and future competitors offer an increasing number of diversified products and engage in price competition. We expect to continue to invest in several areas, including customer experience, product innovation, scaled production, marketing and branding, and distribution network expansion. Trulieve may not have sufficient resources to maintain investments on a competitive basis, which could have a material adverse effect on our business, financial condition and operational results. The management team monitors developments in the fast-paced cannabis industry and adjacent industries to help us remain competitive.
We also compete indirectly with operators in the illicit market for cannabis and manufacturers and retailers of intoxicating hemp products.
See Item 1A-"Risk Factors" of our 2025 Form 10-K for additional information regarding competition.
Seasonality
Our business operates year-round. Operations and sales trends in select markets do follow seasonal trends at various times of the year, providing seasonal impacts on sales in summer and winter months and increases from promotional activity around specific industry and holiday events including 4/20, 7/10, and Green Wednesday (the Wednesday before Thanksgiving).
Recent Developments
In October 2026, the Company fully repaid $65.1 million of its mortgage note payable secured by a property owned by the Company in Jefferson County, Florida, originally due January 1, 2028.
In October 2026, the DEA published a list of all timely applications and all of the Company's applications were included. As part of the application process, the required DEA site inspections have been substantially completed. As of the date of this filing, we've received DEA registrations for substantially all of our dispensary locations.
Critical Accounting Policies and Estimates
The preparation of the condensed consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the financial statements and accompanying notes. The Company's accounting policies that we believe are the most critical to aid in fully understanding and evaluating our reported financial results are described in our 2025 Form 10-K under the caption "Management's Discussion and Analysis of Financial Condition and Results of Operations - Critical Accounting Policies and Estimates." During the nine months ended September 30, 2026, there were no significant changes to our previously disclosed critical accounting policies and estimates other than the addition of a critical accounting estimate related to the valuation of the Company's retained equity method investment in Harvest following the Deconsolidation Transaction. The fair value measurement required significant management judgment related to the selection of discount rates, projected EBITDA margins and marketability discounts, all of which represent significant unobservable inputs. See Note 6. Equity Method Investment for additional information.
Financial Review
Results of Continuing Operations
This section of this Form 10-Q generally describes and compares our results of continuing operations for the three and nine months ended September 30, 2026 and 2025.
Comparability of Results
As discussed in Note 5. Disposition, the Deconsolidation Transaction impacts the comparability of the Company's results of operations between periods. Accordingly, period-over-period comparisons may not be directly comparable and should be considered in conjunction with the discussion of the Deconsolidation Transaction in Note 5. Disposition and the Equity Method Investment disclosure in Note 6. Equity Method Investment.
The following table and discussion compares condensed consolidated statements of operations data for the quarter-to-date periods presented:
| Three Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs. 2025 | ||||||||||||||||||||||||
|
(in thousands)
|
||||||||||||||||||||||||||
|
Statements of Operations Data
|
Amount
|
Amount
|
Amount Change
|
Percentage Change
|
||||||||||||||||||||||
| Revenue | $ | 230,215 | $ | 288,187 | $ | (57,972) | (20) | % | ||||||||||||||||||
| Cost of goods sold | 82,195 | 118,330 | (36,135) | (31) | % | |||||||||||||||||||||
| Gross profit | 148,020 | 169,857 | (21,837) | (13) | % | |||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
|
Selling, general, and administrative
|
87,845 | 99,019 | (11,174) | (11) | % | |||||||||||||||||||||
| Depreciation and amortization | 17,707 | 29,456 | (11,749) | (40) | % | |||||||||||||||||||||
| Gain on disposal or impairment of assets | (19) | (856) | 837 | 98 | % | |||||||||||||||||||||
| Total expenses | 105,533 | 127,619 | (22,086) | (17) | % | |||||||||||||||||||||
|
Income from operations
|
42,487 | 42,238 | 249 | 1 | % | |||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense, net | (11,975) | (16,086) | 4,111 | 26 | % | |||||||||||||||||||||
| Interest income | 2,810 | 4,394 | (1,584) | (36) | % | |||||||||||||||||||||
| Equity in net loss of Harvest | (6,432) | - | (6,432) | N/M | ||||||||||||||||||||||
| Other income (expense), net | 135 | (1,245) | 1,380 | 111 | % | |||||||||||||||||||||
| Total other expense, net | (15,462) | (12,937) | (2,525) | (20) | % | |||||||||||||||||||||
| Income before provision for income taxes | 27,025 | 29,301 | (2,276) | (8) | % | |||||||||||||||||||||
| Provision for income taxes | 26,251 | 53,036 | (26,785) | (51) | % | |||||||||||||||||||||
|
Net income (loss) from continuing operations
|
774 | (23,735) | 24,509 | 103 | % | |||||||||||||||||||||
|
Net loss from discontinued operations, net of tax benefit (provision) $0 and $0, respectively
|
- | (5,049) | 5,049 | N/M | ||||||||||||||||||||||
|
Net income (loss)
|
$ | 774 | $ | (28,784) | $ | 29,558 | 103 | % | ||||||||||||||||||
| Percentage of Revenue | 2026 | 2025 | ||||||||||||||||||||||||
| Cost of goods sold | 35.7 | % | 41.1 | % | ||||||||||||||||||||||
| Gross profit | 64.3 | % | 58.9 | % | ||||||||||||||||||||||
|
Selling, general, and administrative
|
38.2 | % | 34.4 | % | ||||||||||||||||||||||
Revenue
Revenue for the three months ended September 30, 2026 was $230.2 million, a decrease of $58.0 million, from $288.2 million for the three months ended September 30, 2025. The decrease was primarily attributable to the Deconsolidation Transaction, which reduced current quarter consolidated revenue as compared to prior year quarter because Harvest's results were included in the prior year quarter but not in the current quarter. Excluding the impact of the Deconsolidation Transaction, revenue increased from the prior period driven primarily by revenue growth in Georgia and Pennsylvania.
Cost of Goods Sold and Gross Profit
Cost of goods sold for the three months ended September 30, 2026 was $82.2 million, a decrease of $36.1 million from $118.3 million for the three months ended September 30, 2025. Cost of goods sold as a percentage of revenue was 35.7% for the three months ended September 30, 2026 as compared to 41.1% for the three months ended September 30, 2025. Gross profit for the three months ended September 30, 2026 was $148.0 million, a decrease of $21.8 million from $169.9 million for the three months ended September 30, 2025. Gross profit as a percentage of revenue was 64.3% for the three months ended September 30, 2026 as compared to 58.9% for the three months ended September 30, 2025. Cost of goods sold and gross profit decreased primarily as a result of the Deconsolidation Transaction. Gross profit as a percentage of revenue increased due to the remaining market mix as a result of the Deconsolidation Transaction. Gross margin will continue to fluctuate quarter to quarter depending on product and market mix, inventory sell through, promotional activity and idle capacity costs.
Selling, General, and Administrative Expense
Selling, general, and administrative expense for the three months ended September 30, 2026 was $87.8 million, a decrease of $11.2 million from $99.0 million for the three months ended September 30, 2025. Selling, general, and administrative expense as a percentage of revenues was 38.2% for the three months ended September 30, 2026, compared to 34.4% for the three months ended September 30, 2025. Selling, general, and administrative expense decreased primarily as a result of the Deconsolidation Transaction. Selling, general, and administrative expense as a percentage of revenue increased primarily as a result of market mix, and lower revenue to absorb overhead and public company costs as a result of the Deconsolidation Transaction.
Depreciation and Amortization Expense
Depreciation and amortization expense for the three months ended September 30, 2026 was $17.7 million, a decrease of $11.7 million from $29.5 million for the three months ended September 30, 2025. The decrease is primarily attributable to the Deconsolidation Transaction.
Gain on disposal or impairment of assets
Gain on disposal or impairment of assets was less than $0.1 million for the three months ended September 30, 2026 compared to $0.9 million for the three months ended September 30, 2025.
Interest Expense, Net
Interest expense, net for the three months ended September 30, 2026 was $12.0 million, a decrease of $4.1 million from $16.1 million for the three months ended September 30, 2025. The decrease was primarily driven by a reduction in overall debt in the current period as compared to the prior period.
Interest Income
Interest income for the three months ended September 30, 2026 was $2.8 million, a decrease of $1.6 million from $4.4 million for the three months ended September 30, 2025.
Equity in net loss of Harvest
Equity in net loss of Harvest for the three months ended September 30, 2026 was $6.4 million and represents the Company's proportionate share of Harvest's net results following the June 3, 2026 Deconsolidation Transaction. Due to Harvest being accounted for under the equity method of accounting, the Company recognizes only its share of Harvest's net income or loss and no longer consolidates Harvest's revenue, operating expenses, assets, or liabilities.
Other Income (Expense), Net
Other income, net for the three months ended September 30, 2026 was $0.1 million, a change of $1.4 million from other expense of $1.2 million for the three months ended September 30, 2025.
Provision for Income Taxes
The provision for income taxes for the three months ended September 30, 2026 was $26.3 million, a decrease of $26.8 million from $53.0 million for the three months ended September 30, 2025. The provision for income taxes as a percentage of gross profit was 17.7% for the three months ended September 30, 2026, compared to 31.2% for the three months ended September 30, 2025. The decrease was primarily driven by the Company not applying IRC Section 280E for the 2026 taxable year, where the prior period provision included the impact of IRC Section 280E.
The following table and discussion compares condensed consolidated statements of operations data for the year-to-date periods presented:
| Nine Months Ended September 30, | ||||||||||||||||||||||||||
| 2026 | 2025 | 2026 vs. 2025 | ||||||||||||||||||||||||
| (in thousands) | ||||||||||||||||||||||||||
| Amount | Amount | Amount Change | Percentage Change | |||||||||||||||||||||||
|
Revenue
|
$ | 787,921 | $ | 888,033 | $ | (100,112) | (11) | % | ||||||||||||||||||
| Cost of goods sold | 307,531 | 352,031 | (44,500) | (13) | % | |||||||||||||||||||||
| Gross profit | 480,390 | 536,002 | (55,612) | (10) | % | |||||||||||||||||||||
| Expenses: | ||||||||||||||||||||||||||
| Selling, general, and administrative | 294,507 | 318,907 | (24,400) | (8) | % | |||||||||||||||||||||
| Depreciation and amortization | 73,173 | 88,211 | (15,038) | (17) | % | |||||||||||||||||||||
| Loss on disposal or impairment of assets | 1,688 | 686 | 1,002 | 146 | % | |||||||||||||||||||||
| Loss on Deconsolidation Transaction | 403,333 | - | 403,333 | N/M | ||||||||||||||||||||||
| Total expenses | 772,701 | 407,804 | 364,897 | 89 | % | |||||||||||||||||||||
|
(Loss) income from operations
|
(292,311) | 128,198 | (420,509) | N/M | ||||||||||||||||||||||
| Other income (expense): | ||||||||||||||||||||||||||
| Interest expense, net | (38,056) | (48,774) | 10,718 | 22 | % | |||||||||||||||||||||
| Interest income | 8,556 | 11,100 | (2,544) | (23) | % | |||||||||||||||||||||
| Equity in net loss of Harvest | (9,721) | - | (9,721) | N/M | ||||||||||||||||||||||
|
Other income (expense), net
|
381 | (1,992) | 2,373 | 119 | % | |||||||||||||||||||||
|
Total other expense, net
|
(38,840) | (39,666) | 826 | 2 | % | |||||||||||||||||||||
|
(Loss) income before provision for income taxes
|
(331,151) | 88,532 | (419,683) | N/M | ||||||||||||||||||||||
| Provision for income taxes | 70,077 | 160,220 | (90,143) | (56) | % | |||||||||||||||||||||
|
Net loss from continuing operations
|
(401,228) | (71,688) | 329,540 | N/M | ||||||||||||||||||||||
|
Net loss from discontinued operations, net of tax benefit (provision) of $597 and $(441), respectively
|
(1,777) | (6,966) | (5,189) | (74) | % | |||||||||||||||||||||
|
Net loss
|
$ | (403,005) | $ | (78,654) | $ | 324,351 | N/M | |||||||||||||||||||
| Percentage of Revenue | 2026 | 2025 | ||||||||||||||||||||||||
| Cost of goods sold | 39.0 | % | 39.6 | % | ||||||||||||||||||||||
| Gross profit | 61.0 | % | 60.4 | % | ||||||||||||||||||||||
|
Selling, general, and administrative
|
37.4 | % | 35.9 | % | ||||||||||||||||||||||
Revenue
Revenue for the nine months ended September 30, 2026 was $787.9 million, a decrease of $100.1 million from $888.0 million for the nine months ended September 30, 2025. The decrease was primarily driven by the Deconsolidation Transaction, which reduced the period of Harvest activity included in consolidated revenue during the current year. Excluding the impact of the Deconsolidation Transaction, revenue was also affected by continued pricing pressure in certain mature markets, partially offset by revenue growth in Georgia, and revenue growth in Ohio through the Deconsolidation Transaction date. Revenue trends improved sequentially through the third quarter of 2026 following a softer start to the year, partially reflecting the benefit of operational improvements implemented during the year.
Cost of Goods Sold and Gross Profit
Cost of goods sold for the nine months ended September 30, 2026 was $307.5 million, a decrease of $44.5 million from $352.0 million for the nine months ended September 30, 2025. Cost of goods as a percentage of revenues was 39.0% for the nine months ended September 30, 2026 compared to 39.6% for the nine months ended September 30, 2025. Gross profit for the nine months ended September 30, 2026 was $480.4 million, a decrease of $55.6 million from $536.0 million for the nine months ended September 30, 2025. Gross profit as a percentage of revenue was 61.0% for the nine months ended September 30, 2026 as compared to 60.4% for the nine months ended September 30, 2025. Cost of goods sold and gross profit decreased primarily as a result of the Deconsolidation Transaction; however, both remained generally consistent as a percentage of revenue compared to the prior-year period. Gross margin will continue to fluctuate quarter to quarter depending on product and market mix, inventory sell through, promotional activity and idle capacity costs.
Selling, General and Administrative Expense
Selling, general, and administrative expense for the nine months ended September 30, 2026 was $294.5 million, a decrease of $24.4 million from $318.9 million for the nine months ended September 30, 2025. Selling, general, and administrative expense as a percentage of revenue was 37.4% for the nine months ended September 30, 2026, compared to 35.9% for the nine months ended September 30, 2025. The decrease in the current period expenditures compared to the prior year period was primarily driven by the Deconsolidation Transaction and remained relatively flat as a percentage of revenue.
Depreciation and Amortization Expense
Depreciation and amortization expense for the nine months ended September 30, 2026 was $73.2 million, a decrease of $15.0 million from $88.2 million for the nine months ended September 30, 2025. The decrease is primarily attributable to the Deconsolidation Transaction.
Loss on disposal or impairment of assets
Loss on disposal or impairment of assets for the nine months ended September 30, 2026 was $1.7 million compared to $0.7 million for the nine months ended September 30, 2025.
Loss on Deconsolidation Transaction
Loss on deconsolidation transaction expense for the nine months ended September 30, 2026 was $403.3 million and was attributable to the Deconsolidation Transaction completed during the second quarter of 2026. The loss resulted primarily from the application of ASC 810, which required the Company to derecognize Harvest's net assets and measure its retained investment at fair value upon deconsolidation. As a result, the loss is primarily a non-cash accounting charge
and is not indicative of the ongoing operating performance or cash-generating capacity of the underlying business. Further information regarding the transaction and the related loss is included in Note 5. Disposition.
Interest Expense, Net
Interest expense, net for the nine months ended September 30, 2026 was $38.1 million, a decrease of $10.7 million from $48.8 million for the nine months ended September 30, 2025. The decrease was primarily driven by a reduction in overall debt in the current period as compared to the prior period.
Interest Income
Interest income for the nine months ended September 30, 2026 was $8.6 million, a decrease of $2.5 million from $11.1 million for the nine months ended September 30, 2025.
Interest income for the nine months ended September 30, 2026 was $8.6 million, a decrease of $2.5 million from $11.1 million for the nine months ended September 30, 2025.
Equity in net loss of Harvest
Equity in net loss of Harvest for the nine months ended September 30, 2026 was $9.7 million and represents the Company's proportionate share of Harvest's net results following the June 3, 2026 Deconsolidation Transaction. Due to Harvest being accounted for under the equity method of accounting, the Company recognizes only its share of Harvest's net income or loss and no longer consolidates Harvest's revenue, operating expenses, assets, or liabilities.
Other Income (Expense), Net
Other income, net for the nine months ended September 30, 2026 was $0.4 million, compared to other expense, net of $2.0 million for the nine months ended September 30, 2025.
Provision for Income Taxes
The provision for income taxes for the nine months ended September 30, 2026 was $70.1 million, a decrease of $90.1 million from $160.2 million for the nine months ended September 30, 2025. The provision for income taxes as a percentage of gross profit was 14.6% for the nine months ended September 30, 2026, compared to 29.9% for the nine months ended September 30, 2025. The decrease was primarily driven by the Company not applying IRC Section 280E for the 2026 taxable year, where the prior period included the impact of IRC Section 280E.
Management's Use of Non-GAAP Measures
Our management uses a financial measure that is not in accordance with generally accepted accounting principles in the U.S., or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. This non-GAAP financial measure should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Adjusted EBITDA is a financial measure that is not defined under GAAP. Our management uses this non-GAAP financial measure and believes it enhances an investor's understanding of our financial and operating performance from period to period because it excludes certain material non-cash items and certain other adjustments management believes are not reflective of our ongoing operations and performance. Adjusted EBITDA is not a measure of liquidity, cash generated by the Company, or cash available for discretionary expenditures.
EBITDA is calculated as net income (loss) attributable to common shareholders before net: interest expense, interest income, provision for income taxes, and depreciation and amortization. Adjusted EBITDA is calculated as net income (loss) attributable to common shareholders before net interest expense, interest income, provision for income taxes and depreciation and amortization, which is then adjusted for certain contributions, such as cash expenditures related to campaign and political initiatives, items that we do not believe represent the operations of the core business such as cash and non-cash acquisition, disposition and specified transaction costs and certain other cash and non-cash costs including major system changes, impairments and disposals of long-lived assets including goodwill, discontinued operations, share-based compensation, other income and expense items, equity in net loss of Harvest and loss on Deconsolidation Transaction. Some of the items added back to, or removed from, adjusted EBITDA have occurred in prior periods and may occur in future periods.
We report Adjusted EBITDA to help investors assess the operating performance of the Company's business. The financial measure noted above is a metric that has been adjusted from the GAAP net income (loss) measure in an effort to provide readers with a normalized metric in making comparisons more meaningful across the cannabis industry as competitors commonly disclose similar performance measures; however, our calculation of Adjusted EBITDA may not be comparable to other similarly titled performance measures of other companies, as well as to remove items that may otherwise distort the GAAP net income (loss) measure.
As noted above, our Adjusted EBITDA is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net income (loss), which is the most directly comparable financial measure calculated and presented in accordance with GAAP. Because of these limitations, we consider, and you should consider, Adjusted EBITDA together with other operating and financial performance measures presented in accordance with GAAP. A reconciliation of net income (loss), the most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, has been included herein immediately following our discussion of "Adjusted EBITDA".
Adjusted EBITDA
Adjusted EBITDA for the three months ended September 30, 2026 was $89.2 million, a decrease of $13.5 million from $102.7 million for the three months ended September 30, 2025, primarily driven by lower revenue primarily resulting from the Deconsolidation Transaction.
Adjusted EBITDA for the nine months ended September 30, 2026 was $287.6 million, a decrease of $34.9 million from $322.5 million for the nine months ended September 30, 2025, primarily driven by lower revenue primarily resulting from the Deconsolidation Transaction.
The following table presents a reconciliation of net income (loss) attributable to common shareholders (GAAP) to non-GAAP Adjusted EBITDA, for the periods presented:
|
Three Months Ended September 30, |
Nine Months Ended September 30, |
||||||||||||||||||||||
| 2026 | 2025 | 2026 | 2025 | ||||||||||||||||||||
|
(in thousands)
|
|||||||||||||||||||||||
| Net income (loss) attributable to common shareholders | $ | 869 | $ | (26,835) | $ | (402,700) | $ | (73,485) | |||||||||||||||
| Add (deduct) impact of: | |||||||||||||||||||||||
| Interest expense, net | 11,975 | 16,086 | 38,056 | 48,774 | |||||||||||||||||||
| Interest income | (2,810) | (4,394) | (8,556) | (11,100) | |||||||||||||||||||
| Provision for income taxes | 26,251 | 53,036 | 70,077 | 160,220 | |||||||||||||||||||
| Depreciation and amortization | 17,707 | 29,456 | 73,173 | 88,211 | |||||||||||||||||||
| Depreciation included in cost of goods sold | 12,253 | 13,949 | 39,672 | 41,526 | |||||||||||||||||||
| EBITDA (Non-GAAP) | 66,245 | 81,298 | (190,278) | 254,146 | |||||||||||||||||||
| (Gain) loss on disposal or impairment of assets | (19) | (856) | 1,688 | 686 | |||||||||||||||||||
| Campaign and political contributions | 1,573 | 6,330 | 15,852 | 33,685 | |||||||||||||||||||
| Acquisition, disposition and specified transaction costs | 9,172 | 3,825 | 28,924 | 8,514 | |||||||||||||||||||
| Share-based compensation | 5,900 | 5,785 | 16,950 | 16,490 | |||||||||||||||||||
| Other (income) expense, net | (135) | 1,245 | (381) | 1,992 | |||||||||||||||||||
| Equity in net loss of Harvest | 6,432 | - | 9,721 | - | |||||||||||||||||||
| Loss on Deconsolidation Transaction | - | - | 403,333 | - | |||||||||||||||||||
| Discontinued operations, net of tax, attributable to common shareholders | - | 5,049 | 1,777 | 6,966 | |||||||||||||||||||
| Total adjustments | 22,923 | 21,378 | 477,864 | 68,333 | |||||||||||||||||||
| Adjusted EBITDA (Non-GAAP) | $ | 89,168 | $ | 102,676 | $ | 287,586 | $ | 322,479 | |||||||||||||||
|
Adjusted EBITDA (Non-GAAP) % of Revenue
|
38.7 | % | 35.6 | % | 36.5 | % | 36.3 | % | |||||||||||||||
Liquidity and Capital Resources
Sources of Liquidity
Since our inception, we have funded our operations and capital spending through cash flows from product sales, third-party debt, proceeds from the sale of our capital stock and loans from affiliates and entities controlled by our affiliates. We are generating cash from operations and are deploying our capital reserves to acquire and develop assets capable of producing additional revenues to support our business growth when advisable. Our current principal sources of liquidity are our cash and cash equivalents provided by our operations as well as debt and equity offerings. The Company has generated, and expects to continue to generate, additional cash from operations. Cash and cash equivalents consist primarily of cash on deposit with banks and money market funds.
Our primary uses of cash are for working capital requirements, capital expenditures, debt service payments, and income tax payments. Additionally, we may use cash to support cannabis market expansion related initiatives. Working capital is used principally for personnel expenses as well as costs related to the cultivation, processing and distribution of our products. Our capital expenditures consist primarily of additional cultivation and processing facilities and retail dispensaries, and improvements to existing facilities to support the long-term growth in current markets as well as investments in technology infrastructure.
As of September 30, 2026, cash and cash equivalents were $326.7 million. Although there can be no assurance regarding our future liquidity, we believe our existing cash balances will be sufficient to meet our anticipated cash requirements from the date of this Quarterly Report through at least the next 12 months. Any additional future requirements would likely be funded through the following sources of capital:
•Cash from ongoing operations,
•Debt or equity financings.
Cash Flows
The condensed consolidated statements of cash flows include continuing operations and discontinued operations. The table below highlights our cash flows for the periods presented:
|
Nine Months Ended September 30, |
|||||||||||
| 2026 | 2025 | ||||||||||
| (in thousands) | |||||||||||
|
Net cash provided by operating activities
|
$ | 183,268 | $ | 213,605 | |||||||
|
Net cash (used in) provided by investing activities
|
(156,787) | 19,395 | |||||||||
|
Net cash provided by (used in) financing activities
|
44,671 | (15,105) | |||||||||
|
Net increase in cash and cash equivalents, and restricted cash
|
$ | 71,152 | $ | 217,895 | |||||||
Cash Flows - Operating Activities
Net cash provided by operating activities was $183.3 million for the nine months ended September 30, 2026, a decrease of $30.3 million compared to $213.6 million of net cash provided by operating activities for the nine months ended September 30, 2025. The decrease was driven primarily by the decrease in revenue due to the deconsolidation of Harvest as compared to the prior period.
Cash Flows - Investing Activities
Net cash used in investing activities was $156.8 million for the nine months ended September 30, 2026, compared to the $19.4 million in net cash provided by investing activities for the nine months ended September 30, 2025. The change was primarily driven by certificates of deposit entered into in 2024 which matured in 2025 as well as cash transferred as part of the Deconsolidation Transaction in 2026 and cash used to acquire a trademark intangible asset.
Cash Flows - Financing Activities
Net cash provided by financing activities was $44.7 million for the nine months ended September 30, 2026, a change of $59.8 million, compared to $15.1 million net cash used in financing activities for the nine months ended September 30, 2025. The change was primarily driven by proceeds received from a debt issuance in the first quarter of 2026.
Balance Sheet Exposure
As of September 30, 2026 and December 31, 2025, substantially all of our condensed consolidated balance sheet is exposed to U.S. cannabis-related activities, and substantially all our revenue is from U.S. cannabis operations. On April 23, 2026, the DOJ announced the finalization of the rescheduling of medical marijuana under the CSA from Schedule I to Schedule III. As a result of the rescheduling, certain federal tax, regulatory, and research restrictions applicable to Schedule I substances no longer apply to medical marijuana. The DOJ announcement also provided state-legal medical marijuana businesses an expedited process for registration with the DEA. The Company has applied for DEA licenses in Florida, Pennsylvania, Georgia and West Virginia, with the expected effect that the Company's operations in those medical-only states are federally legal. As of the date of this filing, we've received DEA registrations for substantially all of our dispensary locations. We believe our operations are in material compliance with all applicable federal, state and local laws, regulations, and licensing requirements in the states in which we operate.
Contractual Obligations
For information on our commitments for finance leases, financing arrangements, claims and litigation, contingencies, and other obligations, see Note 4. Supplementary Financial Information, Note 8. Long-Term Borrowings, and Note 11. Income Taxes in Part I. Item 1 of this Quarterly Report. Other than the $43.0 million decrease in our uncertain tax position liabilities, and the $3.1 million decrease in future minimum lease payments under non-cancellable finance leases, there were no other material changes to our contractual obligations as set forth in Part II Item 7 of our 2025 Form 10-K.
Off-Balance Sheet Arrangements
As of the date of this filing, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of, including, and without limitation, such considerations as liquidity and capital resources.
Trulieve Cannabis Corp. published this content on November 05, 2026, and is solely responsible for the information contained herein. Distributed via EDGAR on November 05, 2026 at 11:22 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]