Trulieve Cannabis Corp.

NOTES TO CONDENSED CONSOLIDATED FINANCIAL STATEMENTS (UNAUDITED)

NOTE 1. BASIS OF PRESENTATION

The accompanying unaudited condensed consolidated financial statements of Trulieve Cannabis Corp. and its subsidiaries, ("Trulieve," the "Company," "we," "our," or "us") have been prepared in accordance with accounting principles generally accepted in the United States of America (“GAAP”) for interim financial information and, therefore, do not include all financial information and footnotes required by GAAP for complete financial statements. In management's opinion, the condensed consolidated financial statements include all adjustments of a normal recurring nature necessary for a fair statement of the Company's financial position as of March 31, 2026, and the results of its operations and cash flows for the periods ended March 31, 2026 and 2025. The results of the Company's operations for the three months ended March 31, 2026 are not necessarily indicative of the results to be expected for the full 2026 fiscal year.

The accompanying unaudited condensed consolidated financial statements should be read in conjunction with the audited consolidated financial statements for Trulieve Cannabis Corp. and the notes thereto, included in our Annual Report on Form 10-K for the fiscal year ended December 31, 2025, filed with the Securities and Exchange Commission ("SEC") on February 26, 2026 (the "2025 Form 10-K").

Discontinued Operations

In June 2023, the Company exited operations in Massachusetts and in July 2022, the Company exited operations in Nevada. Both actions represented a strategic shift in business; therefore, the related assets and liabilities associated with the discontinued operations are classified as discontinued operations on the condensed consolidated balance sheets and the results of the discontinued operations have been presented as discontinued operations within the condensed consolidated statements of operations for all periods presented. Unless specifically noted otherwise, footnote disclosures only reflect the results of continuing operations.

Basis of Measurement

These condensed consolidated financial statements have been prepared on the going concern basis, under the historical cost convention, except for certain financial instruments that are measured at fair value as described herein.

Functional Currency

The functional currency of the Company and its subsidiaries, as determined by management, is the United States (“U.S.”) dollar. These condensed consolidated financial statements are presented in U.S. dollars.

NOTE 2. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

The Company’s significant accounting policies are described in the Company’s 2025 Annual Report on Form 10-K, filed with the SEC on February 26, 2026. Our management has reviewed these significant accounting policies and related disclosures and determined that there were no significant changes to our significant accounting policies during the three-month period ended March 31, 2026.

Recently Adopted Accounting Pronouncements

ASU 2025-05 - In July 2025, the FASB issued Accounting Standards Update ("ASU") No. 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets. The amendment provides a practical expedient for estimating credit losses on current accounts receivable and contract assets arising from revenue transactions under Accounting Standards Codification ("ASC") 606, including those acquired in business combinations. Entities may assume that current conditions as of the balance sheet date will persist through the reasonable and supportable forecast period for eligible assets. The Company adopted ASU 2025‑05 in the quarter ended March 31, 2026 and elected the practical expedient for eligible current accounts receivable and contract assets. The guidance was applied prospectively and prior period disclosures were not adjusted. The adoption of this ASU had no impact to the Company's financial statements.

NOTE 3. SUPPLEMENTARY FINANCIAL INFORMATION

Inventories

Inventories are comprised of the following as of:

Notes Receivable

No provision for credit losses was recorded during the three months ended March 31, 2026 and 2025.

Held for Sale Assets

During the three months ended March 31, 2026, the Company identified certain assets that no longer met the criteria for classification as held for sale. Management determined that it no longer had the intent to sell these assets, as they are expected to be utilized to support ongoing production activities. As a result of this change in circumstances, the assets were reclassified from held for sale to held and used at their carrying amounts immediately prior to classification as held for sale. The following table presents a rollforward of held‑for‑sale assets, including net transfers into and out of held‑for‑sale classification, which are recorded in other current assets on the condensed consolidated balance sheet, for the periods presented:

Finance Leases

Future minimum lease payments under the Company's non-cancellable finance leases as of March 31, 2026 are as follows:

Fair Value Measurements

The fair values of financial instruments measured on a recurring basis by class are as follows as of:

(1) There were no transfers between hierarchy levels during the periods ending March 31, 2026 or December 31, 2025.

(2) Interest income from money market funds was $2.4 million and $2.8 million for the three months ended March 31, 2026 and 2025, respectively.

(3) The fair value of the interest rate swap liability is recorded in other long-term liabilities on the condensed consolidated balance sheets.

Shared Based Compensation

Stock Options

The following table summarizes the Company's stock option activity for the three months ended March 31, 2026:

(1) The weighted average exercise price for stock options granted was $6.40.

Restricted Stock Units

The following table summarizes the Company's restricted stock unit ("RSU") activity for the three months ended March 31, 2026:

(1) The weighted average grant date fair value of RSUs granted was $6.40.

Performance Stock Units

During the three months ended March 31, 2026, the Board of Directors granted performance stock units ("PSUs") under the Company's Third Amended and Restated Trulieve Cannabis Corp. 2021 Omnibus Incentive Plan. The number of shares ultimately issuable pursuant to these awards is determined based on the achievement of specified future financial metrics with payout levels ranging from 0% to 200% of the target award, in accordance with the terms established at the grant date.

For awards subject to Company financial performance‑based conditions, the Company estimates the probability of achieving the applicable performance conditions at each reporting period and recognizes compensation expense over the requisite service period based on the estimated percentage of the target award expected to vest. PSUs are valued at their grant‑date fair value, which is determined using the closing market price of the Company’s common stock on the grant date.

The following table summarizes the Company's performance stock unit ("PSU") activity for the three months ended March 31, 2026:

(1) The weighted average grant date fair value of PSUs granted was $6.40.

Revenue Disaggregation

Revenue is comprised of the following for the periods presented:

Commitments and Contingencies

Operating Licenses

Although cannabis has been rescheduled as a Schedule-III controlled substance for medical use, it remains on Schedule I with respect to adult use. The possession, cultivation, and distribution of cannabis is permitted for adult use in some states in which the Company operates; however, adult use remains a violation of federal law. Strict enforcement of federal law regarding adult use of cannabis could likely result in the Company’s inability to proceed with certain of the Company's business plans.

Claims and Litigation

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. As of March 31, 2026 and December 31, 2025, there were no pending or threatened lawsuits that could reasonably be expected to have a material effect on the results of the Company’s condensed consolidated statements of operations. There are also no proceedings in which any of the Company’s directors, officers, or affiliates has a material interest adverse to the Company’s interest.

Contingencies

As of March 31, 2026 and December 31, 2025, $0.3 million and $0.8 million, respectively, were included in contingent liabilities on the condensed consolidated balance sheets related to various pending litigation claims as the loss is probable and can be estimated.

An acquisition in 2021 included a contingency providing for an additional $5.0 million in consideration which is contingent on the enactment, adoption or approval of laws allowing for adult-use cannabis in Pennsylvania. No liability was recorded for this contingent consideration, as the estimated value of the liability was not significant at the time of the acquisition nor as of March 31, 2026 and December 31, 2025, based on the likelihood of approval of laws allowing for adult-use cannabis in Pennsylvania.

NOTE 4. LONG-TERM BORROWINGS

Private Placement Notes

Private placement notes payable consisted of the following as of:

Notes Payable

Notes payable consisted of the following as of:

(1) Underlying assets are pledged as collateral for the mortgage notes payable.

(2) Interest rates range from 0.00% to 7.50%, with a weighted average interest rate of 7.49% as of March 31, 2026. Maturity dates range from April 27, 2026 to October 24, 2026.

(3) Notes payable are subordinated to the private placement notes.

(4) The mortgage note payable interest rate is a variable rate equal to the CME Term Secured Overnight Financing Rate ("SOFR") plus 3.00%. In connection with the closing of this note, the Company entered into an interest rate swap to fix the interest rate at 7.53% for the term of the notes.

Construction Finance Liabilities

Total construction finance liabilities were $135.8 million and $136.2 million as of March 31, 2026 and December 31, 2025, respectively. The contractual terms range from 10.0 years to 25.0 years with a weighted average remaining lease term of 14.8 years.

Financial and Other Covenants

Certain long-term borrowing agreements contain various operating and financial covenants as disclosed in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025. As of March 31, 2026, the Company was in compliance with all such operating and financial covenants.

Maturities

Stated maturities of the principal portion of private placement and notes payable outstanding and future minimum lease payments for the construction finance liabilities, including interest, as of March 31, 2026 are as follows:

NOTE 5. EARNINGS PER SHARE

The following is areconciliation for the calculation of basic and diluted earnings per share for the periods presented:

(1) Potentially dilutive securities representing 13.6 million shares of common stock were excluded from the computation of diluted earnings per share for the three months ended March 31, 2025 as their effect would have been antidilutive.

As of March 31, 2026, there were approximately 192.3 million shares of Subordinate Voting Shares and Multiple Voting Shares issued and outstanding, which excluded 0.2 million fully vested RSUs that are not contractually issuable until the earlier of a defined triggering event or the award anniversary date, either December 1, 2030, December 1, 2031 or December 1, 2032.

NOTE 6. INCOME TAXES

A following table summarizes the Company's income tax expense and effective tax rate for the periods presented:

The Company has computed its provision for income taxes based on the actual effective tax rate for the quarter, taking into consideration the April 23, 2026 Internal Revenue Service press release and Department of Justice Final Order reclassifying medical cannabis as a Schedule III substance under the Controlled Substances Act, as the Company believes this is the best estimate for the annual effective tax rate. The Company is subject to income taxes in the United States and Canada.

The difference between the March 31, 2026 effective tax rate and federal statutory rate of 21% is primarily attributable to the $15.2 million of interest recorded in income tax expense for uncertain tax positions recognized in prior years. The remaining difference is attributable to state and local income taxes, nondeductible items, and other adjustments. The difference between the March 31, 2025 effective tax rate and federal statutory rate of 21% is primarily attributable to the recognition of $35.1 million of IRC Section 280E uncertain tax position liability as well as $9.0 million of interest recorded in income tax expense for uncertain tax positions. The remaining difference is attributable to state and local income taxes, nondeductible items, and other adjustments.

Significant judgment is required in evaluating the Company’s uncertain tax positions and determining the provision for income taxes. The Company recognizes benefits from uncertain tax positions based on the cumulative probability method whereby the largest benefit with a cumulative probability of greater than 50% is recorded. An uncertain tax position is not recognized if it has a 50% or less likelihood of being sustained.

The following table summarizes a reconciliation of the beginning and ending amount of unrecognized tax benefits for the period presented:

The following table summarizes a reconciliation of the beginning and ending amount of uncertain tax position liabilities, net for the period presented:

(1) Amounts represent the interest recorded on uncertain tax positions during the respective years which are recorded in the provision for income taxes on the condensed consolidated statements of operations.

(2)The Company has taken a position that IRC Section 280E does not preclude it from deducting ordinary and necessary business expenditures on its tax return. Of the $696.4 million in uncertain tax position liabilities, net, $655.6 million is related to this tax position. The amount does not include $82.9 million of previous tax payments for which the Company has claimed overpayment related to this tax position.

(3) The ending balance includes accrued interest of $90.5 million as of March 31, 2026. Of the $90.5 million in accrued interest, $80.2 million relates to the Company's IRC Section 280E tax position.

The Company accounts for income taxes in accordance with ASC 740 and has evaluated recent federal regulatory developments concluding that its income tax positions related to state‑licensed medical operations meet the more‑likely‑than‑not recognition threshold specific to the 2026 taxable year; accordingly, no uncertain tax positions were recorded for medical cannabis activities in the quarter, as doing so would have caused the effective tax rate for the period to not be representative of the Company’s annual effective tax rate. The Company maintains its tax position based on legal interpretations that challenge the Company's tax liability under IRC Section 280E with regard to adult-use cannabis activities; however, such activities are not material to the Company’s consolidated financial statements, and no uncertain tax positions were recorded for the current reporting period.

The Company recorded interest on uncertain tax positions totaling $15.2 million and $9.0 million for the three months ended March 31, 2026 and 2025, respectively, to the provision for income taxes on the condensed consolidated statements of operations, which was primarily related to the tax positions based on legal interpretations that challenge the Company's tax liability under IRC Section 280E.

The Company and certain of its subsidiaries are currently under examination by the relevant taxing authorities for various tax years. Certain of these examinations include a review of the Company's tax positions based on legal interpretations that challenge the Company's tax liability under IRC Section 280E. The Company is no longer subject to examination by tax authorities for years before 2020.

In September 2025, the IRS issued Revenue Agent Reports proposing assessment of taxes, interest, and penalties for some of the Company's subsidiaries that were under audit. Trulieve has submitted protests to dispute those proposed liabilities before the IRS Independent Office of Appeals. As outlined in Item 3. Legal Proceedings, the Company believes its tax position is supportable and that it has substantive legal arguments. However, management has concluded that the position does not yet meet the recognition threshold required by ASC 740 for tax years prior to 2026. As a result, no reduction or elimination of the related uncertain tax position liability has been recognized as of March 31, 2026. The proposed tax and interest amounts were previously included in the Company's uncertain tax position liabilities; however, the total penalty amount proposed, approximately $38.1 million, is not included in the Company's uncertain tax position. The Company believes the proposed penalties are without merit and will contest them vigorously.

NOTE 7. VARIABLE INTEREST ENTITIES

The Company has entered into certain agreements in several states with various entities related to the purchase and operation of cannabis dispensary, cultivation, and production licenses, and has determined these to be variable interest entities ("VIEs") for which it is the primary beneficiary and/or holds a controlling voting equity position. The Company holds an ownership interest in these entities ranging from 0% to 95%, either directly or through a proxy as of March 31, 2026.

The summarized assets and liabilities of the Company's consolidated VIEs in which the Company does not hold a majority interest are presented in the table below as of the periods indicated and include third-party assets and liabilities of the Company's VIEs only and exclude intercompany balances that were eliminated in consolidation.

NOTE 8. RELATED PARTIES

In 2023, the Company entered into an agreement to rent an asset from an entity that is directly owned in part by the Company’s Chief Executive Officer and Chair of the board of directors. The expense related to the use of this asset was $0.1 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively, and recorded to selling, general, and administrative expenses on the condensed consolidated statements of operations.

The Company also leases a cultivation facility and corporate office facility from an entity that is indirectly owned by the Company's Chief Executive Officer and Chair of the board of directors, a former member of the Company's board of directors, and another member of the Company's board of directors.

The Company had the following related party operating leases on the condensed consolidated balance sheets, under ASC 842, as of:

Lease expense recognized on leases with related parties was $0.1 million and $0.1 million for the three months ended March 31, 2026 and 2025, respectively, and recorded to cost of goods sold and selling, general, and administrative expenses on the condensed consolidated statements of operations.

NOTE 9. DISCONTINUED OPERATIONS

The following table summarizes the Company's loss from discontinued operations for the periods presented:

The condensed consolidated statements of cash flows include continuing operations and discontinued operations.

Construction Finance Liability

Future minimum lease payments, including interest, for the construction finance liability associated with discontinued operations as of March 31, 2026 are as follows:

NOTE 10. SUBSEQUENT EVENTS

The Company’s management evaluates subsequent events through the date of issuance of the condensed consolidated financial statements. There have been no subsequent events that occurred during such period that would require adjustment to or disclosure in the condensed consolidated financial statements, except as disclosed in Note 6. Income Taxes related to rescheduling of medicinal cannabis from Schedule I to Schedule III.