Curaleaf Holdings, Inc.

Good day and welcome to the CuraLeaf Holdings, Inc., second quarter 2026 conference call. All participants will be in listen-only mode. Should you need assistance, please signal a conference specialist by pressing the star key followed by zero. After today's presentation, there will be an opportunity to ask questions. To ask a question, you may press star, then one on your telephone keypad. To withdraw your question, please press star then two. Please note this event is being recorded. I would now like to turn the conference over to Camilo Lyon, Chief Investment Officer. Please go ahead.

Camilo Lyon Good afternoon, everyone, and welcome to CURE Leaf Holdings' second quarter 2026 conference call. Today, I'm joined by Chairman and Chief Executive Officer Boris Jordan, President Rahul Pinto, and Chief and Financial Officer Ed Kremer. Before we begin, I'd like to remind everyone that the comments on today's call will include forward-looking statements within the meaning of Canadian and United States securities laws, which by their nature involve estimates, projections, plans, goals, forecasts and assumptions, including the successful integration of acquisitions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements on certain material factors or assumptions that were applied in drawing a conclusion or making a forecast in such statements. These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information about the material factors and assumptions forming the basis of the forward-looking statements and risk factors can be found in the company's filings and press release on CDAR and EDGAR. During today's conference call, in order to provide greater transparency regarding Curaleaf's operating performance, we will refer to certain non-GAAP financial measures and non-GAAP financial ratios that involve adjustments to GAAP results. Such non-GAAP measures and ratios do not have a standardized meaning under U.S. GAAP. Any non-GAAP financial measures presented should not be considered to be an alternative to financial measures required by U.S. GAAP. should not be considered measures of Curaleaf's liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable U.S. GAAP financial measures under the heading Reconciliation of Non-GAAP Financial Measures in our earnings press release issued today and available on our investor relations website at ir.curaleaf.com. With that, I'll turn the call over to Chairman and CEO Boris Jordan. Boris?

Thank you, Camilo. Good morning, everyone, and thank you for joining us to discuss our second quarter results. This earnings call marks my two-year anniversary as CEO, making it an appropriate moment to reflect on the progress we have made. When I stepped into the role, our priorities were clear. Stabilize the business, improve margins and cash flow, sharpen execution, and rebuild the foundation for durable growth. Simply put, I wanted excellence to become our operating standard across Curaleaf. That was the purpose of our return to our root strategy. Over the first 18 months, that work has delivered meaningful results, stronger cultivation economics, improved flower quality and consistency, tighter merchandising discipline, greater operational efficiency, and a more focused organization. With that foundation substantially reset, we have moved from stabilization to acceleration. In March, we introduced Built for Growth. a disciplined framework focused on customer centricity, brand building, operational excellence, sustainable organic growth, international expansion, and value accretive opportunities as industry conditions improve. Our second quarter results reinforce that this strategy is gaining traction across the business. We have a strong, cohesive team aligned around one common goal, making Curaleaf the global leader in cannabis. While there is still work ahead, and significant opportunity capture, we are firmly on the right path with the team, strategy and operating discipline to lead the next phase of cannabis. Last quarter, I spoke to our operational, I spoke of our operational execution enhanced by tailwinds, specifically regulatory progress and an improving macro backdrop that's driving a market reset. This was the case in the second quarter as the team's disciplined execution drove revenue of $340 million, organic growth of 10% compared to last year, once again surpassing our guidance and internal projections. Our domestic and international segments grew 7% and 26% year-over-year, respectively, as we continued to leverage the operational improvements made over the last 24 months. Gross margin was 50% and adjusted EBITDA was $70 million, representing a 21% margin, despite a 140 basis point drag from international, consistent with an emerging business and a nascent growth curve. Net income from continuing operations was $12.5 million, compared to a net loss of $48 million last year. We ended the quarter with $107 million on the balance sheet. Overall, I'm encouraged by the momentum we are seeing across our markets and our business, and I believe we are well positioned for the second half. Our U.S. business has clearly regained momentum. This was our second consecutive quarter of year-over-year growth following a period of sales compression, an important proof point that our reset is taking hold in a durable way. We achieved this while also expanding gross margins. The foundational work we have done on our largest and most profitable geography is now visible across the business. Higher quality flour, averaging 31% potency, improving cultivation yields, tighter in-store assortments, and stronger execution at the market level. With those building blocks in place, we are now focused on the next phase of our built for growth strategy, customer centricity, operational excellence, and brand building, all supported by an efficiency mindset. Rahul will speak to each of these priorities in greater detail, but the key point is that our U.S. platform is no longer just stabilizing. It is beginning to scale with greater consistency and discipline. In addition to the organic growth we are generating across the existing footprint that should be boosted by the hemp loophole closing, we continue to evaluate new state opportunities that can provide another leg of domestic growth, including Georgia, Texas, and Virginia. I'm also encouraged by the potential for South Carolina and Wisconsin to advance to medical cannabis programs in their next legislative sessions in early 2027. When we combine the momentum we are seeing in the core business with the potential for selective acquisitions and new market expansion, the domestic growth outlook is increasingly compelling. Pure Leaf International delivered another strong quarter with revenue growing 26% year-over-year led by the UK, Germany, and Poland despite ongoing third-party supply volatility. In the UK, growth was driven by continued expansion in clinic patient counts and strong wholesale demand for curaleaf flour and non-flour form factors including oils, vapes, and pastilles. We also successfully launched our Huala value brand in both flour and vape formats, expanding access for patients while reinforcing our ability to serve multiple price points in the medical market. and Germany's sales growth was supported by strong demand for our QMID inhalation device, as well as our Koala and Curly branded flower strains. QMID has gained meaningful early traction since its launch last year, and we are evaluating opportunities to expand the platform into live resin and rosin formats. At the same time, we are closely monitoring price compression in Germany, particularly at the lower end of the pricing spectrum, and we remain disciplined in protecting margin rather than chasing volume at an economic price point. In April, we also completed the buyout of the remaining 45% minority interest in 420 Pharma, bringing Cureleaf International to 100% ownership. This gives us full strategic and economic control of the platform at a time when Europe is becoming an increasingly important growth vector for the company. On the regulatory front, we are encouraged by early signs that German regulators are beginning to take more proactive stance on enforcement against non-EU GMP products. Too much lower quality or non-compliant product has entered Europe through channels that circumvent regulations designed to protect patients. Stronger enforcement protects patient interests and should help create a healthier, more compliant market structure, one that benefits operators like CuraLeaf that have invested in quality, consistency, and regulatory discipline. Looking ahead, we believe Spain, France, and Turkey represent the three of the most Important new medical cannabis opportunities in Europe and the broader international market. These countries are advancing toward their respective medical program launches and together represent more than 200 million people, roughly equivalent to the population of 10 Floridas. In Spain, a market of 48 million people, Curaleaf became the first company to receive approvals for two cannabis medicines last month. We have already received order indications from Spanish pharmacies and expect to begin shipping imminently. In France, a market of 69 million people, we are working to establish a partnership with a leading pharmaceutical company for distribution. Similar to Spain, the French market is expected to begin with approved oil-based medicines sold through hospital pharmacies. In Turkey, a market of 87 million people, final program rules are expected by the end of the summer with the program anticipated to launch in 2027. Taken together, these developments reinforce our conviction that Cureleaf International is one of the most compelling growth platforms in global cannabis and our most distinct competitive differentiator. We are building a scaled compliant and medically focused business across large markets that remain in the early endings of adoption and while we believe the coming years represent a significant growth opportunity for our international segment. Turning to the regulatory tailwind, April marked a defining moment for U.S. cannabis industry as the Department of Justice moved state regulated medical cannabis and FDA-approved cannabis products to Schedule III under the Controlled Substances Act. This was the most consequential shift in federal cannabis policy in more than five decades and an important federal acknowledgement that medical cannabis has a legitimate and enduring role within the U.S. healthcare system. Last month, the second phase of the rescheduling addressing adult use cannabis began with the ALJ process, which concluded on July 15th. Thus far, the process has proceeded according to a fast-paced schedule. While there remain procedural steps before final rule is issued, our view that adult-use cannabis could be rescheduled by year-end and possibly before the midterms is unchanged. Rescheduling would set off a new chain of events, including a potential uplisting to a major exchange. We have been in close and constant communication with the U.S. exchanges, and we are prepared to uplist the entire company rather than deconsolidate adult use once cannabis rescheduling is made effective. In addition, we expect greater clarity on the retroactive treatment of 280E taxes as well as guidance from FinCEN that we believe will direct financial service providers to treat legal cannabis operators like all other Schedule III business. That should improve access to traditional financial services such as credit cards and our dispensaries. Longer term, we are also assessing a world in which exports and interstate commerce are permitted. We believe exports could begin within 12 to 18 months reflecting the time required to stand up to EU GMP ready facilities domestically. That would allow us to leverage the infrastructure we have built in the US and Europe to create a meaningful advantage as we optimize our established value chain from seed to patient. Interstate commerce could also materialize once the proper infrastructure is instituted by the DEA. However, the timeline to materialize will likely be longer than exports. Despite efforts by many to extend the hemp loophole permanently, Based on our discussions with numerous legislators, we believe that inhalables and edibles will be removed from the market when the pending hemp shutdown takes effect later this year. This should be a significant macro tailwind for the regulated cannabis industry when the roughly 25 billion unregulated competitor is expected to be forced offline. We believe the regulated industry is already beginning to see early traffic benefits as states move ahead of the federal change, prompting hemp consumers to migrate back to the dispensary channel. As more consumers turn to licensed dispensaries to replace hemp-derived products, we see a credible path towards pricing stabilization in 2027 that could yield a return to double-digit industry growth. Taken a step further, if demand shifts faster than supply can respond, the regulated market could enter a period of tighter supply, creating an even stronger 2027 growth algorithm driven by both traffic gains and positive pricing growth. Equally encouraging, we are seeing stronger enforcement activity by federal agencies against illicit operators in key markets such as Oklahoma, California, and Maine, three states that are hotbeds for illicit cannabis activity impacting the entire U.S. market. Removing illicit supply from the market should further support demand in the regulated channel and reinforce our view that 2027 is setting up to be a resurgent year for legal cannabis. For Cureleaf, these tailwinds bolster the strategy we have pursued for years, investing in quality, consistency, regulatory discipline, and a national platform capable of serving both medical and adult use consumers as the market continues to evolve. We believe that combination positions Cureleaf to lead as the industry becomes more regulated, more competitive, and more global. Before I close, I want to thank every Cureleaf team member for the focus, resilience, and execution that made this quarter possible. Over the past two years, we have asked a great deal of this organization, and our people have responded with discipline, urgency, and a shared commitment to building Cureleaf into the global leader in cannabis. I'm grateful for their hard work, proud of our progress, and excited about the opportunities ahead. With that, I'll turn the call over to President Rahul Pinto to discuss our domestic highlights. Rahul.