Trulieve Posts $230 Million Q3 Revenue, Raises Capex Outlook

Trulieve Cannabis (NYSE:TRLV) booked third-quarter revenue of $230 million, up 4% from both a year earlier and the prior quarter on a medical-only basis, beating its own guidance. The driver: Georgia and Pennsylvania growth that ran ahead of typical seasonal trends.

CEO Kim Rivers said the results outperformed normal seasonality, and she expects fourth-quarter revenue to rise by a low-single-digit percentage, supported by holiday sales and continued strength in Georgia.

What sits beneath the headline number?

• Net income of $1 million; adjusted EBITDA (earnings before interest, taxes, depreciation and amortization) of $89 million, or 39% of revenue.
• Operating cash flow of $74 million; free cash flow of $45 million after $29 million of capital spending.
• Gross profit of $148 million, up from $139 million a year earlier, with gross margin up one percentage point at 64%.
• Selling, general and administrative expenses of $88 million; adjusted expenses of $78 million.

CFO Jan Reese attributed the margin performance to economies of scale, operating efficiencies and disciplined promotions. Excluding nonrecurring items, net income would have been $18 million, or $0.09 per share, she said.

In short, the top line is growing modestly while cash conversion and margins do the heavy lifting.

Where is the extra capital going?

Trulieve raised its full-year capital spending forecast to roughly $105 million from $95 million to fund growth markets, while keeping its expectation of at least $225 million in annual operating cash flow. Rivers said part of the added spend goes toward cultivation and production in Georgia.

The balance sheet: $327 million in cash against $289 million in debt. After the quarter closed, the company repaid a $65 million mortgage on its Jefferson County, Florida cultivation campus. It did not repurchase shares under a program authorizing up to the lesser of $50 million or roughly 8.5 million shares.

How fast is Georgia actually growing?

Faster than Trulieve modeled. Traffic and units sold in the state rose sevenfold in the quarter as the market expanded and the company rolled out flower, concentrates and vapes. Georgia's registered patient count recently passed 60,000, up 80% since the start of the year, and Trulieve plans to apply for a 10th dispensary once it hits 65,000.

The company runs seven Georgia dispensaries, has approval for two more in coming months, ships to nearly 20 independent pharmacies, and said more than 30 others are ready to sell its products pending licensure. Production capacity is being added in stages into 2027.

In Texas, Trulieve is converting a conditional license into a final one, with initial production capacity ready for inspection and locations in all 11 required regions. Rivers called final licensure "relatively imminent" and pointed to a 2027 launch, subject to approvals and inspections. The company is also evaluating acquisitions, from tuck-ins to larger single- and multistate deals, with discipline on price and fit.

What did rescheduling change?

The rescheduling of state-licensed medical marijuana to Schedule III let Trulieve register its medical facilities with the Drug Enforcement Administration, shed the burden of Section 280E taxation (a rule that barred cannabis businesses from deducting ordinary expenses), and list its medical-only business on the NYSE in June.

Reese said Q3 income tax expense carried no 280E liability. Trulieve has filed amended returns challenging the provision's applicability, and its balance sheet holds an uncertain tax position covering 2019 to the present, including more than $102 million in IRS refunds received plus interest. Rivers also noted wider availability of marketing and tech vendors and talks with credit card companies, though payment providers want updated federal guidance first.

Bottom line: a cash-generative quarter, a bigger Georgia bet, and a cleaner tax structure heading into 2027's Texas opening.