💸 The Tape

TerrAscend doesn't generate the loudest headlines in U.S. cannabis. But quarter after quarter, it generates something more valuable: cash flow.

The North American cannabis operator reported Q1 2026 results that extended one of the most consistent financial track records in the industry — 15 consecutive quarters of positive operating cash flow and 11 consecutive quarters of positive free cash flow. In a sector where profitability claims often come with asterisks, TerrAscend's consistency stands on its own.

The Numbers

Net revenue came in at $65.5 million, up 1.9% year-over-year from $64.3 million in Q1 2025 and essentially flat sequentially against Q4 2025's $66.1 million. It's not explosive top-line growth, but TerrAscend isn't chasing volume at the expense of margins — it's optimizing what it has.

Gross profit margin was 52.8%, improving sequentially from 52.1% in Q4 and reflecting continued strength across the company's core markets of Maryland, Pennsylvania, and New Jersey. A cannabis operator consistently holding margins above 50% is operating at a level of efficiency that most peers can't sustain.

Adjusted EBITDA from continuing operations reached $17.4 million, or 26.5% of revenue — up from $16.7 million and 25.2% in Q4 2025. Year-over-year, the adjusted EBITDA margin dipped from 28.2%, but the sequential improvement signals that the business is tightening operations and moving back in the right direction.

G&A expenses declined sequentially to $21.5 million from $22.8 million in Q4, dropping to 32.8% of revenue from 34.4% — evidence of the "disciplined cost management" that management has emphasized across recent quarters.

GAAP net loss from continuing operations was $6.8 million, an improvement from the $7.7 million loss in Q1 2025, though wider than Q4's near-breakeven $0.5 million loss. The gap between GAAP loss and adjusted EBITDA profitability reflects the non-cash charges and below-the-line items that continue to weigh on reported earnings even as the operating business generates real cash.

Cash Flow: The Defining Metric

The cash flow picture is where TerrAscend's story crystallizes. Net cash from continuing operations was $8.7 million, slightly ahead of Q4's $8.3 million. Free cash flow was $7.8 million, up from $6.6 million last quarter, with capital expenditures held to just $0.9 million — a minimal figure that reflects a company in optimization mode rather than heavy buildout phase.

On a trailing twelve-month basis, TerrAscend's operating cash flow yield was 13.3% and its free cash flow yield was 10.3% — metrics calculated against the company's market capitalization that underscore how much cash the business generates relative to its current valuation. Those are yields that would be attractive in any industry, let alone one still navigating the structural challenges of cannabis.

The company ended the quarter with $39.1 million in cash — a modest balance by large MSO standards, but sufficient for a business generating consistent positive free cash flow and maintaining disciplined capital allocation.

Market Position: Winning Where It Matters

TerrAscend's operational strength shows up most clearly in its retail performance across the Northeast corridor.

In New Jersey, all three Apothecarium stores ranked within the top 25 statewide and improved in rank quarter-over-quarter. The company held a leading market share position supported by new product launches and high-quality branded offerings.

In Maryland, two of four Apothecarium locations — Salisbury and Cumberland — ranked among the top 10 in the state. Market share grew during the quarter, driven by strong performance from core brands Kind Tree and Legend.

In Pennsylvania, five of six Apothecarium stores ranked among the top 15 statewide, and both Kind Tree and Legend delivered double-digit growth across key categories, contributing to continued market share gains. The company also completed first harvests from additional cultivation rooms in Pennsylvania, expanding production capacity ahead of potential adult-use legalization — a development that, if and when it materializes, would dramatically expand TerrAscend's addressable market in one of its strongest states.

The company also launched the Tyson 2.0 brand into Pennsylvania and Maryland through an exclusive licensing agreement, adding a recognizable consumer brand to its retail and wholesale portfolio.

The Rescheduling Catalyst

Executive Chairman Jason Wild was direct about what Schedule III rescheduling means for TerrAscend's trajectory. The elimination of the 280E tax burden on medical cannabis operations "is a historic step forward" that Wild expects will "enhance profitability, strengthen our balance sheet, and lower our cost of capital over time."

But Wild went further, flagging what could be an even more transformative development: "We believe the anticipated rescheduling of adult-use cannabis in the coming months will further expand access to institutional capital and provide TerrAscend with an opportunity to uplist to the NASDAQ or NYSE."

That's a significant statement. Uplisting to a major U.S. exchange would expose TerrAscend to a dramatically larger pool of institutional investors, many of whom are currently restricted from purchasing securities listed on the Canadian Securities Exchange or OTC markets. Combined with 280E relief and improved access to traditional banking and lending, an uplist could fundamentally re-rate the stock.

The company also appointed Eric Jackson as Chief Financial Officer in April, bringing over two decades of financial leadership experience across large-scale retail and consumer businesses — the kind of hire you make when you're preparing for a more complex, institutionally-oriented operating environment.

The Bottom Line

TerrAscend's Q1 2026 won't make anyone's jaw drop with a single headline number. There's no 20% revenue surge or billion-dollar market entry. What there is, instead, is something more valuable in this industry: relentless consistency.

Fifteen quarters of positive operating cash flow. Eleven quarters of positive free cash flow. Gross margins above 50%. Adjusted EBITDA margins above 26%. Top-ranked dispensaries across three competitive Northeast markets. And now, a federal rescheduling tailwind that could eliminate 280E costs, unlock institutional capital, and open the door to a major exchange listing.

TerrAscend has been quietly building one of the most financially disciplined operations in U.S. cannabis. The question is whether the market will finally start paying attention — because the numbers have been there all along.

📈 Dog Walkers

$NLCP ( 0.0% ) Slaps Q1

NewLake Capital Partners occupies a unique position in the cannabis ecosystem — it doesn't grow, process, or sell cannabis. It owns the buildings where other companies do. And in Q1 2026, the cannabis REIT continued to deliver exactly what its investors expect: rent checks and dividends.

The company reported total revenue of $12.3 million for the quarter, down 6.8% from $13.2 million in Q1 2025. The decline was driven by vacancies at three cultivation facilities — in Pottsville, PA; Sparks, NV; and Fitchburg, MA — following tenant departures in 2025. Those vacancies reduced rental income and added carrying costs that flowed through to the bottom line. AFFO (adjusted funds from operations, the key REIT profitability metric) was $10.1 million, or $0.48 per share, down 5.9% year-over-year.

The headline that matters most for income investors: NewLake declared a $0.43 per share quarterly dividend, equivalent to an annualized $1.72 per share, representing a 90% AFFO payout ratio. The company also collected 100% of contractual rent during the period — a detail that carries extra weight given the financial stress some cannabis tenants are experiencing.

Speaking of stress: The Cannabist Company, which operates at four NewLake properties across Illinois and Massachusetts, announced restructuring proceedings under Canada's CCAA during the quarter, with plans to seek Chapter 15 recognition in the U.S. Despite the restructuring, Cannabist remained current on all lease obligations to NewLake, and the company holds roughly $482,000 in security deposits across those four properties. It's a situation worth monitoring, but not one that's impacted cash collection — yet.

On the positive side, NewLake executed lease modifications that added stability to its portfolio. A San Diego dispensary lease was extended through 2034 following a change of control to Wellgreens. And the company added Holistic Industries and Canopy USA as additional guarantors on Pennsylvania and Massachusetts leases, respectively — moves that strengthen tenant credit quality without requiring NewLake to deploy additional capital.

The balance sheet remains conservatively managed. Total liquidity stood at $107.2 million, debt-to-gross-assets was just 1.6%, and the debt service coverage ratio was approximately 72x — fortress-level metrics by any standard. No debt matures until May 2027.

CEO Anthony Coniglio called medical cannabis rescheduling "a pivotal moment" that has the potential to "strengthen the operating environment for our tenants" — which, for a landlord, is the most important outcome of all.

$TCNNF ( ▼ 4.9% ) Is Best In Breed

Trulieve just reminded everyone why it remains one of the most formidable operator in U.S. cannabis — and with Schedule III now in effect, the company's financial profile is about to get even more compelling.

The Florida-based cannabis giant reported Q1 2026 revenue of $287 million, with 92% coming from retail sales — a concentration that reflects Trulieve's dominance as a vertically integrated retail machine rather than a wholesale-dependent operator. Revenue was down 4% year-over-year and 2% sequentially, reflecting ongoing price compression and competitive dynamics, but the profitability metrics tell a much stronger story.

Gross margin held at 59%, generating $170 million in gross profit. Adjusted EBITDA was $100 million, or 35% of revenue — a margin that remains among the highest in the industry. Operating expenses declined 10% year-over-year to $134 million, demonstrating meaningful cost discipline even as the top line faced pressure.

The cash generation was equally impressive. Operating cash flow was $56 million, with free cash flow of $42 million — numbers that funded continued expansion while leaving the company with $353 million in cash at quarter end. Trulieve also closed a $60 million private placement of senior secured notes due 2030, further extending its debt maturity profile.

On the bottom line, Trulieve posted positive GAAP net income of $2 million — a notable swing from the $33 million loss in Q1 2025 and the $43 million loss in Q4 2025. Adjusted net income was $20 million, or $0.10 per diluted share, excluding non-recurring charges and impairments.

The operational footprint continues to expand. Trulieve opened three dispensaries during Q1 and four more subsequently, bringing total retail locations to 240 nationwide with over four million square feet of cultivation and processing capacity. The company's rewards program also crossed one million members — a consumer loyalty asset with significant long-term value.

The rescheduling catalyst looms largest. CEO Kim Rivers praised the Trump administration's action and noted that Trulieve has filed DEA registration applications for 206 retail locations serving medical patients — the largest single-company filing disclosed to date. With 3.5 million square feet of medical production capacity and the industry's deepest retail network, no operator stands to benefit more directly from 280E elimination on medical operations.

At $100 million in quarterly adjusted EBITDA and $42 million in free cash flow, Trulieve is already operating like a blue-chip consumer company. Remove the 280E tax burden, and the numbers get substantially better.

$CRDL ( ▼ 1.52% ) Boosts Street Cred

Cardiol Therapeutics just earned a significant stamp of academic credibility for its cannabinoid-based heart disease therapy.

The company announced that results from its Phase II study evaluating CardiolRx™ in patients with recurrent pericarditis have been accepted for publication in the Journal of the American Heart Association (JAHA) — one of the most respected peer-reviewed cardiovascular journals in medicine.

The published findings demonstrate that CardiolRx™ treatment was associated with rapid and sustained reductions in pericarditis pain and inflammation in patients with high baseline disease burden, along with a substantial reduction in pericarditis episodes per year and a favorable safety and tolerability profile. For a cannabinoid-derived therapy to earn publication in a top-tier cardiology journal, the data needed to be compelling — and apparently it was.

CEO David Elsley called the publication "important independent validation" of the clinical findings, emphasizing CardiolRx™'s positioning as a differentiated, non-immunosuppressive therapy — a meaningful distinction in a treatment landscape currently dominated by immunosuppressive options that carry their own significant side-effect burdens.

The Phase II results directly informed the design of MAVERIC, the company's pivotal Phase III trial — a randomized, double-blind, placebo-controlled study evaluating CardiolRx™ for prevention of recurrent pericarditis. That trial recently surpassed 75% enrollment, putting it on track for completion and potential regulatory submission.

Recurrent pericarditis affects a meaningful patient population with limited treatment options, and a cannabinoid-derived therapy with published Phase II data in JAHA represents exactly the kind of science-first approach that gives the broader cannabis-as-medicine narrative genuine credibility.

🗞️ The News

📺 Trade To Black

Highlights:

• Overview: Dales Report asks if cannabis is entering its most important moment yet.

• Core Topic: New livestream examines federal policy shifts, rescheduling progress, and historic turning points for the industry.

• Key Developments: Covers recent White House cannabis meetings, congressional actions, and changing enforcement stance.

• Industry Implications: Analyzes impacts on operators, capital access, margins, and sector growth potential.