Trulieve Q3 2026 Earnings: Gross Margin Expands as Revenue Falls

Trulieve (NYSE: TRLV) reported Q3 2026 revenue of $230.2 million, down 20% from $288.2 million a year earlier, while diluted EPS attributable to common shareholders improved to $0.00 from a loss of $0.14. Gross margin expanded by five percentage points, and the company generated $74.4 million in operating cash flow despite the lower revenue base. Year-over-year comparisons are affected by the June 2026 deconsolidation of Harvest, as the current quarter includes only Trulieve medical operations while the prior-year period included Harvest’s mixed medical and adult-use operations.

Core Earnings Results

Reported revenue and gross profit declined, but the reduction in operating expenses allowed operating income to remain nearly unchanged. The bottom line also benefited from a lower income tax provision, which fell to $26.3 million from $53.0 million even as operating income stayed close to the prior-year level.

Gross profit declined more slowly than revenue, lifting gross margin to 64%. Adjusted EBITDA also fell, but its margin increased to 39% from 36%, showing that the remaining medical operations produced a higher percentage of profit from each dollar of reported revenue.

Adjusted net income, adjusted EBITDA, and free cash flow are non-GAAP measures. Trulieve defines free cash flow as operating cash flow less capital expenditures. Its cash flow statements include continuing and discontinued operations for the periods presented.

Business and Operating Performance

Retail generated 95% of quarterly revenue. In Georgia, Trulieve reported a seven-fold increase in traffic following the medical cannabis program’s July 1 expansion and the launch of Modern Flower and Roll One products. The company did not quantify Georgia’s contribution to quarterly revenue.

Trulieve opened dispensaries in Marco Island, Florida, and Dunwoody, Georgia. At the time of the earnings release, it operated 208 retail dispensaries and 3.5 million square feet of cultivation and processing capacity in the United States.

The company also completed a perpetual royalty-free license for Alien Labs and Connected branded products in Florida and Texas. The agreement covers genetics, trademarks, proprietary know-how, and a right of first refusal for exclusive licensing in additional expansion markets.

Margin Expansion Preserved Operating Profit as Revenue Fell

Lower expenses and a better gross margin offset most of the effect of declining revenue. Selling, general, and administrative expense fell to $87.8 million from $99.0 million, while depreciation and amortization declined to $17.7 million from $29.5 million. As a result, operating income held at $42.5 million even though revenue was $58.0 million lower than a year earlier.

The improvement from operating income to net income was constrained by taxes and Harvest-related losses. Trulieve recorded $27.0 million of pretax income, a $26.3 million tax provision, and a $6.4 million equity loss from Harvest. Nevertheless, net income attributable to common shareholders reached $0.9 million, compared with a $26.8 million loss in Q3 2025, when the tax provision was substantially higher.

Quarterly operating cash flow remained close to the prior-year level, but capital expenditures increased to $29.0 million from $16.6 million. That higher investment reduced free cash flow to $45.4 million from $59.8 million. For the first nine months of 2026, operating cash flow was $183.3 million and free cash flow was $119.8 million.

Cash and cash equivalents totaled $326.7 million at September 30, up from $255.5 million at the end of 2025. Inventory declined to $190.8 million from $242.3 million over the same period. After quarter-end, Trulieve repaid $65 million of mortgage notes secured by its Jefferson County, Florida cultivation site ahead of their 2028 maturity, which the company said would reduce leverage and interest expense.

Management Perspective

CEO Kim Rivers said the rescheduling of state-licensed medical marijuana enabled several milestones, including final DEA registrations, removal of the 280E tax restriction, and Trulieve’s move to the New York Stock Exchange. Management identified Georgia and Texas as meaningful expansion opportunities and characterized the company as being in the early stages of a faster growth cycle.

Recent Insider Transactions

The supplied insider transaction data lists three direct sales by CEO Kimberly Rivers in June 2026. It reports per-share prices and transaction values but does not identify the currency, so the figures below are presented without adding a currency designation.

These filings establish that the transactions occurred but do not, by themselves, indicate management’s view of Trulieve’s outlook.

Risks Investors Need to Monitor

• Revenue comparisons remain difficult: Q3 2026 contains only Trulieve medical operations, while Q3 2025 included Harvest’s mixed medical and adult-use operations. This limits the usefulness of the reported 20% decline as a measure of underlying demand.
• Taxes continue to absorb most pretax income: The $26.3 million quarterly tax provision nearly matched $27.0 million of pretax income. Trulieve also reported $625.4 million of uncertain tax position liabilities at quarter-end.
• Higher capital spending reduced free cash flow: Operating cash flow was relatively stable, but the increase in capital expenditures caused free cash flow to decline by 24% year over year.
• Harvest remains a source of earnings volatility: Although Harvest was deconsolidated, Trulieve recorded a $6.4 million equity loss from the business during the quarter and carried a $146.1 million investment in Harvest on its balance sheet.

Summary

Trulieve’s Q3 2026 results combined lower reported revenue with better margins, lower operating expenses, and a return to modest GAAP profitability. Operating cash generation remained positive, although higher capital expenditures reduced free cash flow. The main issues to monitor are performance on the post-Harvest revenue base, the effect of taxes on net income, and whether expansion in Georgia and Texas produces measurable growth.