Trulieve Cannabis Corp. (TRLV) Earnings

Management highlights

### Regulatory Milestones & Uplisting - Successfully completed uplisting to the New York Stock Exchange (NYSE) as the first U.S. cannabis operator, enabled by federal rescheduling of state-licensed medical cannabis to Schedule III and deconsolidation of mixed-use Harvest operations; 10% of Harvest was sold to an independent third party, with Trulieve retaining 90% economic interest and an option to reconsolidate pending broader cannabis rescheduling and NYSE approval. - Removal of the punitive 280E federal tax for state-licensed medical cannabis operations starting in 2026 provided an immediate boost to net income and cash flow; all medical-only facilities have been registered with the DEA under the grandfathering provision, and 100% of DEA inspections in Florida, Pennsylvania, and West Virginia are complete, with approvals expected shortly. - Non-deal roadshows have been completed with new institutional investors across North America, with a NYSE closing bell ceremony scheduled for August 18, 2026; uplisting, U.S. redomiciliation, and 280E removal are expected to lower Trulieve's cost of capital over time. ### Core Operational Performance - In medical-only markets, retail traffic increased 6% sequentially, total units sold increased 8% (offset by a slight decline in average basket size), indicating strong underlying demand. - In Florida, Trulieve sold 56% more flower per store than the state average across 169 locations, and 1.5 billion milligrams of oil (twice the volume of the next largest competitor); customer retention held steady at 78%, and 80% of Q2 transactions came from rewards program members, who spend 2.2x more on average than non-members. - Year-to-date 2026, 8 new dispensaries have been opened in Florida, and 24 locations have been refreshed or remodeled across markets; the Florida mobile app has exceeded 200,000 downloads and drives 30% of online orders, with launches planned for Georgia in late 2026 and additional markets in 2027. ### Near-Term Growth Initiatives - **Georgia**: Program expansion that removed THC caps, added new qualifying conditions, and allowed new product formats went into effect July 1, 2026; dispensary traffic tripled in the first two weeks, leading to a flower sell-out, with restock expected in Q3 and cultivation capacity ramping through 2027. Patient enrollment has grown 38% year-to-date to over 45,000, triggering approval for an 8th dispensary expected to open in early 2027. Trulieve is already supplying product to 20 registered independent pharmacies, with over 125 additional pharmacies expressing interest, and is exploring hybrid/partnership retail models alongside its standalone dispensary network. - **Texas**: Trulieve holds a conditional license for the revamped Texas Compassionate Use Program (TCUP), which expanded qualifying conditions, added new product formats, and allowed 12 new operators. Initial production construction is complete, and the company has a retail pipeline covering all 11 Texas regions; the program currently has 157,000 patients, with long-term potential to grow to 1.3 million patients (4% population penetration, matching Florida's rate), making it the largest new medical cannabis opportunity for Trulieve. - **Hemp Market Conversion**: Trulieve is targeting customers from the banned intoxicating hemp market, which represents a large untapped opportunity; the hemp market is estimated at $4 billion in Florida and $6 billion in Texas, and early results from Ohio (where Harvest operates) have already shown demand growth following the hemp ban. ### Product & Technology Investments - Branded products account for nearly 14 million units sold per quarter, with Modern Flower and Roll One making up almost half of branded volume; the Roll One Clutch all-in-one vape grew unit sales over 35% year-over-year. - Project Hyper, a generative AI-powered customer personalization and digital commerce modernization initiative, remains on track for completion in March 2027, with efficiency and speed-to-market benefits expected by the end of 2026.

Guidance

• Q3 2026 revenue (including only medical-only operations) is expected to be roughly flat sequentially at $222 million, matching Q2 2026 medical-only revenue; growth in Georgia and Pennsylvania is forecast to offset typical seasonal summer slowdowns in Florida, with growth expected to accelerate into the end of 2026. • Q3 2026 medical-only gross margin is expected to remain stable at approximately 63%, matching the Q2 2026 level. • Full year 2026 operating cash flow guidance was revised downward to at least $225 million, from the prior guidance of $250 million, to reflect the impact of the Harvest deconsolidation. • Full year 2026 capital expenditure guidance was revised upward to $95 million, from the prior guidance of $85 million, driven by increased investments in Georgia growth; further acceleration of investments in Texas is possible pending regulatory approval of Trulieve's final license.

Segment performance

Trulieve Cannabis reports Q2 2026 results that include combined Trulieve (medical-only) and Harvest (mixed-use medical/adult-use) operations until the Harvest deconsolidation on June 3, 2026, with only medical-only operations included for the remainder of Q2. Total consolidated Q2 2026 revenue was $271 million. The medical-only segment generated revenue of $222 million, representing 81.9% of total Q2 revenue, and grew 4% sequentially. Medical-only Q2 gross profit was $140 million with a 63% gross margin. Harvest, now reported as an equity investment following deconsolidation, achieved revenue growth and margin expansion compared to Q1 2026, driven by growth in its Ohio operations. Consolidated Q2 gross profit totaled $162 million (60% gross margin), adjusted EBITDA was $98 million (36% margin), operating cash flow was $53 million, and ending cash balance was $325 million. GAAP net loss of $406 million includes a $407 million non-recurring charge from Harvest deconsolidation; excluding this item, net income was $20 million ($0.11 per share).

Risks & headwinds

• Supply constraints in Georgia following the rapid demand surge after program expansion created temporary flower sell-outs, with full capacity ramping through the end of 2026 and into 2027 that could limit near-term growth if patient growth outpaces production expansion. • Trulieve's Texas license remains conditional, with final approval timing dependent on regulator inspections and processing, creating uncertainty around the launch timeline for Texas operations. • Many long-only institutional investors and financial service providers still have legacy internal cannabis prohibitions that require internal committee approval to remove, which may delay expected increases in institutional shareholder base and broader access to banking and payment services. • Broader cannabis industry regulatory changes (including final full rescheduling, additional 280E guidance, and SAFE Banking) remain pending, with uncertain timing and final outcomes that could impact growth and cost of capital projections. • Future M&A opportunities are dependent on market distress among smaller operators that have not met NYSE uplisting requirements, creating uncertainty around the volume and timing of attractive acquisition targets.

Analyst Q&A

• Q: Luke Hannan (Canaccord Genuity) asked for long-term clarification on Trulieve's Georgia market strategy: will growth come primarily from standalone dispensaries or the independent pharmacy channel?/

  A: Rivers confirmed that retail dispensary expansion will track directly with patient growth, with one new dispensary allowed per 10,000 additional patients, and Trulieve maintains a ready real estate pipeline to meet expansion eligibility. Trulieve is already wholesaling to 20 licensed independent pharmacies, with many more going through the regulatory approval process, and is exploring blended hybrid models including store-within-a-store concepts, joint ventures, and pharmacy acquisitions to create a mixed retail-wholesale footprint in Georgia.

• Q: Hannan asked if Trulieve aims to reach the same dominant market share scale in Texas that it achieved in Florida, given similar vertically integrated regulatory structure. /

  A: Rivers confirmed Trulieve is fully focused on achieving that scale, leveraging its Florida playbook of building access and capacity alongside patient growth. Phase 1 cultivation/production construction is complete, Trulieve has met all pre-inspection requirements, and will immediately begin operations once the conditional license converts to a final license, prioritizing early access to drive patient adoption just as it did in Florida.

• Q: Gabrielle Ingoglia (Cantor Fitzgerald) asked if the Q3 revenue guidance incorporates the post-July 1 Georgia demand surge after the temporary flower sell-out. /

  A: Rivers confirmed guidance includes the expected Georgia contribution, noting that the current supply shortage will be resolved by late Q3, so growth in Georgia and Pennsylvania offsets Florida's typical Q3 seasonal slowdown to result in flat revenue relative to Q2. Full Georgia demand contribution will begin in Q4 as cultivation capacity ramps, with monthly growth expected thereafter.

• Q: Bill Kirk (ROTH Capital) asked how NYSE uplisting has changed conversations with institutional investors, financial service providers, and vendors. /

  A: Rivers reported strong interest from new long-only institutional investors that previously avoided cannabis, drawn by regulatory stability, strong margins, positive cash flow, and U.S. listing. It will take time for these investors to complete due diligence and for legacy institutional cannabis prohibitions to be removed, but Trulieve expects meaningful institutional share growth within 12 months. Trulieve already meets all criteria for index inclusion following U.S. redomiciliation, and has renewed active conversations with credit card companies and vendors that were previously unavailable, with progress expected after updated FinCEN guidance is released.

• Q: Frederico Gomes (ATB Capital Markets) asked what drove the $10 million increase in full-year CapEx guidance, and Trulieve's current M&A outlook. /

  A: Reese confirmed the CapEx increase is driven primarily by accelerated investments in Georgia's cultivation and retail expansion, alongside ongoing new store and remodel activity in Florida, with additional capacity for accelerated investment in Texas if the license is approved. Rivers added that Trulieve sees a coming wave of attractive M&A opportunities, as smaller mixed-use operators will be unable to meet NYSE uplisting requirements, and Trulieve's strong balance sheet and NYSE listing position it to pursue attractive targets that meet its strategic and pricing criteria.