Q4 2025 Trulieve Cannabis Corp Earnings Call

February 26, 2026

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[Company Representative] (Trulieve Cannabis Corp.): I love rock 'n' roll. Put another dime in the jukebox, baby. I love rock 'n' roll. Come and take your time and dance with me. Don't worry about a thing, 'cause every little thing is gonna be all right. Singing don't worry about a thing, 'cause every little thing is gonna be all right. Rise up this morning, smiled with the rising sun. Three little birds sat on my doorstep, singing sweet songs of melodies pure and true. Saying, This is my message to you, woo hoo! Singing, don't worry about a thing, 'cause every little thing is gonna be all right. Rise up this morning, smiled with the.

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Speaker #14: Good morning, everyone, and welcome to the Trulieve Cannabis Corporation fourth quarter and full year 2025 financial results conference call. My name is Alan, and I will be your conference operator today.

Alan: Good morning, everyone, welcome to the Trulieve Cannabis Corp. Q4 and Full Year 2025 Financial Results Conference Call. My name is Alan, 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. Christine, you may begin.

Operator: Good morning, everyone, welcome to the Trulieve Cannabis Corp. Q4 and Full Year 2025 Financial Results Conference Call. My name is Alan, 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. Christine, you may begin.

Speaker #14: 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.

Speaker #14: Christine, you may begin.

Speaker #15: Thank you. Good morning, and thank you for joining us. During today's call, Kim Rivers, Chief Executive Officer and Yawn Reese, Chief Financial Officer, will deliver prepared remarks on the financial performance and outlook for Trulieve.

Christine Hersey: 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 Q4 and full year 2025 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.

Speaker #15: Following the prepared remarks, we will open the call to questions. This morning, we reported fourth quarter and full year 2025 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.

Speaker #15: 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 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.

Christine Hersey: 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.

Speaker #15: 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.

Speaker #15: 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.

Speaker #15: 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.

Christine Hersey: 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.

Speaker #15: 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.

Speaker #15: 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.

Speaker #15: 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.

Speaker #15: Thank you, Christine. Good morning, everyone, and thank you for joining us today. We are thrilled to report outstanding financial results and meaningful progress on our strategic priorities.

Kim Rivers: Thank you, Christine. Good morning, everyone. Thank you for joining us today. We are thrilled to report outstanding financial results and meaningful progress on our strategic priorities. Congratulations to the entire team for delivering another year of stellar performance, highlighted by record units sold, industry-leading margins, and robust cash generation. We finished the year with considerable momentum, underscored by a series of impressive accomplishments. In December, we won a conditional license in Texas and repositioned our debt, reducing balance sheet leverage and annual interest expense. On top of that, on 18 December, President Trump signed an executive order to reschedule cannabis to Schedule III. I had the pleasure of attending this historic event, where the President advanced the first major step in federal cannabis reform, acknowledging the medical value of cannabis.

Speaker #15: Congratulations to the entire team for delivering another year of stellar performance. Highlighted by record units sold, industry-leading margins, and robust cash generation. We finished the year with considerable momentum, underscored by a series of impressive accomplishments.

Speaker #15: In December, we won a conditional license in Texas and repositioned our debt, reducing balance sheet leverage and annual interest expense. On top of that, on December 18th, President Trump signed an executive order to reschedule cannabis to schedule three.

Speaker #15: I had the pleasure of attending this historic event where the President advanced the first major step in federal cannabis reform, acknowledging the medical value of cannabis.

Speaker #15: We applaud the president for fulfilling a campaign promise and expect the administration will follow through in short order. Importantly, rescheduling signals that long overdue common sense cannabis reform is achievable.

Kim Rivers: We applaud the President for fulfilling a campaign promise and expect the administration will follow through in short order. Importantly, rescheduling signals that long overdue common sense cannabis reform is achievable. Trulieve will continue to advocate for change to support cannabis consumers and the industry. Moving to our results. Full year revenue was $1.2 billion, with traffic and units sold up 5% each. Q4 revenue of $293 million increased 2% sequentially in line with guidance. Full year and Q4 gross margin of 60% was driven by operational efficiencies, lower production costs, and our disciplined approach to promotional activity. Record adjusted EBITDA of $427 million improved by 1% to 36% margins due to expense control in our core business.

Speaker #15: Trulieve will continue to advocate for change to support cannabis consumers and the industry. Moving to our results, full year revenue was $1.2 billion, with traffic and units sold up 5% each.

Speaker #15: Fourth quarter revenue of $293 million increased 2% sequentially in line with guidance. Full year and fourth quarter gross margin of 60% was driven by operational efficiencies, lower production costs, and our disciplined approach to promotional activity.

Speaker #15: Record-adjusted EBITDA of $427 million improved by 1% to $36% margins due to expense control in our core business. Full year operating cash flow of $273 million exceeded our target of $250 million.

Kim Rivers: Full year operating cash flow of $273 million exceeded our target of $250 million. We exited the year with $256 million in cash after retiring over $380 million of debt in December. Overall, 2025 results were strong, leading to standout operational and financial performance despite volatility in consumer sentiment and macroeconomic conditions. Pressure on retail revenue from pricing compression and softer consumer behavior was offset by higher traffic and units sold. Throughout the year, our team was able to refine our product mix and promotional strategies to meet changing customer preferences while maintaining brand equity and margins. Low visibility, headline risk, and mixed consumer sentiment have carried into 2026. Our team is ready to manage through business cycles, meeting customer needs when spending is pressured and when it rebounds.

Speaker #15: We exited the year with $256 million in cash after retiring over $380 million of debt in December. Overall, 2025 results were strong, leading to standout operational and financial performance despite volatility in consumer sentiment and macroeconomic conditions.

Speaker #15: Pressure on retail revenue from pricing compression and softer consumer behavior was offset by higher traffic and units sold. Throughout the year, our team was able to refine our product mix and promotional strategies to meet changing customer preferences while maintaining brand equity and margins.

Speaker #15: Low visibility headline risk and mixed consumer sentiment have carried into 2026. Our team is ready to manage through business cycles, meeting customer needs when spending is pressured and when it rebounds.

Speaker #15: Wholesale revenue grew 23% in 2025, driven by strength in Maryland and Pennsylvania. In Ohio, our production partner continues to ramp sales of branded products including modern flower and roll one.

Kim Rivers: Wholesale revenue grew 23% in 2025, driven by strength in Maryland and Pennsylvania. In Ohio, our production partner continues to ramp sales of branded products, including Modern Flower and Roll One. We plan to grow our wholesale business this year as industry conditions permit. Following tremendous progress last year, we are concentrating efforts on 4 key areas. This year, our strategic priorities are, 1, expanding access to cannabis, 2, growing our loyal customer base, 3, elevating our branded product portfolio, and 4, investing in growth initiatives. Since inception, a core part of our mission has been expanding access to cannabis. Trulieve has been a leader in federal and state efforts to advance the industry, working tirelessly to educate key stakeholders about the many benefits of regulated cannabis. Rescheduling is a historic milestone with major practical and symbolic implications.

Speaker #15: We plan to grow our wholesale business this year as industry conditions permit. Following tremendous progress last year, we are concentrating efforts on four key areas.

Speaker #15: This year, our strategic priorities are: one, expanding access to cannabis; two, growing our loyal customer base; three, elevating our branded product portfolio; and four, investing in growth initiatives.

Speaker #15: Since inception, a core part of our mission has been expanding access to cannabis. Trulieve has been a leader in federal and state efforts to advance the industry, working tirelessly to educate key stakeholders about the many benefits of regulated cannabis.

Speaker #15: Rescheduling is a historic milestone with major practical and symbolic implications. First, rescheduling acknowledges the medical value of cannabis affirming what patients and physicians have known for years.

Kim Rivers: First, rescheduling acknowledges the medical value of cannabis, affirming what patients and physicians have known for years. Second, rescheduling removes barriers to research while reducing the stigma for millions of Americans. Third, it removes the punitive tax burden of 280E, lifting pressure on state legal operators and allowing conversion from the illicit market to regulated channels. Finally, rescheduling sets the stage for much-needed reform, such as safer banking and eventual uplisting to US exchanges. The vast majority of Americans favor common sense reform. We look forward to supporting these efforts in the year ahead. While 40 states have adopted some form of medical and/or adult use cannabis, access to safe, tested products varies by state. We are pushing for expanded access as appropriate across our markets. In Florida, Trulieve continues to support the Smart & Safe Florida Adult Use Campaign.

Speaker #15: Second, rescheduling removes barriers to research while reducing the stigma for millions of Americans. Third, it removes the punitive tax burden of $280 lifting pressure on state legal operators and allowing conversion from the illicit market to regulated channels.

Speaker #15: Finally, rescheduling sets the stage for much-needed reforms such as safer banking and eventual uplifting to US exchanges. The vast majority of Americans favor common sense reform, and we look forward to supporting these efforts in the year ahead.

Speaker #15: While 40 states have adopted some form of medical and/or adult use cannabis, access to safe, tested products varies by state. We are pushing for expanded access as appropriate across our markets.

Speaker #15: In Florida, Trulieve continues to support the smart and safe Florida adult use campaign. The campaign is fighting for ballot initiative inclusion this November. While the campaign submitted $1.7 million signatures prior to the February 1st deadline, state agencies reported a shortfall of validated petitions versus the required $880,000.

Kim Rivers: The campaign is fighting for ballot initiative inclusion this November. While the campaign submitted 1.7 million signatures prior to the 1 February deadline, state agencies reported a shortfall of validated petitions versus the required 880,000. The campaign has asked the Florida Supreme Court to address the invalidation of more than 90,000 signatures, which, if allowed, would place the total over the required threshold. We anticipate the campaign will have greater clarity on ballot inclusion for this year's midterms in the coming months as litigation unfolds. Turning to Pennsylvania, Governor Shapiro has again called for the legislature to pass adult use legislation. We believe state legislators recognize the potential for adult use to satisfy constituent demand for cannabis while generating revenue for the state. Several bills have been filed this session, and we remain optimistic that a compromise can eventually be reached.

Speaker #15: The campaign has asked the Florida Supreme Court to address the invalidation of more than 90,000 signatures, which, if allowed, would place the total over the required threshold.

Speaker #15: We anticipate the campaign will have greater clarity on ballot inclusion for this year's midterms in the coming months as litigation unfolds. Turning to Pennsylvania, Governor Shapiro has again called for the legislature to pass adult use legislation.

Speaker #15: We believe state legislators recognize the potential for adult use to satisfy constituent demand for cannabis while generating revenue for the state. Several bills have been filed this session, and we remain optimistic that a compromise can eventually be reached.

Speaker #15: If adult use is launched in Pennsylvania, Trulieve is well-positioned given our established retail footprint, branded products, and scaled production capabilities. In Texas, Trulieve is one of nine operators awarded a conditional license for the medical marijuana program.

Kim Rivers: If adult use is launched in Pennsylvania, Truly is well-positioned, given our established retail footprint, branded products, and scaled production capabilities. In Texas, Truly was one of nine operators awarded the conditional license for the medical marijuana program. We are honored to be among those chosen, and our team is working to finalize a license. Pending regulatory approvals, we plan to quickly launch production and retail operations. Trulieve was first to market in several states, including Florida, Georgia, and West Virginia. Our distinguished track record, working with patients, physicians, and regulators to develop early-stage programs, sets us apart. With over 135,000 patients today, telehealth consultations for patients, and satellite pickup locations, the Texas Compassionate Use Program is poised for meaningful growth over the next few years. We look forward to contributing to the success of the program.

Speaker #15: We are honored to be among those chosen and our team is working to finalize the license. Pending regulatory approvals, we plan to quickly launch production and retail operations.

Speaker #15: Trulieve was first to market in several states, including Florida, Georgia, and West Virginia. Our distinguished track record working with patients, physicians, and regulators to develop early-stage programs sets us apart.

Speaker #15: With over 135,000 patients today, telehealth consultations for patients and satellite pickup locations the Texas Compassionate Use Program is poised for meaningful growth over the next few years.

Speaker #15: We look forward to contributing to the success of the program. In Georgia, new legislation has been filed that would expand the medical cannabis program.

Kim Rivers: In Georgia, new legislation has been filed that would expand the medical cannabis program. If passed into law, starting in 2027, the program would include new qualifying conditions such as severe arthritis, severe insomnia, HIV, IBS, and lupus, and new form factors, including edibles and vapes, would be allowed. While expanding access to cannabis is a core part of our company's mission, we remain passionate about growing our loyal customer base while providing best-in-class service, messaging, and products. Training and team building to enhance customer service is ongoing. This month, we hosted our first national retail general manager summit in Orlando. During this four-day event, hundreds of leaders from across the country came together for training and to share ideas to improve retail operations and the customer experience.

Speaker #15: If passed into law starting in 2027, the program would include new qualifying conditions such as severe arthritis, severe insomnia, HIV, IBS, and lupus, and new form factors including edibles and vapes would be allowed.

Speaker #15: While expanding access to cannabis is a core part of our company's mission, we remain passionate about growing our loyal customer base while providing best-in-class service messaging and products.

Speaker #15: Training and team building to enhance customer services ongoing. This month, we hosted our first national retail general manager summit in Orlando. During this four-day event, hundreds of leaders from across the country came together for training and to share ideas to improve retail operations and the customer experience.

Speaker #15: Attendees noted the event was a resounding success, setting the tone for our retail team to be energized and ready for the year ahead. Investments in personalized messaging, mobile app, and rewards program allows more sophisticated interactions with customers.

Kim Rivers: Attendees noted the event was a resounding success, setting the tone for our retail team to be energized and ready for the year ahead. Investments in personalized messaging, mobile app, and rewards program allows more sophisticated interactions with customers. Over the past few months, we have moved beyond category-based segmentation, adding targeted messages to specific cohorts based on purchase behavior, browsing activity, engagement history, and preferred communication channels. This year, we are investing in a major project that uses AI to automate segmentation, decisioning, and execution to accelerate speed to market and real-time engagement. Internally, we are calling this multiyear endeavor Project Hyper, as it will accelerate hyper-personalization of customer outreach. Deeper personalization enables more relevant messaging and promotion, improving the quality of interaction while driving desired results. In November, we launched a mobile app in Florida, providing customers one place for browsing, deals, reservations, and rewards.

Speaker #15: Over the past few months, we have moved beyond category-based segmentation, adding targeted messages to specific cohorts based on purchase behavior, browsing activity, engagement history, and preferred communication channels.

Speaker #15: This year, we are investing in a major project that uses AI to automate segmentation, decisioning, and execution to accelerate speed to market and real-time engagement.

Speaker #15: Internally, we are calling this multi-year endeavor Project Hyper, as it will accelerate hyper-personalization of customer outreach. Deeper personalization enables more relevant messaging and promotion, improving the quality of interaction while driving desired results.

Speaker #15: In November, we launched a mobile app in Florida providing customers one place for browsing, deals, reservations, and rewards. Push notifications to learn about special promotions or when orders are ready for pickup provide a seamless experience.

Kim Rivers: Push notifications to learn about special promotions or when orders are ready for pickup provide a seamless experience. In the first 90 days since the app launched, over 115,000 customers downloaded the app, leading to 3.5 million user sessions. Following the success in Florida, we are excited to launch the app in additional markets this year. Our rewards program grew 12% in Q4, reaching 915,000 members at year-end. Rewards members continue to spend on average 2.5 times more than non-members, comprising 78% of Q4 transactions. We plan to introduce program tiers, enabling more robust rewards for customers who spend more, including exclusive offers, products, and events. In combination, advanced messaging capabilities provide a competitive advantage while contributing to customer retention.

Speaker #15: In the first 90 days since the app launch, over 115,000 customers downloaded the app. Leading to 3.5 million user sessions. Following the success in Florida, we are excited to launch the app in additional markets this year.

Speaker #15: Our rewards program grew 12% in the fourth quarter, reaching $915,000 members a year-end. Rewards members continue to spend on average $2.5 times more than non-members, comprising 78% of fourth-quarter transactions.

Speaker #15: We plan to introduce programs tiers enabling more robust rewards for customers who spend more, including exclusive offers, products, and events. In combination, advanced messaging capabilities provide a competitive advantage while contributing to customer retention.

Speaker #15: Fourth-quarter retention improves sequentially to 70% company-wide, with 78% retention in medical-only markets demonstrating the strength of our retail platform. High-quality branded products reinforce customer attraction and retention while building long-term equity.

Kim Rivers: Q4 retention improved sequentially to 70% company-wide, with 78% retention in medical-only markets, demonstrating the strength of our retail platform. High-quality branded products reinforce customer attraction and retention while building long-term equity. In 2025, we sold over 50 million branded product units. In-house brands, Modern Flower and Roll One, continue to gain traction, representing almost half of the branded products sold. New and innovative branded product development is ongoing. Last year, our team introduced over 175 new SKUs, including the Roll One Clutch All-in-One, a discreet compact vape cart. In Florida, the Roll One Clutch launched in Q4 and has sold over 200,000 units. In the past month, we launched the Roll One Clutch in Arizona, Ohio, and Pennsylvania, where initial customer feedback and sell-through rates have been positive. We plan to launch in additional markets in the coming months.

Speaker #15: In 2025, we sold over 50 million branded product units. In-house brands Modern Flower and Role One continue to gain traction, representing almost half of the branded products sold.

Speaker #15: New and innovative branded product development is ongoing. Last year, our team introduced over 175 new SKUs, including the Role One Clutch all-in-one, a discrete, compact vape cart.

Speaker #15: In Florida, the Role One Clutch launched in Q4 and has sold over 200,000 units. In the past month, we launched the Role One Clutch in Arizona, Ohio, and Pennsylvania, where initial customer feedback and sell-through rates have been positive.

Speaker #15: We plan to launch an additional market in the coming months. As the industry continues to evolve, we are pursuing growth initiatives that align with our long-term objective to build a leading cannabis company.

Kim Rivers: As the industry continues to evolve, we are pursuing growth initiatives that align with our long-term objective to build a leading cannabis company. Investments include expansion of retail, production, and distribution in new and existing markets, and technology and infrastructure. Entering 2025, our scaled platform included 233 retail locations, supported by over 4 million sq ft of production capacity. This year, we plan to add at least 5 new retail locations, with the potential to further expand, pending regulatory approval in Texas. Technology and infrastructure investments add flexibility and needed capabilities as our business grows. We are committed to making long-term investments that balance the need to remain competitive today, while positioning Trulieve for the future as layer of prohibition are removed. Following tremendous results in 2025, we are carrying the momentum forward this year.

Speaker #15: Investments include expansion of retail, production, and distribution in new and existing markets, and technology and infrastructure. Exiting 2025, our scaled platform included 233 retail locations, supported by over 4 million square feet of production capacity.

Speaker #15: This year, we plan to add at least five new retail locations, with the potential to further expand pending regulatory approval in Texas. Technology and infrastructure investments add flexibility and needed capabilities as our business grows.

Speaker #15: We are committed to making long-term investments that balance the need to remain competitive today while positioning Trulieve for the future as layer of prohibition are removed.

Speaker #15: Following tremendous results in 2025, we are carrying the momentum forward this year. Given our position as a leader and our strong balance sheet, we are well situated to make substantial progress in the year ahead.

Kim Rivers: Given our position as a leading voice for change, scaled operations, and strong balance sheet, we are well situated to make substantial progress in the year ahead. With that, I'd like to turn the call over to our CFO, Jan Reese. Please go ahead.

Speaker #15: With that, I'd like to turn the call over to our CFO, Yawn Reese. Please go ahead.

Speaker #2: Good morning, and thank you, Kim. We delivered full year 2025 revenue of $1.2 billion, comparable to 2024. Continued pricing compression and retail offset was offset by growth in Ohio and wholesale.

Jan Reese: Good morning. Thank you, Kim. We delivered full year 2025 revenue of $1.2 billion, comparable to 2024. Continued pricing compression in retail was offset by growth in Ohio and wholesale. Contributors from new dispensaries, record units sold, and full-year adult use in Ohio supported overall top-line performance. Q4 revenue was $293 million, declined 3% year-over-year, up 2% sequentially, as new store openings, adult use momentum in Ohio, and wholesale growth were offset by ongoing pricing pressure and softer consumer wallet trends. Full year gross profit was $711 million, representing a 60% margin, consistent with the prior year. Gross margin strength reflected economies of scale, operational efficiencies across our platform, and disciplined promotional management.

Speaker #2: Contributors from new dispensaries, record units sold, and full-year adult use in Ohio supported overall top-line performance. Fourth-quarter revenue was $293 million, declined 3% year over year, up 2% sequentially.

Speaker #2: As new store openings, adult use momentum in Ohio and wholesale growth were offset by ongoing pricing pressure and softer consumer wallet trends. Full-year gross profit was $711 million, representing a 60% margin consistent with the prior year.

Speaker #2: Gross margins strength reflected economies of scale, operational efficiencies across our platform, and disciplined promotional management. Fourth-quarter gross profit totaled $175 million, also at a 60% margin and up sequentially.

Jan Reese: Q4 gross profit totaled $175 million, also at a 60% margin and up sequentially. We expect quarterly gross margin to vary based on product and market mix, inventory sales through promotional activities, and idle capacity costs. For the full year 2025, SG&A expenses were $445 million, or 38% of revenue, compared to 43% in 2024, driven by reduced operational expenses and lower campaign support. Q4 SG&A was $126 million, or 43% of revenue. Adjusted SG&A declined to 30% of revenue from 31% last year, reflecting continued operational discipline and efficiency actions. Full year net loss was $160 million, compared to a net loss of $155 million in 2024. Q4 net loss was $43 million, or $0.22 per share.

Speaker #2: We expect quarterly gross margin to vary based on product and market mix. Inventory sales through promotional activities and idle capacity costs. For the full year 2025, SG&A expenses were $445 million, or 38% of revenue, compared to 43% in 2024.

Speaker #2: Driven by reduced operational expenses and lower campaign support, fourth-quarter SG&A was $126 million, or 43% of revenue. Adjusted SG&A declined to 30% of revenue from 31% last year, reflecting continued operational discipline and efficiency actions.

Speaker #2: Full-year net loss was $160 million, compared to net loss of $155 million in 2024. Fourth-quarter net loss was $43 million, or 22 cents per share.

Speaker #2: Excluding non-recurring items, fourth-quarter net loss per share would have been $0.02. Full-year adjusted EBITDA totaled $427 million, compared with $420 million in 2024. Fourth-quarter adjusted EBITDA was $105 million, representing a 36% margin and reflecting expense leverage across our core operations.

Jan Reese: Excluding non-recurring items, Q4 net loss per share would have been $0.02. Full year adjusted EBITDA totaled $427 million, compared with $420 million in 2024. Q4 adjusted EBITDA was $105 million, representing a 36% margin and reflecting expense leverage across our core operations. Turning to our tax strategy. Beginning 2019, we filed amended returns challenging the applicability of Section 280E to our business. To date, we have received refunds totaling more than $114 million. While we remain confident in our position, final resolution may take time. We continue to accrue an uncertain tax position while benefiting from lower cash tax payments. Excluding the impact of 280E in 2025, full year results would reflect positive net income.

Speaker #2: Turning to our tax strategy, beginning 2019, we filed amended returns challenging the applicability of Section 280E to our business. To date, we have received refunds totaling more than $114 million.

Speaker #2: While we remain confident in our position, final resolution may take time. We continue to accrue an uncertain tax position while benefiting from lower cash tax payments.

Speaker #2: Excluding the impact of 280E in 2025, full-year results would reflect positive net income. On balance sheet and cash flow in December, we redeemed $368 million.

Jan Reese: On balance sheet and cash flow, in December, we redeemed $368 million of senior notes and completed a $140 million private placement. We also repaid a $15.8 million mortgage in our West Virginia property. We ended the year with $256 million in cash and $232 million in debt, and subsequent to the year-end, raised an additional $60 million through a second private placement. Full year operating cash flow was $273 million. Capital expenditure was $44 million, and free cash flow totaled $229 million. Turning to the outlook. We expect Q1 revenue to decline sequentially by a low to mid-single-digit %, consistent with normal seasonality. Gross margin is expected to fluctuate quarter-to-quarter, but remain broadly in line with recent performance. Consumer trends will influence retail results and margin.

Speaker #2: Of senior notes and completed a $140 million private placement. We also repaid a $15.8 million mortgage in our West Virginia property. We ended the year with $256 million in cash and $232 million in debt, and subsequent to the year-end raised an additional $60 million through a second private placement.

Speaker #2: Full-year operating cash flow was $273 million. Capital expenditure was $44 million, and free cash flow totaled $229 million. Turning to the outlook, we expect first quarter revenue to decline sequentially by a low to mid-single digit percentage, consistent with normal seasonality.

Speaker #2: Gross margin is expected to fluctuate quarter to quarter but remain broadly in line with recent performance. Consumer trends were influenced retail results and margin.

Speaker #2: For full year 2026, we anticipate operating cash flow of at least $250 million, and capital expenditure up to $85 million. We will continue to invest in our retail, production, and distribution network.

Jan Reese: For full year 2026, we anticipate operating cash flow of at least $250 million and capital expenditure up to $85 million. We will continue to invest in our retail, production, and distribution network, expand into new markets such as Texas, and enhance technology and infrastructure capabilities. We plan to open at least 5 new stores, complete 5 relocations, and refresh at least 45 stores this year. Pending regulatory approvals, we may accelerate investments in Texas. We may update our outlook as regulatory and market catalysts evolve. With that, I will return the call over to Cara Kim.

Speaker #2: Expand into new markets such as taxes. An enhanced technology and infrastructure capabilities. We plan to open at least five new stores, complete five relocations, and refresh at least 45 stores this year.

Speaker #2: Pending regulatory approvals, we may accelerate investments in taxes. We may update our outlook as regulatory and market catalysts evolve. With that, I will return the call over to Kim.

Speaker #3: Thanks, Yawn. Over the past two decades, cannabis reform has gained increasing momentum and growing mainstream acceptance. At last, the federal government is catching up to the American people with the first step towards reform.

Kim Rivers: Thanks, John. Over the past two decades, cannabis reform has gained increasing momentum and growing mainstream acceptance. At last, the federal government is catching up to the American people with the first step towards reform. As President Trump's executive order states, decades of federal drug control policy have neglected medical marijuana's usage while limiting the ability of scientists to complete necessary research. Rescheduling of cannabis to Schedule III acknowledges the medical value of cannabis and opens the door for additional research. It also sends a powerful signal that the government is willing to revisit antiquated policy that no longer serves the American people. We believe rescheduling is a precursor to additional reform, including safer banking and uplisting of US cannabis companies to major exchanges. At the same time, state adoption of medical and adult use programs continues, normalizing cannabis use and providing consumers greater choice.

Speaker #3: As President Trump's executive order states, decades of federal drug control policy have neglected medical marijuana's uses, while limiting the ability of scientists to complete necessary research.

Speaker #3: Rescheduling of cannabis to schedule three acknowledges the medical value of cannabis and opens the door for additional research. It also sends a powerful signal that the government is willing to revisit antiquated policy that no longer serves the American people.

Speaker #3: We believe rescheduling is a precursor to additional reform, including safer banking and uplifting of U.S. cannabis companies to major exchanges. At the same time, state adoption of medical and adult use programs continues, normalizing cannabis use and providing consumers greater choice.

Speaker #3: Trulieve remains firmly committed to cannabis reform and will continue to lead from the front, investing time and resources to drive change. With scaled operations and attractive markets, we are focused on driving profitable growth while maintaining flexibility to adapt as the industry evolves.

Kim Rivers: Trulieve remains firmly committed to cannabis reform and will continue to lead from the front, investing time and resources to drive change. With scaled operations and attractive markets, we are focused on driving profitable growth while maintaining flexibility to adapt as the industry evolves. Trulieve is defining the future of cannabis, one customer at a time. Thank you for joining us, and as I always say, onward. At this time, we will be available to answer any questions. Operator, please open up the call for questions.

Speaker #3: Trulieve is defining the future of cannabis one customer at a time. Thank you for joining us, and as I always say, onward.

Speaker #4: At this time, we'll be available to answer any questions. Operator, please open up the call for questions.

Speaker #2: 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're using a speakerphone, please pick up your handset before pressing the keys.

Alan: 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're 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 it, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question today comes from Luke Hannan from Canaccord. Please go ahead.

Operator: 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're 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 it, please press star, then two. At this time, we will pause momentarily to assemble our roster. Our first question today comes from Luke Hannan from Canaccord. Please go ahead.

Speaker #2: If at any time your question has been addressed and you would like to withdraw it, please press star, then two. At this time, we will pause momentarily to assemble our roster.

Speaker #2: Our first question today comes from Luke Hannan from Canaccord. Please go ahead.

Speaker #5: Thanks. Good morning, everyone. I wanted to follow up on the CapEx outlook for 2026. So it is a step up from 2025 and both Kim and Yawn.

Luke Hannan: Thanks. Good morning, everyone. I wanted to follow up on the CapEx outlook for 2026. It is a step up from 2025, and both Kim and Yoni, you both outlined sort of the moving parts there. I guess specifically, I wanted to dive in a little bit on how much you plan on spending on Project Hyper. That will sort of be the first question, sort of what's been embedded for 2026 there. Secondly, on the refreshes, you've done a number of them so far. You've seen good organic growth on the back of those. What's the runway look like for continued refreshes, not just for 2026, but if we think about the subsequent years as well?

Speaker #5: You both outlined sort of the moving parts there. But I guess specifically, I wanted to dive in a little bit on how much you plan on spending on project Hyper.

Speaker #5: That'll sort of be the first question, sort of what's in the embedded for 2026 there. And then secondly, on the refreshes you've done a number of them so far, you've seen good organic growth on the back of those.

Speaker #5: What's the runway look like for continued refreshes, not just for 2026, but if we think about the subsequent years as well?

Speaker #6: Sure. Good morning, Luke. So we're very, very excited about project Hyper. And really, I think that it's a testament to our investment strategy to date.

Kim Rivers: Sure. Good morning, Luke. We're very, very excited about Project Hyper. Really, I think that it's a testament to our investment strategy to date, given that we are able to build on investments previously made, including SAP, our consumer data platform, and our insights, that have allowed us to segment and really dive into this personalization concept. Project Hyper is building on the back of that, and will allow us to lean into, really utilizing all this wonderful data that we have in a more robust way, to really speak to an individual, including demographic information, past purchase history, along with other data, such as purchasing time, preferred methods of communication, et cetera, to really accelerate again, that personalized connectivity with the consumer.

Speaker #6: Given that we are able to build on investments previously made including SAP, our consumer data platform, and our insights, that have allowed us to segment and really dive into this personalization concept project Hyper is building on the back of that.

Speaker #6: And will allow us to lean into really utilizing all of this wonderful data that we have in a more robust way to really speak to an individual including demographic information, past purchase history, along with other data such as purchasing time, preferred methods of communication, etc., to really accelerate, again, that personalized connectivity with the consumer.

Kim Rivers: We are not gonna, you know, separate out specific line items in the CapEx budget. Again, this will be a long project that likely will be a multi-year initiative, but we do intend to have milestones throughout this year. We should start to see some returns on that investment in the back half. We are very, very excited about that. Turning to your part of your question on store refreshes, we remain committed to making sure that we have an excellent retail experience for our customers, and we'll continue to refresh stores as they kind of become due.

Speaker #6: We are not going to separate out specific line items in the CapEx budget. And again, this will be a long project that likely will be a multi-year initiative with but we do intend to have milestones throughout this year with and we should start to see some returns on that investment in the back half.

Speaker #6: So we are very, very excited about that. Turning to your part of your question on store refreshes, we remain committed to making sure that we have an excellent retail experience for our customers and will continue to refresh stores as they kind of become due.

Speaker #6: We do have an audit process throughout the organization where we audit our stores very regularly and then they're added to a schedule for refresh depending on what the audit results are.

Kim Rivers: We do have an audit process throughout the organization, where we audit our stores very regularly, and then they're added to a schedule for refresh, depending on what the audit results are. As you noted, last year, we did refresh a number of stores, this year we're slated to refresh another slug of stores. I would anticipate that that would continue in the future, again, but it is on an as-needed basis.

Speaker #6: And so as you noted, last year, we did refresh a number of stores and this year, we're slated to refresh another slug of stores.

Speaker #6: I would anticipate that that would continue in the future. Again, but it is on an as-needed basis.

Speaker #5: That's great. Thanks for that. And as a very quick follow-up, you did talk about the Texas opportunity a little bit. When do you expect to be granted if you have any visibility on it?

Luke Hannan: That's great. Thanks for that. As a very quick follow-up, you did talk about the Texas opportunity a little bit. When do you expect to be granted, if you have any visibility on it? When do you expect to be granted that final license and then begin the build-out potentially after that?

Speaker #5: When do you expect to be granted that final license and then begin the build-out potentially after that?

Speaker #6: Sure. So we were granted a provisional license in Texas, which we're incredibly excited about. And the team has done an amazing job to get us kind of to this point.

Kim Rivers: Sure. We were granted a provisional license in Texas, which we're incredibly excited about. You know, the team has done an amazing job to get us kind of, you know, to this point. We did receive, actually this week, a list of diligence follow-ups, which we, under our understanding is it's the questionnaire that's going out to all of the provisional license holders, which we're in the process of completing. There is another round of licenses, 3 licenses, that will be issued, I believe, in early April. We're not sure if the state will choose to move on final issuances on round 1 before or after that next round is issued.

Speaker #6: We did receive actually this week a list of diligence follow-ups, which our understanding is it's the questionnaire that's going out to all of the provisional license holders.

Speaker #6: Which we're in the process of completing. They do there is another round of licenses, three licenses that will be issued, I believe, in early April.

Speaker #6: So we're not sure if the state will choose to move on final issuances on round one before or after that next round is issued.

Speaker #6: So what I will tell you is that in true, truly fashion, we will be absolutely ready to go to market. Again, I always say that Texas is a state where you go bigger or you go home.

Kim Rivers: You know, what I will tell you is that in true Trulieve fashion, we will be absolutely ready to go to market. Again, you know, I always say that Texas is a state that you go big or you go home. We are very, very much looking forward to having a material, that be a material market for us, once we are awarded that final license.

Speaker #6: So we are very, very much looking forward to having a material that would be a material market for us once we are awarded that final license.

Speaker #2: Our next question comes from Aaron Gray of Alliance Global Partners. Please go ahead.

Alan: Our next question comes from Aaron Grey of Alliance Global Partners. Please go ahead.

Operator: Our next question comes from Aaron Grey of Alliance Global Partners. Please go ahead.

Speaker #7: Hi. Good morning and thank you for the questions. I'd like to piggyback off that last question from Luke a little bit and dive a bit more into Texas.

Aaron Grey: Hi, good morning, and thank you for the questions. I'd like to piggyback off that last question from Luke a little bit and dive a bit more into Texas. In terms of that opportunity that you just kind of alluded to, Kim, you know, how best to think about the potential for Texas and the ramping there? For you, do you see Florida transitioning out of the nursery program in 2016 as a good analog? How important do you think it is to have that first-mover advantage and really kind of dig into that CapEx investment to ensure you have not only the capacity, but also the retail to get, you know, that initial market share that you can essentially, potentially hold on to, similar to what you've seen, Trulieve do in Florida? Thanks.

Speaker #7: In terms of that opportunity that you just kind of alluded to, Kim, how best to think about the potential for Texas and the ramping there?

Speaker #7: For you, do you the nursery program in 2016 as a good analog? And then how important do you think it is to have that first move advantage and really kind of dig into that CapEx investment to ensure you have not only the capacity, but also the retail to get that initial market share that you can essentially potentially hold onto similar to what you've seen truly do in Florida?

Speaker #7: Thanks.

Speaker #6: Yeah. I mean, look, I think that Texas is a tremendous opportunity. It's a market that we have been focused on for quite some time, back to the days where we first announced our hub strategy as we talked about how we thought about M&A and organic growth.

Kim Rivers: Yeah, I mean, look, I think that Texas is a tremendous opportunity. It's a market that we have been focused on for quite some time, back to the days where we first announced our hub strategy, as we talked about how we thought about M&A and organic growth. Texas, we believe, is a key market for us. Again, we have a provisional license now, so timing will be dependent, of course, on regulatory approvals, and we look forward to working with the regulators to hopefully expedite that process as much as possible. To your point, look, we believe that in Texas, with the not only the program set up as well as the population, we believe that it will be meaningful. You know, some key points in Texas...

Speaker #6: So Texas, we believe, is a key market for us. Again, we have a provisional license now. So timing will be dependent, of course, on regulatory approvals.

Speaker #6: And we look forward to working with the regulators to hopefully expedite that process as much as possible. But to your point, look, we believe that in Texas, with the not only the program setup as well as the population we believe that it will be meaningful.

Speaker #6: Some key points in Texas there are 11 regions and you are required to have a retail presence in those 11 regions. Prior to then being able to expand and add additional distribution capacity beyond those initial stores, which we're certainly prepared to do, to your point, we absolutely understand the importance of scale and the supply chain and will be looking to make investments there as well.

Kim Rivers: There are 11 regions, and you are required to have a retail presence in those 11 regions prior to then being able to expand and add additional distribution capacity beyond those initial stores, which we're certainly prepared to do. To your point, we absolutely understand the importance of scale and the supply chain, and we'll be looking to make investments there as well. Because, again, we think that Texas is probably one of the most attractive market opportunities that we've seen since Florida. We absolutely, to your point, will be leaning in.

Speaker #6: Because again, we think that Texas is probably one of the most attractive market opportunities that we've seen since Florida. So we absolutely, to your point, will be leaning in.

Speaker #6: We'll be using all of our knowledge from Florida and applying it to Texas because we believe very strongly that Texans deserve access to high-quality and a robust medical marijuana program and high-quality products.

Kim Rivers: We'll be using all of our knowledge from Florida and applying it to Texas, because, you know, we believe very strongly that Texans deserve access to high quality and a robust, you know, medical marijuana program and high quality products.

Speaker #7: Okay. Great. Appreciate that color. Second question from me. Just in the case of Florida, don't use not occurring and think about incremental growth opportunities.

Aaron Grey: Okay, great. Appreciate that color. Second question from me. Just in the case of, you know, Florida adult use, you know, not occurring and thinking about incremental growth opportunities, I just want to know in terms of your outlook for potential M&A, what you're seeing in the marketplace. Have you seen, you know, potential valuations come down, especially in the private markets, and any appealing assets that you're seeing? Thanks.

Speaker #7: I just want to know in terms of your outlook for potential M&A. What you're seeing in the marketplace? Have you seen potential valuations come down, especially in the private markets in any appealing assets that you're seeing?

Speaker #7: Thanks.

Speaker #6: Sure. So, of course, as we mentioned, we are continuing to monitor the Florida potential for valid inclusion. Just a quick update on that because I'm sure we'll be asked.

Kim Rivers: Sure. You know, of course, as we mentioned, you know, we are continuing to monitor the Florida potential for ballot inclusion. Just a quick update on that, I'm sure we'll be asked. The Florida Supreme Court is hearing a jurisdictional, you know, basically, jurisdictional motions on March 3. Then we'll make a decision as to whether or not they will hear the case as it relates to those 90,000 ballots that certainly we believe should be included in the final count. You know, Florida, of course, is a, and would be a humongous market for us as it relates to adult use. That being said, to your point, you know, we are very excited, as I mentioned, about Texas from an organic growth standpoint.

Speaker #6: The Supreme Court is hearing a jurisdictional basically jurisdictional motions on March 3rd. And then we'll make a decision as to whether or not they will hear the case.

Speaker #6: As it relates to those 90,000 ballots that certainly we believe should be included in the final count, Florida, of course, is and would be a humongous market for us as it relates to adult use.

Speaker #6: That being said, to your point, we are very excited, as I mentioned, about Texas. From an organic growth standpoint, we also have and mentioned some law changes coming out of Georgia.

Kim Rivers: We also have and mentioned some law changes coming out of Georgia. We are also, right, continuing to push in Pennsylvania, as well as doing some, you know, looking to do some expansion of existing footprint in other markets that we already are in. As it relates to M&A, I would say that we remain and will be inquisitive. We certainly have and are still committed to our strategy as we look for markets that are attractive and make sense for us, given our hubs that we've established across the country.

Speaker #6: We are also right continuing to push in Pennsylvania. As well as doing some looking to do some expansion of existing footprint in other markets that we already are in.

Speaker #6: As it relates to M&A, I would say that we remain and will be inquisitive we certainly have in our still committed to our strategy as we look for markets that are attractive and make sense for us, given our hubs that we've established across the country.

Speaker #6: You know that we don't talk about markets specifically. But I will say that it does appear to me with valuations where they're at and where the market is, as well as our cash position, that we are in a good spot to be inquisitive in the future.

Kim Rivers: You know that we don't talk about markets specifically. I will say that it does appear to me with valuations where they're at and where the market is, as well as our cash position, that we are in a good spot to be inquisitive in the future.

Speaker #2: Our next question comes from—pardon me, one moment. Our next question comes from Russell Stanley of Beacon Securities. Please go ahead.

Alan: Our next question comes from. Pardon me, one moment. Our next question comes from Russell Stanley of Beacon Securities. Please go ahead.

Operator: Our next question comes from. Pardon me, one moment. Our next question comes from Russell Stanley of Beacon Securities. Please go ahead.

Speaker #8: Good morning and thanks for the question. Maybe if I could first on Georgia. Great to hear about the efforts to expand our market. I'm wondering if you can talk about the pace of expansion market expansion to date against your expectations and talk to, I guess, your thoughts on the odds of that legislation passing?

Russell Stanley: Good morning. Thanks for the question. Maybe if I could, first on Georgia, great to hear about the efforts to expand that market. I'm wondering if you could talk about the pace of expansion, market expansion to date against your expectations and talk to, I guess, your thoughts on the odds of that legislation passing. Any comments on the level of opposition you're seeing there? Thank you.

Speaker #8: Any comments on the level of opposition you're seeing there? Thank you.

Speaker #6: Sure. So Georgia has been an interesting program given some hiccups as it relates to where the legislature and how the legislature initially set up the program related to distribution versus where kind of we actually are.

Kim Rivers: Sure. You know, Georgia has been an interesting program, given, you know, some hiccups as it relates to where the legislature and how the legislature initially set up the program related to distribution versus where kind of we actually are. Just as a level set, when the Georgia program was initiated, it was anticipated that pharmacies were going to be able to participate alongside of classic dispensaries in dispensation of medical cannabis. If you'll recall, there were letters that were issued to those pharmacies by the DEA, that put that entire distribution network on pause.

Speaker #6: And so just as a level set, when the Georgia program was initiated, it was anticipated that pharmacies were going to be able to participate alongside of classic dispensaries in dispensation of medical cannabis.

Speaker #6: Then if you'll recall, there was were letters that were issued to those pharmacies. And so by the DEA, and that put that entire distribution network on pause.

Speaker #6: And so one of the challenges in Georgia has been one, kind of friction in terms of patients actually being able to get medical cards and how that system was set up through the Department of Health and the local offices.

Kim Rivers: One of the challenges in Georgia has been, one, kind of friction in terms of patients actually being able to get medical cards and how that system was set up through the Department of Health and the local offices, as well as, form factor and, you know, availability of products that fits needed, matching conditions, and then the third is distribution. This legislation would get at, I'll call it, kind of the first two. The state has been making gains to ease friction, allowing medical cards to be actually mailed now, as opposed to having to physically go and pick them up. The second, with this legislation, would be around the form factors and availability of medical marijuana for expanded conditions, which of course, is always a positive step forward.

Speaker #6: As well as form factor and availability of products that folks needed. Matching conditions. And then the third is distribution. And so this legislation would get at, I'll call it kind of the first two, the state has been making gains to ease friction, allowing medical cards to be actually mailed now as opposed to having to physically go and pick them up.

Speaker #6: And then the second, with this legislation, would be around the form factors and availability of medical marijuana for expanded conditions, which of course is always a positive step forward.

Kim Rivers: We, you know, are, actually our team was in Georgia yesterday, lobbying on the Hill. I do think there's relatively strong support for those changes. It's similar to kind of early days that we've seen in other medical states, where, you know, expansion and those changes are gonna take a little bit of time. I think it's relatively in line with our expectations, with the exception of the pharmacy piece and the distribution. I think what will be interesting and what's a little bit of an unknown at this point is, what, if anything, does rescheduling or will rescheduling do as it relates to the impact on that pharmacy model?

Speaker #6: We are and actually our team was in Georgia yesterday lobbying on the Hill. I do think there's relatively strong support for those changes. But it's similar to kind of early days that we've seen in other medical states where expansion and those changes are going to take a little bit of time.

Speaker #6: So I think it's relatively in line with our expectations with the exception of the pharmacy piece and the distribution. I think what will be interesting and what's a little bit of an unknown at this point is what, if anything, does rescheduling or will rescheduling do as it relates to the impact on that pharmacy model?

Speaker #6: And would that potentially open the door to allow for those pharmacies to then be able to participate in distribution, which of course would accelerate adoption in that state from a patient perspective?

Kim Rivers: Would that potentially open the door to allow for those pharmacies to then be able to participate in distribution, which, of course, would accelerate adoption in that state from a patient perspective. I think, likely more to come as we kind of navigate through the realities of how that program sits within a new landscape once rescheduling happens.

Speaker #6: So I think likely more to come as we kind of navigate through the realities of how that program sits within a new landscape once rescheduling happens.

Speaker #8: That's great color. Thanks for that. And maybe if I could follow up on Texas. Obviously, there's been a number of ways in which that market opportunity has been expanded.

Russell Stanley: That's great, Caller. Thanks for that. Maybe if I could follow up on Texas. Obviously, there's been a number of ways in which that market opportunity has been expanded over the last couple of years. You know, but there are still some restrictions, but a massive state. I'm wondering how big you think this market could be under the current regulatory regime, given the size against the lingering restrictions? Thank you.

Speaker #8: Over the last couple of years and but it's still there are still some restrictions. But a massive state. So I'm wondering how big you think this market could be under the current regulatory regime given the size against some lingering restrictions.

Speaker #8: Thank you.

Speaker #6: Yeah. I mean, I think that Texas has, like I said, the opportunities to be a very large market. Specifically, as mentioned on the call, there are fairly low friction points as it relates to patients being able to access physicians.

Kim Rivers: I mean, I think that Texas has, like I said, you know, the opportunity to be a very large market. Specifically, as mentioned on the call, there are fairly low friction points as it relates to patients being able to access physicians and initially get set up in the program, which in a number of markets, that really is and serves as a fairly high barrier to entry. With the availability of telemedicine in Texas, and with the recent changes to the program there, we think that, you know, there's a lot of growth on the medical that is yet to come.

Speaker #6: And initially get set up in the program, which in a number of markets that really is and serves as a fairly high barrier to the availability of telemedicine, in Texas, and with the recent changes to the program there, we think that there's a lot of growth on the medical.

Speaker #6: That is yet to come. Some of that is a little bit of a chicken and an egg, we think. Which certainly is our experience in other markets.

Kim Rivers: Some of that is a little bit of a chicken and an egg, we think, which certainly is our experience in other markets, meaning, right, you have to give someone a reason to go through the exercise of getting their medical card, meaning they have to have access to products, access to a store, you know, and be able to get those products before they're gonna go through the process of getting a card. We think that and expect that that program will experience some pretty significant growth in the coming years as it relates to patient count. The population there would indicate that there's, you know, significant, it's teed up to be a pretty significant market.

Speaker #6: Meaning right? You have to give someone a reason to go through the exercise of getting their medical card. Meaning they have to have access to products, access to a store, and be able to get those products before they're going to go through the process of getting a card.

Speaker #6: So we think that, and expect that, that program will experience some pretty significant growth in the coming years, as it relates to patient count.

Speaker #6: And again, the population there would indicate that there's significant it's teed up to be a pretty significant market.

Speaker #2: Our next question comes from Bill Kirk of Roth Capital Partners. Please go ahead.

Alan: Our next question comes from William Kirk of Roth Capital Partners. Please go ahead.

Operator: Our next question comes from William Kirk of ROTH Capital Partners. Please go ahead.

Speaker #8: Yeah. Good morning. This is Nick on for Bill. Thanks for taking the questions. First one for me, just on the gross margin improvement. Competitors are calling out competition and pressure.

Nick: Yeah, good morning. This is Nick on for Bill. Thanks for taking the questions. First one for me, just on the gross margin improvement, competitors are calling out competition and pressure. Just wondering if you could unpack that sequential improvement a little more. Was it more mix and pricing-based versus cultivation cost improvements or vice versa? Just any color there would be helpful. Thank you.

Nick Pope: Yeah, good morning. This is Nick on for Bill. Thanks for taking the questions. First one for me, just on the gross margin improvement, competitors are calling out competition and pressure. Just wondering if you could unpack that sequential improvement a little more. Was it more mix and pricing-based versus cultivation cost improvements or vice versa? Just any color there would be helpful. Thank you.

Speaker #8: Just wondering if you could unpack that sequential improvement a little more. Was it more mix in pricing base versus cultivation cost improvements or vice versa?

Speaker #8: Just any color there would be helpful. Thank you.

Speaker #6: Yeah. Thanks, Bill. So on the margin, I mean, look, that's something that we continue to be very, very proud of. And I think reflects our absolute high focus and high level of discipline and it's really on a number of things, right?

Kim Rivers: Yeah, thanks, Bill. On the margin, I mean, look, that's something that we continue to be very, very proud of, and I think reflects our absolute, you know, high focus and high level of discipline. It's really on a number of things. Right to your point, we are and continue to be very focused on efficiencies, and, you know, our scale certainly helps there, as we continue to produce very high-quality products at a scaled, you know, at a scaled, and a scaled expense, if you will. Continuing to lower expenses while improving quality is always the name of the game.

Speaker #6: To your point, we are and continue to be very focused on efficiencies. And our scale certainly helps there. As we continue to produce very high quality products at a scale at a scale and a scaled expense, if you will.

Speaker #6: So continuing to lower expenses while improving quality is always the name of the game. That being said, also how we approach our go-to-market strategy.

Kim Rivers: That being said, also how we approach our go-to-market strategy, with respect to very strategic and focused promotional activity, that is, again, taking our data and what we know about our customers and serving up, you know, right product, right price at the right location. We have a number of tools that enable us to be able to do that, including, of course, you know, investments, like as I mentioned, investments we do in SAP, investments we make in customer segmentation, our, you know, dynamic and variable pricing capabilities.

Speaker #6: With respect to very strategic and focused promotional activity, that is again taking our data and what we know about our customers and serving up right product, right price, at the right location.

Speaker #6: We have a number of tools that enable us to be able to do that. Including, of course, as I mentioned, investors moving to SAP.

Speaker #6: Investors moving to customer segmentation. Our dynamic and variable pricing capabilities. So it really is understanding where the customer is, being able to read, trends quickly, and being able to respond to those trends in a disciplined way so that we are able to, again, have the right product mix at the right price, while maintaining margin and profitability.

Kim Rivers: it really is understanding where the customer is, being able to read trends quickly and being able to respond to those trends in a disciplined way, so that we are able to, again, have the right product mix at the right price, while maintaining margin and profitability.

Speaker #8: Great. I appreciate that caller. Second from me, just on the loyalty program. It was up again significantly sequentially. What percent of that growth came from Florida versus other markets?

Nick: Great. I appreciate that, Caller. Second from me, just on the loyalty program, it was up again significantly, sequentially. What percent of that growth came from Florida versus other markets? What have been the primary drivers of success and adoption there? Just your thoughts on what's driven that growth over the past year would be helpful.

Nick Pope: Great. I appreciate that, Caller. Second from me, just on the loyalty program, it was up again significantly, sequentially. What percent of that growth came from Florida versus other markets? What have been the primary drivers of success and adoption there? Just your thoughts on what's driven that growth over the past year would be helpful.

Speaker #8: And what have been the primary drivers of success and adoption there? Just your thoughts on what's driven that growth over the past year would be helpful.

Speaker #6: Yeah. I mean, I think that, again, kudos to the team. We were very, very focused on rolling out a best-in-class loyalty program. We began the rollout in Florida and then have been moving that to additional markets.

Kim Rivers: Yeah, I mean, I think that, again, kudos to the team. You know, we were very, very focused on rolling out a best-in-class loyalty program. We, you know, began the rollout in Florida and then have been moving that to additional markets and, you know, candidly have gotten outstanding adoption in all the markets that we're our loyalty program currently is rolled out into. I would say that I think that there's a few things. I think, one, the ease of the program, really making it very easy for folks to sign up for the program, and then, again, be able to communicate to them.

Speaker #6: And candidly have gotten outstanding adoption in all of the markets that we're currently our loyalty program currently is rolled out into. I would say that I think that there's a few things.

Speaker #6: I think one, the ease of the program—really making it very easy for folks to sign up for the program. And then again, be able to communicate to them the results of participation.

Kim Rivers: the results of participation, meaning, you know, you spend and you get, which is very much in line with loyalty programs across the country for big brands that we all know and love, which it was basically modeled after. I think ease of use, I think, the rewards and the ability to communicate the value of those rewards was also a key driver and has been a key driver. We're very excited based on, you know, feedback that we've gotten from customers. Again, we have a very engaged customer base, so there is a lot of back and forth with our customers, and that goes right into how we develop these things.

Speaker #6: Meaning you spend and you get, which is very much in line with royalty programs across the country for big brands that we all know and love.

Speaker #6: Which it was basically modeled after. So I think ease of use I think the rewards and the ability to communicate the value of those rewards was also a key driver and has been a key driver.

Speaker #6: And we're very excited based on feedback that we've gotten from customers and again, we have a very engaged customer base. So there is a lot of back and forth.

Speaker #6: With our customers. And that goes right into how we develop these things. We're very excited to, as I mentioned, and prepared remarks to be updating that loyalty program in response to customer feedback and offering tiers that we're going to be rolling out here in the near term and that will allow us to even further personalize and to engage our VIP or our top tier customers with more specific and exclusive offerings and really based on their spend and how they're interacting with us.

Kim Rivers: We're very excited to, as I mentioned in prepared remarks, to be updating that loyalty program in response to customer feedback and offering tiers that we're gonna be rolling out here in the near term. That will allow us to even further personalize and to engage our, you know, our VIP or our top-tier customers with more specific and exclusive offerings really based on their spend and how they're interacting with us. Really excited to continue to iterate and further develop the loyalty program as we move throughout the year.

Speaker #6: So really excited to continue to iterate and further develop the loyalty program as we move throughout the year.

Speaker #2: And our next question comes from Frederico Gomez from ATB Cormark Capital Markets. Please go ahead.

Alan: Our next question comes from Frederico Zuccherino, from ATB Capital Markets. Please go ahead.

Operator: Our next question comes from Frederico Gomes, from ATB Cormark Capital Markets. Please go ahead.

Speaker #9: Good morning. Thanks for taking my questions. Congrats on the great quarter. Just the first question you're guiding for, I guess, substantial for cash flow again this year and that's already obviously accounting for an increasing CapEx.

[Analyst] (ATB Capital Markets): Morning. Thanks for taking my questions, and congrats on the great quarter. Just the first question, you're guiding for the substantial free cash flow again this year, and, you know, that's already obviously accounting for an increase in CapEx. How are you thinking about that excess cash, and specifically as it relates to potential, you know, stock buybacks, given the current valuation level? The second part of this question is, how do you think about that cash balance, relative to, I guess, the growing UTP that you have in the balance sheet? Thanks.

Frederico Gomes: Morning. Thanks for taking my questions, and congrats on the great quarter. Just the first question, you're guiding for the substantial free cash flow again this year, and, you know, that's already obviously accounting for an increase in CapEx. How are you thinking about that excess cash, and specifically as it relates to potential, you know, stock buybacks, given the current valuation level? The second part of this question is, how do you think about that cash balance, relative to, I guess, the growing UTP that you have in the balance sheet? Thanks.

Speaker #9: So how are you thinking about that excess cash and specifically as it relates to potential stock buybacks given the current valuation level? And the second part of this question is how do you think about that cash balance relative to, I guess, the growing UTP that you have in the balance sheet?

Speaker #9: Thanks.

Speaker #6: Yeah. So we are continuing to focus on generating cash because we believe that cash is the ultimate provides the ultimate optionality in the business.

Kim Rivers: Yeah. You know, we are continuing to focus on, you know, generating cash because we believe that cash is the ultimate, you know, provides the ultimate optionality in the business. You know, we've been talking a lot in the Q&A about opportunities that we have ahead. Obviously, we're, you know, not at a final point yet related to Florida and ballot inclusion. We also talked about Texas and what an exciting opportunity Texas is, potential growth in Georgia, kind of unsure yet around Pennsylvania and Northeast flip. In addition to those organic growth opportunities, though, we also mentioned that we're gonna, you know, remain and maybe even accelerate a little bit our M&A optionality as well.

Speaker #6: We've been talking a lot in the Q&A about opportunities that we have ahead. Obviously, we're not at a final point yet related to Florida and valid inclusion.

Speaker #6: We also talked about Texas. And what an exciting opportunity Texas is and potential growth in Georgia. Kind of unsure yet around Pennsylvania and not a built-ease slip.

Speaker #6: In addition to organic, there's organic growth opportunities though. We also mentioned that we're going to remain and maybe even accelerate a little bit our M&A.

Speaker #6: Optionality as well. And so I think that for us, it's important to have the cash available so that when these opportunities present themselves and when catalysts come into focus, we have the ability to act with immediacy and with a strong eye on maintaining right and improving shareholder value.

Kim Rivers: I think that for us, it's important to have the cash available so that when these opportunities present themselves and when, you know, catalysts come into focus, we have the ability to act with immediacy and with a strong eye on maintaining, right, and improving shareholder value. As it relates to cash and the UTP, what I would say is that, again, the UTP is a reflection of a totality of a number. Management certainly does not believe that the company will ever pay that amount. It's an accounting rule that we, of course, wanna make sure that we follow and that we're in compliance at all times. Upon rescheduling, we believe that that accrual will stop.

Speaker #6: And then as it relates to cash and the UTP, what I would say is that, again, the UTP is a reflection of a totality of a number.

Speaker #6: Management certainly does not believe that the company will ever pay that amount. It's an accounting rule. That we, of course, want to make sure that we follow and that we're in compliance at all times.

Speaker #6: Upon rescheduling, we believe that that accrual will stop. And we absolutely are in and will continue to update as the results of prior years and negotiations, conversations with the IRS continue to resolution.

Kim Rivers: We absolutely are in, and will continue to update as the results of prior years and negotiations, conversations with the IRS continue to resolution. Again, not at all concerned as it relates to cash position via that UTP number, and definitely focused to have that resolved with within, you know, as quickly as possible once rescheduling comes to fruition.

Speaker #6: So again, not at all concerned as it relates to cash position via that UTP number. And definitely focused to have that resolved within as quickly as possible once rescheduling comes to fruition.

Speaker #9: Thank you. Appreciate that. And just a second question would just be on international cannabis markets. I'm just curious if you're looking at that or interested in any way in doing something there.

[Analyst] (ATB Capital Markets): Thank you. Appreciate that. Just a second question, would just be on international cannabis markets. I'm just curious if you're looking at that or interested in any way in doing something there. Thanks.

Frederico Gomes: Thank you. Appreciate that. Just a second question, would just be on international cannabis markets. I'm just curious if you're looking at that or interested in any way in doing something there. Thanks.

Speaker #9: Thanks.

Speaker #6: Yeah, so I mean, again, I think we are constantly evaluating the opportunity set. I think that, for us, Texas, as an example, is a significantly more exciting opportunity for us right now.

Kim Rivers: Yeah. I mean, again, I think we are constantly evaluating the opportunity set. I think that, you know, for us, you know, Texas, as an example, is a significantly more exciting opportunity for us right now, than, you know, other markets outside of the US. I continue to believe that we have plenty to do here, in our backyard. You know, that being said, I'm very much a believer of never say never. Continue to evaluate all opportunities and we'll make decisions as you know, as those markets come into focus.

Speaker #6: Then other markets outside of the US. I continue to believe that we have plenty to do here in our backyard. And that being said, I'm very much a believer.

Speaker #6: I've never say never. So continue to evaluate all opportunities and we'll make decisions as those markets come into focus.

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

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

Speaker #2: This concludes our question and answer session. I would like to turn the call back over to Christine Hersey for closing remarks.

Speaker #6: Thanks everyone for your time today. We look forward to sharing additional updates during our next earnings call. Thanks day.

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.

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

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

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Q4 2025 Trulieve Cannabis Corp Earnings Call

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