US cannabis companies have spent years paying tax rates no normal retailer would accept. Federal rescheduling changed that for one half of the industry and left the other half where it was. Third quarter results reported between Nov. 3 and Nov. 6 show the gap in hard numbers.
What rescheduling actually changed
The Department of Justice's final order moved state-licensed medical cannabis to Schedule III under the Controlled Substances Act, while adult-use product stayed on Schedule I. Schedule I businesses fall under tax code Section 280E, which blocks them from deducting ordinary business costs.
The Drug Enforcement Administration has registered more than 900 medical dispensaries across Alabama, Florida, Mississippi, South Dakota, Texas, Virginia, and West Virginia. It's refusing applicants in states that run a single combined license, including a Minneapolis dispensary served with an order to show cause.
Treasury and the Internal Revenue Service added 280E guidance to their 2026 to 2027 Priority Guidance Plan with no deadline attached. A DEA administrative law judge rejected rescheduling opponents' request to reopen the hearing, and the proceeding remains stayed through a reply-brief period ending Nov. 5.
The same week, voters in Massachusetts and Idaho rejected measures that would have rolled back or restricted legalization, with about 76% opposing the Massachusetts repeal effort and about 66% rejecting Idaho's constitutional amendment.
Trulieve reported revenue of $230M with a 64% gross margin, adjusted EBITDA of $89M at a 39% margin, and positive net income of $1M. Retail accounted for 95% of sales, and the company finished the quarter with $327M in cash while generating $74M of operating cash flow and $45M of free cash flow. Chief executive Kim Rivers credited the federal shift: rescheduling unlocked major milestones including DEA registration, removal of 280E tax, and uplisting to the NYSE.
Medical heavy operators led third quarter revenue
Net revenue, quarter ended Sept. 30, 2026, $M
Bar chart. Revenue ($M). Trulieve: Revenue ($M) $230. Curaleaf: Revenue ($M) $353. Green Thumb: Revenue ($M) $324. Cresco Labs: Revenue ($M) $173.
Source: Source: Company earnings releases
Curaleaf posted record revenue of $353M, up 10.9% from a year earlier, with adjusted EBITDA of $78M. Domestic revenue grew 8% in the same stretch, while international revenue climbed 28% to $59M, and the company began receiving DEA registrations for its medical dispensaries after the quarter closed.
Green Thumb grew revenue 11.3% to $324.4M and reported normalized EBITDA of $89.4M. Store-level sales climbed 3% from a year earlier, the company's first increase on that measure since the third quarter of 2024.
The clearest tax evidence sits in Green Thumb's income statement. Income tax expense fell to $28.1M from $49.1M a year earlier, a drop the company tied directly to the reclassification of medical cannabis.
Adult-use operators still absorbing the cost
Cresco Labs reported revenue of $173M, up 5% year over year, with adjusted EBITDA of $35M at a 20.2% margin. Adjusted gross margin came in at 46.8%. Operating cash flow reached $26M and free cash flow was $21M.
The quarter still ended in a net loss of $15M. Income tax expense of $9.7M landed on a pretax loss of $4.8M.
Adjusted EBITDA clusters near the high end for the medical tier
Adjusted EBITDA, quarter ended Sept. 30, 2026, $M. Green Thumb figure is normalized EBITDA.
Line chart. Adjusted EBITDA ($M). Trulieve: Adjusted EBITDA ($M) $89. Curaleaf: Adjusted EBITDA ($M) $78. Green Thumb: Adjusted EBITDA ($M) $89.4. Cresco Labs: Adjusted EBITDA ($M) $35.
Source: Company earnings releases
Management isn't building around a reform date. Cresco shareholders approved three resolutions with over 94% support to simplify the corporate structure, and chief executive Charlie Bachtell said the business stands on its own.
Reading the split as an investor
The advantage here is mechanical rather than operational. Only the operators holding separately licensed medical dispensaries are collecting the registration and tax benefits, and that divide shows up in the cash the medical names are now printing.
Mixed operators sit in between. Green Thumb's chief executive Ben Kovler pointed to pending action on scheduling and taxation alongside new DEA compliance requirements, and the company ended the quarter with $316M in cash and $177M of senior debt.
DEA has said registrations will keep rolling out in phases, with manufacturer and distributor applications reviewed next. Businesses trading with partners that lack federal registration risk denial or revocation, and compliant supply chains are required by Nov. 29.
The rescheduling trade has a history of its own, and the retail expansion of cannabis has its own story.
