管理層發言
Thank you. Good morning, everyone, and welcome to the Trulieve Cannabis Corporation Second Quarter 2026 Financial Results Conference Call. My name is Chris, and I will be your conference operator today. As a reminder, this conference call today is being recorded. I would now like to turn the conference call over to Christine Hersey, Chief Corporate Affairs and Strategy Officer for Trulieve, who will be your moderator for today. You may now begin.
Thank you. Good morning, and thank you for joining us. During today's call, Kim Rivers, Chief Executive Officer, and Jan Reese, Chief Financial Officer, will deliver prepared remarks on the financial performance and outlook for Trulieve. Following the prepared remarks, we will open the call to questions. This morning, we reported second 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.trulieve.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 An archived version of today's conference call will be available on our website later today.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 Trulieve'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 8-K 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. We are thrilled to report second quarter results for the first time as a company listed on the New York Stock Exchange. For those of you who may be new to Trulieve, we are the largest medical cannabis operator in the U.S. Our mission is to expand access to cannabis while serving customers with high-quality products and exceptional experiences. Ten years ago, Trulieve served the first medical cannabis patient in Florida, and over the past decade, we have grown from a single dispensary to 207 medical dispensaries and 3.5 million square feet of production capacity. When we include Trulieve-branded adult and medical mixed-use dispensaries owned by Harvest, our branded retail network includes 241 retail locations and over 4 million square feet of production capacity. Last month, Trulieve was named to TIME's America's Best Companies 2026 list, a prestigious recognition awarded to the top 1,000 companies, highlighting our commitment to employee growth and career development. I am so proud of the team and what we have built together. Since the very beginning, Trulieve has led from the front, pushing for reform. For the past 2 years, we have actively supported federal reclassification of marijuana. In December, President Trump issued an executive order to support rescheduling, delivering on his campaign promise to address cannabis reform. In April, Attorney General Todd Blanche rescheduled state-licensed medical marijuana to Schedule III, completing the first meaningful federal reform in over 50 years. In conjunction with state-licensed medical marijuana rescheduling, the Treasury Department confirmed that punitive 280E tax no longer applies to state-licensed medical marijuana operations beginning in 2026. The removal of this tax burden provided an immediate boost to our reported net income and cash flow. At the same time, AG Blanche resumed the broader rescheduling process for marijuana. Hearings concluded last month, and we expect a final order to be issued this year. As part of a final order to reschedule state-licensed medical marijuana, a new process was created for operators to register with the DEA. Trulieve registered all of its medical-only marijuana dispensaries and production facilities with the DEA, complying with the 6-month grandfathering provision in the final order. To date, the DEA has completed inspections at 100% of our dispensaries across Florida, Pennsylvania, and West Virginia. We anticipate facility approvals in the coming weeks. In order to facilitate listing on the New York Stock Exchange, Trulieve segregated the medical-only, state-licensed DEA-registered business from the mixed-use states that have both medical and adult-use operations. State operations serving medical and adult-use customers are part of Harvest. Following precedent and as part of the deconsolidation, 10% of the mixed-use business was sold to an independent third-party investor along with operational control. Trulieve retains 90% of the economic interest in Harvest and will have the option to reconsolidate the Harvest business pending broader rescheduling and NYSE permitting inclusion. Since listing on June 10th, we have conducted non-deal roadshows to meet investors in Chicago, Denver, New York, Montreal, and Toronto. We introduced Trulieve to a host of institutional investors who are new to the cannabis space. Over time, we expect to realize greater stability in our shareholder base, higher liquidity, broader analyst coverage, and index inclusion for our stock. We plan to commemorate our listing at a closing bell ceremony at the NYSE on August 18th, marking another milestone as the first U.S. cannabis company to ring the bell. We believe uplisting to the NYSE, redomiciling in the U.S., and removal of the punitive 280E tax burden will lower our cost of capital. While the shift in federal policy is historic, I'm equally excited about 3 significant near-term growth opportunities. First, in Georgia, program changes have created an unlock for increased distribution that we are executing on now. Second, in Texas, where we are in the process of converting our conditional license to final, we have the opportunity to serve the biggest medical market since Florida. And third, across our market, we have a targeted strategy to acquire new customers currently served by the intoxicating hemp market as the federal ban takes effect. Overall, Trulieve is ready to further solidify our leadership position during this incredibly exciting time for the industry. Our core business continues to outperform, generating industry-leading margins and strong cash flow, providing the flexibility to make strategic investments and growth initiatives. Turning now to our second quarter results. Please note, reported results for this quarter include the combined business until the deconsolidation transaction on June 3rd, and then the medical-only business for the remainder of June. Second quarter revenue of $271 million was in line with guidance. For the medical-only business, revenue increased 4% sequentially to $222 million. Second quarter gross margin of 60% reflects operational efficiencies, low production costs, and our disciplined approach to promotional activity. For the medical-only business, second quarter gross margin was 63%. Adjusted EBITDA of $98 million, or 36% margin, was driven by expense control in our core business. During the quarter, we generated $53 million in operating cash flow, which contributed to our quarter-end cash balance of $325 million. Second quarter retail results were in line with positive seasonal trends, including the 4/20 holiday. In medical-only markets, traffic increased 6%, pressured by a slight sequential decline in average basket. Units were up 8%, underscoring strong demand for cannabis. In Florida, we sold 56% more flower per store than the state average across 169 stores, totaling 680,000 ounces. We sold 1.5 billion milligrams of oil, more than 2 times the next highest competitor. Patient growth in Florida, Georgia, and Pennsylvania has accelerated recently, further highlighting cannabis demand. Customer preferences for value, mid, and premium tier units sold remain consistent from the first quarter. During the third quarter, we expect growth in Georgia and Pennsylvania to offset typical summer pressure in Florida. We expect momentum to fuel continued growth through year-end. Our investment in Harvest performed well in the second quarter with revenue growth and margin expansion compared to the first quarter, driven largely by growth in Ohio. Turning now to our strategic objectives for 2026. We have made meaningful progress in these 4 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. State-licensed medical marijuana has been reclassified to Schedule III, representing a major win for patients, caregivers, and physicians. Acknowledging the medical value of cannabis reduces stigma, eases barriers to research, and sets the stage for further reform. We remain supportive of broader rescheduling and expect a final order this year. We expect momentum to continue with SAFE Banking, updated FinCEN guidance, and Treasury guidance on 280E tax treatment, including potential retroactive application for state-licensed medical marijuana operators. These measures can expand access to banking and service providers, reducing friction and costs in day-to-day operations. While cannabis reform continues to come to fruition, we are ramping investments in meaningful growth opportunities in both Georgia and Texas. Following recent program changes in Georgia and federal reclassification of state-licensed medical marijuana, Trulieve has significant growth potential in both the independent pharmacy channel and our own dispensaries. Independent pharmacies in Georgia are eligible to register with the state and with the DEA to dispense approved medical marijuana products to registered patients. In June, we began supplying licensed pharmacies with medical marijuana products and are now shipping to almost 20 pharmacies. We believe this market opportunity will expand over time as more than 125 independent pharmacies have previously expressed interest in carrying medical marijuana products. Our team is meeting with pharmacy owners across Georgia to discuss medical cannabis and share information on how to apply for state and DEA licenses. Alongside pharmacy distribution, the Georgia program has 6 licensed operators for cultivation and retail. As one of only 2 Tier 1 license holders, Trulieve opened the first medical dispensary in April 2023. At that time, the program was limited to low THC products for patients with severe and end-stage qualifying conditions. The governor signed a new law that expands the program. As of July 1st, Georgia's medical marijuana program removes the THC cap, includes new qualifying conditions such as HIV, IBS, and lupus, and allows for new products such as vape and inhalable flower. In the first 2 weeks of July, traffic at our dispensaries tripled. Due to high demand, we sold out of flower. However, we expect to have flower back in stock in the coming weeks. Cultivation capacity is ongoing and will ramp in stages throughout the end of the year and into 2027. While flower production is ramping, we have a variety of new concentrate and vape products rolling out in August and September. Today, we have 6 open dispensaries and are on track to open our 7th store in Dunwoody this fall. The program allows us to open additional dispensaries as the patient count increases. Patient enrollment in Georgia is accelerating, with growth up 38% this year and surpassed 45,000 this week, triggering eligibility for an 8th dispensary which could open as soon as early 2027. While Georgia presents a meaningful growth opportunity, Texas has tremendous near-term growth potential. We believe Texas represents the largest medical cannabis opportunity in the U.S. Historically, the Texas Compassionate Use Program, or TCUP Medical Marijuana Program, was limited in scope and size. The program had only 3 licensed operators and strict rules that made it very difficult for any of the 3 operators to achieve scale, such as requiring all products to be removed from each dispensary and warehoused every night. Last September, a new law passed that revamped the program, making several critical improvements. Qualifying conditions were expanded to include chronic pain, Crohn's disease, traumatic brain injuries, and terminal illnesses. Initial patient consultations with physicians can be conducted via telehealth, providing a convenient way for patients to speak with a physician to determine which products and dosing may be appropriate. In addition, rules were updated to allow products to remain in dispensaries without warehousing overnight. Permissible products were expanded to include new form factors such as vapes, lotions, and patches. Finally, the number of operators is increasing from 3 to 15 with the award of 12 new licenses. In December, Trulieve was awarded a conditional license for the TCUP Medical Marijuana Program. We are working to convert the conditional award to a final license. The TCUP program allows each license holder to build vertically integrated operations with unlimited production capacity on a contiguous site to support unlimited retail, as long as the operator has 1 retail location in each of the 11 regions across Texas. Construction of initial production capacity is complete and we have a robust retail pipeline of stores covering all regions. We plan to scale our production capacity and retail network modularly as the patient count increases over time. This year, the program has grown by 16% to over 157,000 patients representing less than 0.5% of the population in Texas. For context, established medical programs in Florida and Pennsylvania have 4% population penetration, which for Texas would be about 1.3 million patients or 8.5 times the current market size. The setup in Texas strongly favors Trulieve's approach to market penetration through scaled operations to sell branded products through branded retail. Our proven track record of developing vertically integrated medical markets, such as Florida, combined with our strong balance sheet, provide us with meaningful competitive advantages in Texas. We believe the Texas market can grow more quickly than Florida did, and we look forward to contributing to the success of the TCUP program. Alongside expansion in Georgia and Texas, we are investing in our retail network with both new locations and store refresh or remodels to support patient growth while maintaining brand standards. Year to date, we have opened 8 new dispensaries in Florida and refreshed or remodeled 24 locations across our markets. On top of investments in organic growth, we are actively evaluating acquisition opportunities in new and existing markets ranging from tuck-in assets to large single and multi-state operations. We evaluate potential targets using stringent criteria, including price, strategic fit, quality of assets, and market framework. In addition, we are investing in technology. Earlier this year, we launched Project Hyper, an initiative focused on hyper-personalization of customer messaging. Through generative AI, we are automating creative production at scale, enhancing how we personalize and orchestrate customer communications, and modernizing our digital commerce platform to deliver a more seamless experience across web and mobile. Project Hyper remains on track, and we expect to begin realizing efficiency and speed to market benefits by year-end, with additional capabilities rolling out ahead of our targeted completion date of March 2027. As the cannabis industry continues to evolve, creating deeper and lasting connections with our customers is critical to long-term success. Customer engagement through digital and real-life interaction are at the core of our strategy to grow our loyal customer base. Local community events, physician engagement, and paid media help Trulieve establish and maintain reciprocal relationships with patients, caregivers, and physicians. Across our branded retail network, we conduct over 100 community and physician engagement events a month, partnering with a wide variety of nonprofit organizations to raise awareness for cannabis. Last year, we launched our Florida mobile app, giving patients a more convenient way to browse products, access deals and rewards, and place orders. Adoption continues to exceed expectations with more than 200,000 downloads since launch. In the second quarter alone, the app drove 30% of all online orders with increased average basket size and order frequency. Given the success we've seen in Florida, we plan to launch the app in Georgia later this year with additional markets expected to follow in 2027. Across our branded retail platform, our rewards program added 80,000 members in the second quarter, surpassing 1.1 million members. Rewards members continue to spend on average 2.2 times more than non-reward members, comprising 80% of second quarter transactions. In May, we introduced program tiers in Florida, enabling greater rewards for customers who spend more, including exclusive offers, products, and events. We plan to add reward tiers in additional markets this year. Customer retention is one of the key metrics we use to measure the depth and quality of our customer connections. For medical-only markets, customer retention held steady at 78%. We sold almost 14 million branded product units with Modern Flower and Roll One, comprising almost half of branded units sold. The Roll One Clutch all-in-one vape continues to gain momentum with over 35% growth in units sold. 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. Overall, we have made tremendous progress on all of our objectives. Our team is highly engaged in carrying the momentum forward into the back half of the year. With that, I'd like to turn the call over to our CFO, Jan Reese. Please go ahead.
Good morning and thank you, Kim. As a reminder, second quarter reported results under GAAP include both the Trulieve and Harvest operations until the deconsolidation event on June 3rd and only Trulieve medical operations as a remainder of June. Following the deconsolidation of Harvest, the Harvest results are reported as equity investment. Please refer to our earnings presentation for additional details. Second quarter revenue was $271 million, in line with guidance and typical seasonal trends. Revenue for medical-only states was $222 million, up 4% sequentially. New stores opening and wholesale growth contributed to higher revenue. Second quarter gross profit totaled $162 million or 60% margin. Gross profit for medical-only states was $140 million or 63% margin. Gross margin strength reflects economies of scale, operational efficiencies across our platform and disciplined promotional management. We expect quarterly gross margin to vary based on product and market mix, inventory sell-through, promotional activities and idle capacity costs. Second quarter SG&A was $102 million or 38% of revenue. Adjusted SG&A at 32% of revenue was comparable to last year. We expect SG&A may fluctuate based on the timing of investments and growth opportunities and infrastructure. Second quarter net loss was $406 million, which includes a $407 million impact from the Harvest deconsolidation and equity investment. Excluding non-recurring items, second quarter net income would have been $20 million or $0.11 per share. Second quarter adjusted EBITDA was $98 million, representing a 36% margin and reflecting expense leverage across our core operations. Turning now to our tax strategy. As a reminder, we've followed mandatory terms challenging the applicability of Section 280E to our business. Our balance sheet includes uncertain tax position covering 2019 to the present. The UTP includes 280E tax liability, refunds received from the IRS totaling more than $102 million, and includes interest. Second quarter income tax expense does not include 280E tax liability. The increase in our uncertain tax position includes $20 million in interest on the UTP and $13 million on overpayments used to cover ordinary taxes. We remain confident in our position and our ability to address the outstanding UTP. Moving to our balance sheet and cash flow. We ended the quarter with $325 million in cash and $289 million in debt. Second quarter operating cash flow was $53 million. Capital expenditures were $21 million. And free cash flow totaled $32 million. In June, the company adopted a share repurchase program of up to the lesser of $50 million or approximately 8.5 million shares. During the second quarter, no shares were repurchased. Turning to our outlook, third quarter revenue will include only Trulieve's medical operations. We expect third quarter revenue to be comparable to the medical-only revenue of $222 million in the second quarter. Growth in Georgia and Pennsylvania is expected to offset typical seasonal pressure in Florida. We expect growth to accelerate into year-end. Gross margin is expected to be comparable to the 63% gross margin in the second quarter for the medical-only operations. For the full year 2026, we anticipate operating cash flow of at least $225 million, reduced from $250 million to reflect the impact of deconsolidation. With increased investment in growth markets to meet demand, capital expenditures are now expected to be $95 million, up from $85 million. Pending regulatory approvals, we may accelerate investment in Texas. With that, I turn the call back over to Kim.
Thanks, Jan. 2026 is shaping up to be another landmark year for Trulieve. Federal rescheduling, uplisting to the New York Stock Exchange, and new growth opportunities in Georgia and Texas all solidify Trulieve's position as an industry leader. Marijuana rescheduling represents a major policy shift. We applaud the Trump administration for enacting common sense cannabis reform. Trulieve is proud to have played a role alongside many others in supporting this historic policy change. Looking ahead, we expect additional reform to gain traction. SAFE Banking, updated FinCEN guidance, and Treasury guidance on 280E tax treatment all further align federal policy and state-licensed marijuana programs. As the largest medical marijuana operator in the U.S., Trulieve was the first to segregate its business by deconsolidating Harvest to uplist the medical-only operations on the NYSE. Since uplisting, we've seen greater liquidity and renewed interest by institutional investors. Over time, we expect our shareholder base to broaden, ultimately lowering our cost of capital. Once broader rescheduling of marijuana is completed, Trulieve has the option, but not the obligation, to repurchase the investment by the third-party investor at a fair market value. As demonstrated by our proven track record in Florida, we are incredibly well positioned to succeed in Georgia and Texas. We have the capital and playbook to rapidly scale with discipline, adding retail and production capacity alongside demand. Since day one, our approach hasn't changed. Trulieve grows one patient at a time. Thank you for joining us, as I always say, onward.
At this time, Kim Rivers and Jan Reese will be available to answer any questions. Operator, please open up the call for questions.
Operator instructions were provided. And today's first question comes from Luke Hannan with Canaccord Genuity.
分析師問答
Kim, I'd like to go through, if we can, you called out 3 significant near-term growth opportunities, being Georgia, Texas, and then the conversion of folks from the hemp market into the legal market. I'd like to go through each of those if we can. So starting with Georgia, it sounds like that's a big driver in the stability quarter on quarter that you're seeing thus far in Q3. But if we zoom out and think about your presence in the Georgia market over the long term, you have obviously deep experience selling branded product through branded retail. Should we think about Trulieve's presence in Georgia over the long term being primarily through its own dispensary network or do you expect it to be active within the pharmacy channel?
Yes, on the Georgia opportunity, we will see growth continue to ramp throughout this year. As we mentioned, those program changes went into effect July 1st, and so the Q3 impact includes some supply challenges that are coming back online through the end of the year. We will see increased growth as we continue to meet current patient demand through our branded retail network. It's a very prescriptive program and we can add a dispensary with every 10,000 patients that come online. Crossing that 45,000 patient threshold allowed us an additional dispensary, and then the next mark will be at the 55,000 mark. Important to note for timing is that we actually make that request at a set meeting with the Georgia Commission. It must have met that threshold by the time that meeting occurs. So it's important for us to have a retail real estate pipeline so we can present that location to the commission and maximize our opportunity at those meetings. Those openings will track with the growth of the program in terms of how many dispensaries we're able to build in Georgia. On the pharmacy side, I mentioned in the prepared remarks that we already have established relationships with 20 pharmacies with more to come. Many more pharmacies have their paperwork in and are going through the process; they must get both the DEA license and the state marijuana license. That network will be expanding, and we will wholesale to those pharmacies. However, there are also interesting opportunities in Georgia for hybrid models that we are exploring and have active conversations and some LOIs currently, whether that's a store-within-a-store construct or a pop-up where we take over part of an independent pharmacy and brand it as a Trulieve dispensary. There's an opportunity for us to potentially do a joint venture with a pharmacy where we construct on an adjacent property and combine properties into a single footprint. So it's really a pseudo-standalone JV construct. There's also an opportunity for us to purchase independent pharmacies. There's a lot of opportunity and optionality in Georgia so the presence will not only be a traditional wholesale model, but potentially a blended model where we have retail, wholesale, and blended arrangements.
That's great, thanks. And then switching gears to Texas, you had called out it as a larger market than Florida. And what's interesting, that looks and feels very similar to the Florida market just based on the regulations as well, the forced vertical integration, and the form factors, et cetera. So I guess I'm curious to know, if we were to do a look back on Florida and how you already had scale in that market, of course, from the outset, but you really built your scale in 2022, '23 at a bigger investment cycle to make sure you really retained that dominant market share and it's very early days in Texas I realize that but over the long term is it reasonable to assume that you should try and get to that same level of scale in Texas as well just considering the opportunity?
Absolutely. We are very laser focused on the Texas opportunity. Our experience in Florida is unique and we understand what is required to come in and have strong adoption, create community relationships, build out sufficient capacity, and ensure that we are serving the customer base as it grows. It becomes a bit of a chicken-and-egg: we see people interested in the program, but they need to see access in order to get their card and enter the program. We feel it is very important to be the provider that creates that first experience. We have already built and are complete and ready to go. The Texas regulators have been notified that we are ready for inspections on our initial phase one cultivation and production. We have been interacting regularly with the regulators in Texas, have answered additional questions, provided fingerprints, and completed other requirements. We will move quickly as soon as we get the green light that our license has converted to final.
That's great. Last question for me, and then I'll pass the line. Everyone has seen the Ohio data and sales data, which has been very strong over the course of the last couple of months here, and I was attributing that, of course, to what's happening as far as the hemp markets go and the hemp ban. Can you just remind us what is the size of the hemp market in, I'm thinking specifically in Florida and Pennsylvania, maybe we'll include Texas as well because it's going to be a big organic growth opportunity for you guys in the near term. Like how, I guess what I'm trying to get at is what could be the organic revenue tailwinds that you could get purely from folks converting from the hemp markets to the legal market?
In Florida, the regulated medical marijuana market has a little over 700 store locations across the state. We estimate the smoke shop or hemp storefront portfolio is about 7,000 in Florida. The regulated medical marijuana market in Florida is about $2 billion. We estimate the hemp market in Florida to be about $4 billion. So it is significant. I think similarly in Texas, there is a very large hemp market; we estimate about a $6 billion market. It will be interesting to see what happens in Texas with the hemp changes and the production and product availability that have gone into effect recently. We'll be watching that as well. We also think Pennsylvania represents a significant opportunity. Harvest operates in Ohio and we have seen, along with other operators, an increase in demand following the hemp shutdown in Ohio.
And the next question comes from Aaron Grey with Alliance Global Partners.
And congrats on the uplisting to NYSE. First question for me, just going back to Georgia, it looks like it can be a really nice market based on our tours there. Just looking at it a bit differently, wanted to talk about the cultivation needs over time. I know for dispensaries, it's embedded in the regs for you being able to add those, but it's not embedded for expansion. So curious, just given your commentary of already being restricted on supply in the early days of medical, how best to think about long-term supply, particularly given you're going to have additional distribution outlets through pharmacies?
We are in the process of building out additional capacity. It was already planned for Georgia and we're executing against those plans now. We can adjust the speed depending on growth and demand. As a Tier 1 license holder, we have the ability to expand up to 100,000 square feet of canopy currently with our existing license. There could be an opportunity in the future for additional cultivation capacity as the program accelerates. We're planning to have those conversations with regulators and lawmakers. Georgia is invested in the success of the program, particularly as independent pharmacies come online, and they want those pharmacies to be successful. That will require supply of high-quality product, and we will continue to build out up to the maximum threshold, assuming demand supports that cultivation level.
Appreciate that color. Second question for me, going back to Texas and the opportunity there. And we've often looked at it similar to Florida, as you have. One of the key differences we see is obviously the wholesale market versus forced verticality in Florida. So I want to get your commentary in terms of how that might change or if it does, your plans for expanding cultivation and retail, just given the fact you will have a wholesale market, even though you can't have that scaled retail, which is a difference from what we've seen in Florida.
With how we think the Texas market will develop, we will be very focused on branded product through branded retail. I believe most operators will be similarly situated. We'll execute the playbook that we know works and align with our strategy and positioning. If there is an opportunity to wholesale, we will discuss it internally, but I don't expect there will be a strategic rationale to lean heavily into that front out of the gate. Our focus is on serving the patient base via our branded retail and scaled production capacity.
Our next question is from Gabie Ingoglia with Cantor Fitzgerald.
So you guys mentioned in Georgia in the first few weeks before the products ran out that sales tripled. Does the $222 million revenue guidance for Q3 '26 incorporate that once you have product again and sales ramp back up to this level? Or could you help us frame out what guidance incorporates from Georgia?
Guidance incorporates our estimates related to Georgia contribution. What we're saying is that the rebound in Georgia and growth in Pennsylvania will offset typical Q3 seasonal slowness in Florida. Instead of a down quarter in Q3, we're guiding to a similar quarter as Q2, or relatively flat, due to the growth coming in Georgia, which we believe will accelerate into Q4 and into 2027. In Q3 we had a great start and then a shortage developed; late in Q3 that shortage will be rectified and sales will restart. We'll then have a full contribution coming in Q4 while additional capacity continues to ramp. Growth should continue month over month once we get product back online this quarter.
Okay, awesome. And then you guys had flagged that Georgia patients are already up 38% year-to-date, and that's largely before the July 1 expansion into flower and some other forms. So can you describe what you're seeing in patient enrollment and purchasing behavior since July 1st, and how quickly do you think that program can scale from the current 45,000 patients?
Since July 1st, there have been 8,253 patients added, which is a 24% increase since that date. Year to date, about 12,400 patients were added, representing the 38% increase. You can see the rapid velocity increase since July 1st. I expect that velocity to continue. As we inject the program with consistent quality flower that is available regularly and meets our brand standards, we expect potential upticks in patient growth. Even without flower on our shelves, we have seen increased sales in Georgia from vape products and other product changes. As our product portfolio has grown, we've been able to solidify patient relationships even with the absence of flower.
And the next question comes from Bill Kirk with ROTH Capital.
Understanding that these things can take a little time, can you give us some additional color on how the uplisting has changed your conversations with capital market participants, financial service providers, maybe vendors, credit card companies, or even possible consideration for index inclusion?
It's been an interesting period as we've conducted non-deal roadshows since July 10th. We've met investors brand new to cannabis and long-only funds who had not looked at the space previously, along with investors who invested in cannabis many years ago and are taking a fresh look. Long-only investors are very interested in the regulatory backdrop and the increasing stability in the sector, which allows for more predictability. They see strong margins, growth, positive cash flow, and a strong cash-to-debt ratio in our business. Those quality investors take time to do their homework, build models, and see a few quarters. This quarter has some complexity with deconsolidation, but Q3 will be our first standalone medical quarter and a strong setup to prove out our thesis for these investors. We have had active conversations with some of the bulge bracket firms; compliance and legal teams are working through legacy prohibitions in their policies. It will take time, but progress has started and I am confident we'll see additional institutional investors in the next 12 months. Regarding index inclusion, moving our domicile to the U.S. is a step toward meeting index criteria. We meet a number of other criteria already and are waiting for the reference dates for inclusion. On the vendor side, we've had renewed conversations with providers and active discussions with credit card companies. We are working diligently and expect updated FinCEN guidance to be an important unlock for many vendors. Being listed and able to show a medical portfolio with DEA-registered Schedule III businesses allows for conversations that were previously unavailable. There's a lot in process behind the scenes.
Thank you for that, Kim. And you mentioned earlier in the prepared remarks that you were seeing patient growth accelerating in key states like Florida and Pennsylvania. Do you think that has to do with the Supreme Court ruling for gun owners? Or do you think the increase in patient count could be proactive people preparing for intoxicating hemp going away?
It's hard to tease out precisely, but it's probably a mixture of factors. Rescheduling and cannabis being in the news helps. In Florida, we've launched a ground game initiative this year focused on increasing patient count in key markets. Those events are a large driver of growth in the state. We track these activities; we have QR codes at events that drive people to our dispensaries and then follow up with paid media. It's a multi-layered strategy and it's working. In Florida in July, we added just under 1,000 patients per week compared to about 326 patients per week in Q1 when we kicked off these events. We're focused on educating people about regulatory changes and ensuring they know about rescheduling and other issues. Florida, Pennsylvania, and Georgia are all seeing positive growth trends.
The next question is from Frederico Gomes with ATB Capital Markets.
First question on capital allocation. In terms of your CapEx guidance, you increased that by about $10 million. Any specific market or project that's driving that $10 million increase? And then secondly, obviously you talked about the opportunities in Georgia, Texas, et cetera, but curious how you're thinking about M&A. I guess at this point you would be limited to medical cannabis markets. So are there good medical-only opportunities out there for you?
I'll take the first part of the question relative to CapEx. We always invest into strategic opportunities and one of those strategic opportunities is obviously Georgia. This being said, there are multiple opportunities in Florida as well. We have our relocation budget being fully executed, and new stores are being fully executed. All this leads to an elevated CapEx guidance. The opportunity in Georgia is significant and we are going to invest into Georgia. As the opportunity arises, we will double down in Texas as appropriate.
On M&A, we are actively inquisitive. We think the market may be ripening for opportunities that make sense. As broader rescheduling occurs and the ability to uplist mixed-use businesses begins to happen, we expect separation and renewed interest from private operators and smaller or distressed public operators who may not meet NYSE requirements. We are hearing and having conversations now and want to be poised to take advantage of those opportunities. Given our strong cash balance and NYSE listing, we are well positioned to execute on M&A if it fits our strategic criteria and price discipline.
Thank you. Appreciate that. I want to ask a follow-up on Georgia. I don't know if you guys have or can have any estimate in terms of the dollar side of the market that we talked about patients. But is there any estimate about the size of the market on a dollar basis and where do you think it could be a year from now with the recent expansion? And then secondly, I know there are 6 licenses there. Where is it that you sit in terms of market share right now for that market?
We don't have comprehensive state-level dollar data yet for Georgia because the commission hasn't released it, and we're hopeful they will begin to provide more public data. So we rely on internal estimates based on observed demand. There are 17 dispensaries in the state and we operate 6 of those 17. We're on track to open another before the end of this year, and then another very early in 2027. We'll have to see how other license holders bring stores online. We expect to continue leading the market as we execute on cultivation expansion and our relationships in the independent pharmacy channel.
Thank you very much. And this does conclude our question and answer session. I would now like to turn the conference back to Christine Hersey for any closing remarks.
Thanks, everyone, for your time today. We look forward to sharing additional updates during our next earnings call. Thanks again, and have a great day.
The conference is now concluded. Thank you for attending today's presentation and you may now disconnect your lines.