Cannabis Q2 Earnings: The First Post-280E Quarter

Cannabis Q2 Earnings: The First Post-280E Quarter

Green Thumb Industries paid $12.5 million in income tax in the second quarter. A year earlier it paid $21.6 million. The company attributes the difference to the Justice Department's final order moving state-legal medical cannabis to Schedule III, which ended Section 280E for parts of its business effective April 28.

That is the whole story of Q2 in one line item. Five large operators reported between August 4 and August 7, and the operating businesses look roughly like they did last year. The tax line does not.

The scoreboard

Sources: Curaleaf, Green Thumb, Trulieve, Verano, Cresco.

Curaleaf's 10% growth is the only real top-line move in the group. Verano added $10 million sequentially. Cresco was roughly flat and announced a CFO transition alongside the release. Nobody in this cohort is growing their way out of anything right now.

Why the profit lines moved anyway

280E disallowed ordinary business deductions for anyone trafficking a Schedule I or II substance, which is why cannabis companies posted operating profits and net losses in the same quarter for a decade. Schedule III removes that treatment for the medical side of the business.

The effect is uneven and worth being precise about. It applies to state-legal medical operations, not to every dollar an MSO books. Verano's own read was that 280E structurally falls away for roughly 60% of its retail revenue. One analysis put the annual savings across twelve MSOs at about $700 million if the deduction disallowance goes away entirely.

Trulieve is the reminder that tax relief does not fix a balance sheet. It beat on EPS at $0.11 and still posted a $406 million net loss, driven by a $403 million non-cash charge from deconsolidating its Harvest mixed-use operations on June 3. It closed the quarter with $325 million in cash and 207 dispensaries.

What vendors should take from the quarter

Budget is returning, but not evenly. An operator keeping an extra $9 million a quarter has money for deferred capex: POS replacements, security upgrades, store remodels, packaging changes. The operators with the largest medical mix benefit most, which means Florida-heavy and medical-heavy chains have more room than adult-use-only players.

Cash position matters more than revenue. Trulieve's $325 million and Curaleaf's margin expansion buy different conversations than Cresco's flat quarter. Revenue tells you the size of an account. Cash and margin tell you whether the account can say yes this year.

Executive turnover is a timing signal. A CFO transition usually means procurement decisions slow down for a quarter and then get revisited from scratch. That is bad news for a renewal and good news for a competitive displacement.

The next quarter is the clean read. Q2 was a partial quarter for the tax change. Q3 is the first full one, and it will show whether the savings turn into spending or go straight to debt service. Given what most of these balance sheets look like, debt service is the safer bet.

FAQ

Did Schedule III eliminate 280E for cannabis companies? Only for state-legal medical operations. Adult-use revenue is still exposed, so the benefit varies by an operator's mix.

Which MSO reported the highest Q2 2026 revenue? Curaleaf, at $340.1 million, up 10% year over year.

Why did Trulieve report a large loss despite beating estimates? A $403 million non-cash charge tied to the June 3 deconsolidation of its Harvest mixed-use operations.

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Earnings tell you which chains can spend. License records tell you which stores they actually own. See verified, owner-level dispensary contacts across six states. Free preview here.