Curaleaf Holdings Inc.

11/03/2026 | Press release | Distributed by Public on 11/03/2026 16:27

Quarterly Report for Quarter Ending September 30, 2026 (Form 10-Q)

MANAGEMENT'S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS
The following discussion and analysis of our financial condition and results of operations should be read in conjunction with our Condensed Consolidated Financial Statements (Unaudited) and related notes included in Item 1 of this Quarterly Report.
This management's discussion and analysis ("MD&A") of the financial condition and results of operations of Curaleaf Holdings, Inc. (For the purposes of this MD&A, the terms "Company", "Curaleaf", "we", "our" or "us" mean Curaleaf Holdings, Inc. and, unless the context otherwise requires, includes its wholly-owned subsidiaries, majority-owned subsidiaries and legal entities in which it holds a controlling financial interest.) is as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025. It is supplemental to, and should be read in conjunction with, the Company's Condensed Consolidated Financial Statements (Unaudited) as of September 30, 2026 and December 31, 2025 and for the three and nine months ended September 30, 2026 and 2025 and the accompanying notes for each respective period. The Company's financial statements are prepared in accordance with accounting principles generally accepted in the United States of America ("GAAP"). Financial information presented in this MD&A is presented in thousands of United States dollars ("$" or "US$"), unless otherwise indicated.
This discussion contains forward-looking statements that involve risks and uncertainties. Our actual results may differ materially from those anticipated in these forward-looking statements as a result of certain factors, including those discussed in Part I - Item 1A - Risk Factors in our Annual Report.
We caution readers not to place undue reliance on any forward-looking statements made by us, which speak only as of the date they are made. We disclaim any obligation, except as specifically required by law and the rules of the U.S. Securities and Exchange Commission (the "SEC"), to publicly update or revise any such statements to reflect any change in our expectations or in events, conditions or circumstances on which any such statements may be based, or that may affect the likelihood that actual results will differ from those set forth in the forward-looking
Overview
The Company is a leading global cannabis company dedicated to developing, manufacturing, and distributing a portfolio of highly sought after cannabis brands for consumers and patients worldwide. As of September 30, 2026, our cannabis portfolio included ten national and international brands across four primary categories, consisting of flower, pre-rolls, vaporizer cartridges, and edibles.
Our broad multichannel distribution footprint enables us to serve consumers and patients across the United States, Canada, Europe and Australasia. As of September 30, 2026, through our U.S. operations, we make, market, and distribute our
brands to consumers and patients in 15 states, through 188 owned and managed retail locations and over 1,300 wholesale partner accounts. Internationally, our brand portfolio is available to medical cannabis patients in 15 countries, headlined by our positions in Germany, the United Kingdom, Poland, and Australasia. Subsequent to September 30, 2026, we expanded our U.S. retail footprint to 191 owned and managed locations as of November 3, 2026.
Our brands are supported by a vertically integrated platform that allows us to manage the end-to-end supply chain and distribution network in our core markets. Our owned cultivation and manufacturing infrastructure, consisting of 17 cultivation sites with approximately 1.5 million square feet of cultivation capacity, ensures the quality, consistency and reliable supply of our branded products. In the U.S., we own and operate a fleet of Curaleaf-branded retail stores that sell our cannabis brands as well as third-party products. In our international markets, we distribute through clinics, pharmacies, and telemedicine platforms. We also complement our distribution model with wholesale partnerships and "asset-light" brand-licensing deals, allowing our brands to reach a wider set of consumers and patients, optimizing market exposure, and strategically managing capital allocation.
We are incorporated under the laws of the Province of British Columbia, Canada, pursuant to the British Columbia Business Corporations Act. Our SVS are listed on the TSX under the symbol "CURA" and quoted on the OTCQX® Best Market (the "OTCQX") under the symbol "CURLF." The principal business address of the Company is located at 250 Harbor Drive, Third Floor, Stamford, Connecticut 06902.
Products and Brands
We offer a wide range of cannabis products including flower, pre-rolls, vaporizer cartridges, edibles, concentrates, topicals, tinctures, and beverages. Domestically, these products are marketed under our national brands, including Select, Grassroots, Find, Dark Heart, Reef, Anthem, Curaleaf, and JAMS. Our prominent international brands include Curaleaf, Four20 Pharma, and Huala. Our product portfolio architecture is designed to appeal to consumers and patients of all income demographics by offering a good, better, best assortment with corresponding price points. Our total brand portfolio has consistently earned a leading market share position in the U.S. according to Hoodie Analytics.
Competitive Landscape
The cannabis industry is highly competitive, and we compete with a diverse range of legal and illicit operators on factors such as quality, price, brand recognition and distribution strength. In the U.S., our competitors range from small, family-owned businesses and single-state operators to multi-state operators ("MSOs"). We also face competition from manufacturers of naturally occurring and synthetic cannabinoids and from participants in adjacent markets, including the alcoholic beverage, tobacco and health and wellness sectors. Internationally, we primarily face competition from other licensed cultivators and wholesale distributors of medical cannabis.
We also face persistent competition from the illicit market, which operates without the significant regulatory, compliance and tax burdens we bear, allowing illicit operators to offer lower prices and attract a meaningful portion of the cannabis consumer base. As the industry matures, we anticipate escalating competition from companies with longer operating histories and/or greater financial resources.
Strategy
Our vision is to be the world's leading cannabis company, driven by a mission to democratize cannabis to improve and celebrate life, every day, everywhere. Our primary strategic priority is to grow our brands' share of the global cannabis market, supported by operational excellence across our vertically integrated platform. Our commitment to deliver profitable and sustainable growth is grounded in market leadership in the U.S. and continuous expansion internationally.
•Domestic Market Leadership: Growing U.S. market share for our brands is at the core of our strategic pillars. Those pillars include customer centricity, brand building and innovation, and executional and operational excellence. The Company's focus on customer centricity means we are committed to making quality products, delivering exceptional service, offering an attractive portfolio assortment, and supplying customers with value - wherever those customers are buying our brands. We will continue to build our brand portfolio through new product innovation and developing brand worlds that serve consumers and patients. Our research and development efforts have resulted in 84 peer-reviewed research papers and partnerships with institutions including University of Pennsylvania, Imperial College London, the Institute of Cancer Research London and the University of
Insubria. Given the current regulatory framework, our owned and managed retail stores are valuable assets in our vertical platform and allow us to actively support our brands and speak directly to consumers and patients at the point of purchase. Our U.S. retail and wholesale distribution footprint prioritizes highly populated states with large, well-structured state-licensed cannabis programs, such as Florida, Illinois, New Jersey and Pennsylvania. We will continue to target growth opportunities as existing state programs stabilize or as new state programs launch.
•International Expansion: Although we consider the U.S. to be the marquee market for our business and the global cannabis industry, the population in Europe is roughly twice that of the U.S., with a population of approximately 742 million people, offering a large potential addressable market of medical cannabis patients. We believe we are currently the largest cannabis operator globally and that we are all positioned to capitalize on the growing international opportunity as countries launch new medical cannabis programs. We continue to invest in supply chain capacity and distribution partnerships to broaden our market presence across the globe, including accelerating patient adoption in Germany, the U.K., and Poland, and expanding into Turkey, where we received an operating license in 2025.
Production and Distribution
Across our global operations, we manage the entire cannabis product lifecycle from seed to sale. This vertically integrated business model provides us with significant control over our supply chain, ensuring high standards for product safety, quality and consistency, and control over our distribution network, allowing our brands to reach a wider audience of consumers and patients.
Cultivation and Genetics
We have developed a diverse global portfolio of unique cannabis cultivars, systematically tested and characterized for yield and cannabinoid content. We cultivate cannabis using a variety of methods - including indoor, two-tier indoor and greenhouse environments - across our global footprint. We regularly evaluate our cultivar portfolio to identify the most attractive varieties, replace underperforming varieties and promote operational standardization.
Extraction, Formulation and Quality Control
Our facilities utilize traditional extraction processes as well as proprietary processes for cannabis extraction and terpene purification. Our processing facilities produce a wide spectrum of solid, liquid and inhaled products for both medical and adult-use markets. For our international operations, our manufacturing and processing facilities in Canada, Germany, Portugal, Spain and the U.K. adhere to stringent European Union Good Manufacturing Practice ("EU-GMP") standards.
Domestic Sales and Distribution
We offer multichannel distribution to consumers and patients both in-store and online. Our primary method of cannabis sales in the U.S. is direct-to-consumer retail through our owned and managed state-licensed dispensaries. Our dispensaries also offer online ordering via our e-commerce website and our web app for in-store pickup, and we provide drive-thru service in Nevada, Utah and Florida, and home delivery, where permitted by state regulations. Our U.S. wholesale business generates revenue through sales to third-party dispensaries, distributors, and processors.
International Sales and Distribution
In Europe, our sales occur primarily through licensed wholesale distribution to pharmacies across Germany, Poland, Switzerland and the U.K. Our U.K. model also includes a medical cannabis clinic and a licensed online pharmacy, enabling direct-to-patient sales. We also supply cannabis to our Australasian partners on a wholesale basis. During 2025, we received the only foreign issued license to operate in Turkey upon commencement of its medical cannabis market, expected in 2027.
Results of Operations
Comparison of the three months ended September 30, 2026 and September 30, 2025
(in thousands, except shares and per share amounts)
Three months ended September 30,
2026 vs. 2025
2026 2025 $ %
Revenues, net:
Retail revenues $ 242,609 $ 225,634 $ 16,975 8 %
Wholesale revenues 106,169 87,899 18,270 21 %
Management fee income 3,872 4,323 (451) (10) %
Total revenues, net 352,650 317,856 34,794 11 %
Cost of goods sold 182,173 157,279 24,894 16 %
Gross profit 170,477 160,577 9,900 6 %
Gross profit margin 48 % 51%
Total operating expenses 167,534 153,655 13,879 9 %
Income from continuing operations 2,943 6,922 (3,979) (57) %
Total other expense, net (25,798) (28,339) 2,541 (9) %
Loss before income taxes (22,855) (21,417) (1,438) 7 %
Benefit (provision) for income taxes (14,509) (32,833) 18,324 (56) %
Net loss from continuing operations (37,364) (54,250) 16,886 (31) %
Net income (loss) from discontinued operations 4,643 (2,434) 7,077 (291) %
Net loss (32,721) (56,684) 23,963 (42) %
Less: Net income attributable to non-controlling interest - 345 (345) (100) %
Net loss attributable to Curaleaf $ (32,721) $ (57,029) $ 24,308 (43) %
Net loss per share basic and dilutive (1)
$ (0.12) $ (0.25) $ 0.13 (52) %
Weighted avg. shares outstanding basic and dilutive(2)
264,882,536 254,941,874
(1) Certain non-controlling interests are redeemable at the option of the holders. When the estimated redemption value exceeds the recorded amount, the excess is charged directly to Shareholders' equity. Pursuant to ASC 480-10, the excess redemption value must be included in the calculation of earnings per share - basic and diluted. The redeemable non-controlling interest was settled during the second quarter of 2026. See Note 2 - Basis of presentation and consolidation, Note 18 - Temporary equity and redeemable non-controlling interests and Note 24 - Earnings per share for additional information.
(2) As a result of the Company's net loss for the three months ended September 30, 2026 and 2025, all potentially dilutive securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive. Accordingly, basic and diluted net loss per share are the same for each period presented.
Revenues, Net
Total revenues, net for the three months ended September 30, 2026 were $352.7 million, an increase of $34.8 million, or 11%, compared to $317.9 million for the three months ended September 30, 2025. Retail revenue increased $17.0 million, or 8%, to $242.6 million. The increase in retail revenue was primarily driven by the expansion of our retail footprint through new store openings, predominately in Florida and Ohio, and acquired stores in Maine, as well as growth in active patients within the International segment.
Wholesale revenues increased $18.3 million, or 21% to $106.2 million. The increase in wholesale revenue was primarily driven by new and expanded relationships with wholesale partners, resulting in greater product distributions across an increased number of licensed retail dispensaries. In addition, the International segment benefited from strong demand for value-oriented flower offering in Germany and the U.K. and the launch of the Curaleaf Que Medical Inhalation Device ("QMID"), the first Conformité Européenne ("CE") certified liquid inhaler for cannabis-based medicines, that further supported revenue growth during the period.
Cost of Goods Sold and Gross Profit
Cost of goods sold for the three months ended September 30, 2026 was $182.2 million, or 52% of total revenues, net, compared to $157.3 million, or 49% of Total revenues, net, for the three months ended September 30, 2025, an increase of $24.9 million, or 16%. The increase in Cost of goods sold was primarily driven by the increases in retail and wholesale revenues.
Gross profit was $170.5 million, or 48% of Total revenues, net for the three months ended September 30, 2026, compared to $160.6 million, or 51%, for the three months ended September 30, 2025. Gross margin percentages may vary from period to period due to changes in product mix, including the relative level of wholesale versus retail sales.
Total Operating Expenses
Total operating expenses increased $13.9 million, or 9%, to $167.5 million, primarily driven by an increase in salaries and benefits and share-based compensation of $10.3 million related to increased headcount, higher employee benefit costs, and an increase in the Company's accrued bonus and PSU achievement adjustments for meeting certain performance metrics, as well as higher accounting, legal and professional fees of $6.0 million related mostly to litigation and acquisition costs, including costs associated with the proposed acquisition of Aurora, as well as outsourced information technology services, partially offset by a decrease in license fees of $1.7 million related to prior year adult use license fees mostly in New York.
Total Other Expense, Net
Total other expense, net decreased $2.5 million, or by 9%, to $25.8 million. The primary drivers were a $3.3 million decrease in international expenses due to fair value adjustments of contingent and deferred consideration, as well as favorable change in foreign exchange rates between the U.S. dollar and British pound, as well as decreases of $1.8 million related to prior year non-recurring impairment and disposal losses mostly in Florida and Arizona, partially offset by a $3.1 million increase in interest expense primarily related to the Senior Secured Note - 2029 within notes payable.
Benefit (Provision) for Income Taxes
We recorded a provision for income taxes of $14.5 million for the three months ended September 30, 2026, a change of $18.3 million, or 56%, compared to the provision for income taxes of $32.8 million for the three months ended September 30, 2025. The decrease in income tax expense was driven primarily by a decrease in non deductible expenses due to the rescheduling order.
Net Loss from Continuing Operations
Net loss from continuing operations for the three months ended September 30, 2026 was $37.4 million compared to a net loss from continuing operations of $54.3 million for the three months ended September 30, 2025, a change of 31%. The drivers of the change in net loss from continuing operations are primarily attributable to the change in tax provision, and are correlated with the aggregate net impact of the aforementioned factors discussed in the "Results of Operations" section of this MD&A.
Net Income (Loss) from Discontinued Operations
Net income from discontinued operations was $4.6 million and net loss from discontinued operations was $2.4 million for the three months ended September 30, 2026 and 2025, respectively, an increase of $7.1 million primarily due to the release of Hello Farms litigation accrual $5.0 million as well as continued wind-down of the discontinued operations and the resulting reduction in operating losses.
Comparison of the nine months ended September 30, 2026 and 2025
(in thousands, except shares and per share amounts)
Nine months ended September 30,
2026 vs. 2025
2026 2025 $ %
Revenues, net:
Retail revenues $ 714,449 $ 685,650 $ 28,799 4 %
Wholesale revenues 291,963 241,356 50,607 21 %
Management fee income 10,568 8,061 2,507 31 %
Total revenues, net 1,016,980 935,067 81,913 9 %
Cost of goods sold 519,299 465,840 53,459 11 %
Gross profit 497,681 469,227 28,454 6 %
Gross profit margin 49% 50%
Total operating expenses 489,763 446,693 43,070 10 %
Income from continuing operations 7,918 22,534 (14,616) (65) %
Total other expense, net (85,710) (76,621) (9,089) 12 %
Loss before income taxes (77,792) (54,087) (23,705) 44 %
Benefit (provision) for income taxes 122,980 (98,328) 221,308 (225) %
Net income (loss) from continuing operations 45,188 (152,415) 197,603 (130) %
Net income (loss) from discontinued operations 4,381 (18,121) 22,502 (124) %
Net income (loss) 49,569 (170,536) 220,105 (129) %
Less: Net (loss) income attributable to non-controlling interest (16) 717 (733) (102) %
Net income (loss) attributable to Curaleaf $ 49,585 $ (171,253) $ 220,838 (129) %
Net income (loss) per share (basic)(1)
$ 0.19 $ (0.80) $ 0.99 (124) %
Weighted avg. shares outstanding (basic) 262,168,678 252,936,604
Net income (loss) per share (dilutive)(1)
$ 0.18 $ (0.80) $ 0.98 (123) %
Weighted avg. shares outstanding (dilutive)(2)
272,094,796 252,936,604
(1) Certain non-controlling interests are redeemable at the option of the holders. When the estimated redemption value exceeds the recorded amount, the excess is charged directly to Shareholders' equity. Pursuant to ASC 480-10, the excess redemption value must be included in the calculation of earnings per share - basic and diluted. The redeemable non-controlling interest was settled during the second quarter of 2026. The excess redemption value included in the EPS calculation for the nine months ended September 30, 2026 relates to accretion recognized through the settlement date. See Note 2 - Basis of presentation and consolidation, Note 18 - Temporary equity and redeemable non-controlling interests and Note 24 - Earnings per share for additional information.
(2) As a result of the Company's net loss for the nine months ended September 30, 2025, all potentially dilutive securities were excluded from the calculation of diluted net loss per share because their effect would have been anti-dilutive. Accordingly, basic and diluted net loss per share are the same for each period presented.
Revenues, Net
Total revenues, net for the nine months ended September 30, 2026 were $1,017.0 million, an increase of $81.9 million, or 9%, compared to $935.1 million for the nine months ended September 30, 2025. Retail revenues increased 4% or $28.8 million. The increase in retail revenue was primarily driven by the expansion of our retail footprint through new store openings, predominately in Florida and Ohio, and acquired stores in Maine. Retail revenue in the international segment also benefited from continued adoption of the QMID vaporizer, as well as growth in active patients. These increases were partially offset by price compression and heightened competition in certain markets.
Wholesale revenues increased 21% to $292.0 million. The increase in wholesale revenue was primarily driven by new and expanded relationships with wholesale partners, resulting in greater product distributions across an increased number of licensed retail dispensaries as well as improved flower quality in the U.S. market. In addition, the International segment benefited from the launch of the QMID vaporizer, as well as strong demand for value-oriented flower offering in Germany and the U.K.
Cost of Goods Sold and Gross Profit
Cost of goods sold for the nine months ended September 30, 2026 was $519.3 million, or 51% of Total revenues, net, compared to $465.8 million, or 50% of Total revenues, net, for the nine months ended September 30, 2025, an increase of $53.5 million, or 11%. The increase in Cost of goods sold was primarily driven by the increase in wholesale revenues, which are typically lower margin than retail revenues, as a percent of total revenues.
Gross profit was $497.7 million, or 49% of Total revenues, net, compared to $469.2 million, or 50%, for the nine months ended September 30, 2025. Gross profit percentages may vary from period to period due to changes in product mix, including the relative level of wholesale versus retail sales.
Total Operating Expenses
Total operating expenses increased $43.1 million, or 10%, to $489.8 million. The primary drivers were an increase in salaries and benefits and share-based compensation of $32.6 million related to increased headcount and an increase in the Company's accrued bonus and PSU achievement adjustments for meeting certain performance metrics. Accounting, legal and professional fees were also higher by $7.8 million related mostly to litigation and acquisition costs, including costs associated with the proposed acquisition of Aurora, as well as outsourced information technology services and additional audit fees, higher lobbying and public relations costs of $3.8 million associated mostly with national adult-use initiatives.
Total Other Expense, Net
Total other expense, net increased $9.1 million, or 12%, to $85.7 million. The primary drivers were a $7.7 million increase in international expenses due to the change in foreign exchange rates between the U.S. dollar and British pound, a $5.3 million increase in interest expense primarily related to the Senior Secured Note - 2029 within notes payable, partially offset by prior year non-recurring domestic impairment and disposal losses of $3.4 million.
Benefit (Provision) for Income Taxes
We recorded a benefit for income taxes of $123.0 million for the nine months ended September 30, 2026, a change of $221.3 million, or 225%, compared to the provision for income taxes of $98.3 million for the nine months ended September 30, 2025. The change was driven primarily by (i) the release of $121.2 million of previously recorded uncertain tax positions related to the treatment of certain costs in our U.S. consolidated tax return; (ii) a $60.5 million release of valuation allowance following the reassessment of the realizability of certain deferred tax assets after the Rescheduling Order; and (iii) lower uncertain tax position accruals, as deductions attributable to qualifying state-licensed medical cannabis activities occurring on or after April 28, 2026 are no longer limited by Section 280E. These decreases were partially offset by state income taxes, non-deductible expenses such as executive compensation and lobbying expenses, and the U.S. tax impact of foreign operations.
Net Income (Loss) from Continuing Operations
Net income from continuing operations for the nine months ended September 30, 2026 was $45.2 million compared to a net loss from continuing operations of $152.4 million for the nine months ended September 30, 2025, a change of 130%. The drivers of the change in net income (loss) from continuing operations are primarily attributable to the change in tax provision, and are correlated with the aggregate net impact of the aforementioned factors discussed in the "Results of Operations" section of this MD&A.
Net Income from Discontinued Operations
Net income from discontinued operations was $4.4 million, compared to a net loss from discontinued operations of $18.1 million for the nine months ended September 30, 2026 and 2025, respectively, an increase of $22.5 million, primarily due to the continued wind-down of the discontinued operations and the resulting reduction in operating losses, as well as the release of the Hello Farms litigation accrual of $5.0 million.
Segment Results
We have two reportable operating segments: (i) Domestic operations and (ii) International operations.
Comparison of the three months ended September 30, 2026 and 2025
The following tables present revenues, net by segment for the three months ended September 30, 2026 and 2025:
Domestic Operations
Three months ended September 30,
2026 vs. 2025
2026 2025 $ %
Retail revenues $ 225,076 $ 211,483 $ 13,593 6 %
Wholesale revenues 68,637 60,138 8,499 14 %
Management fee income 240 245 (5) (2) %
Total revenues, net - Domestic $ 293,953 $ 271,866 $ 22,087 8 %
International Operations
Three months ended September 30,
2026 vs. 2025
2026 2025 $ %
Retail revenues $ 17,533 $ 14,151 $ 3,382 24 %
Wholesale revenues 37,532 27,761 9,771 35 %
Management fee income 3,632 4,078 (446) (11) %
Total revenues, net - International $ 58,697 $ 45,990 $ 12,707 28 %
Domestic revenues increased $22.1 million, or 8%, to $294.0 million. Domestic retail revenues increased $13.6 million to $225.1 million, driven primarily by new store openings, and acquired new stores. Domestic wholesale revenues increased $8.5 million to $68.6 million, due primarily to increased wholesale partner locations and better flower quality.
International revenues increased $12.7 million, or 28%, to $58.7 million. International retail revenues increased $3.4 million to $17.5 million, primarily driven by an increase in active patients. International wholesale revenues grew 35% to $37.5 million, driven by sales of flower and vapes in Germany and the U.K.
Comparison of the nine months ended September 30, 2026 and September 30, 2025
The following tables present revenues, net by segment for the nine months ended September 30, 2026 and 2025:
Domestic Operations
Nine months ended September 30,
2026 vs. 2025
2026 2025 $ %
Retail revenues $ 664,678 $ 647,511 $ 17,167 3 %
Wholesale revenues 194,199 165,167 29,032 18 %
Management fee income 759 568 191 34 %
Total revenues, net - Domestic $ 859,636 $ 813,246 $ 46,390 6 %
International Operations
Nine months ended September 30,
2026 vs. 2025
2026 2025 $ %
Retail revenues $ 49,771 $ 38,139 $ 11,632 30 %
Wholesale revenues 97,764 76,189 21,575 28 %
Management fee income 9,809 7,493 2,316 31 %
Total revenues, net - International $ 157,344 $ 121,821 $ 35,523 29 %
Domestic revenues increased $46.4 million, or 6%, to $859.6 million. Domestic retail revenues increased $17.2 million to $664.7 million, primarily driven by new store openings and partially offset by increased price compression due to increased competition. Domestic wholesale revenues increased $29.0 million to $194.2 million, due to increased wholesale partner locations.
International revenues increased $35.5 million, or 29%, to $157.3 million. International retail revenues grew $11.6 million to $49.8 million, primarily driven by an increase in active patients. International wholesale revenues grew 28% to $97.8 million, driven by sales of flower and vapes in Germany and the U.K.
Non-GAAP Measures
Adjusted EBITDA is a non-GAAP financial measure, and Adjusted EBITDA Margin is a non-GAAP financial ratio, and such measure and ratio do not have standardized definitions under GAAP. A reconciliation of the supplemental non-GAAP financial measure to the most directly comparable financial measure calculated and presented in accordance with GAAP is presented below and in Item 1, Note 25 - Segment reporting. The Company has provided the non-GAAP financial measure and ratio, which are not calculated or presented in accordance with GAAP, as supplemental information and in addition to the financial measures that are calculated and presented in accordance with GAAP. These supplemental non-GAAP financial measures and ratios are presented because management has evaluated the financial results both including and excluding the adjusted items and believes that the supplemental non-GAAP financial measure and ratio presented provide additional perspective and insights when analyzing the core operating performance of the business. These supplemental non-GAAP financial measure and ratio should not be considered superior to, as a substitute for or as an alternative to, and should be considered in conjunction with, the GAAP financial measures presented. They may not be comparable to similar financial measures or financial ratios disclosed by other issuers. The Company defines such non-GAAP financial measure and ratio as follows:
"Adjusted EBITDA" is defined as earnings before interest, taxes, depreciation and amortization, adjusted for share-based compensation expense and other adjustments related to restructuring costs, adult use campaign and political initiatives, as well as acquisition, transaction and other non-recurring costs.
"Adjusted EBITDA Margin" is defined as Adjusted EBITDA divided by total revenue.
Three months ended September 30,
2026 2025
Net (loss) $ (32,721) $ (56,684)
Net income (loss) from discontinued operations 4,643 (2,434)
Net income (loss) from continuing operations (37,364) (54,250)
Interest expense, net 28,271 25,214
Provision for income taxes 14,509 32,833
Depreciation and amortization 51,539 48,992
Share-based compensation 14,045 10,294
(Gain) loss on impairment (28) 848
Total other (income) expense, net (2,445) 2,277
Other adjustments(1)
9,050 5,499
Adjusted EBITDA $ 77,577 $ 71,707
Adjusted EBITDA Margin 22 % 23 %
(1) Other adjustments for the three months ended September 30, 2026 primarily include restructuring costs of $1.7 million, adult use campaign and political initiatives of $1.2 million as well as acquisition, transaction, and other non-recurring costs of $6.2 million. Other adjustments for the three months ended September 30, 2025 primarily include restructuring costs of $0.2 million, as well as acquisition, transaction, and other non-recurring costs of $5.3 million.
Nine months ended September 30,
2026 2025
Net income (loss) $ 49,569 $ (170,536)
Net income (loss) from discontinued operations 4,381 (18,121)
Net income (loss) from continuing operations 45,188 (152,415)
Interest expense, net 81,152 75,842
(Benefit) provision for income taxes (122,980) 98,328
Depreciation and amortization 148,006 146,985
Share-based compensation 33,980 23,395
Loss on impairment 13 3,334
Total other expense (income), net 4,545 (2,555)
Other adjustments(1)
21,210 12,760
Adjusted EBITDA $ 211,114 $ 205,674
Adjusted EBITDA Margin 21% 22%
(1) Other adjustments for the nine months ended September 30, 2026 primarily include restructuring costs of $4.0 million, adult use campaign and political initiatives of $5.1 million as well as acquisition, transaction, and other non-recurring costs of $12.1 million. Other adjustments for the nine months ended September 30, 2025 primarily include restructuring costs of $2.2 million, as well as acquisition, transaction, and other non-recurring costs of $10.6 million.
Liquidity and Capital Resources
The Company's primary sources of liquidity are cash flows from operations and, to a lesser extent, proceeds from asset sales and borrowings under our credit facilities. Our primary uses of cash are working capital requirements, capital expenditures, debt service and lease obligations. We expect that cash on hand together with anticipated cash flows from operations and financing activities will be sufficient to meet our capital requirements and operational needs over the next 12 months.
Working Capital
Working capital is defined as current assets minus current liabilities. As of September 30, 2026, we had positive working capital of $175.8 million compared to positive working capital of $154.3 million as of December 31, 2025. Cash and cash equivalents (including restricted cash) were $104.9 million and $101.6 million as of September 30, 2026 and December 31, 2025, respectively. The $21.5 million increase in working capital was driven primarily by increased inventory for new product launches and projected demand as well as increases in accounts receivable driven by higher wholesale sales.
Outstanding Debt Obligations
As of September 30, 2026, our material outstanding debt obligations were as follows:
Credit Facility Outstanding Balance Maturity Date
Senior Secured Notes - 2029 $ 500,000
February 18, 2029
Senior Secured Notes - 2027 36,702
December 17, 2027
Amended Needham LOC(1)
69,000
February 18, 2029
ABL Facility - EWB Note 12,000
August 25, 2027
Seller note payable - Scottsdale Note 3,880
December 1, 2036
Seller note payable - Cannabis Haven 6,500 September 18, 2028
Other notes payable 8,836
Various
Total notes payable $ 636,918
(1) In connection with the completion of the private placement of $500 million of Senior Secured Notes due February 18, 2029 (the "Senior Secured Notes - 2029"), the maturity date of the Amended Needham LOC was extended to February 18, 2029. See Note 16 - Notes payable and debt.
Cash Flows
The following table summarizes our sources and uses of cash for the nine months ended September 30, 2026 and 2025:
Nine months ended September 30,
2026 2025
Operating activities:
Continuing operations $ 72,302 $ 109,433
Discontinued operations (959) (14,752)
Net cash provided by operating activities $ 71,343 $ 94,681
Investing activities:
Continuing operations $ (52,541) $ (50,084)
Discontinued operations - (951)
Net cash used in investing activities $ (52,541) $ (51,035)
Financing activities:
Continuing operations $ (14,977) $ (44,551)
Discontinued operations - -
Net cash used in financing activities (14,977) (44,551)
Net increase (decrease) in cash $ 3,825 $ (905)
Net cash provided by operating activities decreased $23.3 million to $71.3 million. Cash from continuing operations of $72.3 million was driven by income from operations and partially offset by cash interest payments on debt and lease obligations.
Net cash used in investing activities increased $1.5 million to $52.5 million. Investing cash outflows in both periods were primarily driven by increase PPE expenditures supporting our global expansion and operational efficiency initiatives.
Net cash used in financing activities decreased $29.7 million to $15.0 million. Decrease in net cash outflows was driven primarily by the proceeds from the Senior Secured Notes refinancing, partially offset by the cash settlement of Four20 NCI and withholding to cover shares for PSU/RSU share.
Contractual Obligations
The following table summarizes our contractual obligations as of September 30, 2026:
Notes Total Less than 1 Year 1-3 Years 3-5 Years More than 5 Years
Notes payable (principal)
16 $ 636,918 $ 48,929 $ 582,884 $ 2,346 $ 2,759
Notes payable (interest) 16 157,213 67,498 89,055 341 319
Operating lease obligations 11 181,681 $ 8,308 65,049 51,150 57,174
Finance lease obligations 11 262,653 $ 8,108 65,597 64,443 124,505
Financial obligations - failed sale-leasebacks 12 336,044 8,370 62,848 59,956 204,870
Contingent consideration 4, 27 3,666 - 3,666 - -
Deferred consideration 4 7,203 7,203 - - -
Litigation settlements(1)
26 3,521 - - - -
Uncertain tax positions(1)
23 476,092 - - - -
Total contractual obligations $ 2,064,991 $ 148,416 $ 869,099 $ 178,236 $ 389,627
(1) Excluded from aging columns due to uncertainty regarding timing of settlement.
Off-Balance Sheet Arrangements
As of September 30, 2026 and December 31, 2025, the Company does 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 the Company, including, and without limitation, such considerations as liquidity and capital resources.
Changes in or Adoption of Accounting Practices
We have implemented all applicable accounting standards recently issued by the Financial Accounting Standards Board, as well as applicable pronouncements from certain other standard-setting bodies, within the prescribed effective dates. Pronouncements that are not applicable or where it has been determined do not have a significant impact to the accompanying Consolidated Financial Statements have been excluded. See discussion under Item 1, Note 3 - Significant accounting policies.
Future Capital Offerings
On February 3, 2025, we filed a final short-form base shelf prospectus in Canada (the "Base Shelf Prospectus") and, on February 5, 2025, we filed the Base Shelf Prospectus on a Form F-10 registration statement (File No. 333-284710) (the "Registration Statement") with the SEC under the U.S./Canada Multijurisdictional Disclosure System ("MJDS"), allowing us to offer up to $1 billion of securities (including SVS, debt securities, subscription receipts, warrants and units) from time to time during the 25-month period of effectiveness (subject to MJDS eligibility). The specific terms of any future offering of securities, including the use of proceeds from any offering, will be established in a supplement to the Base Shelf Prospectus and/or the Registration Statement. Upon our transition from complying with MJDS requirements as a foreign private issuer to complying with U.S. domestic issuer requirements, we expect to file future shelf registration statements on applicable domestic filer forms.
NCIB
On April 16, 2026, we announced that our Board of Directors had authorized, and the TSX had approved, a NCIB pursuant to which we may repurchase up to 11.4 million of our SVS, representing approximately 5% of the SVS issued and outstanding as of April 10, 2026, over the twelve-month period commencing on April 20, 2026 and ending no later than April 19, 2027. The NCIB is conducted through the facilities of the TSX and/or alternative trading systems in Canada, if eligible, from time to time over the term of the NCIB. Under the NCIB, other than purchases made under block purchase exemptions, we will be allowed, subject to applicable securities laws and stock exchange requirements, to purchase daily, through the facilities of the TSX, a maximum of 70,046 SVS, representing 25% of the average daily trading volume of 280,186 SVS, as calculated per the TSX rules for the six-month period ended on March 31, 2026. All SVS purchased under the NCIB will be canceled.
We have appointed ATB Cormark Capital Markets as its designated broker under the NCIB.
As of September 30, 2026, we had repurchased 198,803 SVS under the Bid, leaving 11,264,140 SVS available for repurchase. Securityholders of the Company may obtain a copy of the Form 12 - Notice of Intention to Make a Normal Course Issuer Bid filed with the TSX in connection with the NCIB, without charge, by contacting the secretary of the Company at [email protected].
Takeover Bid for Aurora Cannabis Inc.
On August 11, 2026, the Company announced its intention to make an offer (the "Original Offer"), and on August 18, 2026, the Company formally commenced the Original Offer, to purchase all of the issued and outstanding common shares (the "Aurora Shares") of Aurora Cannabis Inc. ("Aurora"), together with the associated rights to purchase Aurora Shares issued and outstanding under Aurora's shareholder rights plan, for consideration consisting of SVS and cash. Upon acceptance of the Original Offer, each holder of Aurora Shares whose Aurora Shares are taken by the company would have been entitled to receive, for each Aurora Share, $0.75 in cash and 0.3463 of an SVS, subject to a maximum value per each Aurora share of $5.00.
On October 6, 2026, the Company amended the Original Offer to increase the consideration and vary certain terms and conditions of the Original Offer (the "Amended Offer" or the "Offer"). Under the Amended Offer, each Aurora shareholder whose Aurora Shares are taken up by the Company will be entitled to receive, for each Aurora Share, $1.00 in cash and 0.4013 of a SVS, subject to a maximum value per Share of $6.00. The Amended Offer is open for acceptance until 11:59 p.m. (Mountain Time) on December 4, 2026, unless extended, varied or withdrawn in accordance with its terms.
The Amended Offer is subject to customary conditions, including: (i) there being validly deposited under the Offer, and not withdrawn, more than 50% of the outstanding Aurora Shares, excluding any Shares held by Curaleaf and other non-independent shareholders; (ii) at least 66⅔% of the outstanding Aurora Shares (on a fully diluted basis) having been deposited under the Offer; (iii) receipt of all required governmental and regulatory approvals; (iv) no material adverse effect having occurred in respect of Aurora; (v) Aurora's shareholder rights plan not impairing the Offer; and (vi) the absence of any legal, regulatory or other event that would prevent or materially adversely affect completion of the Offer.
If the Amended Offer is successful, the Company would intend on acquiring the remaining Aurora Shares not tendered to the Amended Offer in the manner described in the Offer and Circular filed with the regulatory authorities on August 18, 2026, as amended on October 6, 2026 (the "Offer Circular"). There are numerous risks associated with the Amended Offer, and there can be no assurance that the Amended Offer will be successful, or if it is successful, that the Company will be able to acquire the remaining Aurora Shares. The Offer Circular describes numerous risks associated with the Amended Offer.
On November 3, 2026, Organigram Global, Inc., a publicly listed Canadian licensed producer ("Organigram"), announced that it has entered in an Arrangement Agreement with Aurora to conclude an alternative transaction (the "Organigram Transaction"), which provides Aurora shareholders with consideration that Organigram values at CAD 7.80, including a mix of Organigram shares and cash. The Board of Aurora is recommending the Organigram Transaction as superior to Curaleaf's Amended Offer. The Company is assessing the terms and value of the Organigram Transaction compared to its Amended Offer and is considering its options. As of the date hereof, the Amended Offer remains in force.
Reverse Stock Split
On June 5, 2026, the Company effected a 1-for-3 reverse stock split of its issued and outstanding SVS and MVS. The reverse stock split reduced the number of issued and outstanding shares of the Company's SVS and MVS on a proportionate basis and did not affect any shareholder's percentage ownership interest in the Company, except for adjustments resulting from the treatment of fractional shares. Share amounts, per share amounts, voting rights and equity award information presented in these consolidated financial statements and accompanying notes have been retroactively adjusted to reflect the reverse stock split for all periods presented.
Critical accounting policies, judgments 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 critical accounting estimates that we believe affect our more significant judgments and estimates used in the preparation of our Condensed Consolidated Financial Statements presented in this Quarterly Report on Form 10-Q are described under Critical Accounting Policies and Estimates included in the section titled 'Management's Discussion and Analysis of Financial Condition and Results of Operations' in Part II, Item 7 of the 2025 Annual Report on Form 10-K. There have been no material changes to our critical accounting policies or estimates from those set forth in our Annual Report on Form 10-K.
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