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Good morning, everyone, and welcome to the Trulieve Cannabis Corp. second quarter 2026 financial results conference call. My name is Chris, and I will be your conference operator today. As a reminder, this conference call today is being recorded. I would now like to turn the conference call over to Christine Hersey, Chief Corporate Affairs and Strategy Officer for Trulieve, who will be your moderator for today. You now may begin.

Thank you. Good morning and thank you for joining us. During today's call, Kim Rivers, Chief Executive Officer, and Jan Reese, Chief Financial Officer, will deliver prepared remarks on the financial performance and outlook for Trulieve. Following the prepared remarks, we will open the call to questions. This morning, we reported second quarter 2026 results. A copy of our earnings press release and PowerPoint presentation may be found on the investor relations section of our website, www.trulieve.com. An archived version of today's conference call will be available on our website later today.

As a reminder, statements made during this call that are not historical facts constitute forward-looking statements. These statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially from our historical results or from our forecasts, including the risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including Item 1A Risk Factors of the company's most recent annual report on Form 10-K, as well as our periodic quarterly filings. Although the company may voluntarily do so from time to time, it undertakes no commitment to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. During the call, management will also discuss certain financial measures that are not calculated in accordance with the United States Generally Accepted Accounting Principles, or GAAP.

We generally refer to these as non-GAAP financial measures. These measures should not be considered in isolation or as a substitute for Trulieve's financial results prepared in accordance with GAAP. A reconciliation of these non-GAAP measures to the most directly comparable GAAP measures is available in our earnings press release that is an exhibit to our current report on Form 8-K that we furnished to the SEC today and can be found in the investor relations section of our website. Lastly, at times during our prepared remarks or responses to your questions, we may offer metrics to provide greater insight into the dynamics of our business or our financial results. Please be advised that we may or may not continue to provide these additional details in the future. I'll now turn the call over to our CEO, Kim Rivers.

Thank you, Christine. Good morning, everyone. Thank you for joining us today. We are thrilled to report second quarter results for the first time as a company listed on the New York Stock Exchange. For those of you who may be new to Trulieve, we are the largest medical cannabis operator in the U.S. Our mission is to expand access to cannabis while serving customers with high-quality products and exceptional experiences. 10 years ago, Trulieve served the first medical cannabis patient in Florida. Over the past decade, we have grown from a single dispensary to 207 medical dispensaries and 3.5 million sq ft of production capacity. When we include Trulieve-branded adult and medical mixed-use dispensaries owned by Harvest, our branded retail network includes 241 retail locations and over 4 million sq ft of production capacity.

Last month, Trulieve was named to TIME's America's Best Companies 2026 list, a prestigious recognition awarded to the top 1,000 companies, highlighting our commitment to employee growth and career development. I am so proud of the team and what we have built together. Since the very beginning, Trulieve has led from the front, pushing for reform. For the past two years, we have actively supported federal reclassification of marijuana. In December, President Trump issued an executive order to support rescheduling, delivering on his campaign promise to address cannabis reform. In April, Attorney General Todd Blanche rescheduled state-licensed medical marijuana to Schedule III, completing the first meaningful federal reform in over 50 years. In conjunction with state-licensed medical marijuana rescheduling, the Treasury Department confirmed that punitive 280E tax no longer applies to state-licensed medical marijuana operations beginning in 2026.

The removal of this tax burden provided an immediate boost to our reported net income and cash flow. At the same time, AG Blanche resumed the broader rescheduling process for marijuana. Hearings concluded last month. We expect a final order to be issued this year. As part of the final order to reschedule state-licensed medical marijuana, a new process was created for operators to register with the DEA. Trulieve registered all of its medical-only marijuana dispensaries and production facilities with the DEA, complying with the six-month grandfathering provision in the final order. To date, the DEA has completed inspections at 100% of our dispensaries across Florida, Pennsylvania, and West Virginia. We anticipate facility approvals in the coming weeks. In order to facilitate listing on the New York Stock Exchange, Trulieve segregated the medical-only state-licensed DEA-registered business from the mixed-use states that have both medical and adult use operations.

State operations serving medical and adult use customers are part of Harvest. Following precedent, as part of the deconsolidation, 10% of the mixed-use business was sold to an independent third-party investor along with operational control. Trulieve retains 90% of the economic interest in Harvest and will have the option to reconsolidate the Harvest business pending broader rescheduling and NYSE permitting inclusion. Since listing on June 10th, we have conducted non-deal roadshows to meet investors in Chicago, Denver, New York, Montreal, and Toronto. We introduced Trulieve to a host of institutional investors who are new to the cannabis space. Over time, we expect to realize greater stability in our shareholder base, higher liquidity, broader analyst coverage, and index inclusion for our stock.

We plan to commemorate our listing at a closing bell ceremony at the NYSE on August 18th, marking another milestone as the first U.S. cannabis company to ring the bell. We believe uplifting to the NYSE, re-domiciling in the U.S., and removal of the punitive 280E tax burden will lower our cost of capital. While the shift in federal policy is historic, I am equally excited about three significant near-term growth opportunities. First, in Georgia, program changes have created an unlock for increased distribution that we are executing on now. Second, in Texas, where we are in the process of converting our conditional license to final, we have the opportunity to serve the biggest medical market since Florida. Third, across our markets, we have a targeted strategy to acquire new customers currently served by the intoxicating hemp market as the federal ban takes effect.

Overall, Trulieve is ready to further solidify our leadership position during this incredibly exciting time for the industry. Our core business continues to outperform, generating industry-leading margins and strong cash flow, providing the flexibility to make strategic investments in growth initiatives. Turning now to our second quarter results. Please note, reported results for this quarter include the combined business until the deconsolidation transaction on June 3rd, and then the medical-only business for the remainder of June. Second quarter revenue of $271 million was in line with guidance. For the medical-only business, revenue increased 4% sequentially to $222 million. Second quarter gross margin of 60% reflects operational efficiencies, low production costs, and our disciplined approach to promotional activity. For the medical-only business, second quarter gross margin was 63%. Adjusted EBITDA of $98 million or 36% margin was driven by expense control in our core business.

During the quarter, we generated $53 million in operating cash flow, which contributed to our quarter-end cash balance of $325 million. Second quarter retail results were in line with positive seasonal trends, including the 420 holiday. In medical-only markets, traffic increased 6%, pressured by a slight sequential decline in average basket. Units were up 8%, underscoring strong demand for cannabis. In Florida, we sold 56% more flower per store than the state average across 169 stores, totaling 680,000 ounces. We sold 1.5 billion milligrams of oil, more than two times the next highest competitor. Patient growth in Florida, Georgia, and Pennsylvania has accelerated recently, further highlighting cannabis demand. Customer preferences for value, mid, and premium tier units sold remain consistent from the first quarter. During the third quarter, we expect growth in Georgia and Pennsylvania to offset typical summer pressure in Florida.

We expect momentum to fuel continued growth through year-end. Our investment in Harvest performed well in the second quarter, with revenue growth and margin expansion compared to the first quarter, driven largely by growth in Ohio. Turning now to our strategic objectives for 2026. We have made meaningful progress in these four areas. One, expanding access to cannabis, two, investing in growth initiatives, three, growing our loyal customer base, and four, elevating our branded product portfolio. I'll begin with expanding access to cannabis, which is a critical part of our mission. State-licensed medical marijuana has been reclassified to Schedule III, representing a major win for patients, caregivers, and physicians. Acknowledging the medical value of cannabis reduces stigma, eases barriers to research, and sets the stage for further reform. We remain supportive of broader rescheduling and expect a final order this year.

We expect momentum to continue with safe banking, updated FinCEN guidance, and Treasury guidance on 280E tax treatment, including potential retroactive application for state-licensed medical marijuana operators. These measures can expand access to banking and service providers, reducing friction and costs in day-to-day operations. While cannabis reform continues to come to fruition, we are ramping investments in meaningful growth opportunities in both Georgia and Texas. Following recent program changes in Georgia and federal reclassification of state-licensed medical marijuana, Trulieve has significant growth potential in both the independent pharmacy channel and our own dispensaries. Independent pharmacies in Georgia are eligible to register with the state and with the DEA to dispense approved medical marijuana products to registered patients. In June, we began supplying licensed pharmacies with medical marijuana products and are now shipping to almost 20 pharmacies.

We believe this market opportunity will expand over time, as more than 125 independent pharmacies have previously expressed interest in carrying medical marijuana products. Our team is meeting with pharmacy owners across Georgia to discuss medical cannabis and share information on how to apply for state and DEA licenses. Alongside pharmacy distribution, the Georgia program has six licensed operators for cultivation and retail. As one of only two Tier 1 license holders, Trulieve opened the first medical dispensary in April 2023. At that time, the program was limited to low-THC products for patients with severe and end-stage qualifying conditions. In May, the governor signed a new law that expands the program. As of July 1st, Georgia's medical marijuana program removes the THC cap, includes new qualifying conditions such as HIV, IBS, and lupus, and allows for new products such as vapes and inhalable flower.

In the first two weeks of July, traffic at our dispensaries tripled. Due to high demand, we sold out of flower. However, we expect to have flower back in stock in the coming weeks. Cultivation capacity is ongoing and will ramp in stages throughout the end of the year and into 2027. While flower production is ramping, we have a variety of new concentrate and vape products rolling out in August and September. Today, we have six open dispensaries and are on track to open our seventh store in Dunwoody this fall. The program allows us to open additional dispensaries as the patient count increases. Patient enrollment in Georgia is accelerating, with growth up 38% this year, and surpassed 45,000 this week, triggering eligibility for an eighth dispensary, which could open as soon as early 2027. While Georgia presents a meaningful growth opportunity, Texas has tremendous near-term growth potential.

We believe Texas represents the largest medical cannabis opportunity in the U.S. Historically, the Texas Compassionate Use Program, or TCUP Medical Marijuana Program, was limited in scope and size. The program had only three licensed operators and strict rules that made it very difficult for any of the three operators to achieve scale, such as requiring all products to be removed from each dispensary and warehoused every night. Last September, a new law passed that revamped the program, making several critical improvements. Qualifying conditions were expanded to include chronic pain, Crohn's disease, traumatic brain injuries, and terminal illnesses. Initial patient consultations with physicians can be conducted via telehealth, providing a convenient way for patients to speak with a physician to determine which products and dosing may be appropriate. In addition, rules were updated to allow products to remain in dispensaries without warehousing overnight.

Permissible products were expanded to include new form factors such as vapes, lotions, and patches. The number of operators is increasing from three to 15 with the award of 12 new licenses. In December, Trulieve was awarded a conditional license for the TCUP Medical Marijuana Program. We are working to convert the conditional award to a final license. The TCUP program allows each license holder to build vertically integrated operations with unlimited production capacity on a contiguous site to support unlimited retail as long as the operator has one retail location in each of the 11 regions across Texas. Construction of initial production capacity is complete, and we have a robust retail pipeline of stores covering all regions. We plan to scale our production capacity and retail network modularly as the patient count increases over time.

This year, the program has grown by 16% to over 157,000 patients, representing less than 0.5% of the population in Texas. For context, established medical programs in Florida and Pennsylvania have 4% population penetration, which for Texas would be about 1.3 million patients or 8.5 times the current market size. The setup in Texas strongly favors Trulieve's approach to market penetration through scaled operations to sell branded products through branded retail. Our proven track record of developing vertically integrated medical markets such as Florida, combined with our strong balance sheet, provide us with meaningful competitive advantages in Texas. We believe the Texas market can grow more quickly than Florida did, and we look forward to contributing to the success of the TCUP program.

Alongside expansion in Georgia and Texas, we are investing in our retail network with both new locations and store refresh or remodels to support patient growth while maintaining brand standards. Year to date, we have opened eight new dispensaries in Florida and refreshed or remodeled 24 locations across our markets. On top of investments in organic growth, we are actively evaluating acquisition opportunities in new and existing markets, ranging from tuck-in assets to large, single, and multi-state operations. We evaluate potential targets using stringent criteria, including price, strategic fit, quality of assets, and market framework. In addition, we are investing in technology. Earlier this year, we launched Project Hyper, an initiative focused on hyper-personalization of customer messaging.

Through generative AI, we are automating creative production at scale, enhancing how we personalize and orchestrate customer communications, and modernizing our digital commerce platforms to deliver a more seamless experience across web and mobile. Project Hyper remains on track, and we expect to begin realizing efficiency and speed to market benefits by year-end, with additional capabilities rolling out ahead of our targeted completion date of March 2027. As the cannabis industry continues to evolve, creating deeper and lasting connections with our customers is critical to long-term success. Customer engagement through digital and real-life interaction are at the core of our strategy to grow our loyal customer base. Local community events, physician engagement, and paid media help Trulieve establish and maintain reciprocal relationships with patients, caregivers, and physicians.

Across our branded retail network, we conduct over 100 community and physician engagement events per month, partnering with a wide variety of nonprofit organizations to raise awareness for cannabis. Last year, we launched our Florida mobile app, giving patients a more convenient way to browse products, access deals and rewards, and place orders. Adoption continues to exceed expectations with more than 200,000 downloads since launch. In the second quarter alone, the app drove 30% of all online orders with increased average basket size and order frequency. Given the success we've seen in Florida, we plan to launch the app in Georgia later this year, with additional markets expected to follow in 2027. Across our branded retail platform, our rewards program added 80,000 members in the second quarter, surpassing 1.1 million members. Rewards members continue to spend on average 2.2 times more than non-reward members, comprising 80% of second quarter transactions.

In May, we introduced program tiers in Florida, enabling greater rewards for customers who spend more, including exclusive offers, products, and events. We plan to add reward tiers in additional markets this year. Customer retention is one of the key metrics we use to measure the depth and quality of our customer connections. For medical-only markets, customer retention held steady at 78%. We sold almost 14 million branded product units, with Modern Flower and Roll One comprising almost half of branded units sold. The Roll One Clutch all-in-one vape continues to gain momentum, with over 35% growth in units sold. We will continue to identify white space in our branded product portfolio in the markets we serve as we develop and launch innovative new products. Overall, we have made tremendous progress on all of our objectives.

Our team is highly engaged in carrying the momentum forward into the back half of the year. With that, I'd like to turn the call over to our CFO, Jan Reese. Please go ahead.

Good morning, thank you, Kim. As a reminder, second quarter reported results under GAAP include both the Trulieve and Harvest operations until the deconsolidation event on June 3rd, and only Trulieve medical operations as a remainder of June. Following the deconsolidation of Harvest, the Harvest results are reported as equity investment. Please refer to our earnings presentation for additional details. Second quarter revenue was $271 million, in line with guidance and typical seasonal trends. Revenue for medical-only states was $222 million, up 4% sequentially. New stores opening and wholesale growth contributed to higher revenue. Second quarter gross profit totaled $162 million, or 60% margin. Gross profit for medical-only states was $140 million, or 63% margin. Gross margin strength reflects economies of scale, operational efficiencies across our platform, and disciplined promotional management.

We expect quarterly gross margin to vary based on product and market mix, inventory sales through promotional activities, and idle capacity costs. Second quarter SG&A was $102 million, or 38% of revenue. Adjusted SG&A at 32% of revenue was comparable to last year. We expect SG&A may fluctuate based on the timing of investments in growth opportunities and infrastructure. Second quarter net loss was $406 million, which includes $407 million impact from the Harvest deconsolidation and equity investment. Excluding non-recurring items, second quarter net income would have been $20 million or $0.11 per share. Second quarter adjusted EBITDA was $98 million, representing a 36% margin and reflecting expense leverage across our core operations. Turning now to our tax strategy. As a reminder, we filed amendment returns challenging the applicability of Section 280E to our business. Our balance sheet includes uncertain tax position covering 2019 to the present.

The UTP includes 280E tax liability, refunds received from the IRS totaling more than $102 million and include interest. Second quarter income tax expense does not include 280E tax liability. The increase in our uncertain tax position includes $20 million in interest on the UTP and $13 million on overpayments used to cover ordinary taxes. We remain confident in our position and our ability to address the outstanding UTP. Moving to our balance sheet and cash flow. We ended the quarter with $325 million in cash and $289 million in debt. Second quarter operating cash flow was $53 million. Capital expenditures were $21 million, and free cash flow totaled $32 million. In June, the company adopted a share repurchase program of up to the lesser of $50 million or approximately 8.5 million shares. During the second quarter, no shares were repurchased. Turning to our outlook.

Third quarter revenue will include only Trulieve's medical operations. We expect third quarter revenue to be comparable to the medical-only revenue of $222 million in the second quarter. Growth in Georgia and Pennsylvania is expected to offset typical seasonal pressure in Florida. We expect growth to accelerate into year-end. Gross margin is expected to be comparable to the 63% gross margin in the second quarter for the medical-only operations. For the full year 2026, we anticipate operating cash flow of at least $225 million, reduced from $250 million to reflect the impact of the consolidation. With increased investment in growth markets to meet demand, capital expenditure are now expected to be $95 million, up from $85 million. Pending regulatory approvals, we may accelerate investment in Texas. With that, I turn the call back over to Kim.

Thanks, Jan. 2026 is shaping up to be another landmark year for Trulieve. Federal rescheduling, uplisting to the New York Stock Exchange, and new growth opportunities in Georgia and Texas all solidify Trulieve's position as an industry leader. Marijuana rescheduling represents a major policy shift. We applaud the Trump administration for enacting common sense cannabis reform. Trulieve is proud to have played a role, alongside many others, in supporting this historic policy change. Looking ahead, we expect additional reform to gain traction. Safe banking, updated FinCEN guidance, and Treasury guidance on 280E tax treatment all further align federal policy and state-licensed marijuana programs. As the largest medical marijuana operator in the U.S., Trulieve was the first to segregate its business by deconsolidating Harvest to uplift the medical-only operations on the NYSE. Since up-listing, we've seen greater liquidity and renewed interest by institutional investors.

Over time, we expect our shareholder base to broaden, ultimately lowering our cost of capital. Once broader rescheduling of marijuana is completed, Trulieve has the option, but not the obligation, to repurchase the investment by the third-party investor at a fair market value. As demonstrated by our proven track record in Florida, we are incredibly well-positioned to succeed in Georgia and Texas. We have the capital and playbook to rapidly scale with discipline, adding retail and production capacity alongside demand. Since day one, our approach hasn't changed. Trulieve grows one patient at a time. Thank you for joining us, and as I always say, onward.

At this time, Kim Rivers and Jan Reese will be available to answer any questions. Operator, please open up the call for questions.

Thank you. We will now begin the question-and-answer session. If you'd like to ask a question, please press star then one on your telephone keypad. If your question has been addressed and you would like to withdraw it, please press star then two. For participants using a speakerphone, please pick up your handset before pressing the keys. We will now pause momentarily to assemble our roster. Today's first question comes from Luke Hannan with Canaccord Genuity. Please go ahead.

Thanks, good morning, everyone. Kim, I'd like to go through, if we can, you had called out three significant near-term growth opportunities being Georgia, Texas, and then the conversion of folks from the hemp market into the legal market. I'd like to go through each of those, if we can. Starting with Georgia, it sounds like that's a big driver in the stability quarter-on-quarter that you're seeing thus far in Q3. If we zoom out and think about your presence in the Georgia market over the long term, you have obviously deep experience selling branded product through branded retail. Should we think about Trulieve's presence in Georgia over the long term being primarily through its own dispensary network, or do you expect to be active within the pharmacy channel?

Yeah. On the Georgia opportunity, we will see growth continue to ramp throughout this year. As we mentioned, those program changes went into effect July 1st, Q3 impact, with again, some supply challenges that are coming back online through the end of the year. Some increased growth as we continue to meet current patient demand that is through our branded retail network currently. As I mentioned on the call, we're able to expand that retail presence. It's a very prescriptive program, and we can add a dispensary with every 10,000 patients that come online. Crossing that 45,000 patient threshold allowed us an additional dispensary, and then the next mark will be at the 55,000 mark.

Important to note from a timing perspective for folks is that we actually make that request at a set meeting with the Georgia Commission, it has to have met that threshold by the time that meeting comes into place. It's important for us to have a retail real estate pipeline so we can bring that location to that Commission at the maximum and basically have a maximum opportunity at those meetings. Those will be very, I would say, everyone can track that because it's just going to track with the growth of the program in terms of how many dispensaries we're able to build in Georgia. I will say on the pharmacy side, I mentioned in the prepared remarks that we already have established relationships with 20 pharmacies with more to come.

A lot more pharmacies have their paperwork in and are going through the process of getting, they have to get both the DEA license and marijuana license as well as maintain or obtain, rather, the Georgia medical marijuana specific license. They have a two-step process to go through. That network will be expanding, and we will wholesale to those folks. However, I think that there's also interesting opportunities in Georgia with us being able to actually come in and do a hybrid model, which we're exploring and have active conversations and even some LOIs out currently, whether that's a store-within-a-store construct or a pop-up construct where we take over part of the independent pharmacy and really brand it as a Trulieve dispensary.

There's an opportunity for us to potentially do a JV with a pharmacy where potentially we actually do some construction on an adjacent property and then combine those properties into a single, it's really a pseudo standalone, if you will, and a JV construct. There's also an opportunity for us to purchase independent pharmacies. There's a lot of, I'll call it, opportunity and optionality for us in Georgia so that it would not only be, if you will, a traditional wholesale-type model, but potentially a blended model. You'll have three different pieces where it'll be retail, wholesale, and then again, this sort of blended type of arrangement in Georgia.

That's great. Thanks. Switching gears to Texas, you had called out it as a larger market than Florida, what's interesting is it looks and feels very similar to the Florida market just based on the regulations as well, the forced vertical integration and the form factors, et cetera. I guess I'm curious to know if we were to do a look back on Florida and how you already had scale in that market, of course, from the outset, but you really built your scale in 2022, 2023 at a bigger investment cycle to make sure you really retained that dominant market share. It's very early days in Texas, I realize that. Over the long term, is it reasonable to assume that you should try and get to that same level of scale in Texas as well, just considering the opportunity?

Oh, absolutely. We are very laser-focused on the Texas opportunity, as we noted in the prepared remarks, believe that our experience in Florida is unique in that we understand what is required to come in and have strong adoption, create relationships in communities, build out sufficient capacity, and ensure that we are, in fact, serving the customer base as it grows and scales. It becomes a little bit of a chicken and an egg. We see this over and over again, right? In that you have folks who are interested in the program, but they need to see and have access in order to come in and actually get their card and begin the process of entering a program. We feel that it's very, very important for us to be a provider that is creating, again, that first experience whenever we can.

We understand how valuable that is with our experience in Florida. You have to provide access in order for that to occur. As I mentioned, we have already built, we are complete and ready to go, the Texas regulators have been notified that we are ready for inspection on our initial phase 1 of our cultivation and production. We have been interacting on a very regular basis with the regulators in Texas, have answered additional questions that they've had, have gotten fingerprinted, et cetera. We will be moving very quickly as soon as we get the green light that our license has converted to final.

That's great. Last question from me, then I'll pass the line. Everyone has seen the Ohio data and the sales data, which has been very strong over the course of the last couple of months here, everyone's attributing that, of course, to what's happening as far as the hemp markets go and the hemp ban. Can you just remind us, what is the size of the hemp market in, I'm thinking specifically in Florida and Pennsylvania, maybe we'll include Texas as well, that's going to be a big organic growth opportunity for you guys in the near term. I guess what I'm trying to get at is what could be the organic revenue tailwinds that you could get purely from folks converting from the hemp markets to the legal market? Thanks.

Yeah, sure. In Florida, the regulated medical marijuana market has a little over 700 store locations across the state. We estimate that the smoke shop or hemp storefront portfolio is about 7,000 in Florida. The regulated marijuana market in Florida, medical marijuana market, is about $2 billion. The hemp market in Florida we would estimate to be about $4 billion. It is significant. I think, similarly, right, in Texas, that's also a very large hemp market with about, we would estimate, about a $6 billion market. It's going to be interesting to see what happens in Texas with the hemp changes and really the reduction in product availability that has gone into effect recently. We'll be watching that as well. We also, of course, think that there's a significant opportunity in Pennsylvania as well.

To your point, Harvest operates in Ohio, we have seen, along with the other operators, an increase in demand following the hemp shutdown in Ohio.

That's great. Thank you very much.

The next question comes from Aaron Grey with Alliance Global Partners. Please go ahead.

Hi, good morning. Thank you for the questions, and congrats on the uplisting to NYSE. First question for me, just going back to Georgia, it looks like it can be a really nice market based on our tours there. Just looking at it a bit differently, wanted to talk about the cultivation needs over time. I know for dispensaries, it's embedded in the regs for you being able to add those, but it's not embedded for expansion. Curious, just given your commentary of already being restricted on supply in the early days of medical, how best to think about long-term supply, particularly given you're going to have additional distribution outlets through pharmacies. Thank you.

Sure. We are in the process, as I mentioned, Aaron, of building out additional capacity. It was already planned for Georgia, this is alongside of our plans. We're, just like in other markets, we're able to increase the speed up or down, depending on growth and demand. We're executing against those plans now. As a Tier 1 license holder, we have the ability to expand up to 100,000 sq ft of canopy currently with our existing license. I do believe that there could be an opportunity in the future in Georgia. It's not unusual for once there's an acceleration in the program for there to be changes and additions allowed under that cultivation capacity. We're planning, right, I would think, to have those conversations with regulators and lawmakers.

I do think that Georgia is very invested in the success of this program, and particularly, as these independent pharmacies come online, they're very invested in ensuring that there's a real opportunity for those independent pharmacies to participate and to be successful. Right, that is going to require, of course, supply of high-quality product. We're going to continue to build out up to, I would anticipate, up to that maximum threshold, assuming, which I would make the assumption that the program will support from a demand perspective, that cultivation threshold.

Appreciate that color. Second question from me, going back to Texas, and the opportunity there. We've often looked at it similar to Florida, as you have. One of the key differences we see is obviously, the wholesale market versus forced verticality in Florida. Want to get your commentary in terms of how that might change, or if it does, your plans for expanding cultivation and retail, just given the fact you will have a wholesale market, even though you can't have that scaled retail, which is a difference from what we've seen in Florida. Thank you.

Yeah, I think that, with the way that market is going, or what we think anyway, how that market is going to develop, we're going to be very focused on, again, that branded product through branded retail. Candidly, I think most, if not all operators, will be similarly situated. I think we're going to execute the playbook that we know works and align with our strategies and our strategic positioning. If we are able to wholesale, we'll have a conversation about that internally, but I don't believe that I don't know that the strategic rationale will support, and certainly I don't think there will be a need out of the gate to really lean in on that front, Aaron.

Thanks very much for the detail. I'll jump back in the queue.

Our next question is from Gabie Ingoglia with Cantor Fitzgerald. Please proceed.

Hi, everyone. Thanks for taking the question. You guys mentioned in Georgia in the first few weeks before the product ran out, that sales tripled. Does the $222 million revenue guidance for 3Q 2026 incorporate that once you have product again, sales ramp back up to this level, or could you help us bring out what guidance incorporates from Georgia?

Yeah, sure. Guidance would incorporate our estimates as it relates to Georgia contribution, and really what we're saying is that that rebound in Georgia and then also some growth in Pennsylvania will offset Q3 typical seasonal slowness in Florida, which has happened over the last, since we started the company. Essentially, instead of having a down quarter in Q3, we're guiding to a similar quarter as Q2, or relatively flat. That is really a result of, again, that growth coming in in Georgia, which we believe will absolutely accelerate into Q4 and into 2027. Again, in Q3, we had a great start and then we have our fighting through a shortage. In late Q3, that shortage will be rectified and sales will restart. Again, we'll have that full contribution coming in Q4 while additional capacity continues to ramp.

It's going to continue to grow month-over-month once we get it back online here this quarter.

Okay, awesome. You guys had flagged that Georgia patients are already up 38% year to date, and that's largely before the July 1 expansion into flower, and some other forms. Can you describe what you're seeing in patient enrollment and purchasing behavior since July 1st? How quickly do you think that program can scale from the current 45,000 patients?

Yeah, I think that really, I think that it's been up. There's been approximately 8,253, I guess that's not approximate, patients added since July 1st, so it's up 24%. That is in comparison to about 12,400 patients added year to date, which is up that 38% number. You can just see just the rapid increase from a velocity perspective since July 1st being up 24%. I do expect that, again, that velocity to continue, and again, it goes back to what we were just talking about as it relates to chicken or egg. I think as soon as we're able to inject the program with consistent quality flower that's available on a regular basis and meeting our brand standards, I think you're going to have a potential uptick again, in that rate of patient growth.

I will say it has been interesting because even without flower on our shelves, we have seen increased sales in Georgia, with again, the vape products that we've been able to launch and some of the other program changes with the removal of that cap, et cetera. As our product portfolio has grown, we've been able to solidify, again, those patient relationships, even with the absence of flower being available on our shelf.

Okay, awesome. Thank you guys very much.

Thanks.

The next question comes from Bill Kirk with Roth Capital. Please proceed.

Good morning, everyone. Understanding that these things can take a little time, can you give us some additional color on how the up-listing has changed your conversations with capital market participants, financial service providers, maybe vendors, credit card companies, or even as you mentioned, Kim, possible consideration for index inclusion?

Yeah, sure. It's been such an interesting period of time as we have traveled the country with these non-deal roadshows since July 10th. What we have seen, I think, there's been a mix of folks who are completely brand new to cannabis, a lot of long-only funds who have not looked at the space previously, mixed with folks that were previously invested in the space many years ago, who now are taking another and a fresh look. I would say those are probably the two primary categories of folks that we've been talking with. I would tell you, among the long-onlys, very interested in, of course, the regulatory backdrop and interested in what appears to be some stability from a regulatory perspective coming into the sector and coming into the space, which allows for some additional predictability, candidly, in the investment.

Along with just the fact that we are a company that has fantastic margins. We have growth ahead of us, and on the backdrop of a lot of companies who have been under pressure for quite some time. When you look at, and you've got an opportunity in front of you with 60%-plus margins and 35%, 36% adjusted EBITDA with strong top-line positive cash flow, lower cash to debt ratio. I mean, those are the conversations that we're having with folks, and there's been a lot of excitement. Now, I will tell you that type of investor, that quality investor, does take a little bit more time. They want to do their homework. They want to build their model. They want to see a few quarters.

This quarter, of course, we have deconsolidation, so it is a bit, I'll call it, I'm not going to say confusing, but there's a lot going on this quarter with our two months of consolidated and then a little less than a month of medical-only. Going into Q3, which is going to be our first standalone medical quarter, again, getting that growth into the business again with these opportunities that we've been talking about is a really fantastic setup, I think, to prove out the hypothesis for a lot of these guys. In addition, I will tell you that we have been having active conversations and meetings with some of the bulge bracket guys. There is work that is being done. I've been on the phone specifically with compliance and legal teams. They're working through it.

Many of these folks have cannabis prohibitions that are holdovers in their policies that they're working through committees to get removed. It is going to take some time, but I can assure you that work has started, and I am confident that we will have, as we said in the remarks, additional institutional investors in our name here being able to call in the next 12 months. I would also tell you that index inclusion absolutely we believe will happen. The domicile proxy that we just completed, moving the company to the U.S., is a step. Many of those indexes require domestication in the U.S., and that checks that box along with other criteria that we already meet. Really, we're waiting for those reference dates to come for us to be included.

I would just tell you on the vendor side, there have been renewed conversations with providers. I've had active conversations with credit card companies. We are working very diligently, and I believe we're on the cusp of getting FinCEN guidance updated, which is, I believe, an unlock for a lot of these vendors. They're doing work as well. Us being listed and having the ability to show a medical portfolio with DEA-licensed businesses that are Schedule III allows for a lot of additional conversations that were unavailable to us previously. Trust me when I tell you that we are working every single day, all day, every day, to create as many of these unlock opportunities as possible for us and, of course, for the industry.

To your point, it does take a little time, but there's a lot that's in process behind the scenes.

Thank you for that, Kim. You mentioned earlier in the prepared remarks that you were seeing patient growth accelerating in key states like Florida and Pennsylvania. Do you think that has to do with the Supreme Court ruling for gun owners, or do you think the increase in patient count could be proactive people preparing for intoxicating hemp going away?

Yeah. It's hard to tell in terms of, I think it's probably a mixture of those things. I also think that rescheduling and cannabis being in the news is always helpful. I will also just say that particularly in our states like Florida, we have launched an entire ground game initiative, which started at the beginning of this year, which has been laser-focused on increasing the patient count in our key markets, and we started in Florida. I will tell you that I think those events, we know because we track them, are a large driver of a lot of that growth in the state of Florida. When you look at it, and we mentioned we're doing 100 events, we're tracking it. We've got QR codes that those folks then come to our dispensaries and show up with.

We're surround sounding with paid media on top of it. It's a multi-layered strategy, it is working. We showed in Florida as a whole, in July, which I think this is a really encouraging stat, just under 1,000 patients per week have been added. You compare that to Q1, which was about 326 patients per week. That's when in Q1 we kicked off these events and this activity. We are, I'll say, out there pounding the pavement and doing our part to educate and making sure that folks know about the things that you just talked about, right? That they know about the fact that they no longer have an issue with their gun permit, if that was a gating issue for them. That they know about rescheduling and everything that's happening on the regulatory front.

Very exciting for us to see that growth come back in. Again, Florida, Pennsylvania, where we have also a ground game strategy, and then also Georgia, which we just talked about, are all seeing positive trends on the growth front.

Thank you. I'll pass it along.

The next question is from Frederico Gomes with ATB Capital Markets. Please go ahead.

Morning. Thanks for taking my questions. First question on capital allocation. In terms of your CapEx guidance, you increased that by about $10 million. Any specific market or project that's driving that $10 million increase? Secondly, obviously you've talked about the opportunities in Georgia, Texas, et cetera, but curious how you're thinking about M&A. I guess at this point you would be limited to medical cannabis markets, so are there good medical-only opportunities out there for you? Thank you.

Thank you for this question. I take the first part of the question relative to CapEx. As we know, we always invest into strategic opportunities, and one of those strategic opportunities, as Kim alluded to multiple times, obviously Georgia. This being said, there are multiple opportunities as well here in Florida. We do have our relocation budget being fully executed. We do have new stores being fully executed. All this alludes to a new and upgraded guidance. The opportunity, again, that we do see in Georgia is significant. We're going to invest into Georgia, and as the opportunity arises, obviously we will double down in the opportunity in Texas.

In terms of, I think you asked about M&A. As we said in our prepared remarks, we are absolutely inquisitive as it relates to M&A. We think that the market is potentially ripening for opportunities that may make sense. I do think that as broader rescheduling occurs, and the opportunity to uplift mixed-use businesses begins to happen, I think you're going to see some separation and some renewed interest from both private operators and also from, I'll say, smaller and/or distressed public operators who aren't going to be able to meet the requirements, particularly for NYSE uplisting. We do think, and we're seeing and hearing and having conversations now, that I think that's coming. Making sure that we're poised and, again, in the market and able to take advantage of those.

The other point I would mention is that given our strong cash balance and the fact that now we are listed on NYSE, I think it's an attractive setup for us to be able to execute on M&A as long as, again, as always, as long as it makes sense and fits into our criteria.

Thank you. Appreciate that. I want to ask a follow-up on Georgia. I don't know if you guys have or can have any estimate in terms of the dollar size of the market. I know that we talked about patients, but is there any estimate about the size of the market on a dollar basis, and where do you think it could be a year from now with the recent expansion? Secondly, I know there are six licenses there. Where is it that you sit in terms of market share right now for that market? Thank you.

Yeah. It's a little tough because we don't have state-level data yet in Georgia. We're hopeful that the commissioner will begin to release numbers, but so far, unfortunately, we don't have anything. It's really our internal estimates based on sort of what we believe other folks may or may not be doing. As it relates to dispensaries, there's 17 dispensaries right now in the state of Georgia. We have six of those 17. Again, we'll be moving to open another. Again, because of the way the growth is moving, we believe that it's kind of seven and eight will come in short or rapid succession. One coming online at the end of this year, in fall actually, so a little bit before end of this year, and then the next very early in 2027.

Again, we'll have to see what the rest of the players do in terms of bringing other stores online. I do think that, again, we're going to have an opportunity to continue to lead that market, and particularly as we execute on our expansion plans on the cultivation side of things, then also our relationships through the independent pharmacy channel.

Thank you very much.

This does conclude our question-and-answer session. I would now like to turn the conference back to Christine Hersey for any closing remarks.

Thanks, everyone, for your time today. We look forward to sharing additional updates during our next earnings call. Thanks again and have a great day.

The conference is now concluded. Thank you for attending today's presentation, and you may now disconnect your lines.

Good morning, everyone, and welcome to the Trulieve Cannabis Corp. First Quarter 2026 Financial Results Conference Call. My name is Chloe, and I will be your conference operator today. As a reminder, this conference call is being recorded. I would now like to introduce your host for today's conference, Christine Hersey, Chief Corporate Affairs and Strategy Officer for Trulieve. You may begin.

Thank you. Good morning, and thank you for joining us. During today's call, Kim Rivers, Chief Executive Officer, and Jan Reese, Chief Financial Officer, will deliver prepared remarks on the financial performance and outlook for Trulieve. Following the prepared remarks, we will open the call to questions. This morning, we reported first quarter 2026 results. A copy of our earnings press release and PowerPoint presentation may be found on the investor relations section of our website, www.trulieve.com. An archived version of today's conference call will be available on our website later today.

As a reminder, statements made during this call that are not historical facts constitute forward-looking statements. These statements are subject to risks, uncertainties, and other factors that could cause our actual results to differ materially from our historical results or from our forecasts, including the risks and uncertainties described in the company's filings with the Securities and Exchange Commission, including Item 1A, Risk Factors of the company's most recent annual report on Form 10-K, as well as our periodic quarterly filings. Although the company may voluntarily do so from time to time, it undertakes no commitment to update or revise these forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by law. During the call, management will also discuss certain financial measures that are not calculated in accordance with the U.S. Generally Accepted Accounting Principles or GAAP.

We generally refer to these as Non-GAAP financial measures. These measures should not be considered in isolation or as a substitute for Trulieve's financial results prepared in accordance with GAAP. A reconciliation of these Non-GAAP measures to the most directly comparable GAAP measures is available in our earnings press release that is an exhibit to our current report on Form 8-K that we furnished to the SEC today and can be found in the investor relations section of our website. Lastly, at times during our prepared remarks or responses to your questions, we may offer metrics to provide greater insight into the dynamics of our business or our financial results. Please be advised that we may or may not continue to provide these additional details in the future. I'll now turn the call over to our CEO, Kim Rivers.

Thank you, Christine. Good morning, everyone, and thank you for joining us today. This is an incredibly exciting time for the cannabis industry. President Trump delivered on his promise to address cannabis reform with two decisive actions. First, Attorney General Todd Blanche reclassified medical marijuana to Schedule III, effective immediately. Second, AG Blanche announced the continuation of the formal rulemaking process to more broadly reclassify marijuana. We applaud President Trump and his administration for this historic shift in federal policy that more closely aligns with scientific evidence, current medical practice, and state laws. These developments have major positive implications for Trulieve. First, reclassifying medical marijuana to Schedule III acknowledges the medical benefits of marijuana and eases restrictions on research. Robust scientific research can now be conducted using medical marijuana that Americans buy in dispensaries every day.

This research can help delineate which doses and form factors are most likely to benefit patient groups with specific indications and symptoms. Second, state licensed operators can register with the Drug Enforcement Administration to manufacture, distribute, and dispense medical marijuana. For Trulieve, this is important because the majority of our business serves medical patients. Today, we have 206 dispensaries supported by over 3.5 million square feet of production capacity in four states that are strictly medical marijuana operations. As outlined in the final order by DOJ, state licensed operators have 60 days to apply for registration. Those applications are deemed approved in the interim period until final registration. We have already applied to register our 206 dispensaries in medical-only markets. We would like to thank Attorney General Blanche and his team for having the registration portal launched quickly.

Third, following the reclassification of medical marijuana, the Department of the Treasury announced that state-licensed medical marijuana businesses are able to deduct ordinary expenses as medical marijuana is no longer subject to the punitive 280E tax burden. This change applies to the current tax year and is reflected in our first quarter results. We look forward to additional guidance from the Department of the Treasury and appreciate the clarity provided on this issue. Finally, the formal process to address the classification of marijuana more broadly has resumed with a new hearing scheduled to begin on June 29th and conclude no later than July 15th. Given the expedited timeline and significant body of data that has already been examined, we are optimistic that marijuana rescheduling can be finalized this year. We expect that reclassification to Schedule III will remove the 280E tax burden from non-medical operations.

This comprehensive approach demonstrates the commitment by the administration to definitively reschedule marijuana. Given all of these changes, we are actively exploring options for Trulieve to uplist to a major U.S. exchange and address the outstanding uncertain tax position. We remain confident in our overall strategy and our ability to further solidify our position as an industry leader. Turning now to our first quarter results. Our team continues to deliver stellar financial and operational performance with industry-leading margins and robust cash generation underpinned by outstanding customer retention. First quarter revenue of $287 million was in line with guidance and seasonal trends. First quarter gross margin of 59% reflects operational efficiencies, low production costs, and our disciplined approach to promotional activity. Adjusted EBITDA of $100 million, or 35% margin, was driven by expense control in our core business.

During the quarter, we raised $60 million in senior notes and generated $56 million in operating cash flow, both of which contributed to our quarter-end cash balance of $353 million. First quarter retail results were in line with seasonal patterns as traffic dipped slightly and average basket size was flat compared to the fourth quarter. Our team did a phenomenal job managing through the post-holiday period in January to meet customers where they are while maintaining margins. Traffic improved in March, rebounding to the same traffic level as December. Holiday performance on 4/20 was strong, with traffic and units up 40% and 26% respectively compared to last year. Record wholesale revenue increased 37% compared to last year, reaching $22 million due to strength in Maryland and Pennsylvania.

In Ohio, our production partner realized higher sales of branded products, including Modern Flower and Roll One. While wholesale demand remains strong, our team continues to carefully balance growth and counterparty risk. Turning now to our key initiatives this year, we are concentrating efforts in four strategic areas. One, expanding access to cannabis. Two, investing in growth initiatives. Three, growing our loyal customer base. Four, elevating our branded product portfolio. I'll begin with expanding access to cannabis, which is a critical part of our mission. For over a decade, Trulieve has been working tirelessly to open up markets, bring more products to patients, and reduce the stigma associated with cannabis. Advocacy efforts at federal, state, and local levels highlight the many benefits of regulated cannabis to key stakeholders. Rescheduling cannabis to Schedule III sends a powerful signal that reform is achievable, setting the stage for additional measures.

The majority of Americans favor common sense cannabis reform, and we look forward to supporting these efforts. In Texas, Trulieve was granted a conditional license for the Texas Compassionate Use Program, or TCUP, medical marijuana program. Our team has submitted due diligence materials and is working to finalize the license. A recent poll by Fabrizio, Lee & Associates showed that while the majority of Texans approve having medical marijuana available in the state, only 11% of those surveyed were aware of the TCUP program. We believe there is a meaningful opportunity to raise awareness and provide greater access for patients in need. With over 145,000 patients today, telehealth consultations for patients in satellite pickup locations, the TCUP program is poised for meaningful growth over the next few years. We look forward to contributing to the success of the program with education and high-quality products.

In Georgia, legislation to expand the medical cannabis program is expected to be signed by Governor Kemp or automatically commenced next week. The medical cannabis program expansion includes new qualifying conditions such as HIV, IBS, and lupus, and new form factors, including vapes. Rulemaking to allow sale of new products could be completed as early as the fourth quarter of this year. The patient count in Georgia recently passed 35,000, and we have applied to open one additional dispensary to meet growing demand. Given the reclassification of medical marijuana to Schedule III, we are hopeful that sales of approved medical marijuana products through independent pharmacies in Georgia will resume. As a reminder, Georgia was the first state to allow licensed independent pharmacies to dispense medical cannabis to registered patients. Trulieve supplied cannabis products to pharmacies for a short period until the DEA required the pharmacies to cease dispensation.

With rescheduling and our applications for DEA registration, we are hopeful that pharmacies may again dispense medical cannabis products in the future. Alongside efforts to expand access to cannabis, we are investing in growth initiatives that align with our long-term objectives to build a leading cannabis company. Investments this year include retail and production upgrades and expansion in our existing footprint, new market expansion in Texas, and technology to advance hyper-personalization of customer messaging. Year to date, we have opened seven new retail dispensaries in Florida and refreshed or remodeled 10 locations. In Texas, we began our initial investment, breaking ground on our production campus. Pending regulatory approvals, we plan to quickly launch production and retail operations to serve patients across the Lone Star State. Alongside expansion within our existing markets, we are actively evaluating potential acquisition opportunities.

Investment in technology that enables more sophisticated hyper-personalization and targeted outreach kicked off in the first quarter. During our last call, we introduced Project Hyper, a multi-year project that upgrades our messaging capabilities by using AI to automate segmentation, decisioning, and execution to accelerate speed to market and real-time engagement. Project Hyper is well underway, and we expect to realize initial benefits through greater efficiency as soon as the fourth quarter of this year. Investments in our retail network, production sites, and technology provide competitive advantages today while setting the stage for future growth in new and existing markets. While expanding access and investing in growth initiatives are critical to long-term success, we are growing our loyal customer base through engagement, high-quality products, and world-class service. Engagement through paid media, physician engagement, and local community efforts continues to attract new patients and customers to Trulieve.

Across our markets, we are allocating resources to reach new customers in digital and real-world environments. These efforts continue to gain momentum and drive store traffic as we make deeper connections in the markets we serve. Last year, we launched a mobile app in Florida, providing users with one centralized place for browsing, deals, reservation, and rewards. Since launch, over 150,000 customers downloaded the app, leading to 7 million user sessions. We plan to launch the app in Arizona later this year. In the first quarter, our rewards program surpassed 1 million members, reaching this major milestone just two years after initial launch. Rewards members continue to spend on average 2.4 times more than non-members, comprising 78% of first-quarter transactions. We plan to introduce program tiers starting this month with Florida.

This program enhancement enables greater rewards for customers who spend more, including exclusive offers, products, and events. Segmentation and personalized messaging based on purchase behavior, browsing activity, engagement history, and preferred communication channels enables more effective outreach and drives stronger results. We utilize segmentation today and are adding functionality based on more granular, behavior-driven category preferences to yield higher conversion rates while improving marketing efficiency. Sending an appropriate message in the right channel at the right time to provide customers with information they care about reinforces customer satisfaction and retention. First quarter retention remains strong at 69% company-wide, with 78% retention in medical-only markets. Serving customers with high-quality branded products is an essential ingredient to lasting success. In the first quarter, we sold over 12 million branded product units.

In-house brands, Modern Flower and Roll One, continue to resonate with customers, representing 45% of the branded products sold. Our Roll One Clutch all-in-one vape was recently launched in five new markets. The customer feedback for this compact, discreet vape has been fantastic and unit sales are gaining momentum. In the flower category, we recently launched Legacy by Cultivar, premium-quality craft flower. New original strains represent the culmination of years of work to select, refine, and nurture genetics from seed as part of our in-house breeding program. We will continue to identify white space in our branded product portfolio and the markets we serve as we develop and launch innovative new products. In summary, we are making demonstrable progress in all of our strategic priorities. As we approach mid-year, our team is dialed in and executing on our plan.

With that, I'd like to turn the call over to our CFO, Jan Reese. Please go ahead.

Good morning. Thank you, Kim. First quarter revenue was $287 million, in line with guidance. New store openings, adult-use momentum in Ohio, and wholesale growth were offset by ongoing pricing pressure and softer consumer wallet trends. First quarter gross profit totaled $170 million or 59% margin. Gross margin strength reflects economies of scales, operational efficiencies across our platform, and disciplined promotional management. We expect quarterly gross margin to vary based on product and market mix, inventory sell-through, promotional activity, and idle capacity costs. First quarter SG&A was $105 million or 37% of revenue compared to 40% last year, driven by reduced operating expenses and lower campaign support. Adjusted SG&A at 31% of revenue was comparable to last year. First quarter net income was $2 million or $0.01 earnings per share.

Excluding non-recurring items, first quarter net income would have been $20 million or $0.10 per share. First quarter adjusted EBITDA was $100 million, representing a 35% margin and reflecting expense leverage across our core operations. Turning now to our tax strategy. As a reminder, we filed amended returns challenging the applicability of Section 280E to our business, and our balance sheet includes an uncertain tax position covering 2019 to the present. The UTP includes 280E tax liability, refunds received from the IRS totaling more than $114 million, and accrued interest. As Kim alluded to earlier, the first quarter income tax expense applies the normal tax rate. It does not include 280E tax liabilities for the first quarter.

The increase in our uncertain tax position includes $15 million in interest on the UTP and $11 million of overpayments used to cover ordinary taxes. We remain confident in our position and our ability to address outstanding UTP. Moving on to the balance sheet and cash flow. We ended the quarter with $353 million in cash and $290 million in debt. The first quarter operating cash flow was $56 million, capital expenditure was $13 million, and free cash flow totaled $42 million. Turning to our outlook, we expect second quarter revenue to increase by low single-digit percentage sequentially. Gross margin is expected to fluctuate quarter to quarter but remain broadly in line with our recent performance. Consumer trends will influence retail results and margin.

For full year 2026, we anticipate operating cash flow of at least $250 million and capital expenditure up to $85 million.

Pending regulatory approvals, we may accelerate investment in Texas. We may update our outlook as regulatory and market catalysts evolve. With that, I turn the call back over to Kim.

Thanks, Jan. Marijuana rescheduling is the first major policy shift in U.S. history. Rescheduling accomplishes several historic goals. First, it acknowledges the medical value of cannabis. Reducing the stigma on cannabis frees patients to more readily access needed medicine. Second, it removes barriers to research. Enabling critical research provides information and tools for physicians to effectively treat patients. Finally, it eliminates the punitive tax burden of 280E. Removing the tax burden reduces financial pressure on state-legal operators, opening up pathways for new investments and greater conversion into a regulated marketplace. We applaud the Trump administration for delivering on its promise to address common-sense cannabis reform, an issue that the vast majority of Americans agree is long overdue. We believe that rescheduling is the first major domino to fall, paving the way for broader reform efforts.

While federal policy advances, state adoption and expansion of cannabis programs continues every year. Consumers benefit from greater choice and access to the products they rely on. Over the past decade, Trulieve has been on the forefront of change, opening new markets and providing millions of customers with access to safe, tested products in a normalized retail environment. This year, we are especially focused on expanding access in Georgia and Texas. Bolstered by our cash position, scaled platform, and laser focus on serving customers, we are ready to maximize the opportunities ahead. Trulieve grows one customer at a time, setting the bar for today and the decades to come. Thank you for joining us, and as I always say, onward.

At this time, Kim Rivers and Jan Reese will be available to answer any questions. Operator, please open up the call for questions.

Thank you. We will now begin the question-and-answer session. To ask a question, you may press star then one on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. If at any time your question has been addressed and you would like to withdraw your question, please press star then two. At this time, we will pause momentarily to assemble our roster. The first question today comes from Luke Hannan with Canaccord Genuity. Please go ahead.

Thanks. Good morning, everyone. Kim, I wanted to go back to in your prepared remarks, you talked about how you're actively exploring options when it comes to up-listing. I'm just curious to know what specific milestones are you looking for here, then potentially what's your base case for when you might expect that an up-listing could occur?

Yeah. Good morning, Luke. What I would tell you is that, as we said in the prepared remarks, we're actively pursuing all opportunities at the moment. We are not at this time prepared to go into additional detail, but I would say, stay tuned and, you know, I would say Trulieve is, I think we have a track record of pushing hard and moving as fast as possible.

Great. Secondly, something else that you called out was that you're actively evaluating acquisition opportunities. I'm curious to know when it comes to overall deal flow now that the news on rescheduling has landed and presumably, other operators in the industry are more interested in transacting, have you seen deal flow pick up? Are the multiples that you're seeing deals occur at, is it more or less in line with expectations?

We certainly are seeing deal flow pick up, for sure, and valuations remain all over the place. It's very dependent, obviously on sophistication level, size, you know, position of the company, private versus public, et cetera. Variability has not necessarily shifted, but I would say deal flow certainly has increased.

Got it. Great quarter. Thank you very much.

Thanks.

Next question comes from Aaron Grey with Alliance Global Partners. You may go ahead.

All right. Thank you very much for the questions today. You know, 1 thing I wanna talk about is wholesale. You know, it's been a nice couple quarters for you guys, positive momentum. While you've under-indexed relative to some others in terms of the wholesale segment, you know, can you speak to some of the opportunities you're seeing there and how we should expect it to trend in the near to medium term?

Sure. You know, very proud of our wholesale team and our performance. You know, wholesale for us is certainly part of our strategic mix, but I would say secondary right behind our primary strategy of branded products through branded retail. That being said, after establishing a presence in a market, such as, for example, Pennsylvania, Arizona, Ohio, where we have great penetration of our internal brands in our stores, we, you know, more recently have embraced the opportunity to take that brand affinity and expand it out into the wholesale channel in a more robust way. We're seeing fantastic results, particularly around our core brands such as Modern Flower and Roll One.

You know, we mentioned on the call as an example of that, you know, the Roll One Clutch has been a huge seller for us, across both, again, internal branded, retail and also on the wholesale channel. We see it certainly as a bit of a growth opportunity for us, Aaron, and are, I think, you know, continuing to add doors and increase, penetration, shelf penetration, of existing doors, quarter-over-quarter.

Okay, great. Thanks for the color. 2nd question for me, just in terms of the potential hemp ban, you know, coming to fruition in November. You know, how do you think about potential positive impacts for the domestic market as well as specifically for Florida? I know Florida is just a medical market today, but do you feel like there could be a big benefit there and potential things that you could do to set up there? Thank you.

Sure. We certainly see an opportunity of conversion from that broadly unregulated market and converted into a more regulated marketplace. We believe that that opportunity is significant in both Florida and Texas, actually, I think is another market that obviously we'll be entering and could the timing pair nicely with the expansion of retail locations and the program in Texas alongside Senate bill being more fully implemented. As you mentioned, the market size for hemp in Florida, in particular in Texas, is very large. Even if you were to take a fraction of those customers and convert them into the regulated medical programs, it could be meaningful for sure.

In terms of advanced work, we continue to focus on education. We mentioned in our prepared remarks, launching activities where we're meeting customers where they are, both digitally and physically. We refer to that as our ground game, and we have ramped that in a meaningful way in Florida, specifically being on the ground and in front of folks, having conversations at different events and in different venues where folks may be interested in learning about the regulated program. That is laying track for, you know, for conversion opportunities, ahead of, ahead of, again, what could be a meaningful shift within the Florida landscape.

Okay, great. Thanks for the detail there. I'll go and jump back in the queue.

Yep.

The next question comes from Bill Kirk with Roth Capital Partners. Please go ahead.

Good morning, everybody. Kim, first, thank you for your advocacy and your efforts to advance the industry. Where I wanted to start is on the retrospective relief. In particular, how far back do you think that could capture? When do you think we'd get the guidance on that from Treasury and IRS? I'm asking it in the context of how important that decision will be for determining how you make investments or how it could even impact the M&A that you may be considering.

Sure. You know, I think that the administration was, you know, very coordinated in the announcements that happened around rescheduling. You know, the fact that Treasury immediately issued that press release with some general color, I think was, you know, indicative of the expectation for them that's been set for them to move quickly. I think it's certainly helpful that in the order from the Attorney General, there was specific language around retroactivity.

You know, I would tell you, that's all the indication that I have, that I would expect this to be something that is front and center for Treasury and that we should be, you know, getting certainly additional guidance as it relates to the allocation metrics for the allocation process that they alluded to in the press release for this year and future years. As far as retroactivity, I would hope that that is a fast follow. You know, for us, we look at this as a when, not an if at this point, with very clear brackets around previous years and previous years exposure.

As many folks know, and just as a reminder, have had a position as it relates to 280E for quite some time now and, you know, received refunds from the IRS and I believe are in a very good position to have a resolution as it relates to that, those outstanding years again, here in the near term. I don't have any specific dates. I can just say that it again appears that there's a concerted effort to have a, you know, a broad resolution, you know, to the taxes issue.

Thank you. As a follow-up, in the final order, you know, the Attorney General talks about the possibility of exports. I guess, how would you rank your excitement for that potential? What would it take for you to ramp up supply at a, I would assume, Jefferson County if you decided that was an opportunity worth pursuing?

Yeah. You know, our legal counsel, as it relates to the export, the import-export portion of the treaty, that is a requirement under the, that's under the treaty pathway, if you will. I'm not sure yet, I think we're awaiting additional guidance and clarity from the DEA as it relates to that being any sort of an automatic green light for international export. I think there's a little bit of conversation that needs to be had there given the tension between the fact that the program was set up specifically in reference to and incorporating the state structures, obviously, there's no state structure that would allow for any exportation. I think there's some additional, there's certainly some additional, you know, kind of regulatory work to be done there.

Not to say that it's not an exciting, you know, prospect. You know, with respect to international opportunity for Trulieve, we are very focused, as we said in our prepared remarks, on expanding and expansion within the U.S. We believe that there's incredible opportunity in front of us. You know, Texas is a very large market, which we believe can be, you know, the size or potentially even bigger than the Florida market. Georgia, you know, I think we're very encouraged with conversations with the regulators there and the focus on being able to turn back on the independent pharmacy model. In Georgia, there were 140 something pharmacies who were registered prior to the DEA turning that program off.

I do think that there is a very real and near-term pathway for expansion in Georgia as well. You know, with respect to supply, we can Well, first of all, JeffCo is fully utilized. That is the facility that supplies our primary operations in Florida. We do have other capacity that we could certainly bring online if there was a meaningful opportunity. Again, right now, I think first there would need to be some significant regulatory clarity and also, again, I would need to be convinced that the opportunities here within the U.S. are, you know, less attractive than perhaps international, and I'm not there yet.

Thank you again. I'll pass it along.

All right. Thank you.

Next question comes from Russell Stanley with Beacon Securities. Please go ahead.

Good morning, and thanks for the question. Maybe following up on Georgia and the potential to restart that pharmacy model, can you elaborate, I guess, on what the next steps are? Do you need a specific DEA approvals? What other milestones do you need in order to restart that?

Our understanding is that the GMCC is in active conversation with the DEA so that they can get comfortable, that they can advise these independent pharmacies that they have the green light to go ahead and begin selling. We have let the GMCC know that we have our, you know, our dispensary DEA registration. Actually, yesterday, the DEA opened the portal to begin registering manufacturing, the manufacturing registrations, which cover, it's kind of a universal registration under the DEA, so that will cover cultivation, processing, distribution. Unfortunately, yesterday there was some trouble on the site, but expect that to get worked out in short order.

Once we have those DEA license numbers, we plan to then contact the GMCC again, let them know that we're ready to go, and that it then becomes a DEA to DEA prospect. We're also encouraging those independent pharmacies to also register as a dispensary, right, under the specific marijuana portal with the DEA. I think once those steps are complete, Russ, we're in good shape to restart that aspect of the program.

That's great. That's really exciting. Maybe just my second question, just around price compression. We've heard varying degrees of optimism from some of your peers, and I'm wondering what you're seeing in that regard in your core markets. Are you seeing any deceleration at this point, and your thoughts on that environment? Thank you.

Sure. You know, what I would tell you is that we are starting to see stabilization in basket, you know, after a fairly volatile year in 2025, post-election. Last year there was just a lot of variability in, as it relates to consumer behavior. You know, in the quarter, typical for the quarter, we saw, you know, traffic kind of relatively flat on a year-over-year basis, a little bit down on a sequential basis, which is normal. I think importantly, you know, the basket from Q4 to Q1 has stabilized.

It was down a bit year-over-year, but again, that stability that we've seen kind of also coming into Q2 is a good sign that we're not seeing, again, that broad volatility that we saw throughout 2025. You know, I think again, Q1, in line with seasonal trends, we were a little soft in January and February, which is normal, and then rebounded into the back half of the quarter and in March, exited with traffic back to Q4 levels. I think, you know, again, things are in the process. It appears to be normalizing. Of course, you know, we still are in a bit of a wait and see. We need a couple of, you know, consecutive quarters before we kind of call it.

We are starting to see early signs of stabilization.

That's great. Thanks for the color. Congrats on the quarter. I'll get back in the queue.

Thanks.

Again, if you have a question, please press star then one. The next question comes from Frederico Gomes with ATB Capital Markets. Please go ahead.

Hi, all. Thanks for taking our questions. Congrats on the quarter. Just continuing on with the medical cannabis rescheduling theme, and the DEA registration, do you think that there's a path for potentially shipping medical cannabis products between DEA-registered entities in different states?

Yeah, I would tell you that I think that it's a little early to tell as it relates to that. I mean, again, I think that the, you know, the path that was created, I do think that I think that that's the words that are being used by the administration as well as it relates to this new Schedule III pathway for state-licensed operators, again, folds in the state-specific requirements under the state programs. I think that likely there would need to be changes to those state programs prior to allowing any type of, you know, state-by-state activity, which is of course not allowed currently under any of those state programs. That would be my current read.

Again, you know, certainly would look forward to additional commentary and guidance from the DEA as things evolve here.

Okay. Understood. Just looking at the balance sheet. Considering the significant amounts of free cash flow that you're generating, and now with 280E being gone from medical side, which is by far the majority of your business, does that potentially increase your appetite for share buybacks?

Yeah, I mean, I think that we are absolutely in an evaluation period at this point in time, I would say, right? There are a lot of moving parts, as we indicated, and a lot of different initiatives that we're reviewing, including, you know, potential M&A and then, obviously excited about exploring opportunities to get on, you know, a U.S. exchange. I think that, you know, for us, again, we wanna make sure that we have a clear picture of the landscape. It's something that the board is, you know, continues to evaluate.

All right. Thank you for the color. I'll jump back in the queue.

Great.

This concludes our question and answer session. I would like to turn the call back to Christine Hersey for closing remarks.

Thanks everyone for your time today. We look forward to sharing additional updates during our next earnings call. Thanks again, and have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.