Trulieve Cannabis Corp

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

Thank you. Good morning, and thank you for joining us. During today's call, Kim Rivers, Chief Executive Officer, and Jan Rees, Chief Financial Officer, will deliver prepared remarks on the financial performance and outlook for TrueLeave. Following the prepared remarks, we will open the call to questions. This morning, we reported first quarter 2026 results. A copy of our earnings press release and PowerPoint presentation may be found on the investor relations section of our website www.trueleave.com. An archived version of today's conference call will be available on our website later today. As a reminder, statements made during this call that are not historical facts constitute forward-looking statements, 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 8K that we furnished to the SEC today and can be found in the investor relations section of our website. Lastly, At times during our prepared remarks or responses to your questions, we may offer metrics to provide greater insight into the dynamics of our business or our financial results. Please be advised that we may or may not continue to provide these additional details in the future. I'll now turn the call over to our CEO, Kim Rivers.

Thank you, Christine. Good morning, everyone, and thank you for joining us today. This is an incredibly exciting time for the cannabis industry. President Trump delivered on his promise to address cannabis reform with two decisive actions. First, Attorney General Todd Blanch reclassified medical marijuana to Schedule III, effective immediately. Second, A.J. Blanch announced the continuation of the formal rulemaking process to more broadly reclassify marijuana. We applaud President Trump and his administration for this historic shift in federal policy that more closely aligns with scientific evidence, current medical practice, and state laws. These developments have major positive implications for Trulieve. First, reclassifying medical marijuana to Schedule III acknowledges the medical benefits of marijuana and eases restrictions on research. Robust scientific research can now be conducted using medical marijuana that Americans buy in dispensaries every day. This research can help delineate which doses and form factors are most likely to benefit patient groups with specific indications and symptoms. Second, state licensed operators can register with the Drug Enforcement Agency to manufacture, distribute, and dispense medical marijuana. For Trulieve, this is important because the majority of our business serves medical patients. Today, we have 206 dispensaries supported by over 3.5 million square feet of production capacity in four states that are strictly medical marijuana operations. As outlined in the final order by DOJ, state licensed operators have 60 days to apply for registration, and those applications are deemed approved in the interim period until final registration. We have already applied to register our 206 dispensaries in medical-only markets. We would like to thank Attorney General Blanch and his team for having the registration portal launched quickly. Third, following the reclassification of medical marijuana, the Treasury Department announced that state-licensed medical marijuana businesses are able to deduct ordinary expenses as medical marijuana is no longer subject to the punitive 280E tax burden. This change applies to the current tax year and is reflected in our first quarter results. We look forward to additional guidance from the Treasury Department and appreciate the clarity provided on this issue. Finally, the formal process to address the classification of marijuana more broadly has resumed with a new hearing scheduled to begin on June 29th and conclude no later than July 15th. Given the expedited timeline and significant body of data that has already been examined, we are optimistic that marijuana rescheduling can be finalized this year. We expect that reclassification to Schedule III will remove the 280E tax burden from non-medical operations. This comprehensive approach demonstrates the commitment by the administration to definitively reschedule marijuana. Given all of these changes, we are actively exploring options for Trulieve to uplift to a major U.S. exchange and address the outstanding uncertain tax position. We remain confident in our overall strategy and our ability to further solidify our position as an industry leader. Turning now to our first quarter results. Our team continues to deliver stellar financial and operational performance with industry-leading margins and robust cash generation underpinned by outstanding customer retention. First quarter revenue of $287 million was in line with guidance and seasonal trends. First quarter growth margin of 59% reflects operational efficiencies, low production costs, and our disciplined approach to promotional activity. Adjusted EBITDA of $100 million, or 35% margin, was driven by expense control in our core business. During the quarter, we raised $60 million in senior notes and generated $56 million in operating cash flow. both of which contributed to our quarter end cash balance of $353 million. First quarter retail results were in line with seasonal patterns as traffic dipped slightly and average basket size was flat compared to the fourth quarter. Our team did a phenomenal job managing through the post-holiday period in January to meet customers where they are while maintaining margins. Traffic improved in March, rebounding to the same traffic level as December. Holiday performance on 4-20 was strong, with traffic and units up 40% and 26% respectively compared to last year. Record wholesale revenue increased 37% compared to last year, reaching $22 million due to strength in Maryland and Pennsylvania. In Ohio, our production partner realized higher sales of branded products, including Modern Flower and Roll One. While wholesale demand remains strong, our team continues to carefully balance growth and counterparty risk. Turning now to our key initiatives this year, we are concentrating efforts in four strategic areas. One, expanding access to cannabis. Two, investing in growth initiatives. Three, growing our loyal customer base. And four, elevating our branded product portfolio. I'll begin with expanding access to cannabis, which is a critical part of our mission. For over a decade, Trulieve has been working tirelessly to open up markets, bring more products to patients, and reduce the stigma associated with cannabis. Advocacy efforts at federal, state, and local levels highlight the many benefits of regulated cannabis to key stakeholders. Rescheduling cannabis to Schedule 3 sends a powerful signal that reform is achievable, setting the stage for additional measures. The majority of Americans favor common-sense cannabis reform, and we look forward to supporting these efforts. In Texas, Trulieve was granted a conditional license for the Texas Compassionate Youth Program, or TCAP, medical marijuana program. Our team has submitted due diligence materials and is working to finalize the license. A recent poll by Fabrizio Lee and Associates showed that while the majority of Texans approve having medical marijuana available in the state, only 11% of those surveyed were aware of the TCAP program. We believe there is a meaningful opportunity to raise awareness and provide greater access for patients in need. With over 145,000 patients today, telehealth consultations for patients in satellite pickup locations The TCAP program is poised for meaningful growth over the next few years. We look forward to contributing to the success of the program with education and high-quality products. In Georgia, legislation to expand the medical cannabis program is expected to be signed by Governor Kemp or automatically commence next week. The medical cannabis program expansion includes new qualifying conditions such as HIV, IBS, and lupus, and new form factors including vapes. Rulemaking to allow sale of new products could be completed as early as the fourth quarter of this year. The patient count in Georgia recently passed 35,000, and we have applied to open one additional dispensary to meet growing demand. Given the reclassification of medical marijuana to Schedule 3, we are hopeful that sales of approved medical marijuana products through independent pharmacies in Georgia will resume. As a reminder, Georgia was the first state to allow licensed independent pharmacies to dispense medical cannabis to registered patients. truly supplied cannabis products to pharmacies for a short period until the DEA required the pharmacies to cease dispensation. With rescheduling and our applications for DEA registration, we are hopeful that pharmacies may again dispense medical cannabis products in the future. Alongside efforts to expand access to cannabis, we are investing in growth initiatives that align with our long-term objectives to build a leading cannabis company. Investments this year include retail and production upgrades and expansion in our existing footprint, new market expansion in Texas, and technology to advance hyper-personalization of customer messaging. Year-to-date, we have opened seven new retail dispensaries in Florida and refreshed or remodeled 10 locations. In Texas, we began our initial investment, breaking ground on our production campus. Pending regulatory approvals, we plan to quickly launch production and retail operations to serve patients across the Lone Star State. Alongside expansion within our existing markets, we are actively evaluating potential acquisition opportunities. Investment in technology that enables more sophisticated hyper-personalization and targeted outreach kicked off in the first quarter. During our last call, we introduced Project Hyper, a multi-year project that upgrades our messaging capabilities by using AI to automate segmentation, decisioning, and execution to accelerate speed to market and real-time engagement. Project Hyper is well underway, and we expect to realize initial benefits through greater efficiency as soon as the fourth quarter of this year. Investments in our retail network, production sites, and technology provide competitive advantages today while setting the stage for future growth in new and existing markets. While expanding access and investing in growth initiatives are critical to long-term success, we are growing our loyal customer base through engagement, high-quality products, and world-class service. Engagement through paid media, physician engagement, and local community efforts continues to attract new patients and customers to Trulieve. Across our markets, we are allocating resources to reach new customers in digital and real-world environments. These efforts continue to gain momentum and drive store traffic as we make deeper connections in the markets we serve. Last year, we launched a mobile app in Florida, providing users with one centralized place for browsing, deals, reservation, and rewards. Since launch, over 150,000 customers downloaded the app, leading to 7 million user sessions. We plan to launch the app in Arizona later this year. In the first quarter, our rewards program surpassed 1 million members, reaching this major milestone just two years after initial launch. Rewards members continue to spend on average 2.4 times more than non-members, comprising 78% of first quarter transactions. We plan to introduce program tiers starting this month with Florida. This program enhancement enables greater rewards for customers who spend more, including exclusive offers, products, and events. Segmentation and personalized messaging based on purchase behavior, browsing activity, engagement history, and preferred communication channels enables more effective outreach and drives stronger results. We utilize segmentation today and are adding functionality based on more granular behavior-driven category preferences to yield higher conversion rates while improving marketing efficiency. Sending an appropriate message in the right channel at the right time to provide customers with information they care about reinforces customer satisfaction and retention. First quarter retention remains strong at 69% company-wide with 78% retention in medical-only markets. Serving customers with high-quality branded products is an essential ingredient to lasting success. In the first quarter, we sold over 12 million branded product units. In-house brands Modern Flower and Roll1 continue to resonate with customers, representing 45% of the branded products sold. Our Roll1 clutch all-in-one vape was recently launched in five new markets. The customer feedback for this compact, discreet vape has been fantastic. and unit sales are gaining momentum. In the flower category, we recently launched Legacy by Cultivar, premium quality craft flower. New original strains represent the culmination of years of work to select, refine, and nurture genetics from seed as part of our in-house breeding program. We will continue to identify white space in our branded product portfolio and the markets we serve as we develop and launch innovative new products. In summary, we are making demonstrable progress in all of our strategic priorities. As we approach mid-year, our team is dialed in and executing on our plan. With that, I'd like to turn the call over to our CFO, Jan Rees. Please go ahead.