Trulieve Cannabis Corp. (TRLV) Q3 2026 Earnings Call Transcript

Operator: Good morning, everyone, and welcome to the Trulieve Cannabis Corporation Third Quarter 2026 Financial Results Conference Call. My name is Chuck, and I will be your conference operator today. As a reminder, this conference call is being recorded. Would now like to turn the conference over to your host for today's call. Miss Christine Hersey. Chief corporate affairs and strategy officer for Trulieve. Please go ahead.

Christine Hersey: Thank you. Good morning, and thank you for joining us. During today's call, Kimberly 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 third 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 An archived version of today's conference call will be available on our site later today. As a reminder, statements made during this call that are not historical fact constitute forward looking statements. And 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 forecast. 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 Truly'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 will now turn the call over to our CEO, Kimberly Rivers.

Kimberly Rivers: Thank you, Christine. Good morning, everyone, and thank you for joining us today. We are thrilled to report third quarter results that exceeded guidance with higher revenue, margins and cash generation. Third quarter results represent medical only markets and our first full quarter listed on the New York Stock Exchange. This is an incredibly exciting time for our company. For anyone new to Trulieve, we are the largest U. S. Medical cannabis operator with 208 dispensaries and 3.5 million square feet of production capacity. We are in the early stages of an accelerated growth period fueled by organic market development, acquisition opportunities, regulatory catalysts and continued adoption of cannabis. Before we discuss our quarterly results, I would like to share some perspective on rescheduling and how Trulieve is positioned. The Trump administration made history by completing the first major cannabis policy reform in over 50 years. Last December, President Trump issued an executive order opening the door for medical cannabis research and supporting rescheduling of state licensed medical marijuana to Schedule III. Following the executive order in April, attorney general Todd Blanche took 2 major actions. First, he issued a final order to reschedule state licensed medical marijuana to Schedule III, And second, he restarted the rulemaking process to reschedule marijuana more broadly Schedule III. The first action, rescheduling of state licensed medical marijuana, triggered 3 major positive developments for Trulieve. 1, registration with the DEA 2, removal of the 280E punitive tax burden and 3, uplisting to the NYSE. I will touch briefly on each area. First, Truly registered all of its medical only marijuana dispensaries and production facilities with the DEA, complying with the final order. Since then, the DEA has completed inspections and began issuing final at all of our medical dispensaries and production sites. With DA registration and state licensure, Trulieve is a federally legal Schedule III operator. This is an important differentiator for us as it opens the door for new strategic partnerships and service providers. Second, concurrent with rescheduling of state licensed medical marijuana, Treasury Department issued a press release confirming that punitive 280E tax does not apply to state licensed medical operators under Schedule 3. From this year forward, we are taxed the same as any U. S. Corporation. This parity is important because it improves profitability and cash flow, while acknowledging the medical status of our business. Third, state licensed medical marijuana rescheduling enabled Trulieve to list on the NYSE. As the largest U. S. Medical operator, Trulieve was uniquely positioned to segregate its business into 2 parts, separating the nonmedical mixed use market from our medical only business. Truly listed its medical only Schedule III business on the NYSE in June. Since uplisting, we have realized higher daily trading volume, reduced swap exposure, expanded access to institutional investors, and inclusion in several indices such as the S&P Total Market Index, and the Morningstar Total Stock Market Index. We expect Trulieve will be added to additional indices in the coming year. Altogether, Trulieve has realized meaningful benefits from rescheduling of state licensed medical marijuana. Turning now to our third quarter results. As a reminder, results include markets serving only medical patients. During the third quarter, the team outperformed in multiple ways, delivering impressive execution in our core markets, while rapidly expanding in Georgia and preparing to build out vertical operations in Texas. Third quarter revenue of $230 million grew 4% year over year and sequentially, compared to medical only revenue in prior periods. Medical revenue exceeded guidance and outperformed typical seasonal trends. Compared to medical only results last year, third quarter gross margin of 64% improved 1% reflecting operational efficiencies low production costs, and our disciplined approach to promotional activity. Adjusted EBITDA of $89 million or 39% margin was driven by expense control in our core business. During the quarter, we generated $74 million in operating cash flow, which contributed to our quarter end cash balance of $327 million Subsequent to quarter end, we fully repaid a $65 million mortgage, secured by our cultivation campus in Jefferson County, Florida. The reduction in debt lowers annual interest expense, improving profitability and cash flow. Retail revenue grew 2% sequentially due to growth in Georgia and Pennsylvania. Traffic increased 3% partially offset by a slight sequential decline in average basket size. Units sold were up 2%. In Georgia, traffic and units increased 7-fold with market expansion and new product types, including concentrates, flower and vapes. In Pennsylvania, higher traffic and strength in the wholesale channel contributed to revenue growth. Results in Florida were consistent with typical seasonal trends. Trulieve sold 55% more flower per store than the state average, across 170 stores, totaling 657 thousand ounces. We sold 1.4 billion milligrams of oil more than 2x the next highest competitor. Across our branded retail platform, customer trends have been consistent throughout the year, with some mid tier customers leaning into value products, while the premium segment remains unchanged with a focus on exclusive top shelf products. Our investment in Harvest performed well in the third quarter, with revenue growth and margin expansion compared to the second quarter, driven largely by growth in Ohio. As we approach year end and the busy holiday season, our team is carrying the momentum forward. At the start of the year, we identified 4 strategic initiatives to focus on, 1, expanding access to cannabis 2, investing in growth initiatives 3, elevating our branded product portfolio and 4, growing our loyal customer base. Year to date, we have made significant progress in all 4 areas. First, I would like to discuss expanding access to cannabis, which is central to our mission here at Trulieve. 2026 has been a pivotal year, with historical federal policy changes, and expansion in state markets such as Georgia. Federal rescheduling of state licensed medical marijuana removes barriers for research, reduces stigma for patients and physicians, and provides a level playing field for lawful operators. Enabling additional investments in patient access. We remain optimistic that broader rescheduling will happen in the near term. We expect the Treasury Department will issue additional guidance on tax treatment, including potential retroactive relief, following completion of the rescheduling process. Following the midterm elections, cannabis reform remains a central theme across the country. We look forward to continuing to work with Congress to advance cannabis policy into 2027. Alongside rescheduling, we remain supportive of additional reform, including updated FinCEN guidance and SAFE Banking. These measures reduce friction for operators, support credit card payments and dispensaries, and ease restrictions on banking and service providers. Our second strategic growth priority is investing in growth initiatives, which includes both organic and acquisition opportunities, We believe Georgia and Texas present meaningful organic growth opportunities for Trulieve. In Georgia, following changes to the medical marijuana program and federal rescheduling for state licensed operators, we are pursuing 2 pathways for growth, The first is expansion of our licensed medical dispensary network. Today, we own and operate 7 dispensaries that serve qualified patients with our branded products. Yesterday, we received approval to open our eighth and ninth dispensaries which we anticipate will open in the coming months. The state program is designed to provide expanded access as the patient count grows. With 80% patient growth since the start of the year the patient count recently surpassed 60 thousand. We can request an additional location for every 10 thousand patients that enroll. We plan to apply for our 10th dispensary this month, once the patient count reaches 65 thousand patients. The second growth area is wholesale distribution of branded products to independent pharmacies. In Georgia, independent pharmacies can register with state and the DEA to dispense approved medical marijuana products to registered patients. Today, we are shipping to almost 20 pharmacies. While development of this channel remains ongoing, early progress is encouraging. Over 30 more pharmacies are ready to commence sales of Trulieve products pending licensure, and over 125 independent pharmacies previously expressed interest. 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. In support of growth in Georgia, we have been increasing production capacity since last spring. Our Georgia operations are fully vertically integrated, we produce all of the cannabis products that we sell in our dispensaries. As I mentioned, third quarter units sold increased by 7x the amount sold in the second quarter. Newly launched in house brands Modern Flower and Roll 1 accounted for 70% of our branded units sold in Georgia. Our team has done a fantastic job managing through the period of rapid growth. Today, we have adequate supply to service our current business, and we are adding capacity in stages into 2027 to meet growing demand in all channels. While the Georgia market is rapidly expanding now, we believe Texas represents the largest medical cannabis opportunity in The US. Last December, Truly was awarded a conditional license. We are working through the process to convert the conditional award to a final license. We expect the next steps include completion of financial review and site inspections. Our initial production capacity is ready for inspection, and we have a robust retail pipeline of stores covering all regions. Pending final licensure, our team is ready to quickly ramp to serve Texas patients. New patients can enroll in the program through convenient telehealth consultations. Easy program entry, greater price variety, and increased awareness all support rapid program growth. We plan to replicate the success we have had in other markets like Florida and Georgia by scaling modularly as the patient count increases over time. Alongside investments in Georgia and Texas, we are actively evaluating acquisition opportunities ranging from tuck in assets to larger single and multi state operations. We expect consolidation in the cannabis industry will continue for the foreseeable future. Our stringent evaluation criteria includes price, strategic fit, quality of assets, and market framework. The strength of our core business and cash flow generation allow us the flexibility to consider acquisition opportunities while remaining disciplined to ensure transaction enhance long term shareholder value. While reform and growth initiatives continue to advance, we remain committed to operational excellence in our core business. This brings us to our third initiative, which is elevating our branded product portfolio. Serving our customers consistently with high quality branded products is a key ingredient to our success. Our branded product portfolio includes both in house brands and partner brands. In the third quarter, we sold over 10 million branded product units in our medical dispensaries, with in house brands Modern Flower and Roll1 accounting for 55% of the units sold. We complement in house brands with partner brands to add variety for our customers. In September, we closed on a master licensing agreement with Connected. This agreement affords us exclusive perpetual royalty free rights to genetics, trademarks, and know how for Alien Labs and connected branded products in Florida and Texas and has a payback period of less than 2 years. Since 2022, Trulieve has been the exclusive provider of Alien Labs and Connected Premium Flower in Florida. We plan to introduce new Alien Labs and Connected categories and form factors in Florida, including vapes and concentrates, as soon as the first half of 2027. The agreement provides Julie with the right of first refusal for exclusive licensing rights and additional expansion markets. Availability of top shelf premium products supported with collaborative marketing campaigns reinforces customer acquisition and retention. We will continue to enhance our assortment with new and innovative branded products. Turning now to our fourth initiative this year, growing our loyal customer base. Since inception, Trulieve has embraced a customer centric approach to building our company. Reinforcing acquisition and retention. We use a combination of digital outreach paid media, and in person events to attract new customers to Trulieve. Across our platform, we conduct over 100 community and physician engagement events per month. Partnering with a wide variety of nonprofit organizations to raise awareness for cannabis. Establishing and maintaining reciprocal relationships with our customers is essential for customer retention. Customer retention remains strong at 75%, highlighting the success of our approach. Consistent customer retention requires availability of high quality products, timely and informative messaging, and exceptional service. Over the past 3 years, we have invested significantly in talent, technology, and training reinforce our customer messaging and service. As our marketing capabilities evolve, we are adding more sophisticated functionality. Together, personalized messaging, rewards program, and mobile app provides customers with convenient real time updates. Earlier this year, we launched an initiative called Project Hyper, which uses generative AI to enable personalized customer messaging at scale. This initiative is on track, and we expect to begin realizing efficiency and speed-to-market benefits in the first quarter of 2027. Our rewards program added over 45 thousand members in the third quarter surpassing 700 thousand members. Rewards members spend on average 2.1x more than nonmembers, comprising more than 80% of third quarter transactions. In May, we added tiers to the rewards program in Florida, giving our most loyal customers greater rewards. Following the early success in Florida, we are rolling out tiered rewards in Georgia this month. 1 year ago, 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 half a million orders or 30% of all online orders placed through the app in the third quarter. We plan to launch the mobile app in Georgia soon, followed by additional markets in 2027. In summary, we have made substantive progress on our strategic priorities. With notable wins across reform, growth initiatives, branded products and customers. As we approach year end, our team is laser focused on maintaining operational excellence in our core business while prepping for the next wave of accelerated growth. With that, I would like to turn the call over to our CFO, Jan Reese.

Operator: Please go ahead.

Jan Reese: Good morning, and thank you, Kimberly. As a reminder, third quarter reported results includes Trulieve Medical Operations. Following the deconsolidation of Harvest, the harvest results are reported as an equity investment. Please refer to our earnings presentation for additional details. Third quarter medical revenue was $230 million compared to medical only revenue of $221 million in Q3 last year and $222 million in Q2 this year. up 4% compared to both periods. Third quarter revenue exceeded guidance, outperforming typical seasonal trends driven by growth in Georgia and Pennsylvania. Third quarter gross profit totaled $148 million or 64% margin, up from $139 million in Q3 last year and $140 million in Q2 this year. Gross margin improved by 11% year over year and sequentially. 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 sell through promotional activity and idle capacity costs. Third quarter SG&A was $88 million or 38% of revenue, Adjusted SG&A was $78 million or 34% of revenue. A 1% improvement from last quarter. We expect SG&A may fluctuate based on the timing of investments and growth opportunities and infrastructure. Third quarter net income was $1 million. Excluding nonrecurring items, third quarter net income would have been $18 million or $09 per share. Third quarter adjusted EBITDA was $89 million, representing a 39% 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 an 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 accrued interest. Third quarter income tax expense does not include 280E tax liability. The increase in our uncertain tax position include $18 million in interest on the UTP and $9 million of ordinary taxes covered by overpayments. Ordinary taxes were impacted by the equity loss in harvest and other nondeductible operating expenses. We remain confident in our position and our ability to address the outstanding UTP. Moving on to the balance sheet and cash flow. We ended the quarter with $327 million in cash and $289 million in debt. Third quarter operating cash flow was $4.07 billion dollars capital expenditure were 29 million and free cash flow totaled $45 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 third quarter, no shares were repurchased. Turning to the outlook. Our expected fourth quarter revenue to be up low-single digits compared to the third quarter. Growth is expected to accelerate into the year end with holiday season and continued strength in Georgia. Gross margin is expected to be comparable to recent quarters. With some pressure due to holiday promotions. We anticipate purchase accounting adjustments for the Harvest deconsolidation will result in a net loss for the fourth quarter. This noncash accounting treatment will influence harvest investment and consequently Trulieve's reported results. For full year 2026, we anticipate operating cash flow of at least $225 million with increased investment in growth markets to meet demand capital expenditures are now expected to be approximately $105 million, up from $95 million. Year to date, we have opened 9 new dispensaries, and refreshed or remodeled 43 locations we plan to open at least 2 additional dispensaries and complete 7 more refreshes or remodels by the end of this year. With that, I will turn the call back to Kimberly.

Kimberly Rivers: Thanks, Jan. So far, 2026 has been a monumental year for Trulieve. Many historic milestones were reached with federal rescheduling of licensed medical marijuana and uplisting to the New York Stock Exchange making the top of the list. In the third quarter alone, we had several accomplishments. In August, we redomiciled the company to Delaware from British Columbia, making Trulieve eligible for U. S.-based market index inclusion. In September, Trulieve was added to several indices, including the S&P Total Market Index. Broadening awareness and creating passive investor demand driven by benchmarking. We fully expect greater liquidity provided on the NYSE index inclusion and broader access to capital markets will help drive long term shareholder value. Looking ahead, we believe additional cannabis reform is on the horizon. Broader rescheduling of marijuana, SAFE Banking, updated FinCEN guidance, and Treasury guidance on 280E tax treatment, all further align federal policy and state licensed marijuana programs. Allowing state licensed marijuana businesses unfettered access to capital normalized tax rate, and service providers is critical to supporting long term success of the regulated marketplace. Our team is ready for future catalysts, including credit card processing and potential conversion of customers, from the intoxicating hemp market, once the federal ban takes effect next month. Alongside policy reform, Trulieve is poised to realize significant growth in Georgia and Texas. We are already scaling production and retail in Georgia to meet increased demand. In Texas, our team is ready to scale alongside market growth pending final regulatory approvals. Our mission at Trulieve is to expand access to cannabis while serving customers with high quality products and exceptional experiences. Since day 1, our approach has not changed. Trulieve grows 1 patient at a time. With meaningful opportunities in Georgia and Texas, robust cash generation to fuel investments in organic growth and M&A, and a proven track record for capturing outsized market share I could not be more excited about the road ahead. Thank you for joining us, and as I always say, onward.

Operator: At this time, Kimberly 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 1 on your touch tone phone. If you are using a speakerphone, please pick up your handset before pressing the keys. And to withdraw your question, please press star, then 2. We ask that you please limit yourself to 1 question and 1 follow-up. And if you have further questions, you may reenter the question queue. And today's first question will come from Luke Hannan with Canaccord Genuity. Please go ahead.

Luke Hannan: Thanks. Good morning, everyone, congratulations on the results. Kimberly, I just wanted to frame up, I guess, with the near term and perhaps 2027 will look like. And I am sure we will get a more fulsome view on that once you report your Q4 results. But from a high level, it sounds like everything in Georgia is going well and you are investing more to meet demand You will likely also need to invest a little bit more in Texas as well to meet the there, especially now with the midterms, and it seems like potentially recreation will be more on the table in the next few years. But just from a high level, I think it is probably fair to say that 2027 will be a little bit more CapEx intensive than perhaps what we have seen in the past. But specifically, I guess, what I am I am looking for is what ranking. Rank order capital allocation priorities. I imagine it is Texas and Georgia first. And then where specifically would M&A show up on that list?

Kimberly Rivers: Yeah. Thanks, Luke. So as we noted, we are certainly going to focus on the opportunities that are directly ahead of us. And right now, we are executing I think the team is doing a wonderful job executing against the opportunity that we have in Georgia. We are going to continue that momentum and are very excited about what we are seeing from a growth trajectory in Georgia, not only in our branded retail platform, but as mentioned on the call, the opportunities that we have to expand our pharmacy network and partnerships in the state of Georgia as well. Also, right, in Georgia, I think we could have an opportunity for some potential expansion, again, as a result of the election there. So we are excited to get to work and continue to partner with the legislature in Georgia as that program really begins to fully realize. In Texas, as I said, all along, I think Texas is going to be a massive market. I think similarly, we have got folks now in Texas who have taken the leadership roles with the governor and obviously the senator elect as well as the lieutenant governor, who all voted in favor of were very supportive of the regulated medical program, along with the expansion to that medical program. So again, remain very bullish on not only kind of the current state in Texas, but hopefully some acceleration and some additional momentum behind that program. We believe that licensure is relatively imminent there. And are very much looking forward to launching Texas in 2027, which, of course, will be a huge focus for our team just because of, again, the sheer size of that market, we believe, is going to be fairly massive. In addition to that, from a capital allocation standpoint, I also should say that we are very bullish on Pennsylvania. Now, with both the governor and the legislature being the same team, guess, if you will, that removes some potential barriers that have existed previously for program expansion there. You know? So interested, of course, in expanding our reach in existing markets, which we said on the call. Whether that is via tuck-in, or some additional either single state or multistate Our approach as it relates to M&A has not changed. I think we have been very disciplined in M&A. I mean, we grew in Pennsylvania, for example, has grown 100% via an M&A. And so we are very comfortable both via organic and expansion through M&A. We will remain disciplined as we think about how expansion impacts our leadership teams, how we can manage those businesses, how we can share resources across markets, and we have previously been very descriptive about our regional hub strategy. Again, that has not changed either. And so we will be focused on, again, accretive opportunities that make sense with respect to our specific portfolio. that is helpful. Thanks. And then for my follow-up, I appreciate in your prepared remarks and in the presentation as well. You called out the prevalence of modern flower and roll 1 amongst your branded products and branded retail. I am curious to know as far as the mix, of those 2 brands in particular, but maybe mix of your broader brand portfolio. I mean, comfortable with that figure? Would you like to see that go up? Or would you like to see prevalence of or greater distribution of other brands that own brands that you have? Just curious. How you look at the brand portfolio from here. Yeah. I mean, I think that, look, we are it is our job to make sure that we have brands that resonate with customers where we can meet those customers where they are at. And what I mean by that is it is our goal to have a strengthened brand at each tier of customer across the platform. And so we are very you know, excited that the momentum that we have behind both that Modern Flower and Roll 1 brand Both of those brands cover a number of different form factors. With innovation in both of those brands across form factors. So example, we launched and are actually in the process of launching a number of live products in that modern category in many of our markets. And utilizing fresh frozen and has gotten a very know, positive patient response as well as some concentrate products. Similarly, in Roll 1, we launched Clutch, which is an all in 1, which has really taken off across our market. As a vape, all in 1 vape product in that category. And then, of course, our genetics and our flower pipeline in both of those categories as well. So think it is important, right, because those 2 categories together comprise the largest portion of patients in our platform. But that being said, we have been leaning into premium via our own in house brand, Cultivar, as well as our partnerships I mentioned Alien Labs and Connected. On the call, which we are very, again, bullish on the expansion of those portfolios, not just in additional form factors, but also expanding genetics and genetic availability across Florida and then bringing that into Texas. We are also exploring expansion of that brand into some other markets. In addition, we recently launched a seed junkie partnership in Pennsylvania, in that premium slot, which is going to be, I think, showing. it is showing very positive results early, and I think we will continue to perform well. So it is important for us to, again, have concrete strategies from a branded product standpoint in each of those price tiers and to make sure that we are not just staying stagnant. The cannabis consumer demands us to keep up and to make sure that we are providing you know, newness and innovation to Innovation to the product lineup, which we will continue to focus on. that is great. Thank you very much.

Operator: The next question will come from Bill Kirk with ROTH Capital Partners. Please go ahead.

William Kirk: Hey, good morning, everyone. I wanted to ask about the quarter over quarter gross margin improvement. I guess, how much of that would be cost control or, like, yield efficiency type items? How much would be a better price environment if it is out there and exists? And how much are things like mixed benefits from higher margin states like Georgia that get bigger, impacting that gross margin improvement?

Jan Reese: Yes, thanks for the question. There are multi-- First off, we continue to be very disciplined with our promotional activities. Which enables us to obviously accelerate a little bit on the margin profile. Second, yes, there is a component of newness as we go into the new territories like Georgia, where we do have future opportunities as well. I would argue that the quarter-over-quarter gross margin is what we expected and what we reported in the recent quarters for the Trulieve side.

Kimberly Rivers: Perfect. Thank you. And then Kimberly, when you were talking about federal legal DEA status, I think you mentioned it opening the door for strategic partners. Wanted to go back to see if I if I heard that right. And if so, have you seen any specific increased interest from strategic and what could partnerships look like? Yeah. So I mean, I would say that yes, you did hear that right. The first, we will just point out is NYSE That, I think, is a pretty strategic partner. And that we can point to. Aside from Aside from that 1, we have certainly seen an increased availability of vendor relationships, primarily across marketing as well as some tech partnerships. I do not want to name specific names, but I will tell you that our ability to partner in the marketing channel with, you know, larger providers and services, including them reaching out to us, at this point, has definitely. We have definitely seen an increase there. We continue to have meaningful conversations with folks in the credit card space. I do think that they are looking for some updated guidance from FinCEN specifically in. You know, through kind of some formal banking updates. But they are definitely engaged at this point, which I well, sure. They would maybe take a phone call before, and they certainly were not leaning in. At this level that they are now when we were able to open the conversation with, maybe you did not know, but we are actually a fully Schedule III DEA registered business listed on the NYSE and feel that we should be treated no differently than CVS and or Walgreens and so having. Being able to have that direct conversation has definitely changed, I will call it, the tone of those conversations, and it is gonna maybe take a little bit of time. But we have been able to start that process. Perfect. Thank you, Kimberly. I will pass it along. Yep.

Operator: Your next question will come from Aaron Grey with Alliance Global Partners. Please go ahead.

Aaron Grey: Hi. Good morning. Thanks for the questions, and congrats on the results here. First question for me, just the outlook for Florida, potentially post a change in governor you know, sticking strictly to medical and not pertaining to potential adult use. But are there changes potentially believe could be on the horizon just given the prior governor was not as favorable to cannabis? And, you know, what would be on your ask, you know, from regulators to create a medical. A better medical market in the state, you know, particularly given the potential for increased demand post the intoxicating hemp ban?

Kimberly Rivers: Sure. So we definitely have been having a lot of conversations you know, with this incoming administration along with, of course, leadership on both the health and Senate side. I think it is a little early, maybe, to give concrete specifics, Aaron. But what I can point you to is there was a bill that was filed last year that we were supportive of that pointed to some structural improvements within the Florida program, things like aligning patient certifications, with card renewals, extending the time of those additional physician telehealth visits that folks have to do. In Florida. In Florida, there is just a lot of different points and each of those points produces friction and oftentimes requires payment. From patients. And so trying to streamline that process also while potentially reducing costs for patients is certainly something that we have been supportive of. Expanding access for veterans is another initiative that we have championed with the legislature as well. And so I think that there are a number of things that could be improvements to the program. And, you know, I do think that we are entering kind of a new era in Florida as it relates to the ability to get some of those things done. Okay, great. Appreciate that commentary. And then just switching over to Georgia. First and foremost, you know, how has the increase in demand been relative to your expectations know, now a couple months post July 1? And as we think about the upcoming months, you know, how do you think the market could grow even further with potential hemp ban coming into place? And do you think there is any potential bottlenecks that could come into the system there? Thank you. Yeah. So I think Georgia has been growing faster, candidly, than what we initially had modeled. And it is that is a great problem, and we know how to deal with that, thankfully. At Trulieve. And so we have been you know, making sure, again, due to our modular setup, we have been able to meet that demand and are, though, now investing ahead of what we see as our new reality, which is a step up in accelerated growth. And so when you hear us talk about that CapEx example, growing from that by about 10 million A chunk of that is definitely in the cultivation and production side of Georgia business. And to start that next phase into 2027 along with, right, the stores that we mentioned on the call that are now being triggered that we can go ahead and build out. So lots of excitement as it relates to Georgia. I, at the moment, do not necessarily see any bottlenecks ahead into 2027. As I said, I think that there is, you know, greater opportunity for additional pharmacies enter the mix. I think there was a little bit of confusion around the DEA process. A lot of those independent pharmacies because they also have, like, licensing through a separate DEA channel with their pharmacy license and just how all those pieces were not necessarily working with were not working together. Now I believe that has been sorted. And so we are starting to see, again, those additional folks come into play in Georgia. So I think that it is exciting to be able to have that conversation now with the legislature that, hey, Finally, the program that you put in place is starting to work. And to, again, be able to talk with them about, you know, future opportunities for expansion and demand in Georgia. Okay, great. Appreciate that color. I will jump back in the queue.

Operator: The next question will come from Gabrielle Ingoglia with Cantor Fitzgerald. Please go ahead.

Gabrielle Ingoglia: Congrats on the quarter. I wanted to frame the questions back to 2027. Historically, Florida has driven pretty seasonal pattern for you guys, which is maybe some softness in the summer. Post holiday dip in Q1, and then strength around 24 in the holidays. But this year, Georgia and Pennsylvania helped to offset the typical Q3 pressure. And then your Q4 guide is up low-single digits on revenue. So as we start to think about 2027, how much did Georgia and then potentially Texas and potentially the hemp conversion change that seasonality and should we maybe expect some smoother quarterly cadence? Or anything you can speak to there would be helpful.

Kimberly Rivers: Yeah, thanks, Gabby. So I would tell you that I think we have not been through a holiday with Georgia kind of performing as, like, a normal. I do not. I will call it more normalized you know, eclipse. This will be our first Georgia holiday season with a full product suite. So it is a little difficult to give a full outlook there without having gone through you know, at least 1 cycle. Full cycle in Georgia. And, really, with Georgia, we really got started, call it, midyear. So I am gonna I am gonna politely table the Georgia question until we get through a full a full year there. Just because of, again, a little bit of lack of visibility. We will also be able, though, I think in Q4, beginning of the year, able to do a look back on holiday and probably can extrapolate a little better at that time. That being said, Georgia is growing right now, which is going to somewhat skew or mask a bit of what I will call a normalized pattern. For probably the next definitely into 2027. So, again, I am saying kind of 2 different things there, but it may not be completely helpful because I think it is gonna continue. You are gonna have that growth uptick as we are able to open new stores and patient counts are increasing. that is going to kind of, again, maybe overshadow any I will call it, typical seasonality that you might otherwise have in that market. Texas is gonna all be dependent on when that actually comes into the portfolio. So, I mean, obviously, we did see, I think, you know, maybe we can anchor on Pennsylvania a little bit. Pennsylvania is different than Florida. It always has been. Right, Pennsylvania is seasonal and that there is pressure in Pennsylvania actually in the winter months. As opposed to the summer months, and Florida is kind of the opposite. And so those businesses obviously are not the same exact size. To put it mildly. So you have some offset, but not complete offset between the 2. In this quarter, what we said is that we did we held a little bit better, I would say, in Florida. Than what we typically see in a Q3 seasonal pattern. Plus we had, again, Pennsylvania performing, again, kind of 1 of their maybe stronger quarters. And then we also had Georgia growth in Q3. And so everything is rolling in the same in the right direction here. And again, the hope is that we will, to your point, get to a point where we are not talking as much about a dip in the business because of seasons. Okay. that is really helpful. And then if I could just ask 1 more on Texas. As we wait for the final licensure, can you help level set how many retail doors you could open in the first 6 and then 12 months? Sure. Well, the program in Texas allows for unlimited dispensaries. So long as you have opened 1 in each of the mandated 11 regions. And so we have locations in each of those 11. And so after those are open, which has to go through, inspection period, etcetera. Right? So we have to have it. Them inspected and fully open, then we would be able to call for inspection and open additional stores. So really, the trigger point in Texas is getting those first 11 open, which we would be moving to do so in short order as soon as licensing is finalized. Okay. Super helpful. Thanks, guys. Thanks.

Operator: The next question will come from Frederico Yokota Gomes with ATB Core Mark. Please go ahead.

Frederico Yokota Gomes: Good morning. Thanks for taking my questions. Congrats on the great quarter here. I want to ask about the DA registration. Just curious are there any new compliance cost related to that registration, or is it just, you know, business as usual considering you are getting them in the medical only markets? Thank you.

Kimberly Rivers: Sure. Yeah. I would I would tell you, Federico, it is very. it is nonmaterial. it is it is very light. Right? I mean, there is certainly some additional legal costs that we have incurred. We have got folks that have been in market interacting with the DEA inspectors. In Georgia, there are due to the wholesale nature of that business and, again, the relationship with the pharmacies, In the Georgia marketplace, they are issuing MOUs. That have to be reviewed and signed prior to issuing finals I think that is going be a very common practice in markets for wholesale as this unfolds. And so these MOUs, we do have to ensure that the folks that were transacting with also have DEA registrations. And so there is a little bit of right, an additional I will call it, compliance around that. But, again, nothing material. And I think maybe to that point, because I think this question, I have seen floating out there as it relates to is the DEA going to impact our ability to wholesale in other markets. Again, in all of our markets, there has been almost you know, unanimous or, you know, definitely majority of our partners who also are DEA And so we have done a full analysis, and that is a super minimal almost not worth mentioning impact on the wholesale business. Thank you. Appreciate that. And then the second question, just on Florida. I guess, the competitive environment there, how saturated do you think Florida is today from a retail location perspective just in terms of the overall retail dispensary count in the state. We know that, you know, several other companies have been opening stores there. At what point do you think that gets saturated and we see that store count in the state sort of stabilizing? Yeah. So, I mean, we certainly look at productivity of our stores on a store by store basis. Of course, we also track our same store sales. We have positive momentum there. I can tell you that the patient count continues to grow. Right, in Florida when you look at Q3 versus Q2. There were additional 200 patients per week. Were being added to the registry. I think in addition to your point, there is a significant intoxicating hemp market in Florida. I think that there was, like, 7 thousand points of distribution. Based on some numbers that I recently saw. So. And there is, you know, 700 plus, 786 dispensaries in Florida. So I do think that there is likely continued room. I think the question is at what rate and at what time. We will continue to invest in Florida in locations that we feel makes sense for our customer base. Based on the data and information that we have in terms of where customers are coming from and convenience of purchase. All of our stores are not the same as it relates to size and or type. Right? We have super small stores, which are literally pickup only, to very large stores with drive throughs and kind of the full the full you know, suite of services. So. And everything in between. So I think we are very strategic in terms of not only where we put stores, but the type of store that we put there. And we will continue to look for those fill in and or white space opportunities, which we do believe still exist in Florida. Although certainly at a lower rate than, you know, you saw from us in early days. Thank you.

Operator: And this will conclude our question and answer session. I would like to turn the conference back over to Ms. Christine Hersey for any closing remarks. Please go ahead.

Christine Hersey: 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.

Operator: The conference has now concluded. Thank you for your participation. You may now disconnect.