Curaleaf Aktie

Good morning. My name is Camilo Lyon, Chief Investment Officer of Curaleaf Holdings, Inc. And on behalf of our management and directors, I would like to welcome you to the Annual General and Special Meeting of Shareholders of Curaleaf Holdings, Inc. I will be acting as Chair of the meeting today. On behalf of the Board, I wish to express thanks to those shareholders who have submitted their proxies in advance of today's meeting.

This year, again, the meeting is being held virtually via live webcast only. The company views the use of technology-enhanced shareholder communications as a method to facilitate individual investor participation, making the meeting more accessible and engaging for all involved by permitting a broader base of shareholders to participate in the meeting, which is consistent with the goals of the regulators, stakeholders and others invested in the corporate governance process.

As this meeting is being held virtually via live webcast, we think it is necessary to set out a few rules for the orderly conduct of the meeting. One, registered shareholders and duly appointed proxy holders who wish to communicate with the members of the management team and the Board or who wish to present or ask a question in respect of a motion may do so using instant messaging on the Lumi virtual interface.

Two, as described in our circular, duly appointed proxy holders were required to register with our transfer agent and obtain a control number prior to this meeting in order to participate, vote and ask questions during the meeting.

Three, when asking a question, please indicate which entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder.

Four, questions asked during the meeting will only be addressed at the end of the meeting unless they relate to procedural matters or are directly related to the motions presented before the meeting.

Five, questions or comments containing inappropriate language or that are otherwise disruptive to the orderly conduct of the meeting for all shareholders will not be answered.

Six, questions which were already answered or that are redundant or repetitive will not be answered.

Seven, for the purposes of the meeting today, voting on all matters will be conducted by a single electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on all business items at the same time. Curaleaf has determined that voting will be open at the beginning of the formal part of the meeting and will remain open throughout the same. This will allow you to choose to vote on each resolution as soon as voting opens or wait until the conclusion of the discussion on each resolution prior to casting your votes.

Eight, only registered shareholders and duly appointed proxy holders of the company are permitted to participate in the voting.

I would also like to advise everyone that certain of the comments you may hear today may be forward-looking statements that involve assumptions, risks and uncertainties that could cause actual results to differ materially from future results expressed or implied by such forward-looking statements. We refer you to our disclaimer regarding forward-looking statements contained in our annual information form for the year ended December 31, 2025, which was filed on SEDAR+ on February 26, 2026.

Please note that only registered holders of subordinate voting shares and multiple voting shares of record as of May 5, 2026, or their duly appointed proxy holders are permitted to participate, ask questions and vote at this meeting. The formal part of the meeting should last around 45 minutes. We will end the meeting with a short moderated questions-and-answer period to answer a few questions from stakeholders.

It should be noted that based on the proxies already received by the company prior to the meeting, the required level of shareholders' approval to adopt each of the resolutions to be presented to the shareholders at today's meeting has already been obtained. To expedite the formal part of the meeting, I will move and second all motions as permitted under the company's articles.

We will now proceed with the formal portion of today's meeting. Please note that voting is now open and will remain open throughout the formal portion of the meeting. I call to order the Annual General and Special Meeting of the company's shareholders. With the consent of the meeting, I appoint Peter Clateman, Chief Legal Officer, to act as Secretary of the meeting.

In addition and with the consent of the meeting, I appoint Odyssey Trust Company through Stacey Diocampo as scrutineer. The scrutineer will report the number of subordinate voting shares and multiple voting shares represented in person and by proxy at this meeting, tabulate the votes and report the results. The scrutineer has provided me with a copy of the report, which indicates that at least 2 shareholders of the company are present or represented by proxy. This meets the quorum requirements in the company's articles. And as such, we are permitted to proceed with the meeting. A copy of the final report on attendance will be filed with the records of the meeting.

I have here the certificate of our transfer agent, Odyssey Trust Company, indicating that proper notice of the meeting has been given in accordance with applicable corporate and securities laws and the articles of the company. Accordingly, unless there is an objection, I will dispense with the reading of the notice of the meeting. I direct that a copy of the notice with proof of mailing be kept by the Secretary with the records of the meeting.

The purpose of today's meeting are set out in detail in the management information circular dated May 7, 2026, as supplement to the circular dated June 15, 2026. Copies of the circular were made available to shareholders on or around May 14, 2026, together with the notice of the meeting in the form of proxy. Copies of the circular and other meeting materials are available under the company's profile on the SEDAR+ website.

In addition to the customary annual meeting matters, there are also items of special business for your consideration today. You will be asked to consider and, if thought advisable, to pass with or without variation. One, an ordinary resolution to approve the continued ability of the company to issue awards under the company's 2018 Stock and Incentive Plan as amended from time to time, including the approval of unallocated awards thereunder. Two, a special resolution to approve an amendment to the articles of the company having the effect of amending the share capital of the company. Three, an ordinary resolution to approve the implementation of our proposed exchange program, whereby up to 10,070,478 of the company's currently outstanding stock options having an exercise price or subject to performance vesting conditions tied to a trading price per share equal to or exceeding $5 will be exchanged for the restricted share units of the company. And four, a special resolution to approve a plan of arrangement under Section 288 of the Business Corporations Act, British Columbia, involving, among other things, the continuation of the company out of British Columbia, Canada, to the state of Delaware in the United States.

For the purposes of the meeting today, voting on all matters will be conducted by a single electronic ballot. As noted earlier, voting for all business items will remain open throughout the formal portion of the meeting until voting is closed near the end of the formal portion. After you have registered your votes, the scrutineer will compile the votes in respect of each business item.

You should know that proxies lodged before this meeting allow management of the company to cast a significant number of votes. Based on the number of shares represented at this meeting, the members of management here with me today will be able to determine the outcome of all motions that will go to a vote today. I may, therefore, declare that motions, which will go to a vote today as carried even though all of the votes may not have been counted or a final report may not yet be available. I shall do this to keep up the pace of the meeting.

Under the company's articles, the Chair of the meeting can propose motions and no motion proposed at a meeting of shareholders is required to be seconded. In order to expedite the meeting, I will propose certain motions and will not call for a seconder, but this is in no way intended to inhibit any questions or discussion with respect to the motions. I now declare that this meeting was properly called and duly constituted for the transaction of business.

The first item of business is the presentation of the company's consolidated financial statements for the fiscal year ended December 31, 2025, as well as the auditor's report thereon. These financial statements and the auditor's report were made available on SEDAR+, on the SEDAR+ website under the company's profile on February 26, 2026. The financial statements were also made available on a dedicated site hosted by our transfer agent, Odyssey Trust Company, as required under the notice and access regime.

Unless there is an objection, I will dispense with the reading of the auditor's report. We will entertain any questions with respect to the financial statements in the general question period.

We now move to the next item on today's agenda. The articles of the company require a minimum of 3 directors of the company. There are currently 7 directors of the company. At this meeting, 7 directors are proposed for election. Out of the 7 direct nominees, 6 are currently serving on the Board and 5 were elected by the shareholders at the Annual General Meeting of Shareholders held on June 13, 2025. Mr. Torsten Greif was just recently appointed to the Board, and the company is proposing each of Mr. Greif and Ms. Faith Charles for election as directors of the company for the first time.

Mr. Mitchell Kahn is not being nominated for reelection at the meeting. On behalf of the Board of Directors of the company, I would like to extend our most heartfelt gratitude to him for his service and dedication to the company over the last several years.

I now move to set the number of directors on the Board of Directors of the company at 10. In accordance with the articles of the company, the Board will have the discretion to select suitable candidates and appoint them as directors of the company to fill in the 3 vacancies that will remain following the meeting. As such, directors will hold office until the next Annual General Meeting of the Shareholders or until they are otherwise replaced.

The motion is now on the floor. Is there any discussion on the motion? As mentioned at the beginning of this meeting, voting today is conducted by a single electronic ballot and voting is now open on all matters to be presented at the meeting. Unless there are any questions or discussions, we will continue with the next items of business.

The next matter to be acted upon is the election of 7 individuals to the Board of Directors. The term of office of the directors is from today until the next Annual General Meeting of Shareholders or until such time as their successors have been duly elected or appointed. The circular contains information on each of the 7 nominees recommended for election as directors.

As outlined in the circular, the following individuals have been nominated to hold office until the close of the next Annual General Meeting of the Shareholders or until their successors are duly elected or appointed. They are: Boris Jordan, currently the Chair of the Board and the Chief Executive Officer of the company; Joseph Lusardi, currently the Executive Vice Chair of the Board; Michelle Bodner; Faith Charles; Torsten Greif; Karl Johansson; and Shasheen Shah. Each of these persons nominated has confirmed that he or she is prepared to serve as director. Each of them qualifies to serve as a director under the provisions of the British Columbia Business Corporations Act.

Given that no nominations were received in accordance with the provisions contained in the company's articles, I declare the nominations to be closed. I move to nominate the directors as set forth in the circular.

The motion is now on the floor. Proxies have been solicited for each of the 7 proposed qualified persons listed in the circular. The form of proxy for voting on the election of directors sets out each proposed nominee separately and allows shareholders to vote for each director individually. Is there any discussion on the motion?

I'll now move to the next item of business. The next item of business is the appointment of the auditors of the company for the ensuing year and to authorize the directors of the company to fix the remuneration of the auditors. BDO USA, P.C. have been first appointed as auditors of the company effective as of May 6, 2026, following the resignation of PKF O'Connor Davies, LLP, the previous auditors of the company having served as auditors from August 9, 2022, until May 6, 2026. The Audit Committee and the Board have approved, subject to shareholder approval, the appointment of BDO as auditors of the company. I move that BDO USA, P.C. be appointed auditors of the company until the next Annual General Meeting of Shareholders and that the directors be authorized to fix their remuneration. Is there any discussion on the motion?

I'll now move on to the next item of business. The next item of business is a resolution to approve the continued ability of the company to issue awards under the company's 2018 Stock and Incentive Plan as amended from time to time, including the approval of unallocated awards thereunder. Such resolution being referred to as the LTIP resolution.

As required by the rules of the Toronto Stock Exchange, all unallocated options, rights or other entitlements under a security-based compensation arrangement, which does not have a fixed maximum aggregate number of securities issuable must be approved by a majority of the company's security holders every 3 years. Given that the company's Stock and Incentive Plan is a rolling 10% or evergreen plan, the company is seeking shareholder approval of the company's rolling plan and of all unallocated awards issuable thereunder in accordance with the TSX Company Manual.

The full text of the LTIP resolution is set out and reproduced in Appendix B of the circular, and a summary of the LTIP resolution can be found on Page 37 and following of the circular. To be adopted, the LTIP resolution requires the affirmative vote of not less than the majority of the votes cast by shareholders present in person or represented by proxy and entitled to vote at the meeting. Unless there is an objection, I will dispense with the reading of the full text of the LTIP resolution, which can be found at Appendix B of the circular. I now move that the LTIP resolution be approved. Is there any discussion on the motion?

I will now move to the next item of business. The next item of business is a special resolution for the purpose of adopting an amendment to the articles of the company. The proposed amendment would amend the share capital of the company such that the automatic conversion feature of the dual-class share structure of the company pursuant to which the multiple voting shares would automatically convert into subordinate voting shares on a one-to-one basis on the date following the listing of the subordinate voting shares of the company on the NASDAQ Stock Market, New York Stock Exchange or another exchange or marketplace approved by the Board of Directors would be removed from the articles of the company.

The full text of the special shareholders resolution approving the proposed amendment and amending the articles of the company is set out and reproduced in the Appendix C of the circular, and a summary of the proposed amendment can be found on Page 39 and following of the circular.

Due to the requirements of the British Columbia Business Corporations Act, the articles of the company and relevant Canadian securities laws, the amendment resolution must be approved by at least 2/3 of the votes cast at the meeting by all holders of the subordinate voting shares and multiple voting shares present in person or represented by proxy voting together as a single class; at least 2/3 of the votes cast at the meeting by all holders of multiple voting shares present in person or represented by proxy voting as a class; at least 2/3 of the votes cast at the meeting by all holders of the subordinate voting shares present in person or represented by proxy voting as a class; and for the purpose of confirming the requisite minority approval under relevant Canadian securities laws has been obtained, a majority of the votes cast at the meeting by the holders of subordinate voting shares, excluding the votes attached to the subordinate voting shares beneficially owned or over which control or direction is exercised by Boris Jordan, Chairman and Chief Executive Officer of the company, or by related parties of Mr. Jordan and persons acting jointly or in concert with Mr. Jordan, including affiliates and associates, if any.

It should be noted that assuming the proposed amendment is adopted, the substance of the proposed amendment will be incorporated in the certificate of incorporation by which the company will be domiciled as a Delaware company pursuant to the plan of arrangement, which will be the last item of business at today's meeting.

Unless there is an objection, I will dispense with the reading of the full text of the special resolution approving the proposed amendment, which can be found at Appendix C of the circular. I now move that the proposed amendment be approved. Is there any discussion on the motion?

I'll now move to the next item of business. The next item of business is the resolution for the purpose of approving the implementation of a proposed exchange program, whereby up to 10,070,478 of the company's currently outstanding stock options having an exercise price or subject to performance vesting conditions tied to a trading price equal to or exceeding USD 5 would be exchanged for the restricted share units of the company. A summary and the full text of shareholders' resolution approving the option/RSU exchange is set out and reproduced on Page 47 and following of the circular.

Due to requirements under the applicable stock exchange rules and applicable securities legislation, the option/RSU exchange must be approved by: one, a simple majority of the votes cast by the holders of the subordinate voting shares and the holders of multiple voting shares voting together as a single class; and two, as it relates to the participation of the insiders of the company in the option/RSU exchange, a simple majority of the votes cast by the holders of subordinate voting shares and the holders of multiple voting shares voting together as a single class, excluding the votes attached to subordinate voting shares and multiple voting shares held or over which direction of control is exercised directly or indirectly by insiders of the company who are eligible holders being Boris Jordan, Chairman and Chief Executive Officer; Joseph Lusardi, Executive Vice Chairman; Ed Kremer, Chief Financial Officer; Peter Clateman, Chief Legal Officer; and Camilo Lyon, Chief Investment Officer.

Unless there is an objection, I will dispense with the reading of the full text of the option/RSU exchange resolution, which can be found on Page 47 and following of the circular. I now move that the option/RSU exchange be approved. Is there any discussion on the motion?

I will now move to the last item of business. The last item of business in the special resolution -- is a special resolution for the purpose of approving the plan of arrangement under Section 288 of the Business Corporations Act, British Columbia, involving, among other things, the continuation of the company out of British Columbia, Canada, to the state of Delaware in the United States and maintaining the same corporate name, Curaleaf Holdings, Inc. The continuance would have the effect of subjecting the company to the laws of the state of Delaware as if it had originally been incorporated in the state of Delaware and the company adopting new charter documents and bylaws, including the new authorized capital structure contemplated in such charter documents.

Upon completion of the continuance, among other things, each issued and outstanding subordinate voting share of the British Columbia-formed Curaleaf will be deemed to represent one share of subordinate voting common stock of the Delaware-continued Curaleaf. The same treatment will apply to each issued and outstanding multiple voting share and exchangeable share of the precontinuance Curaleaf, which will, for all purposes, be deemed to represent, respectively, one share of multiple voting common stock and one share of exchangeable common stock of the Delaware continued Curaleaf.

Furthermore, each outstanding option to purchase subordinate voting shares and each outstanding restricted share unit to receive subordinate voting shares will, for all purposes, be deemed to be adjusted pursuant to the terms of the Curaleaf 2018 Stock and Incentive Plan as amended to become, respectively, one outstanding option to purchase an equal number of Delaware subordinate voting shares and one restricted stock unit to receive an equal number of Delaware subordinate voting shares in each case on the same terms and conditions and set forth in the Curaleaf 2018 Stock and Incentive Plan and the applicable award agreement.

The plan of arrangement is in the form attached as Appendix E of the circular. The new charter documents being the certificate of domestication, the certificate of incorporation and the bylaws are in the forms attached as Schedules A, B and C, respectively, to the plan of arrangement.

Given the results of the voting on the proposed amendment, note that the certificate of incorporation included in the circular will be the version that reflects the substance of the proposed amendment. The full text of the special shareholders' resolution approving the plan of arrangement is set out and reproduced in Appendix D of the circular and a summary of the resolution and the plan of arrangement can be found on Page 50 and following of the circular.

The resolution must be approved by at least 2/3 of the votes cast by holders of subordinate voting shares and the holders of multiple voting shares voting as a single class present in person or by proxy at the meeting. Unless there is an objection, I will dispense with the reading of the full text of the special resolution approving the plan of arrangement, which can be found in Appendix D of the circular. I now move that the plan of arrangement be approved. Is there any discussion on the motion?

As previously mentioned, voting today is conducted by a single electronic ballot. Voting opened at the beginning of the formal part of the meeting for all business items. If you have not yet cast your vote in respect of each of today's business items for this meeting, please do so now.

Please register your vote by accessing the voting page when prompted and by pressing on the for or against buttons next to the resolutions: setting the number of directors at 10; two, approving the continued ability of the company to issue awards under the company's 2018 Stock and Incentive Plan as amended from time to time, including the approval of unallocated awards thereunder; three, approving the amendment to the share capital of the company; four approving the option/RSU exchange program; and five, approving the plan of arrangement. And by pressing on the for or abstain buttons next to the resolutions relating to the election of the 7 proposed directors and next to the resolution with respect to the appointment of BDO as auditors of the company and authorizing the Board of Directors to fix their remuneration.

Once the electronic balloting closes, the voting page will disappear and your votes will automatically be submitted. We will wait a few minutes for the completion of the electronic ballots and then move on with the remainder of the meeting. We will provide registered shareholders and duly appointed proxy holders approximately 1 minute to complete the electronic ballots. Once voting is completed, I would ask that the scrutineer compile the preliminary report on ballots regarding the preliminary results of voting on all business matters.

[Voting]

Now that voting is completed, we will take a short break of a minute or 2 so that the scrutineer can compile preliminary ballot results in respect of each business item. We will reconvene in a few moments with the scrutineer's preliminary ballot results.

[Break]

At this meeting, I am pleased to confirm the following. One, the number of directors of the company has been set at 10. Two, each of the 7 nominees have been elected as directors of the company to serve until the next Annual General Meeting of Shareholders or until their successors are elected or appointed. Three, the appointment of BDO USA, P.C. as the auditors of the company has been approved and the Board of Directors of the company has been authorized to fix their remuneration. Four, the resolution approving the company's Stock and Incentive Plan and the unallocated awards thereunder has been approved. Five, the proposed amendment to the articles of the company for the purpose of amending the articles of the company has been approved. Six, the resolution for the purpose of approving the option/RSU exchange has been approved. Seven, the special resolution for the purpose of approving the plan of arrangement, including the continuation of the company out of British Columbia, Canada, to the state of Delaware in the United States has been approved.

I direct that the results of the poll be included in the minutes of this meeting. We will announce the final results of the meeting in a press release in accordance with the policies of the TSX and file the press release on SEDAR+ following completion of the meeting.

If there is no further business to be brought before this meeting, I move that the formal portion of today's meeting be concluded, and I now declare the formal part of the meeting closed.

We will now open the floor for a question-and-answer period. I ask that all attendees who would like to ask a question use the instant messaging feature of the virtual platform to do so. We will answer as many questions as time permits. When asking your question, please state your name, the entity you represent, if any, and confirm you are a registered shareholder or a duly appointed proxy holder. Please limit your questions to topics relating to today's subject matter and keep your questions short and to the point.

We will now give attendees a brief moment to type in their questions. For each question we answer, we will summarize the question. We would like to remind you that the questions which were already answered or that are redundant or repetitive will not be answered.

There being no questions, we are now concluding the question-and-answer portion of this meeting. On behalf of management, our Board of Directors and our employees, I would like to take the opportunity to thank everyone for attending the meeting today. I would like to thank all of our shareholders for their commitment and continued support. We look forward to your attendance again next year. We encourage all shareholders to regularly consult with the investor presentations that we published at the Investor Relations section of our website at www.curaleaf.com.

Good afternoon, and welcome to the Curaleaf Holdings, Inc. First Quarter 2026 Conference Call. [Operator Instructions] Please also note, today's event is being recorded.

At this time, I would like to turn the floor over to Camilo Lyon, Chief Investment Officer. Sir, please go ahead.

Good afternoon, everyone, and welcome to Curaleaf Holdings First Quarter 2026 Conference Call. Today I'm joined by Chairman and Chief Executive Officer, Boris Jordan; President, Rahul Pinto; and Chief Financial Officer, Ed Kremer.

Before we begin, I'd like to remind everyone that the comments on today's call will include forward-looking statements within the meaning of Canadian and United States securities laws, which, by their nature, involve estimates, projections, plans, goals, forecasts, and assumptions, including the successful integration of acquisitions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements on certain material factors or assumptions that were applied in drawing a conclusion or making a forecast in such statements.

These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events, or otherwise, except as required by applicable law. Additional information about the material factors and assumptions forming the basis of the forward-looking statements and risk factors can be found in the company's filings and press releases on SEDAR and EDGAR.

During today's conference call, in order to provide greater transparency regarding Curaleaf's operating performance, we will refer to certain non-GAAP financial measures and non-GAAP financial ratios that involve adjustments to GAAP results. Such non-GAAP measures and ratios do not have a standardized meaning under U.S. GAAP. Any non-GAAP financial measures presented should not be considered to be an alternative to financial measures required by U.S. GAAP, should not be considered measures of Curaleaf's liquidity, and are unlikely to be comparable to non-GAAP financial measures provided by other companies.

Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable U.S. GAAP financial measure under the heading Reconciliation of non-GAAP Financial Measures in our earnings press release issued today and available on our Investor Relations website at ir.curaleaf.com.

With that, I'll turn the call over to Chairman and CEO, Boris Jordan. Boris?

Thank you, Camilo. Good afternoon, everyone, and thank you for joining us to discuss our first quarter results. 2026 is off to a strong start across macro, fundamental, and regulatory landscapes. And more importantly, we are seeing a clear shift in the trajectory of our business and the industry. The macro headwinds that constrained growth over the past 3 years are now beginning to turn into meaningful tailwinds. In the U.S., consumer spending remained healthy in the first quarter. However, we are closely monitoring current inflationary pressures. Stronger income tax refunds versus last year have supported spending power to the benefit of robust cannabis sales, reinforcing the resilience of underlying demand even in the face of higher gas prices.

At the same time, we believe the anticipated hemp ban is already benefiting the regulated market. Alcohol retailers have begun destocking hemp-derived products, and we expect that trend to accelerate as we approach the November 11 hemp ban implementation deadline, driving consumers back into the regulated channel, increasing traffic, and further strengthening the position of skilled operators like Curaleaf.

From a fundamental standpoint, our strategy is delivering. The investments we've made in the core pillars of our Built for Growth framework, customer centricity, brand building and operational excellence are translating directly into tangible P&L performance. First quarter revenue of $324 million grew 6% year-over-year, exceeding both our guidance and internal expectations. Our domestic and international segments grew 2% and 35%, respectively, underscoring the durability of our core business and the strength and scalability of our global platform. Without question, Curaleaf International is a key differentiator and an increasingly important driver of long-term value.

Gross margin was 49% and adjusted EBITDA was $63 million or 20% margin, including a 170 basis point drag from our international as we continue to invest in driving growth and market share gains abroad. We ended the quarter with $106 million in cash on the balance sheet. Net income from continuing operations was $70 million or $0.09 per share compared to a net loss of $50 million or $0.09 per share last year. We also continued to strengthen our balance sheet. We reduced our acquisition-related debt by $9 million and successfully refinanced our $475 million senior secured note with an oversubscribed $500 million 3-year facility backed by strong demand from both new and existing investors. This transaction is a clear signal of investor confidence in our strategy, execution, and credit profile.

Additionally, we completed the buyout of the remaining 45% minority interest in our German subsidiary, Four 20 Pharma, bringing our ownership of Curaleaf International to 100%. Based on a recent comparable public market transaction, the implied value of Curaleaf International is approximately $1 billion, highlighting the significant embedded value within our global platform that we believe is not yet fully reflected in our current valuation.

The U.S. cannabis industry has now entered what we believe is the most important regulatory inflection point in 55 years. Two weeks ago, under the direction of President Trump, Acting Attorney General Todd Blanche, formally rescheduled medical cannabis from Schedule I to Schedule III, while simultaneously restarting the broader rescheduling process with an ALJ hearing set to commence on the June 29 and conclude no later than July 15.

This dual-track approach is deliberate, designed to move with urgency while ensuring a durable and legally sound outcome. The practical and financial implications are highly transformative to the industry. First, federal funding for medical research will be allowed. Our U.K. team has been conducting research in concert with Imperial College in London on cannabis-derived solutions for neuropathic pain. We plan to share this research with the DEA and FDA while also leveraging our partnership with the University of Pennsylvania, whose cannabis research we also support under our special research license. Access to cannabis research should shed light on the medicinal properties of the plant and further remove the stigma that cannabis carries.

Second, the removal of 280 taxation on medical cannabis expected to be retroactive to at least January 1st, immediately unlocks meaningful balance sheet benefits. 60% of Curaleaf's business is medical and stands to get substantial 280E relief. When the adult-use process concludes, which we expect later this summer, these benefits should extend across the adult-use portion of our business as well. The remaining open question relates to the IRS look-back period for retroactive 280E relief, and we expect further clarity in due course.

Equally important, the DOJ's order opens an unexpected step that reforms medical cannabis beyond Schedule III. The order provides that we can get DEA licenses for our medical cannabis businesses, which would make our business fully legal under the CSA. In fact, earlier today, we filed applications to register with the DEA. Proceeds from the CSA cannabis cannot be deemed money laundering. The practical implications of this are yet to be seen, but we and the industry are racing to explore increased access to banking, financial services, and credit card use for our medical cannabis business.

Normalized banking relationships and, critically, the ability to accept major credit cards would remove friction at the point of sale, improve conversion, lower transaction costs, continuing the normalization of the consumer experience. It would also improve cash management and expand access to credit, representing another meaningful step change in profitability and scalability for Curaleaf. Our adult-use business may also benefit from increased access to financial services when the expected adult-use rescheduling happens later this year. Furthermore, after adult-use rescheduling, the probability of uplifting to a major exchange meaningfully increases once guidance from treasury is provided later this year.

With the glass ceiling now broken, we are seeing increased momentum at the state level as non-cannabis states, including North Carolina, South Carolina, Tennessee, and Indiana are actively exploring medical programs. Importantly, the upside here goes well beyond tax relief and banking access. The DOJ framework introduces a catalyst from which Curaleaf is particularly well-positioned to gain. The issuance of DEA licenses to state legal cannabis operators makes them compliant providers of cannabis under the CSA and the international treaty. This opens the door for us to participate in import and export transactions. A real import-export market will require permits from the DEA and many states have already indicated that they would support both exports and interstate commerce.

For Curaleaf, this represents a significant and highly strategic opportunity. We already have built one of the largest and most sophisticated cultivation manufacturing footprints in the United States. This established network of facilities positions us to supply our international operations with domestically grown products dramatically improving margins and strengthening control over our supply chain. Today, we produce approximately 20% of our product we sell internationally. That leaves a substantial opportunity to vertically integrate, expand margins, and unlock incremental profitability at scale while further leveraging our existing domestic infrastructure. Interestingly, in the U.S., the mix has flipped. We produce approximately 80% of our own products and by 20% third-party products. Put simply, we believe we're uniquely positioned not just to benefit from the regulatory shift, but to lead the next phase of industry growth.

Curaleaf International delivered a strong start to the year with revenue growing 35% year-over-year, ahead of our internal expectations. Performance was led by continued momentum in Germany and the U.K. with early signs of recovery in Poland. In Germany, after a soft January, reflecting accelerated pharmacy stocking late last year, sales rebuilt through the quarter and March was our strongest month, a positive setup heading into quarter 2. In the U.K., consistent with patient growth at Curaleaf Clinic more than offset competitive pricing dynamics and patient fees.

Margins were pressured this quarter as we worked through transitional dynamics in our international supply chain. Prior to the recent U.S. rescheduling developments, we had been evaluating meaningful CapEx to expand our international cultivation footprint. We are now reassessing that investment in light of a more compelling alternative, leveraging our domestic cultivation assets and award-winning U.S. genetics to supply international markets. We would not only avoid significant CapEx, but also unlock meaningful gross margin expansion as we scale.

Looking ahead, we remain optimistic that Spain, France, and Turkey will begin contributing in 2027 as those programs finalize their frameworks. And importantly, U.S. rescheduling could act as a catalyst for other countries to embrace medical cannabis. We're actively monitoring each market, and we'll share more as visibility increases.

With that, I'd like to hand the call over to our President, Rahul Pinto, to discuss our U.S. strategy and operations. Rahul has been with us for nearly a year, bringing his CPG experience from Pepsi and Albertsons to Curaleaf and has already made impact on the business. Rahul?

Thank you, Boris. Our domestic business grew 2% year-over-year. And more importantly, we are seeing clear proof points that our strategy is working. The 3 pillars of our Built for Growth framework, customer centricity, operational excellence and brand building are coming together to create a durable and scalable foundation for growth. We saw the clearest early success in Florida, where we implemented the strategy first. By improving flower quality and strain diversity, introducing new products, aligning assortment with demand and delivering a seamless customer experience, we drove 15% transaction growth year-over-year, more than offsetting price compression. We have now taken this playbook and are deploying it across other key markets, including Utah, Ohio, and Pennsylvania, with similarly encouraging early results. Ultimately, our entire network of states will benefit from these actions.

Let's discuss the pillars of our Build for Growth strategy, beginning with the first, customer centricity. Our R&D efforts have always started with a deep understanding of our consumer, and that focus continues to drive meaningful insights and innovation. Briq 2, which launched in March, is a clear example, addressing key consumer pain points like clogging while enhancing the overall experience through flavor protection technology and meter mode intelligence, providing a measurable draw each time.

Soon, the flavor series and legacy series of Briq 2 strains will be complemented by the live series consisting of live resin and rosin to round out the portfolio. Similarly, the launch of Dark Heart last month establishes a new benchmark in ultra-premium flower. With best-in-class genetics, limited drops, and disciplined distribution, the brand is driving strong full price sell-through and reestablishing Curaleaf as a leader in the premium segment.

Second is operational excellence, which speaks to delivering consistent improvements across our business as we've seen in our cultivation facilities and more recently, in our retail store experience. By matching retail assortments with customer demand and optimizing pricing, we are driving steady gains in key metrics such as traffic and units per transaction. These incremental improvements are compounding into meaningful financial performance.

Third is brand building, which is critical to long-term staying power as the market evolves. In Select, we've simplified the product architecture to clearly communicate its value proposition, and we're seeing positive consumer reception that will add to its market-leading position. We are also investing in trade marketing, elevated visual merchandising in partner doors with encouraging results as domestic wholesale grew 19% this quarter.

At the same time, we're expanding distribution with a disciplined focus on profitable growth. For example, last month's takeover of the travel agency in New York showcased our brands across both physical and digital channels, delivering outstanding results by significantly increasing traffic and AOV, benefiting both Curaleaf and the travel agency. As the industry scales, we believe leading brands will capture disproportionate share.

Today, according to Hoodie Analytics, the Curaleaf portfolio holds a top share position with Select maintaining the #1 position in vapes, and we see substantial opportunity to expand on that leadership. When these 3 strategic pillars come together, they create a powerful flywheel, driving repeatable revenue growth, margin expansion, and increasing returns over time.

I'll close by recognizing that these results and the opportunity ahead are a direct reflection of the execution, discipline, and commitment of our over 5,000 member team across the organization. As we look forward, we believe the 3-year down cycle the cannabis industry has navigated is now turning upward. The combination of improving fundamentals, accelerating regulatory momentum, and our scaled global platform positions us exceptionally well for what comes next. We thank President Trump for delivering on his commitments, turning promises into tangible results. Promises made, promises kept. Alongside acting AG Blanche, he achieved what others had started but weren't able to complete. As a result, patients, consumers, Curaleaf, and the burgeoning cannabis industry are meaningfully better today.

With that, I'll turn the call over to our CFO, Ed Kremer. Ed?

Thank you, Rahul. Total revenue for the first quarter was $324 million, a 3% sequential decline compared to the fourth quarter due to normal seasonality and increased 6% compared to the same period last year. Strength in Ohio, Curaleaf International, New York, Utah, and Massachusetts was offset by challenges in Nevada and Illinois.

By geography, our domestic segment grew 2% year-over-year with retail contracting 2%, which was more than offset by 19% year-over-year growth in domestic wholesale. International revenue grew 35% year-over-year, beating our internal plan, driven primarily by Germany and the U.K. By channel, total revenue was $231 million, flat to the first quarter of 2025, while strength in wholesale increased 21% year-over-year to $90 million, representing 28% of total revenue. The growth in wholesale was driven by strong performance in New York, Massachusetts, Ohio, and solid growth in Curaleaf International.

Our first quarter gross profit was $157 million, resulting in a 49% gross margin, a decrease of 220 basis points compared to the prior year period. The primary drivers of this contraction were price compression and discounts, partially offset by continued cultivation efficiency gains and disciplined labor expense controls. Our domestic gross margin was 50%, flat with the fourth quarter, underscoring the stabilization we're seeing in our U.S. business. While price compression remained present in most of our markets, we continue to find ways to offset that impact through cultivation efficiencies, product innovation, and selective price increases in states where demand is outstripping supply.

Notably, we have recently begun to see the rate of price compression decelerate. International gross margin was 42%, a decrease of 190 basis points sequentially, driven by pricing pressure in our U.K. business and in German flower and lower service volume sales, which carry a higher margin. SG&A expenses were $113 million in the first quarter, an increase of $7 million from the year ago period. Core SG&A was $108 million, an increase of $5 million from the prior year. The year-over-year increase in our core SG&A primarily reflects international expansion, additional headcount, and new store openings in Florida and Ohio.

Core SG&A was 33% of revenue in the first quarter, a 35 basis point decrease compared to the prior year due to leverage on stronger sales. First quarter adjusted EBITDA was $63 million, a decrease of 4% compared to last year, while adjusted EBITDA margin was 20%, inclusive of a 170 basis point drag from international, a decrease of 200 basis points versus last year.

First quarter net income from continuing operations was $70 million or $0.09 per share compared to a net loss of $50 million or negative $0.09 per share in the year ago period. During the quarter, prior to the rescheduling news, we completed a routine tax review with external counsel based on new information that came to light in which we determined that certain tax positions in previous years met the more likely than not standard required under ASC 740. This conclusion allowed us to release a significant portion of our previously recorded tax reserves and accrued interest from our balance sheet. These positions will also reduce our uncertain tax position liabilities going forward. Separately, following the Treasury and IRS guidance on medical cannabis rescheduling, we expect to recognize additional 280E tax benefit in future periods.

Now turning to our balance sheet and cash flow. We ended the quarter with cash and cash equivalents of $106 million. Inventory increased $16 million or 7% compared to the fourth quarter due to planned inventory builds in anticipation of our breakthrough and Dark Heart launches, coupled with inventory stocking ahead of 4/20 holiday. Capital expenditures in the first quarter were $17 million. And for 2026, we continue to expect capital expenditures to be roughly $80 million. We generated first quarter operating free cash flow from continuing operations of $21 million and $4 million, respectively, largely due to the aforementioned inventory investments ahead of 2 product launches. We expect operating cash to build as the year progresses, consistent with the cadence of our business. Our outstanding debt was $565 million. During the quarter, we reduced our acquisition-related debt by $9 million and completed the refinancing of our $475 million note with a 3-year $500 million note.

Before moving on to guidance, I'd like to announce that we are transitioning independent audit partners to BDO. BDO is the fifth ranked global accounting firm known for its expertise, innovation, and global reach. The move reflects our commitment to strengthening transparency, enhancing financial oversight and aligning with the best-in-class partners who can support our continued growth. Notably, we are the first in the cannabis industry to make this shift, setting a new benchmark for operational excellence and forward-thinking leadership. By partnering with a firm of BDO's caliber, we're positioning ourselves to navigate an increasingly complex business landscape with greater confidence and precision as we get closer to U.S. exchange uplisting.

I want to extend my sincere thanks to our accounting team for their exceptional work in making this transition possible. This achievement is a direct result of their dedication, expertise, and tireless efforts. And I'd like to thank PKF for their support and partnership over the past 7 years.

Now on to our outlook. While we are experiencing strong increases in traffic due to the many initiatives we have in place, we are closely watching the impact higher energy prices will have on our consumers' disposable income as inflationary pressures rise. Taking these macroeconomic factors into account and assuming current market conditions persist, we expect total revenue for the second quarter to increase 2% to 3% sequentially from the first quarter, which at the midpoint implies approximately $333 million.

And with that, I'd like to turn the call over to the operator to open the line for questions.

[Operator Instructions] Our first question today comes from Aaron Grey from Alliance Global Partners.

Nice to see that growth continue on international. I know it's decelerated a bit from 2025. So first off, I would just love to hear in terms of your outlook for growth for international for 2026. And then second, for us, in terms of your prepared remarks for potential exports in the U.S. to international. Just any color you could give potentially on timing? And then as we think about whether or not the existing cultivation footprint would suffice or potentially you'd want to acquire just given the climate that your current cultivation is in and also the potential for the need for EU-GMP and GACP. Thank you.

Thank you for that question. Let me first start with the international supply chain. As everyone knows, the international supply chain has been very difficult for everybody in the sector. A lot of cultivators aren't producing the type of flower that passes very strict EU-GMP regulations. And therefore, we have been looking both in Canada, mostly in Canada for increasing our own production, our own growing of product to ship to the international markets.

However, this recent rescheduling, the language and the rescheduling really has given us pause because we can use our U.S. infrastructure. The timing of that, we don't know. It very explicitly says that we should be able to. Upon my return from Europe, I'm in Europe now, upon my return from Europe, I plan to spend some time in Washington meeting with the DEA as well as the DOJ to see what the timing could be. But because we're deemed once we submit our application, we were deemed rescheduled from Schedule I to Schedule III, in theory, we could start very quickly. We do need state cooperation as well. We need export permits from them. So there will be some time. So I really expect not to be able to do this probably until the end of the year, and we'll see at that point in time.

Sorry, what was the first question that you had?

Just outlook for international growth for 2026.

Yes. International growth, I think we mentioned in the last call, we're looking at around 25% to 30% growth internationally this year, reduced down from over 50% last year due to no new markets. We expect that to accelerate significantly going into 2027.

Our next question comes from Bill Kirk from ROTH.

During the prepared remarks, Rahul gave transaction numbers for the quarter. I think he said plus 15% year-over-year, I believe, was how he said it. What is that on a same-store sales basis? And how has that number for the transaction growth year-over-year, how has it been trending the last couple of quarters?

Rahul?

Sorry. From a same-store sales basis, we're not going to comment on that, but the trends are moving in the right direction in general. And we will be able to talk about that on the next cycle. But overall, as we look at transactions, they are moving up and they are eclipsing right now the price compression that we see in the marketplace.

And then a separate kind of follow-up question. We've seen some comments today or some reported comments out of Senator Tim Scott about banking. I guess my question would be, how much of what we need to see or want to see from here requires some sort of congressional action versus things that can be done by the administration and the agencies who appear to be pretty well aligned.

So I'll take that. I think that we knew that Senator Scott was going to say this as a matter of fact, I think last year on several of the various podcasts and things I did, I mentioned that Senator Scott had said that once we got rescheduling as Chairman of the Feds Committee, he would move SAFE banking. So we do expect him to do that. I think we'll probably see that in the third quarter, most likely. I don't think it will fit the agenda for the second quarter. And maybe we could even get a vote before the midterm elections. I don't know, but certainly, I think we could get a vote before year-end. It's a very popular issue. As you know, it's passed the House many, many times. I suspect that it will pass the Senate now. It seems to be more bipartisan today than it was under the previous Senate. The main person blocking it was Senator McConnell. As we know, Senator McConnell is retiring in 2027. So I do expect that SAFE Banking should be able to make it through.

However, there is a chance also that we could get guidance from like the crypto industry did, guidance from FinCEN and from Secretary Bessent that would indicate that the banking industry could start to serve the sector. However, I believe that that will be good enough for certain institutions, but I believe other institutions will want to see some level of legislation because as we all know, one presidential administration to another could change the view. And so ramping up banking operations to then have to shut them down if the next President, for instance, had a different view or the next Attorney General or Finance Minister had a different view, Secretary. I think that they'll want to see -- certainly, money center banks, I believe, will want to see safe banking legislation go through before they get involved.

But I do think a lot of other financial institutions, including credit card companies and midsized regional banks, I think, as well as, for instance, credit working capital facilities, things like that can open up with a simple guidance from FinCEN and the treasury.

Congratulations, guys.

Our next question comes from Kenric Tyghe from Canaccord Genuity.

This is at least the second quarter I can recall where you've highlighted the lower price compression and better sort of domestic environment in terms of that price compression actually decreasing. Could you sort of speak to, one, how broad-based that lower promotional intensity is? And 2, Boris, the extent to which you think that, that hemp relief that you were calling out with alcohol retailers destocking and increased traffic into the regulated channel being a factor?

I think there are several factors that are driving our comments on price compression. The first one is Curaleaf has substantially over the last year and 6 months that I've been CEO, increased the quality of our products. We've rationalized our product SKUs. We've increased the quality of our flower substantially. And so we've been able to start to increase prices ourselves because of that. And so we're seeing better margins, both in our wholesale business and our retail business based on our own product quality.

The second thing I would say is there are certain markets in the U.S. I'll bring 2 as an example, Florida and Massachusetts that are starting to see stabilization in pricing, and we're not seeing the type of decline or maybe even any decline in those markets at this point in time. There are other markets, however, that are still compressing, but we are starting to see stabilization in certain markets. So overall, I would say that I'm getting a slightly better feeling that partially maybe because hemp products are starting to disappear even though we still have many hemp sellers still have until November. We definitely think that the supply chains are starting to break down. We think that there's less product availability. We think certain retailers are already starting to -- as they sell the inventory, they're not replenishing it. And so I think we are starting to see the only part of a recurrence in that. I don't believe that that will really hit until early 2027 when I do expect somewhere between 10% and 15% organic growth in the sector just based on the hemp shutdown.

Our next question comes from Frederico Gomes from ATB Cormark Markets.

Congrats on the great quarter here, guys. Just a question, more big picture on rescheduling. Obviously, we got the medical portion, and we're probably going to get the recreational portion in the second half. And we know about the impact. But could you talk about the potential impact that rescheduling could have on sales, margins, the overall competitive environment, M&A? I mean, could it accelerate consolidation? Would it maybe let some companies that are struggling, survive for longer? What do you think are some of the puts and takes here in terms of a post rescheduling world in the industry?

I think that it's too early to tell whether it will or won't have an impact on pricing. Let's be honest, most companies were not paying but accruing UTPs on their balance sheets. So I don't know yet whether we can talk about pricing changes in the marketplace at this point in time. I don't expect it to have a significant effect there.

I do, however, think that it will have a significant effect on consolidation and M&A. We're already seeing a tremendous amount of tuck-in acquisitions across the countries. Many companies have not announced them yet. But I can tell you, we know of literally probably 10 to 15 transactions that have been done in the last 2 quarters regionally, maybe they're waiting for approvals or something. And I do also expect, as I've said earlier, I do expect to see larger consolidations between MSOs as well. This is a very much a velocity business. A lot of these companies compete literally across the street from each other with stores. We're seeing more transactions and we're seeing transactions increasing. And with the price compression that happened with hemp, we're seeing less capacity availability and less product availability in markets and shortages of products in the regulated market.

And so by combining grow facilities, you're going to have massive cost savings and you're also going to have massive synergies to be able to provide the market with product and branding. And so I do think you're going to see -- it's a compelling story to see significant MSOs starting to merge on the back of 280E. I think you will see it because now you have certainty on the balance sheet. And so certainly, after we get the IRS guidance on 280E and we get hopefully the rescheduling of adult use in the second quarter, at that point in time, I do think that you're going to start seeing consolidation in the sector.

Our next question comes from Russell Stanley from Beacon.

Just around the scheduled hemp ban and efforts that start to interfere with the implementation date has so far fallen short. So I'd love to hear your confidence level that it will go into effect as scheduled. Do you see any risk to the date at this point?

Listen, I think that, obviously, the hemp industry is doing everything they can. We raised quite a bit of money and they're lobbying very aggressively. And so this is politics and it's Washington and never say never. But at the moment, as we speak right now, I can tell you, I believe there's very little appetite within the House and Senate to change the rules that they set last year at this early stage.

I do think, however, going forward, maybe a few years from now, I do think that you might get some changes, particularly around beverages, but I don't think you're going to get any changes here between now and November, no.

Our next question comes from Pablo Zuanic from Zuanic & Associates.

Two quick questions. One, in the past, Boris, you've talked about spinning off part of the international business. On the math you're giving of $1 billion, that's about 5, 6x sales. Your domestic business is staying around 2.5x. Is that still in the cards, especially with stocks, although they have moved up, stocks, they haven't moved up as much as we would have expected given all the good news. So if you can comment on that.

And then the second question, which is somewhat related, I know we are all, including myself, very excited about the news flow and about the fact that the companies are registered with the DEA will become federally illegal supposedly, but the product will remain federally illegal, right? And will that create a problem as we move forward trying to implement a lot of these changes. When I say federally legal, Iowa, Kansas, Indiana is still illegal there, right, for medical even. So I'm just trying to reconcile one or the other, an illegal product and a federally illegal company.

So the product -- medical product in those states where medical product is approved will be legal under federal law. And I believe many of the states will be passing medical cannabis legislation. We already know that at least 5 states that in the past have not even considered it that are ready now looking at passing medical cannabis legislation in those states. Some of the states you mentioned are part of that group that is looking at doing that. And so I do think that you'll have that. But under the CSA, you have to understand medical cannabis is going to be legal. So I want to stretch that point.

Under -- are plans are international. We always have that option if we want to do it. Right now, we'd like to see what happens with the rescheduling that we'll use in the second quarter. Our business if you take a look at Curaleaf, in fact if you add in our European business, 80% if our business is medical. And so if you combine the U.S. and the European business, 80% of our revenues actually come from medical. However, the impact of 280E will only impact our U.S. business, which is 60% medical. And so we have a lot of options available to us if we decide.

But at the moment, I'm assuming and hoping that as this legislation passes in the second quarter, I do think that at that point in time and as we get banking legislation, I do think at that point in time that you will have significant institutional interest in the sector. I have spoken to many large-scale investors, large long-only funds that manage trillions of dollars today, they cannot really look at this sector until they have one visibility into adult use, visibility into what effect that has on the balance sheet. And at that point in time, they need to start doing their research. They need to go to their compliance committees.

So I believe that it will take 6 to 12 months post final rescheduling for large institutional players to start participating in the market. And if that's the case, I don't see a reason for us to have to split the business up. However, I will never say never because the European business is growing very, very aggressively. I do believe our margins as we start to vertically integrate that business are going to improve also quite dramatically, obviously, helping the overall margin of the business because Europe is starting to become a bigger part of our business. And so we will take a look at things at the time that we feel necessary. Right now, I feel pretty good about keeping the business together.

And with that, we'll be concluding today's question-and-answer session. I'd like to turn the floor back over to Camilo Lyon for closing remarks.

Thank you, everyone, for joining us today. We look forward to speaking with you again in about 90 days. Have a great day.

And with that, ladies and gentlemen, we'll be concluding today's conference call and presentation. We thank you for joining. You may now disconnect your lines.

Good day, and welcome to the Curaleaf Holdings' fourth quarter and full year 2025 conference call. [Operator Instructions] Please note that this event is being recorded.

I would now like to turn the conference over to Camilo Lyon, Chief Investment Officer. Please go ahead.

Good afternoon, everyone, and welcome to Curaleaf Holdings' fourth quarter and full year 2025 conference call. Today, I am joined by Chairman and Chief Executive Officer, Boris Jordan; and Chief Financial Officer, Ed Kremer.

Before we begin, I'd like to remind everyone that the comments on today's call will include forward-looking statements within the meaning of Canadian and United States securities laws, which, by their nature, involve estimates, projections, plans, goals, forecasts and assumptions, including the successful integration of acquisitions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements on certain material factors or assumptions that were applied in drawing a conclusion or making a forecast in such statements.

These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information about the material factors and assumptions forming the basis of the forward-looking statements and risk factors can be found in the company's filings and press releases on SEDAR and EDGAR.

During today's conference call, in order to provide greater transparency regarding Curaleaf's operating performance, we will refer to certain non-GAAP financial measures and non-GAAP financial ratios that involve adjustments to GAAP results. Such non-GAAP measures and ratios do not have a standardized meaning under U.S. GAAP. Any non-GAAP financial measures presented should not be considered to be an alternative to financial measures required by U.S. GAAP, should not be considered measures of Curaleaf's liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies.

Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable U.S. GAAP financial measure under the heading Reconciliation of non-GAAP Financial Measures in our earnings press release issued today and available on our Investor Relations website at ir.curaleaf.com.

With that, I'll turn the call over to Chairman and CEO, Boris Jordan. Boris?

Thank you, Camilo. Good afternoon, everyone, and thank you for joining us to discuss our fourth quarter and full year 2025 results. We closed 2025 with clear momentum, delivering fourth quarter revenue of $333 million, our strongest performance in 6 quarters. Revenue increased 5% sequentially and 2% year-over-year, bolstered by a broad-based return to growth in nearly all of our domestic markets despite a persistently challenging pricing environment.

Our international team closed out an impressive year with $51 million in the fourth quarter revenue, representing 10% sequential growth and 65% year-over-year revenue growth. Adjusted gross margin expanded to 49%, up 20 basis points from last year as the benefits from productivity gains in our cultivation facilities outweighed price compression. Adjusted EBITDA totaled $69 million or 21% of sales, inclusive of a 120 basis point drag from international.

Operating and free cash flow from continuing operations were $42 million and $25 million, respectively. That's after paying $39 million in acquisition-related debt during the quarter. For the full year, revenue reached $1.27 billion with adjusted gross margin of 50% and adjusted EBITDA of $275 million or 22% of revenue. We generated $152 million in operating cash flow and $89 million in free cash flow from continuing operations, while ending the year with $102 million of cash on the balance sheet.

These results were delivered despite a third consecutive year of double-digit price compression, underscoring the strength, discipline and resilience of our operating model and the success of our return to Roots plan. Reflecting on the progress we made in 2025, we took decisive actions to fundamentally reset and strengthen the business.

First, we transformed our cultivation network. Through disciplined execution and best practice standardization, we doubled yields across our facilities, materially lowering production costs and mitigating the impact of sustained price compression on margins. Importantly, this increase in output did not come at the expense of quality. By leveraging genetics from Dark Heart, we significantly improved flower quality, consistency and strain diversity.

In the fourth quarter, average flower potency across our facilities reached 31%, the highest level in our history. This combination of higher yields and higher quality represents a structural improvement in our cultivation platform, not a temporary gain.

Second, we overhauled our buying, planning and merchandising functions to better align supply with demand at the local level. The impact was immediate, particularly in Florida, where stronger product allocation discipline paired with consistency -- consistently higher quality flower drove meaningful improvements in conversion, traffic and customer satisfaction. This created a virtuous cycle of stronger sell-through, improved in-stock positioning and enhanced customer loyalty. We are now systematically replicating this playbook across our other states, and we are encouraged by the early traction. We believe there remains substantial runway to unlock incremental productivity and same-store growth.

Third, we accelerated innovation across our product portfolio. In April, we launched Anthem Classic, our cigarette style pre-rolls in select markets to overwhelming consumer response. We followed that in September with Anthem Bold, our infused pre-roll line, which has also exceeded expectations. Demand has consistently outpaced supply. In less than a year, Anthem has become a top 5 national pre-roll brand in its 4 launch markets: New York, New Jersey, Illinois and Arizona, demonstrating the strength of our innovation engine and brand-building capabilities.

These initiatives represent just a portion of the foundational work completed in 2025. We are now seeing the benefits of flow-through the P&L in the form of improved margins, stronger sell-through and organic growth momentum. Importantly, we believe there remains significant opportunity to further amplify these gains as we continue to scale the operating discipline and innovation framework we have put in place. While price compression continues to impact most markets, we believe 2025 represents the trough.

Structural changes to the industry, most notably the federal hemp ban scheduled to take effect in November are expected to materially alter market dynamics. Over the past 3 years, we believe the regulated cannabis market was disrupted not by excess cultivation capacity, but by the rapid proliferation of low-cost, lightly regulated hemp-derived THC products that could be shipped nationally.

As this loophole closes and consumers migrate back to the regulated dispensary channel, we expect demand to normalize, pricing pressures to abate and the industry to return to a more rational and sustainable pricing environment. A defining moment for the U.S. cannabis industry occurred last December when President Trump issued an executive order directing the reclassification of cannabis from Schedule I to Schedule III.

This is the most consequential federal action taken on cannabis in the last 55 years. When, not if the final rule becomes effective, which we expect to occur ahead of the midterm elections, it will serve as the foundational catalyst for broader reform. Momentum from rescheduling will bring us closer to a U.S. exchange uplisting, expanded access to money center institutions and credit card usage, which will create a fundamentally improved operating and capital markets landscape.

These anticipated regulatory and capital market improvements are already driving increased consolidation across the sector. We are seeing this primarily through asset sales by undercapitalized operators, targeted bolt-on retail acquisitions by scaled platforms seeking to leverage their fixed infrastructure and smaller category-specific brands merging to achieve scaled operations. As a result, we expect industry consolidation to accelerate meaningfully in 2026, led by a few operators of which Curaleaf is one, with strong balance sheet, access to capital and proven execution.

We have built our business through both organic and acquisitive means and will leverage investor appetite to partner with scaled operators to further increase our leading position in the market. In support of this opportunity set, last week, we completed the refinancing of our $475 million senior secured notes maturing on December 15, 2026 of which $457 million was outstanding, issuing a new $500 million senior secured note with a 3-year maturity at an 11.5% coupon due February 18, 2029.

This landmark transaction sets a new precedent as the largest transaction in U.S. cannabis, extends our runway and significantly enhances our financial flexibility. I am pleased with the strong demand expressed in our offering from both new and existing investors, demonstrating the growing institutional interest, not only in Curaleaf but also the broader cannabis industry. With this refinancing complete, we are well positioned to pursue growth initiatives while maintaining disciplined capital allocation.

With our debt refinancing and Return to Our Roots plan now complete, we have decisively reset the foundation of our business. We have strengthened leadership across critical functions, embedded data-driven decision-making and sharpened operational execution. Our strong fourth quarter performance reflects the evolution of our Built for Growth initiative, driving organic growth through the -- through high-quality brand portfolio, premium customer experiences and operational excellence.

We believe this positions the company for sustained growth and value creation as industry conditions improve. Importantly, the results we delivered in the fourth quarter provide tangible proof points that reinforce our conviction in the direction we are heading. During the quarter, the Curaleaf family of brands captured the #1 overall market share position according to Hoodie Analytics, with Select maintaining its #1 ranking in the vape category.

These outcomes are a direct result of disciplined execution and brand focus, and they reflect the collective efforts of our employees across the organization who consistently support our portfolio of brands and deliver high-quality service to our customers. Domestically, our fourth quarter year-over-year outperformance was driven primarily by strength in Ohio, Utah, Pennsylvania and Florida, each a clear example of our operating [ lease, net ] translating into tangible results.

Ohio continues to benefit from its transition to adult use, coupled with the successful ramp of 2 new stores. Early performance has exceeded expectations, reflecting both favorable market dynamics and disciplined execution at the store level. Utah remains a healthy and stable medical market, where we are gaining share through increased consumer adoption of our brand portfolio and expanded wholesale penetration.

Our focused approach to product mix and distribution continues to unlock incremental growth. Pennsylvania delivered strong performance throughout the year, driven largely by the consistently high-quality flower output from our cultivation network. The improvements we made in yield, potency and strain diversity have directly translated into stronger sell-through and brand loyalty. Similarly, Florida's resurgence is directly tied to a step change improvement in our flower quality and in-store execution.

As product consistently improved, we saw corresponding gains in traffic, conversion and customer satisfaction, validating the structural work completed earlier in the year. I would be remiss if I didn't highlight that we believe is one of our most significant and fastest-growing opportunities in 2026, New York. After growing our business in the state by 14% last year and achieving the #1 overall brand share position, we have established a leadership platform in one of the most important emerging adult-use markets in the country.

We are now intensely focused on extending that leadership by becoming the brand house of choice for wholesale partners statewide. Our portfolio is uniquely positioned to capture growth across multiple segments with Anthem driving momentum in pre-rolls, Select strengthening our vapes and Dark Heart elevating our premium flower offering. As distribution expands and market infrastructure matures, we believe our scale, brand equity and execution discipline position us to capture disproportionate share as the market ramps.

New York represents not only a near-term growth catalyst, but a strategic long-term value driver within our U.S. portfolio. The common thread across all these states is clear: high-quality products, disciplined execution and elevated service levels. That formula is repeatable, scalable and central to how we intend to drive performance in 2026. Innovation remains a core driver to our growth strategy. To expand our addressable market and attract new customers, we must consistently lead with differential products, new flower genetics, advanced delivery technologies and category-defining formats that elevate both quality and customer experience.

As part of that commitment, next month, we will launch Briq 2.0, the next generation of our highly successful vape platform across 13 states. Building on the strong performance of Briq, this upgraded version enhances functionality, reliability and overall user experience, positioning us to further strengthen our share in the vape category. In parallel, we are expanding Dark Heart as our flagship premium flower offering, reinforcing our ability to compete at the high end of the market with differentiated genetics and superior consistency. We will share more details on that expansion in the coming months.

Our objective in every category we enter is not simply participation but leadership through uncompromising product quality and a superior customer service. Sustained focus and disciplined execution against these principles will enable durable market share gains, stronger brand equity and long-term value creation for shareholders.

Curaleaf International delivered another exceptional revenue quarter, generating revenue of $51 million, an increase of 65% year-over-year and putting the business on an annual run rate of over $200 million, led by strong performance in Germany and the United Kingdom. This momentum reflects the strength of our differentiated platform across key European markets. In Germany, not only are we the largest supplier of flower to the market, but also consumer demand remained robust for our portfolio of brands.

Our value tier brand, [indiscernible] continued to gain traction with cost-conscious patients, while our [ QMID ] vape, the first medically approved inhalation device also benefited from strong consumer adoption. Germany remains one of the most dynamic and scalable medical markets in Europe, and we are well positioned across both premium and value tiers to further leverage our strong market position. In the U.K., Curaleaf Clinic expanded its active patient count once again, reinforcing our #1 market share position. The U.K. continues to be a steady, consistently growing market for us, underpinned by disciplined patient acquisition, high retention rates and vertically integrated operations that leverage technology.

Elsewhere, Poland began to recover meaningfully following the easing of our prior regulatory restrictions on telemedicine. Patient access has improved, demand trends are strengthening, and we are seeing tangible momentum reemerge, positioning the market for continued growth as we move into 2026. In Australia, we are prioritizing expansion in 2026 by leveraging our European innovation pipeline to introduce new products tailored to local demand. We see a clear opportunity to capture incremental market share through product quality, brand positioning and disciplined commercial execution.

Collectively, these markets demonstrate the breadth and resilience of our international platform. They provide multiple growth vectors and reinforce our ability to allocate capital towards markets with favorable regulatory trajectories and attractive long-term returns.

Turning to Four 20 Pharma, our premium German brand. As anticipated, the put option on the remaining 45% ownership stake was exercised, and we will fully own the business and the brand. Upon closing, we will have 100% ownership of our international operations following the buyout of our minority partner in Curaleaf International last summer.

Full ownership meaningfully simplifies our corporate structure, enhances transparency around the performance and valuation of our International segment. This is particularly relevant in the recent cross-border transactions between Canadian and German operators, which have helped clarify valuation benchmarks in the European market. With complete control of our international platform, we are better positioned to drive strategic alignment, capture full economic upside and maximize long-term shareholder value.

Turning to new international [indiscernible] in France and Turkey. Regulators in each country are actively advancing rule-making process that will define their respective medical cannabis frameworks. In Spain and France, we could see programs commence as early as the fourth quarter with initial commercialization centered predominantly on extracts and distribution expected through hospital pharmacy channels. In Turkey, we currently anticipate a program launch in the first quarter of 2027, while precise timing remains subject to regulatory finalization, progress continues to move constructively.

As we have seen across other European markets, these programs are likely to begin modestly in scale before ramping over time as patient enrollment expands, supply chains mature and regulatory clarity improves. Importantly, as form factor restrictions evolve beyond extracts and access broadens, we expect growth trajectories to accelerate meaningfully. Over the longer term, we believe these markets will -- markets with a combined population of over 200 million people have the potential to become significant contributors to our international business, reinforcing our first-mover advantage and disciplined expansion strategy in Europe.

In light of the restrictive regulatory challenges affecting hemp-derived THC products expected to take effect later this year, we made the deliberate decision to discontinue our hemp business. The revenue impact was de minimis as the business was still in its early start-up phase. Similarly, we also decided to exit Missouri, a state in which we were subscale producers of formulated products with no vertical presence. These decisions reflect our disciplined approach to capital allocation and our focus on opportunities where we have scale, visibility and clear path to attractive returns. While we believe there may be ultimately a role for hemp-derived THC beverages within the broader consumer landscape, the timing, regulatory framework and economic parameters of that category remain highly uncertain. That said, consumer adoption of alternatives to alcohol continues to accelerate, representing a meaningful long-term trend.

We will continue to monitor regulatory developments closely, including ongoing discussions among members of Congress, and we will reassess our participation if and when the category evolves into a more defined regulated economically compelling opportunity. 2025 was a pivotal and highly productive year for our company. We executed a necessary and comprehensive reset of the business. And with each successive quarter, our Return to Our Roots plan gained traction and delivered measurable results. That work has now established a structurally stronger, more disciplined operating foundation.

We are transitioning from stabilization to acceleration with our Build for Growth strategy. By leveraging the platform we have strengthened, improved cultivation economics, tighter merchandising discipline, brand-led innovation and enhanced execution, we are positioned to drive sustainable organic growth. At the same time, we will remain disciplined but opportunistic in pursuing acquisitions that enhance scale, expand capabilities and accelerate market share gains.

Together, these initiatives position us to capture incremental share in 2026 and beyond. As the global leader in cannabis, we recognize our responsibility to advance the industry across regulatory environment, responsible adoption and scientific research, areas where we will continue to commit capital. I want to recognize and thank our global team for the extraordinary focus and execution over the past year. Their commitment has reshaped the business and built a foundation capable of supporting growth, both domestically and internationally. With that foundation now firmly in place, I'm confident in our trajectory and energized by the opportunities ahead.

With that, I'll turn the call over to our CFO, Ed Kremer. Ed?

Thanks, Boris. All my comments will reflect continuing operations, which exclude Hemp and Missouri, 2 business units we exited in the fourth quarter. Total revenue for the fourth quarter was $333 million, representing 5% sequential growth and a 2% increase compared to the same period last year. Strength was broad-based as most of our markets saw sequential growth led by Ohio, International, Florida and Pennsylvania. International revenue grew by 65% year-over-year, driven primarily by Germany and the U.K.

By channel, retail revenue was $237 million compared to $247 million in the fourth quarter of 2024, a decline of 4% year-over-year, partially offset by strength in wholesale, which increased 15% year-over-year to $91 million, representing 27% of total revenue. The robust momentum in wholesale was driven by market share gains in Curaleaf International, a strong recovery in Massachusetts, strong sell-through and reorders in Arizona and Ohio, all supported by the increased quality and product availability of our brands.

For 2025, total revenue was $1.27 billion. Retail revenue was $923 million, while wholesale revenue was $332 million. We opened a total of 9 new dispensaries, including 5 in Florida, 3 in Ohio and 1 in Maine. International revenue of $172 million grew by a very healthy 63% over 2024. The work our commercial and operations teams accomplished in 2025 resulted in the strong market share position we maintained throughout the year. In the fourth quarter, that work to prioritize high-quality flower culminated in the Curaleaf portfolio of brands reaching the #1 share position according to Hoodie Analytics data. What's more, Select continued to command the #1 vape share in the market.

Our relentless focus on quality and innovation are pillars for us to build long-term durable brands and consumers will see more of this innovation in 2026. Fourth quarter adjusted gross profit was $162 million, resulting in a 49% adjusted gross margin, an increase of 20 basis points compared to the prior year period. Continued productivity and efficiency gains in our cultivation facilities were the primary drivers of the margin expansion, partially offset by pricing pressure.

These gains were partially offset by price compression and higher utility expenses. For the year, our adjusted gross profit was $633 million, resulting in a 50% adjusted gross margin, an increase of 150 basis points compared to the prior year. SG&A expenses were $111 million in the fourth quarter, an increase of $11 million from the year ago period. Core SG&A, which excludes add-backs, was $107 million, an increase of $10 million from the prior year. The year-over-year increase in our core SG&A primarily reflects international expansion and new store openings in Florida and Ohio.

Core SG&A was 32% of revenue in the fourth quarter, a 260 basis point increase compared to the prior year due to aforementioned investments. For the year, SG&A and core SG&A was $428 million and $413 million, respectively. As a percent of sales, core SG&A was 33%. Fourth quarter net loss from continuing operations was $49 million or a loss of $0.06 per share. Excluding onetime noncash impairments of $6 million, adjusted net loss from continuing operations was $39 million or a loss of $0.05 per share.

For 2025, net loss from continuing operations was $202 million or a loss of $0.26 a share. Excluding onetime noncash impairments and other add-backs, adjusted net loss from continuing operations was $176 million or a loss of $0.23 per share. In the fourth quarter, adjusted EBITDA was $69 million, a decrease of 9% compared to last year. Fourth quarter adjusted EBITDA margin was 21%, a decrease of 260 basis points versus last year.

Our International segment profitability is improving. However, margins remain below the corporate average and thus weighed on fourth quarter EBITDA by 120 basis points. The year adjusted EBITDA was $275 million, and adjusted EBITDA margin was 22%, a decrease of 100 basis points compared to the prior year.

Turning to our balance sheet and cash flow. We ended the quarter with cash and cash equivalents of $102 million. Inventory increased $8 million or 4% compared to last year's fourth quarter due to growth in our International segment. Our domestic inventory decreased 2% compared to last year. Operating and free cash flow from continuing operations were $42 million and $25 million, respectively. For the full year 2025, we generated operating and free cash flow from continuing operations of $152 million and $89 million, respectively.

Capital expenditures in the fourth quarter were $17 million, bringing the total spend for the year to $63 million. The expenditures were driven by investments of facility upgrades, retail dispensary openings and IT infrastructure projects. For 2026, we expect capital expenditures to be approximately $80 million. The primary buckets of investment include international, automation, relocation and renovation of existing stores, coupled with at least 10 new dispensary openings in select locations, IT infrastructure and expenses associated with the relocation of our corporate headquarters.

Our outstanding debt at quarter end was $549 million. During the year, we reduced our acquisition debt by $57 million. Last week, we completed the refinancing of our $475 million senior secured note due December 2026 with a $500 million, 11.5% senior secured note due February 2029. This highly successful and oversubscribed transaction extends our maturities, gives us ample financial flexibility and allows us to fund the buyout of the put option for the remaining 45% of the Four 20 Pharma business in Germany, we did not own. Once that transaction is completed, we will own 100% of our international business.

Turning to guidance for the first quarter. Due to normal seasonality, we expect total revenue to be down mid-single digits sequentially from the fourth quarter. And with that, I'll turn the call back over to the operator to open the line for questions.

[Operator Instructions] And the first question will come from Aaron Grey with Alliance Global Partners.

Nice finish to the year for 2025. I want to talk a bit about pricing pressure and outlook. Boris, you spoke to another year of double-digit pricing pressure. So I want to get some color in terms of your outlook for 2026 on pricing, if you're starting to see some price stabilization in certain markets?

And then second part to that question, just relating to your comfort in terms of having levers available to offset the pricing pressure as we saw in 2025, albeit from your back to Roots initiative or yield improvements.

Aaron, thank you. Yes, we continue to see pricing pressure across most markets in the United States. And I think that, that will probably continue through the first half of the year. I do expect, however, as the hemp ban comes into play towards the end of the year, a stabilization in pricing across markets as what we're starting to see is a short -- in some markets, we're starting to see shortage of certain products. And I think that, that's led by the fact that hemp has been prevalent on shelves across the whole country. Slowly some of those products are starting to disappear. We're starting to see less advertising.

I think a lot of the C-stores are going to stop carrying a lot of these hemp products over the next several months. And as that happens, I think you will see a certain migration of customers over to the regulated market. We certainly think about 50% of the $25 billion estimated revenue of the hemp market will probably move over to the regulated market. That's largely the flower, vape and edibles part of the market, whereas we anticipate that beverage will probably stay within the hemp market and the structure that will be established for it.

But otherwise, we do start -- I think we will start to see a firming of pricing going into the year-end and probably maybe even some price moves higher going into 2027. In terms of our ability to fight those price compressions across markets, we are constantly focused on our efficiencies. We're getting more and more efficiencies out of our grow operations. We're doing a lot of improvements in both automation as well as in the grows themselves. We don't believe that we have squeezed every possible thing we can out of these efficiencies, and we do expect more of these efficiencies to come to fruition this year and feel comfortable that we'll be able to hold on to our margin profile that we have now.

The next question will come from Russell Stanley with Beacon.

Just on the international business, I'm wondering how you're thinking about margin expectations there in '26, given the drag in Q4 at 120 bps. Germany is continuing to scale nicely as a tailwind, but you've got multiple new markets that justify their own investment. So I'm wondering where you think the margin drag will be this year and next? Just wondering what your mind's eye is showing on that front.

So we anticipate European margins to stay basically flat to where they were this year. As our business scales, we do anticipate small improvements in those margins heading closer to the U.S. margins that we receive in the business. However, we think that it's probably a little bit early as we are continuing to invest in our new markets, as I said, France, Spain and Turkey, which is a drag and those markets will not hit -- will not start to revenue generate until at best the fourth quarter of this year and early next year.

So I think that as the business scales in 2027, margins will start to improve and start to get better closer to that 50% gross margin. But this year, we anticipate margins being at the same sort of level of 42% to 43% that we're achieving. However, I do want to say that we have the absolute best-in-class gross margins in the European market of any other operator in the market today. And so we're very proud of the way we operate our business in Europe. And those margins of Curaleaf are substantially better than all of our competition in European market. Using our U.S. experience in running the business and applying that in the European markets has helped us receive the best-in-class margins in Europe.

The next question will come from Bill Kirk with ROTH Capital.

What gives you guys confidence that the intoxicating hemp group won't be able to delay the ban or find some sort of reprieve? And then in states where you've effectively seen a ban already like Massachusetts, what have you seen in your dispensaries in Massachusetts as intoxicating hemp has gone away?

So again, I want to reiterate that the federal ban on hemp products is a 1-year ban from the time it was enacted in November of last year. And so even in Massachusetts, where you have local bans in other states as well, you still see those products because federally, those products are allowed to be sold in those markets. However, specifically in Massachusetts, Curaleaf, not directly related to the hemp ban, we have seen a marketable improvement in both margin and performance for Curaleaf in Massachusetts. However, in terms of our confidence, as you know, we spent an enormous amount of time in Washington down the hill, and we are hearing there is 0 chance that the Republicans are going to vote for an extension of the hemp ban at this point in time.

There may be some compromises around some of the medical programs that are going to play. And there may be, at some point, a compromise around beverage. But I can tell you that I think chances are pretty low on that right now. And at the moment, the Republican side of which controls both the House and the Senate at this point in time has no interest. And I believe today, there was more information that came out of Washington. They have no interest in voting on extension of the hemp program.

And the next question will come from Frederico Gomes with ATB Cormark Capital Markets.

Question is on the pricing environment in Germany and the U.K., Boris. Are prices holding up well in those 2 markets? Or do you see any sort of pressures coming there this year?

I think the growth profile in both of those markets are very early stage. I mean, Germany is still around $1 billion market. The U.K. is around 50,000 to 70,000 patients. These are very, very early-stage markets. So we anticipate growth to continue to be very, very strong in both of those markets going forward. If you think about it, Germany has a program that is less than half the size of Florida, and it's got 4.5x the population.

So we're not particularly concerned about the growth profile in these markets. However, there has been pressure on prices in both Germany and less so in the U.K., but it's starting in the U.K. But Curaleaf tends to operate at the upper end of the product segment. And so therefore, we've been able to hold on to our margins, given that our supply chain and our facilities that are available for us to move product are best-in-class, and we've been able to continue to hold on to our margins at the higher level.

Again, we think growth will help in the scalability of the business and therefore, holding margins. But we are seeing at the low end of the product portfolio, which we do not participate in, we are definitely seeing pricing pressures at the low end.

[Operator Instructions] Our next question will come from Kenric Tyghe with Canaccord Genuity.

Boris, if we look at this through the lens of the consumer, what were the biggest changes from your Return to Our Roots plan that supported the outperformance in key markets like New York, Ohio, Florida, Pennsylvania in the quarter. I mean, essentially, what you're speaking to here is an increased share of wallet in a very tough backdrop, which takes some doing. What were the changes that drove it? And how sticky do you think those changes will prove in the eyes of the consumer?

I think in Curaleaf's case, it was definitely product quality. We had a massive focus since I became the CEO 1.5 years ago on improving the product quality, also assortment and making sure that we have the right products in the right places at the right time. So between product quality and supply chain as well as being able to be more efficient in the manufacturing process and therefore, bringing down our cost base and the manufacturing of our products, all of those things contributed for us to be able to grow transactions.

And I think that with our marketing launches that you're going to start seeing here at the end of the third quarter going to the fourth quarter, a lot of revamps, we think we'll continue to see an improvement in traffic in not only our stores, but also through our marketing efforts, our products in third-party stores where we're wholesaling.

And this will conclude our question-and-answer session. I would now like to turn the conference back over to Mr. Camilo Lyon for any closing remarks. Please go ahead.

Thank you, everyone, for joining. We will talk to you again in May for our Q1 earnings results. Have a great night.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good day, and welcome to the Curaleaf Holdings, Inc. Third Quarter 2025 Conference Call. Please note this event is being recorded. I would now like to turn the conference over to Camilo Lyon, the Chief Investment Officer. Please go ahead.

Good afternoon, everyone, and welcome to Curaleaf Holdings Third Quarter 2025 Conference Call. Today, I'm joined by Chairman and Chief Executive Officer, Boris Jordan; and Chief Financial Officer, Ed Kremer.

Before we begin, I'd like to remind everyone that the comments on today's call will include forward-looking statements within the meaning of Canadian and United States securities laws, which, by their nature, involve estimates, projections, plans, goals, forecasts and assumptions, including the successful integration of acquisitions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements on certain material factors or assumptions that were applied in drawing a conclusion or making a forecast in such statements.

These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information about the material factors and assumptions forming the basis of the forward-looking statements and risk factors can be found in the company's filings and press releases on SEDAR and EDGAR.

During today's conference call, in order to provide greater transparency regarding Curaleaf's operating performance, we will refer to certain non-GAAP financial measures and non-GAAP financial ratios that involve adjustments to GAAP results. Such non-GAAP measures and ratios do not have a standardized meaning under U.S. GAAP. Any non-GAAP financial measures presented should not be considered to be an alternative to financial measures required by U.S. GAAP, should not be considered measures of Curaleaf's liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable U.S. GAAP financial measure under the heading Reconciliation of non-GAAP Financial Measures in our earnings press release issued today and available on our Investor Relations website at ir.curaleaf.com.

With that, I'll turn the call over to Chairman and CEO, Boris Jordan. Boris?

Thank you, Camilo. Good afternoon, everyone, and thank you for joining us to discuss our third quarter 2025 results. The return to our roots plan we initiated 12 months ago, which is focused on enhancing product quality, driving growth, expanding margins and optimizing cash flow is delivering tangible results.

Over the past year, we have completed significant foundational work to reset the business, leveraging our Dark Heart genetics program, investing in our supply chain and realigning our retail operations. These actions have positioned our domestic business for renewed growth while supporting rapid international expansion. I'm encouraged to report that we're seeing positive momentum across the organization despite ongoing macro pressure from price compression.

In the third quarter, we generated $320 million in revenue, up 2% sequentially. Price compression continued to be a headwind consistent with last quarter, yet our domestic segment remained stable and achieved modest growth. Our International segment continued its strong trajectory, delivering 12% sequential growth and 56% year-over-year growth. Adjusted gross margins improved to 50%, an increase of 115 basis points, both sequentially and versus the prior year. Adjusted EBITDA was $69 million, representing a 22% margin, inclusive of a 200 basis point drag from our international and hemp businesses.

Our balance sheet remains healthy with a quarter end cash position of $107 million after paying $28 million in principal and interest debt obligations. We generated $53 million in operating cash flow from our continuing operations and $37 million in free cash flow. Subsequent to quarter end, we made a $30 million in acquisition-related debt payments primarily to Tryke, thus completing our obligation and leaving approximately $70 million payable over the next 2 years. We also closed on an upsized $100 million revolving credit line with Needham Bank, giving us greater flexibility to manage our business and pay down more expensive debt.

The U.S. segment grew modestly compared to the second quarter, reinforcing the stability we've achieved and positioning the business for a return to growth. Many of our markets delivered solid sequential growth, including Ohio, New York, Utah and Massachusetts, partially offset by seasonal softness in Arizona, muted tourism in Nevada and an ongoing pressure in New Jersey.

We've made significant progress strengthening our supply chain, starting with cultivation. I can't overstate the improvement we've seen in our garden yields continue to rise across the network and potencies have steadily increased. This quarter, our average flower potency surpassed 30% for the first time in our history. That's a direct result of our team's focus, discipline and support from the Dark Hart Genetics team. Strong genetics, sound techniques and quality equipment form the winning formula we're now deploying across all markets.

On the retail side, we've implemented data-driven analytics tools that are improving assortment planning, merchandising and inventory flow. With better data quality, our teams are operating with greater precision and stronger discipline, driving better connectivity throughout the supply chain. As a result, customers are finding the right product in the right place at the right time and price, which is leading to higher visits, stronger loyalty and greater lifetime value.

To build on that momentum, we're leveraging our database of more than 2.1 million loyalty members to enhance customer engagement, deepen brand affinity and drive long-term sustainable demand. We're still in the early innings of this refreshed playbook with just 3 states onboarded, but the results are already starting to show.

On the innovation front, our new Anthem pre-roll brand continues to gain strong traction with both customers and retailers. Since its April launch, adoption rates and customer feedback have been exceptional. In our initial launch states, the response was overwhelmingly positive, and in Illinois, Anthem Classic has already become a top 10 pre-roll brand according to BDSA.

The brand is off to a fast start and continues to build awareness and momentum. To complement the Classic line, we introduced Anthem Bold, our infused pre-roll offering in September across New York, New Jersey, Illinois and Arizona. While early feedback has been outstanding, in Illinois, the addition of Anthem Bold to our in-store lineup has propelled Anthem to nearly 30% of total pre-roll sales while also expanding the overall category. We're seeing similar strength in other launch states.

Given the success, our operations team is rapidly scaling production to meet growing demand and support continued momentum. ACE, our proprietary aqueous cannabis extraction oil launched last quarter continues to gain strong traction with consumers. The message of an ultra-clear, ultra-smooth oil with minimal plant extract is resonating, driving solid sell-through and reorders in New York.

In Massachusetts, ACE is flying off the shelves, contributing to improved state performance. Next, we plan to introduce ACE in Florida, where we believe it has the potential to reshape the distillate market. Innovation remains at the core of our strategy and products like ACE are proving to be powerful drivers of traffic, customer engagement and sustainable growth.

The Curaleaf International segment delivered another outstanding quarter with revenue up 12% sequentially and 56% year-over-year, driven primarily by continued strength in the U.K. and Germany. In the U.K., sustained patient growth in our Curaleaf Clinic, coupled with solid wholesale performance reinforced our #1 market share position. In Germany, demand for our brands remained robust despite near-term challenges tied to regulatory delays in lifting import permit caps. That issue has now been resolved as import caps were raised last week, allowing the market plenty of supply headroom for the next couple of quarters.

In September, we launched the world's first medically certified liquid inhalation device, the QMID in the U.K. and Germany. Developed over several years in partnership with Jupiter Research, the QMID is currently the only Class IIa medical device of its kind available in the European market, offering patients precise and consistent dosing through advanced vaporization technology. Pharmacist feedback has been highly positive and adoption continues to grow across both markets. The device was recently approved for sale in Australia, and we expect continued momentum and strong patient uptake as awareness builds globally.

Now turning to new international markets. We're seeing encouraging progress across several key geographies. In Turkey, the government continues to advance its medical cannabis draft law, which could be made public in the coming months. In concert with that, we've begun the architectural design phase of our facility and remain on track for this market to go live in the second half of 2026.

In Spain, momentum is also building. In October, the Spanish Health Minister formally approved a measure authorizing the use of medical cannabis in hospitals. The government now has 3 months to publish a detailed monograph outlining the program parameters. We expect the market will initially focus on oil-based products, and we're well positioned for any outcome with our GMP-certified facility in Alicante, Spain and our strong partnership with the University of Alicante. We anticipate further clarity on next steps in early 2026.

France is similarly advancing its medical cannabis framework, which we expect will follow a model similar to that of Spain, beginning with hospital distribution. Importantly, there is work being done to allow for insurance reimbursements, which we believe would quickly usher in many patients into the market. We could see the market go live in the first half of 2026 with the help of our in-country partner, we are well positioned to optimize on the French opportunity when the timing is right.

Collectively, Turkey, Spain and France represent a combined population of more than 200 million people, offering a significant long-term runway for Curaleaf. While we're excited about the potential of these markets, we recognize they will take time to mature. As such, we do not anticipate meaningful revenue contribution commencing from these countries until 2027 and beyond.

Turning to our hemp business. We added several new distribution partners during the quarter and are moving quickly to expand our beverage brand portfolio. We expect to share additional updates on our next earnings call. Overall, we continue to prudently scale this segment while we await federal guidance that will help shape the long-term trajectory of this category.

With much of the foundational and restructuring work under our return to Roots program now complete, we are preparing to shift towards a growth mindset in 2026. We're cautiously optimistic that the early signs we're seeing today point to a strengthening domestic business. While we expect competition across our international markets to intensify, we're confident in the multiple growth drivers at our disposal to sustain robust performance next year.

We also remain encouraged by the continued progress towards federal reform, even if the pace is slower than anyone would prefer. I continue to believe the administration will ultimately deliver on its commitment to reschedule cannabis to Schedule III on its own timetable, but the direction remains clear and positive for the industry.

To our more than 5,000 employees worldwide, thank you for your dedication and hard work. The results we've shared today are a direct reflection on your focus, resilience and commitment to Curaleaf's mission. None of this would be possible without each and every one of you. We're energized by the opportunities ahead and remain steadfast in our mission to shape the future of cannabis responsibly and sustainably for patients, consumers and shareholders alike.

With that, I'll turn the call over to our CFO, Ed Kremer. Ed?

Thank you, Boris. Total revenue for the third quarter was $320 million, a 2% sequential increase compared to the second quarter and 3% decrease compared to the same period last year. Strength in Ohio, our International segment, New York and Utah was partially offset by pressure in Arizona, Nevada and New Jersey.

Our domestic retail metrics continued showing signs of stabilization in the third quarter as transactions increased 2%. That said, as consumers make trade up to larger value size formats, units per transactions and AUR decreased 2% compared to the second quarter. Price compression headwinds did not abate in the third quarter as all markets we operate in showed a low double-digit decline on average as compared to the third quarter last year.

By channel, retail revenue was $226 million compared to $253 million in the third quarter of 2024, a decline of 11% year-over-year, partially offset by strength in wholesale, which increased 19% year-over-year to $90 million, representing 28% of total revenue, driven by broad-based strength across most of our states with particular strength in New York, Connecticut, Illinois and Massachusetts as well as international.

By geography, domestic revenue was up slightly from the second quarter and declined 9% compared to the same period last year, largely driven by price compression as flower price per gram was down 10% and vape pricing was down mid-teens. Curaleaf International produced another robust quarter as revenue grew by 56% year-over-year, driven primarily by the U.K. and Germany businesses.

During the quarter, we made strategic investments in our international supply chain, unlocking additional capacity at our NGC facility to support strong demand in Germany. In Spain, we tripled oil production to enable the launch of new QMID device. These high-return investments are strengthening Curaleaf's presence in these emerging medical markets, further establishing our position as the global leader in cannabis.

Our third quarter adjusted gross profit was $160 million, resulting in a 50% adjusted gross margin, an increase of 115 basis points compared to the prior year period. The primary drivers of this expansion were cost reductions in our cultivation facilities, partially offset by continued headwinds of price compression and higher promotions. Sequentially, adjusted gross margin also expanded by 115 basis points.

SG&A expenses were $110 million in the third quarter, an increase of $4 million from the year ago period. Core SG&A was $105 million, an increase of $3 million from the prior year. The year-over-year increase in our core SG&A was driven by an increase in payroll expenses as we added strategic new hires and retail labor for our new stores. Core SG&A was 32.7% of revenue in the third quarter, a 200 basis point increase compared to the prior year.

Third quarter net loss from continuing operations was $54.5 million or a loss of $0.07 per share and adjusted net loss from continuing operations was $48.2 million or a loss of $0.06 per share. Third quarter adjusted EBITDA was $69 million, a decrease of 8% compared to last year, while adjusted EBITDA margin was 22%, a decrease of 115 basis points versus last year.

Our International segment was a 120 basis point drag on our total EBITDA margin in the quarter. As expected, our hemp business weighed on margins by 80 basis points as we invest in marketing, brand building and product development.

Now turning to our balance sheet and cash flow. We ended the quarter with cash and cash equivalents of $107 million. Inventory increased $2 million or 1% compared to the same period last year, comprised of a 4% reduction in domestic inventory and partially offset by 61% growth in international inventory to support growth initiatives.

Capital expenditures in the third quarter were $16 million. For 2025, we now expect capital expenditures to be approximately $60 million with the majority of the increase coming from incremental investments in pre-roll automation to support the strong demand for our Anthem pre-roll brand.

In the third quarter, we generated operating cash flow from continuing operations of $53 million, bringing the year-to-date total to $104 million, driven by improved margins and continued improvements in working capital management. Free cash flow from continuing operations was $37 million in the quarter. Our outstanding debt was $544 million. During the quarter, we repurchased $3.2 million of our 2026 notes at an 8.75% discount, and we reduced our acquisition-related debt by $13 million. Subsequently to quarter end, we retired an additional $30 million of debt, the majority of which went towards paying the third and final tranche owed to Tryke.

Last month, we closed on a $100 million upsized revolving line of credit with Needham Bank at an interest rate of 7.99%, which then resets to 8.99% upon the refinancing of our bond. This is a significant accomplishment given the challenges the industry has had attaining standard banking access and speaks to the confidence and continued support our partners have in our long-term strategy. We will continue reducing various components of our debt throughout the year while maintaining ample liquidity to support our operations and growth objectives.

Consumer has been resilient this year. However, macro headwinds continue to pressure disposable income. That said, overall demand for cannabis remains robust, yet pricing pressures are not abating. As such, for the fourth quarter, we expect total revenue to be up low single digits sequentially from the third quarter.

With that, I'll turn the call back over to the operator to open the line for questions.

[Operator Instructions] The first question comes from Aaron Grey with Alliance Global Partners.

Great to see the continued momentum, especially on the international side here. I want to kind of start with my question on that. How do you guys view the potential for this momentum you've had on the international front to continue in 2026? What do you see as a potential risk to disrupt some of the growth that you've been seeing? Would you see it more so in terms of the increased competition, which force you called out in your prepared remarks? Or maybe regulatory changes such as risk to German telemedicine or otherwise. Any type of color in terms of your outlook for continued growth for international would be helpful.

Aaron, thanks for the question. Well, all of the above, basically, there's always risk and regulatory in new industries like cannabis and especially early-stage industries like cannabis in Europe, where it's behind sort of U.S. and Canadian development by about 5 years. There can be regulatory changes. There's been rumblings in Germany, Australia and other markets. We know we had changes in Poland, which affected the market.

However, at the moment, demand is very robust. It continues to grow. Supply chains are getting better. The government is clamping down on some of the illicit product that was hitting the markets. I think that all-in-all, we're pretty bullish on next year and the growth, but we have to look at it quarter-to-quarter because these things do change. We know -- as I said, we know there are changes coming in Germany and in other markets, but there's also new markets coming online. I think it's a mixed bag, but it's one that we're continuing to be quite positive on and continue to invest in.

The next question is from Frederico Gomes with ATB Capital Markets.

Just regarding the improvement in potency and yields that you're seeing. Obviously, you mentioned all the price compression that we're seeing in those markets. Do you see any path here for substantial margin expansion in 2026 with that improved quality and improved product mix?

Listen, as you see, we've had substantial margin improvement this year, as we said to the market earlier in the year that we would end the year -- exit the year at a healthy 50% gross margin. It looks as though that's where we're going to end the year.

Going forward, it's a very volatile market. I wouldn't want to make the prediction of where we're going to be next year, but I can say one thing. The company's metrics internally will continue to improve. We're going to continue to put pressure on costs. We're going to continue to be more efficient in the way we manufacture. We're putting a lot of automation equipment in order to bring down costs as well and become more efficient, but where we end up with price compression is nobody can predict at this point in time.

There's a lot of things in the U.S., just like there is in Europe. There's regulations in the federal government right now in hemp. Obviously, if hemp gets shut down, that would have a massive improvement to both demand and margin. I believe in the U.S. If they do something in between, it could have different effects. It's a little bit early for us to say. I think in the first quarter -- in the year-end call, we'll probably take a look at that and make some forecast to that effect. Right now, I can only say what we can control. We can control our internal metrics. We're going to be better next year than we are this year.

The next question is from Russell Stanley with Beacon Securities.

Maybe just following up on Germany. You mentioned the import caps just lifted last week. I think in August, you were thinking that you might see pricing and margins normalize here in Q4, but it seems like the caps took longer to get lifted than perhaps you'd expected. How are you thinking about this now? Is that more of a Q1 event? Or might it take longer?

Listen, I think it's going to be difficult to tell. Again, as we all know, there is changes to German regulation coming. They may be very small. They may be large. We just don't know at this point in time. We're pretty close to the government, and we're pretty much involved in a lot of the changes that are taking place.

What I can say now is that there's nothing that looks that would be catastrophic to the industry. I think that most of the changes the government looking at could even positively impact the business in terms of illicit product getting into the market and some of the dumping of product. That could actually be a positive.

On the other hand, it could also have some negative consequences. It's a little bit too early to tell. We don't see any changes in the fourth quarter. We see robust demand in the fourth quarter. Basically, Curaleaf is in a slightly better position than most because we have been permitted to sell, for instance, vapes into the market because of our medically approved vape, and that is driving demand heavily here in the fourth quarter and will continue into the next quarter as we're the only company today that has a medically improved vape in Europe, which is helping us both in the U.K. and Germany.

Soon, we've just got approved in Australia, and that is driving, and that's giving us a little bit of a head over everyone else and that other companies just don't have that product.

The next question is from Bill Kirk with ROTH Capital Partners.

Gallup had a pull out yesterday that showed, less Republican voter support year-over-year for cannabis legalization. If that's really the case, what do you think that means for state reform in places like Florida? Or what could it mean for federal progress on cannabis initiatives?

I don't know about Gallup's report. I don't believe in most polls anyway because according to those same polls, Trump would not be President, and he is. I'm not a huge believer. In terms of our own polling that we've done together with the administration, I can only say one thing that we pulled NAGA, which is the most conservative part of the U.S. population and cannabis held firmly at 65% on adult use and I think 69% on medical. It's got very strong support from the work that we've done.

The next question is from Kenric Tyghe with Canaccord.

Boris, in your prepared remarks, you called out the more pronounced seasonality in Arizona and Florida comments similar to what we've heard out of some of your competitors. Could you provide any indication on just how much of a drag Florida and Arizona were compared to their typical performance? Or alternatively, even just give us some indication around how those states have performed quarter-to-date, where you've seen some sort of normalization there or where they're performing as they more typically would?

Thank you for that question. Yes, we've seen substantial recovery in October and generally have had a very strong October. Florida for Curaleaf didn't have as much compression as we've had in previous years on cyclicality. Arizona, however, yes, we did. It's been pretty regular now. I think it's about 4 years in a row where, as we all know, Arizona tends to run exceptionally warm in -- with temperatures well over 100 degrees for most of the summer, and that tends to have an exodus of the population. But that -- we've seen a very strong recovery in the last 2 weeks of September going into October and October was very strong. It is cyclicality, is weather-based and it has recovered.

The next question is from Pablo Zuanic with Zuanic & Associates.

Boris, if you allow me, I'm going to ask you a 2-part question and both is related to hemp. Regarding hemp, in my opinion, and I could be wrong, it seems to me that Green Thumb has been able to move a lot faster in hemp because they bought Agrify and they bought the NASDAQ vehicle. They were more compliant on everything around hemp and they were able to distribute Señorita and a bunch of other hemp derivatives through that vehicle. Would that be something that you would consider buying a NASDAQ-listed vehicle that will allow you to move faster in hemp derivatives? Again, my assumption could be wrong.

The second one that maybe is more important, in my interpretation, and again, I could be wrong, by reposting that video from the Commonwealth project into social, the President -- and there's a lot in that video. The President was pretty much also backing hemp-derived CBD, right? That were specifically mentioned in that video. Someone could say that backing hemp-derived CBD and perhaps other derivatives is not compatible with backing the THC cannabis industry. If they are making promises to 2 separate industries, how does that work out in the end? Does that maybe call for both the THC industry and the heavy industry maybe to work together in lobbying the federal government, which is something you've mentioned before. I'm sorry, I know there's a lot there, but hopefully, you can comment on all of that.

Well, let me answer the second question first. I think the President published a video. I can guarantee you he didn't watch it until the end. I'm not sure the President had full knowledge of full content in that video. Our view that CBD alone has virtually no medical properties at all. You have to eat almost 1,000 milligrams of it to have any impact in terms of anti-inflammation or anything, and so usually, it is mixed with other elements or other cannabinoids in order to get its effectiveness.

Without those cannabinoids, CBD is largely useless, unless eaten or taken in very, very high quantities. I can tell you right now, at least the briefing papers that the President administration have received, both from the regulated industry, but also from the medical industry would show that CBD alone is not very effective, and we'll soon be publishing some results of our medical studies that we've done in Europe that we've recently submitted to the MHRA in the U.K. and hope to receive approvals on that will show that.

I don't think he's sending a mixed message on there. I think that was a video generally supporting CBD and other cannabinoids for medical purposes in the United States. The President has made his position clear that he supports cannabis as far as it's concerned for medical reasons, not for recreational purposes. That's, I would say, on that video.

On the other purpose, I don't comment on our competitors. Curaleaf is very comfortable, very happy with the positioning that we have in the hemp-derived products. I can promise you, we're doing just fine there and are not concerned about competition, especially because the industry is so young and so early stage that really whether or not somebody sells $1 million more than the other party at this point in time really makes no difference. We're looking at a multiple tens of billions of dollars of potential revenue out of this industry over the next 5 years, and that's really the prize that everybody is after.

This concludes the question-and-answer session. I would like to turn the conference back over to Camilo Lyon for any closing remarks.

Thanks, everyone, for joining us tonight. We will talk again in 90 days. Have a great day.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect.

Good afternoon, and welcome to the Curaleaf Holdings, Inc. Second Quarter 2025 Conference Call. [Operator Instructions]

Please note that this event is being recorded.

I would now like to turn the conference over to Camilo Lyon, Chief Investment Officer. Please go ahead.

Good afternoon, everyone, and welcome to Curaleaf Holdings' Second Quarter 2025 Conference Call. Today, I'm joined by Chairman and Chief Executive Officer, Boris Jordan; and Chief Financial Officer, Ed Kremer.

Before we begin, I'd like to remind everyone that the comments on today's call will include forward-looking statements within the meaning of Canadian and United States securities laws, which by their nature, involve estimates, projections, plans, goals, forecasts and assumptions, including the successful integration of acquisitions and are subject to risks and uncertainties that could cause actual results or outcomes to differ materially from those expressed in the forward-looking statements on certain material factors or assumptions that were applied in drawing the conclusion or making a forecast in such statements.

These forward-looking statements speak only as of the date of this conference call and should not be relied upon as predictions of the future events. We undertake no obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise, except as required by applicable law. Additional information about the material factors and assumptions forming the basis of the forward-looking statements and risk factors can be found in the company's filings and press releases on SEDAR and EDGAR.

During today's conference call, in order to provide greater transparency regarding Curaleaf's operating performance, we will refer to certain non-GAAP financial measures and non-GAAP financial ratios that involve adjustments to GAAP results. Such non-GAAP measures and ratios do not have a standardized meaning under U.S. GAAP. Any non-GAAP financial measures presented should not be considered to be an alternative to financial measures required by U.S. GAAP, should not be considered measures of Curaleaf's liquidity and are unlikely to be comparable to non-GAAP financial measures provided by other companies. Any non-GAAP financial measures referenced on this call are reconciled to the most directly comparable U.S. GAAP financial measure under the heading Reconciliation of non-GAAP Financial Measures in our earnings press release issued today and available on our Investor Relations website at ir.curaleaf.com.

With that, I'll turn the call over to Chairman and CEO, Boris Jordan. Boris?

Thank you, Camilo. Good afternoon, everyone, and thank you for joining us to discuss our second quarter 2025 results. Over the past 10 years, we've strategically built Curaleaf into a global cannabis leader, now operating in 17 U.S. states, plus 15 countries worldwide. With our infrastructure in place and our asset base established, we're sharpening our focus on product quality, customer service and supply chain excellence to ensure every customer receives the best possible experience every time in every store.

From the outset, rapidly growing the business has been central to my vision, recognizing that scale would be essential to navigating the inevitable volatility of the cannabis industry. While current pricing pressures are affecting the entire sector, subscale operators are bearing the brunt, exiting markets and shedding assets at an accelerating pace. This ongoing industry rationalization strengthens our long-term position as we continue investing in growth initiatives and capitalize on emerging opportunities.

In the second quarter, we generated revenue of $315 million, up 1.5% compared to the first quarter, consistent with our guidance for low single-digit growth. Price compression across most of our markets kept domestic sales roughly flat compared to the first quarter, while our International segment continued to impress with another solid quarter of 17% sequential growth.

Adjusted gross margin of 49% decreased 130 basis points from the first quarter due to higher levels of promotional activity, particularly around 4/20 holiday compared to the first quarter. We generated $66 million in adjusted EBITDA, resulting in a 21% AEBITDA margin with international and health accounting for 260 basis points of margin drag. For now, we've made the strategic decision to keep those 2 businesses consolidated as momentum around federal reform and potential 280E relief from rescheduling continues to build heading into year-end. That said, if meaningful reform fails to materialize, we are prepared to pursue alternative paths such as spinning out these businesses to unlock significant value that we believe is not currently reflected in our valuation as neither of these businesses are subject to 280E.

We ended the second quarter with cash of $102 million after paying $47 million in interest and principal debt payments and generated $9 million in operating cash flow from continuing operations.

In the U.S., our primary focus for the past few quarters has been to manage pricing headwinds and stabilize the domestic business through an unrelenting pursuit of producing consistent, high-quality flower, improving customer service levels, enhancing our marketing and branding and optimizing our supply chain. In the second quarter, we achieved stabilization as sales were essentially flat compared to the first quarter. Sequential growth in Massachusetts, Ohio, Florida, Pennsylvania and New Jersey was offset by pressure in the balance of our network. Continued gains in our cultivation facilities were offset by an underwhelming and promotional 4/20 holiday that landed on Easter impacting the results.

That said, we made meaningful advancements in our product portfolio. April was a pivotal month for Curaleaf innovation engine, marked by the launch of several strategically developed products aimed at enhancing our competitive position and fueling long-term growth. In New York, we introduced ACE, our proprietary Aqueous Cannabis Extraction oil, which has received exceptional early feedback. Unlike traditional distillate oils, ACE is the next evolution of oil that delivers an ultra-clear, ultra-pure product with minimal plant material, offering a smoother, more refined consumer experience. We view this as a disruptive advancement in the cannabis oil category, and we expect strong consumer adoption as awareness and trial increase.

In parallel, we rolled out Anthem, our new cylindrical style pre-roll line across 6 major markets: New York, New Jersey, Florida, Arizona, Massachusetts and Illinois. Anthem is already outperforming expectations, and we are accelerating production to meet surging demand while scaling to add additional states. According to Hoodie sell-through data, Anthem is the fastest-growing pre-roll brand in New York. Building on the strong brand momentum, we are expanding Anthem into a full-scale pre-roll line with a clear goal of establishing it as a national market share leader. As part of this expansion, we will launch Anthem Bold, our new line of infused pre-rolls in late September across key markets, including New York, New Jersey, Illinois and Arizona.

Our innovation pipeline is backed by industry-leading R&D and continues to reinforce our brand leadership. Select remain the #1 vape brand in the U.S. during quarter 2. While Grassroots, our premium flower offering, was a top 3 flower brand according to BDSA. These gains reflect ongoing improvements in our cultivation practices supported by our genetics program. Specifically, over the past 15 months, we have overhauled our genetics library to deliver high-quality, consistent flower across our state footprint.

The acquisition of Dark Heart Nursery, a highly regarded West Coast genetics lab, we completed a couple of years ago, is bearing significant fruit in our gardens. In quarter 2, we saw overwhelming success in the markets where we first began harvesting these genetics, states such as New York, Florida, Arizona and Utah. As these strains continue to roll out across additional markets in quarter 3, we see strong momentum building ahead. Flower remains the cornerstone of the cannabis category, and we are laser-focused on ensuring Curaleaf delivers the best-in-class quality, consistency and assortment. Our progress to date gives us confidence in our ability to win in this critical product segment, and we're just getting started.

Operating as a fully legal medical business, Curaleaf International functions much like a pharmaceutical company, giving us greater flexibility to capitalize on the strategic investments we've made over the past 4 years. This structure continues to deliver scale advantages and brand momentum as clearly demonstrated by robust second quarter results in which the segment generated $41 million in revenue and a 17% sequential increase, a 62% year-over-year growth driven by robust demand in Germany and the U.K.

In Germany, we continue to see healthy patient growth 1 year after the government passed the CanG, Cannabis Act, removing cannabis as a narcotic and streamlining patient access. Official data from the German regulator shows that 43 tons of dried flower was imported into Germany in quarter 2 2025, a fourfold increase over quarter 2 of 2024.

While pricing pressures become more prevalent in the market, the team has navigated these dynamics well by leading with our premium 4/20 flower brand, complemented by our mid-tier and value offerings. Last year's introduction of Huala, our value flower brand, is performing above expectations and in the second quarter was boosted by addition of new strain options.

In the U.K., the team did a fantastic job of adding new patients to our platform through our Curaleaf Clinic, where we focus on delivering high levels of service and product quality to our patients. In addition, the U.K. business benefited from the new wholesale partnerships and ensuing orders.

Curaleaf International achieved 3 significant milestones this quarter that further solidify our global leadership position. First, we completed the buyout of our minority partner and now own 100% of Curaleaf International. This move simplifies our structure, increases operational flexibility and reinforces our long-term commitment to global expansion. We thank our partner for their collaboration and continued support of Curaleaf's vision.

Second, we are pleased to announce we have received a license to enter Turkey, providing us a first-mover advantage in the country's nascent medical market. Turkey, with a population of 87 million people, represent a large and underpenetrated opportunity. Subject to the finalization and scope of the secondary regulations, we aim to commercialize our brand portfolio in the market within 2026. We will provide more detail as rules and time lines become clear.

Third, we achieved EU medical device registration certification for our world's first medically certified liquid cannabis inhalation device. This is a significant regulatory breakthrough that establishes a new standard for inhaled cannabis medicines in Europe. Designed to deliver consistent metered doses, the device is currently the only handheld solution legally permitted under EU medical device regulations. We're launching the device in the U.K. this month with plans to expand into key European and Australian markets as regulators evolve -- as regulations evolve. This innovation positions Curaleaf at the forefront of a differentiated pharma-grade delivery platform that addresses growing global demand for precision cannabis therapies.

Our International strategy continues to deliver results, driven by disciplined execution and a focus on scalable high-growth markets. Recent milestones including new market entries, product launches and regulatory wins are not just symbolic, they translate directly into near- and long-term revenue opportunities. In fact, Curaleaf International's current total addressable market, including the U.K., Germany, Poland, Australia, New Zealand and now Turkey, rivals that of the U.S. While these are primarily medical markets that are earlier in their development curve, the long-term growth potential is significant.

To support the momentum we're seeing today, we're expanding cultivation capacity through a more asset-light model than in the U.S., prioritizing leased infrastructure over owned assets to maintain flexibility and maximize returns on invested capital. Curaleaf International is now on pace to be 1 of our top 3 revenue contributors by year-end. We expect this segment to play a significant and growing role in our long-term value creation strategy.

Our hemp business continues to gain momentum, driven by a clear strategy focused on expanding distribution and increasing access to low-dose sessionable products that resonate with both core consumers and new entrants to the category. This quarter, we successfully launched FormulaX in brick-and-mortar retail and made it available on DoorDash, further broadening our omnichannel reach. In addition to Total Wine and DoorDash, we deepened our distribution footprint across key markets, including Connecticut, Indiana, Kentucky, New Jersey, Georgia, Ohio and Illinois. We're also optimizing our supply chain by bringing beverage fulfillment in-house at our Kentucky facility, an initiative that enhances production control and expected to drive stronger margin capture moving forward.

I'd like to provide an update on our upcoming debt refinancing. Over the past several months, we've engaged with a broad range of investors, including public and private credit funds as well as regional banks. The initial response has been highly encouraging with strong indicative interest and constructive dialogue. We remain focused on securing the most favorable outcome for Curaleaf, aligned with our long-term capital strategy. We are on track to complete the refinancing by year-end and are confident it will enhance our financial flexibility and support our growth priorities.

This earnings call marks my 1-year anniversary as CEO, and I'm proud of the meaningful progress we've made through our return to our roots program. Over the past 12 months, we've laid critical groundwork to strengthen the business, resetting gardening yields, elevating flower quality across our network, expanding gross margins, reducing costs and fueling growth in key areas, including international, New York, Ohio and our hemp business. While price compression remains a headwind in many of our markets, driven in large part by the rapid expansion of the Lucie regulated hemp sector, which benefits from interstate commerce, low operating costs and freedom from the 280 tax burden, we remain confident in the long-term trajectory of the cannabis industry. That's why we continue to invest in the 5 core pillars of sustainable success: people, product quality, R&D, distribution and customer experience.

Domestically, we've upgraded cultivation facilities, improved our flower quality, implemented automation and made meaningful progress on our retail build-outs. Internationally, we've expanded production capacity, entered new markets and broadened our brand portfolio. To support this next phase of growth, we've also made key additions to our leadership team at the corporate level. Recently, we welcomed 4 senior executives who bring deep experience from best-in-class consumer and retail organizations. Rahul Pinto joins us as President in our newly created role, overseeing revenue, innovation and brand, critical drivers of top line growth. He brings a strong background from Abertsons, PepsiCo and Bacardi.

Scott Crawford, our new Head of Merchandising, comes to us from Baldor Foods, FreshDirect and Whole Foods, offering deep expertise in category management.

Justin Miller, now leading brand marketing, brings brand building experience from Diageo and William Grant & Sons. And Helen Chen, our new Head of Digital, joins us from Pernod Ricard U.S.A., PepsiCo and McKinsey with a mandate to enhance consumer engagement and drive our digital transformation. These hires reflect our disciplined focus on leadership excellence and position us to execute with great precision, drive margin expansion and unlock long-term shareholder value.

Global consumer demand for cannabis is not only robust, it's accelerating. With the right team, strategy and infrastructure in place, Curaleaf is uniquely positioned to lead and capture the next wave of industry growth. With meaningful momentum building around federal reform and the potential for rescheduling, combined with many strategic initiatives underway at Curaleaf, I have never been more confident in our future as we enter the next phase with a stronger foundation made possible by the relentless dedication of our 5,000 global employees. To our entire team, thank you. With your continued focus and execution, I believe Curaleaf is exceptionally well positioned to lead the next era of cannabis.

With that, I'll turn the call over to our CFO, Ed Kremer. Ed?

Thank you, Boris. Total revenue for the second quarter was $315 million, a 1.5% sequential increase compared to the first quarter and an 8% decrease compared to the same period last year. Strength in our International segment, Ohio, Missouri and Utah was offset by pricing pressure in Pennsylvania, New Jersey and Illinois. Our domestic retail metrics showed signs of stabilization in the second quarter as transactions were flat and units per transaction increased 1%, while AUR decreased 3% compared to the first quarter.

By channel, retail revenue was $229 million compared to $264 million in the second quarter of 2024, a decline of 13% year-over-year, partially offset by strength in wholesale, which increased 8% year-over-year to $83 million, representing 26% of total revenue and driven by growth in the international, Missouri and Ohio.

By geography, domestic revenue declined 14% compared to the same period last year, largely driven by price compression as both flower and vape pricing was down mid-teens. Conversely, International was again the standout performer as revenue grew by 62% year-over-year, driven primarily by Germany and the U.K.

We continue to strategically leverage our cultivation facility in Portugal, which enables us to supply high-quality flower at scale across multiple markets. By introducing mid-tier and value-tier flower offerings in our portfolio, we have effectively managed to fend off price compression in our key markets, while expanding our reach across patient segments. These results underscore the strength and resilience of our International platform as well as our ability to scale profitably in diverse regulatory environments.

Our second quarter adjusted gross profit was $154 million, resulting in a 49% adjusted gross margin, an increase of 120 basis points compared to the prior year period. The primary drivers of this expansion were continued cultivation productivity and efficiency gains and an increase in vertical mix, partially offset by price compression and higher promotions. Sequentially, adjusted gross margin contracted by 130 basis points, primarily due to the product mix dynamics from international as higher-than-anticipated demand for our value flower in Germany weighed on the segment's margins. We expect the segment's product mix and gross margin to normalize and increase in the fourth quarter as we return to selling a balanced assortment of high-end, mid-tier and value flower.

SG&A expenses were $105 million in the second quarter, a decrease of $4 million from the prior year ago period. Core SG&A was $102 million, also a $4 million decrease from the prior year. The year-over-year decrease in our core SG&A primarily reflects reductions in payroll and marketing expenses as we are laser-focused on managing all elements of our cost structure. Core SG&A was 32.5% of revenue in the second quarter, a 160 basis point increase compared to the prior year due to the reduced sales base.

Second quarter net loss from continuing operations was $51 million or a loss of $0.07 per share. Adjusted net loss from continuing operations was $48 million or a loss of $0.06 per share.

Second quarter adjusted EBITDA was $66 million, a decrease of 10% compared to last year, while adjusted EBITDA margin was 21%, a decrease of 40 basis points versus last year. Our International segment was a 180 basis point drag on total AEBITDA margins in the quarter, primarily due to the aforementioned product mix dynamics. As I previously mentioned, while International margins will fluctuate from quarter-to-quarter, we anticipate International margins to rebound in the back half of the year. Separately, and as expected, our hemp business weighed on our total AEBITDA margins by 80 basis points as we continue to invest in marketing, brand building and product development.

Turning to our balance sheet and cash flow. We ended the quarter with cash and cash equivalents of $102 million. Inventory decreased $2 million or 1% compared to the same period last year, comprised of a 6% reduction in domestic inventory, partially offset by 62% growth in international inventory to support robust demand. Capital expenditures in the second quarter were $15 million. For 2025, we continue to expect capital expenditures to be approximately $50 million with investments focused on International facility expansion, IT infrastructure and new store openings.

In the second quarter, we generated operating cash from continuing operations of $9 million driven by changes in working capital as we saw an increase in wholesale sales in the last month of the quarter, coupled with material reductions in our payables and accrued liabilities accounts. We expect a meaningful improvement in operating cash flow in the second half of the year, in line with our historical pattern of stronger cash generation in the back half.

Our outstanding debt was $561 million. After the quarter end period, we opportunistically repurchased $3.2 million of our 2026 notes at an 8.75% discount. During the quarter, we reduced our acquisition-related debt by $7 million. We will continue reducing various components of our debt throughout the year while maintaining ample liquidity to support our operations and growth objectives.

The consumer is facing many macro headwinds. And while our demand for cannabis is strong, pricing pressure have not abated. As such, for the third quarter, we expect total revenue to be flat to up low single digits sequentially from the second quarter.

And with that, I'll turn the call back over to the operator to open the line for questions.

[Operator Instructions] And our first question will come from Aaron Grey with Alliance Global Partners.

So first question for me, I just want to touch on International, specifically in Germany. Any color you could offer in terms of the growth you're seeing in that market? And also in terms of -- we're seeing in terms of the pricing tier, I believe you mentioned increase in terms of value products. There has been some conversation around some pricing pressure starting to come in Germany. So any color around those dynamics? And also from the regulatory front, just any term -- any kind of risk you might see in terms of some proposals that have been made restricting telemedicine and otherwise from the market?

Thanks, Aaron, for that question. Growth in Germany has been very, very strong. I think we outlined those growth rates in the call. We don't see them abating here in the third quarter, and we see them continuing into the fourth quarter as well. Obviously, Germany is still very underpenetrated at less than around 1%. We've seen medical markets like this easily go from -- to 4% to 8% depending on the program and the structure of the program. So we anticipate continued growth over the next several years in the German market as the patient pool continues to expand.

There have been proposals by the conservative government to rein in the telemedicine platforms. We don't believe that, that will actually happen. We think there may be some limitations put on it, for instance, not being able to use European Union platforms, but only being able to use German platforms. However, that could be a violation of EU rules. And so it will be very difficult. It's too early to tell right now where we think Germany will end up. We'll know probably somewhere in October and November. But that's not going to change the growth trajectory of the business. That may change even if there was a negative -- a more negative response than we anticipate. That -- all that would do would push out the growth a little bit longer because people have to go back to medical clinics to get their prescriptions rather than online.

However, as I said earlier, everything we're seeing, we think that there'll be very minor changes, and there won't be a major change to the trajectory. There have been -- obviously, all the Canadian growers as well as African growers, South American growers are buying to get into this market. There's a lot of product that's entering the market. And so we've seen definitely some price compression in that market. I think it's been about 35% year-over-year price compression. However, Curaleaf being one of the largest operators, if not the largest, we have a very diversified portfolio where we're playing in the premium segment. We're the largest player in the premium segment. We're also playing in the mid-segment and the lower segment in the market. So we're capturing all aspects of the market. And we -- so far, our margins have held up reasonably well, and we continue to believe that those margins will actually expand into the second half of the year in Europe.

Okay. That's great. I really appreciate that commentary. Second question for me, just around hemp. Could you speak to some of the marketing initiatives that you have planned to help drive velocity given that you have more marketing levers available for hemp THC that are available for cannabis? Do you see the opportunities that were available this summer, potentially as kiosks to increase marketing and drive growth given the seasonality that we've seen in other categories that would probably be similar to hemp drinks?

Yes. We are on the cusp of signing some very interesting marketing transactions. We're also on the cost of signing some sponsorship deals. Marketing for hemp products and seltzers is almost the same for any other drinks that are out there. And so the options are very wide and very big. Obviously, they do cost quite a bit of money. So we want to be very careful to pick the right ones. But we are looking at some very, very interesting sponsorship and marketing cooperations here over the next several months that we'll be coming out with. It's too early to announce anything now. But we feel very good. We can use all of -- obviously, all of the social media channels. and we can use also -- we're starting to talk to sports teams and other things. So we do think that this product will continue to get widely accepted. And as I said, my view, as I said many years ago, I think that beverage will be at least 50% of the cannabis segment, but it will take 5 to 10 years to get there.

And our next question will come from Bill Kirk with ROTH Capital Partners.

I wanted to ask about New York with the OCM saying some formerly approved sites are now noncompliant. And I guess while we're there, it looks like they paused to see the sale implementation deadline yesterday, I guess. So what's the status of that program? What's the status of some of these licenses and the product that's been coming from California?

Yes. I think on the store front, 60 stores are affected by this. The state has come under a tremendous amount of pressure. We believe the state will also be sued over this because it's obviously a mistake that the state made and the $250,000 that they're offering these stores to relocate is way too low. I personally think that they will change the legislation to allow these stores to be located where they are. It's just going to take them a little bit of time. They have to get back in the session to do it. I don't think it's a difficult lift. And I think the lawsuits will be such that they'll almost be forced to do it.

So I personally believe the state will move on the issue of the stores because it was a mistake that the state made and not the fault of any of the store owners. But it does represent 60 stores out of -- I think it's almost 450 stores that are open now in the state and more opening.

On the seed to sale, the state, obviously under pressure over the issue of the stores. And the acquisition recently of metric -- of BioTrack, which is the system that's being implemented in New York and a lot of the smaller players not being ready has made a decision to postpone the seed-to-sale program -- the seed-to-sale tracking system. We're obviously very upset by that. It's something that we feel would take out the illicit product that's in the system right now. We will be making a statement on that shortly and probably taking legal action with the state on that issue in order to keep them to implementing the program.

The original implementation was supposed to be finished by October -- middle of October, which would have made the whole system and the whole tracking system working by, call it, early November, which would have probably removed most of the illicit products that are in the system now. Where they're going to come out on timing is unknown at the moment. And we're going to continue the pressure on the state in order to implement the system. We know the state is committed to doing it. Many of the smaller players in the state just weren't ready to do it, and they're using the excuse of the takeover of BioTrack biometric to give people more time. We're going to keep their feet to the fire and make sure that they do what they promised they were going to do in the program.

Okay. And then switching to Turkey since it's obviously a potentially large market, could you give us a sense to how you see that market structure developing there? From what I understand, the program seems to be setting up a little bit more, I guess, nationalistic than other international markets. Is that a fair characterization? And what would that mean? Would you have to maybe produce there? Or would they be accepting a product from other countries?

They haven't set up of the -- the final rules yet, but we've been involved from day 1 in that program. Curaleaf led the initiative there. It's obviously a massive opportunity, 87 million people. Just to put things into perspective, Germany is 84 million people. They're looking at this as purely a medical market. And yes, they are going to -- at least in the early part of the development of the program, they are going to require to produce the products in Turkey. Turkey has a good climate. Turkey grows a tremendous amount of hemp today. They have a good climate for growing cannabis. And it will be easy to formulate. We're hoping that they'll allow us to buy hemp products to formulate our products so we can bring in our technologies in order to do it. It's much more medical in structure than the U.S. as is most of the European market, but it will be, I believe, 16 licenses have been issued and Curaleaf was one of the 16 licenses. And at the moment, I believe, the only part issued license at the moment.

And our next question will come from Frederico Gomes with ATB Capital Markets.

Just want to go back to a comment that you made on the prepared remarks that you could spin out your International business or your Hemp business to unlock some value if we don't see federal reform materializing soon. So could you talk more about that how long would you be willing here to wait for that regulatory change in the U.S. before you would make that decision? And how do you envision that happening and how much value could be unlocked here?

We can't discuss the numbers and the value. I can only say that the -- we've met with bankers and the value in our European business as a -- basically a biotech or pharma business would be substantial. And it's definitely not recognized in any way today in the valuation of Curaleaf. When we make that decision, I really think will depend on what we get here during this calendar year on reform. If the U.S. moves ahead with the reform, and obviously, we're pretty close to that process and feel good about it, then we would keep it consolidated at this point in time.

If we don't get reform in the United States, those businesses, both the hemp business and the medical business in Europe would obviously be probably better off spun out from under Curaleaf because of the value that's attributed to those businesses and the growth profile of those businesses and the fact that they -- none of those businesses are subject to 280E. One of our competitors has already done that and spinning out the hemp business that they have. We, at the moment, have decided to keep it consolidated. We think the company is better together, especially if we get the critical reform that we're looking for. However, if it's not there, then we would work with advisers and bankers on looking at the best option for shareholders and spinning out those businesses as separate entities.

Perfect. Second question, just on Australia. I know that you launched some new products there recently. Could you talk about that market? How are those products performing? And what sort of growth you're seeing in Australia?

I mean we just launched our product portfolio in Australia. It's too early to think about the individual countries there. And we've just broken out the overall European revenue, as you know. So we're not going to talk about individual countries. But I can say, though, that we see a huge opportunity. It's an over $1 billion market right now. And we see a lot of opportunities in Australia and are eager to continue the expansion. We are going vertical, vertical not in a sense that we're growing, but we are integrated and we're buying a wholesaler.

We're looking at becoming a local distributor of our products in that marketplace. So we're currently looking at licensing and other things. So not only distributing through third parties, but also distributing ourselves and controlling our own brands. And that's something that we're looking at and on the cusp of executing on that shortly.

And our next question will come from Russell Stanley with Beacon Securities.

Maybe coming back to Turkey and understanding, I think you said that secondary market regulations are still being finalized, but wondering if you can compare what patient access is likely to look at -- look like compared to, for example, Germany? And secondly, I guess, when you think or what the time line might be to first revenue there?

We think that -- again, it's a little bit early to tell. I would say somewhere in the -- we would hope that the program would get lunched somewhere around the third quarter. Obviously, we've got to build our facilities there, which we'll start doing very shortly in order to build our processing facilities and our facilities to make product.

Listen, 87 million people, I think it's probably as all these medical markets starts out slow, there's an education process. You have to educate doctors and the doctors have to work with patients. But it's a big -- and cannabis is a widely used product in Turkey. And so we are pretty optimistic about it. And as I've said in my prepared comments, with Turkey coming online, we now have an international TAM in markets that we're in -- that rivals out in the United States.

So obviously, early stage. I wouldn't want to make any dramatic predictions on it. But if you remember, Germany took a while to get to 150,000 patients and then all of a sudden with some reforms, it's now over 1% of -- and I think it's over 1 million patients now, 1.2 million patients in Germany as of this quarter. And so we've gone in 1 year from 150,000 to 1.2 million, with a small degree of reform. Turkey, I think will start out like Germany and like the U.K. slow as we go through the education process, and then it will accelerate over time. But it's 87 million people, limited licenses. We're pretty excited about it.

And maybe coming back to Germany, apologies if I missed it, but can you elaborate on what transpired there with respect to the sales mix in Q2? And I guess, more importantly, I guess, what drives the rebalance later this year?

I think that the only thing that happened to Curaleaf in the sales mix was that because of permitting and moving products, don't forget, we do grow and we also buy products in Canada. We move it to Germany. We also are growing product in Portugal moving it. So sometimes when you have export holdups, I think some of the Canadian companies mentioned it. More of our mid- and lower tier product got permits to go into Germany versus our higher-tier product. And so we weren't able to get as much of our higher-margin product into Germany. However, we did get those permits on the last day of the quarter.

So this quarter, we have all that product now in market. And overall, though, as I said, that there's been a lot of mid- and lower-tier products that's entered the German market recently. And so there's been quite a bit of price pressure at that level. However, the premium product continues to hold very well, and we're the largest operator in the premium segment in Germany. So we feel pretty good about where we are.

And our next question will come from Jesse Pytlak with Cormark Securities.

Just staying on the International business, can you talk about the amount of headroom that you ultimately see in that business for driving margins even higher just as you further integrate your supply chain globally?

Yes. Listen, it's all about scale now for us. As we get to scale, obviously, our margins get better. And we're expecting margin expansion in the second half of the year. We think we're going to close out the year around the 45% gross margin. That's up from about 34% last year.

That's helpful. And then just as a follow-up, in your prepared remarks, you talked about some of the rationalization and distress that you're seeing in the U.S. market. Can you speak to how that landscape has evolved over the past 6 months?

Sorry. About U.S. pricing?

The U.S. competitive environment, more with respect to distressed assets and business rationalization.

Yes, thanks. I've been saying this for some time. The price pressures in the United States have nothing to do with the regulated market. The price pressures in the United States have to do with 2 things. One is hemp and 2 is the illicit market in which there's very little enforcement -- or historically, there's been very little enforcement.

With the Trump administration, we've seen a lot more enforcement in the illicit market. We believe we'll continue to see that. So that will put pressure on the illicit growth and the illicit products that are sold in the market. And on the hemp side, listen, we're waiting for some guidance from the federal government where they're going to end up on there. But as a hedge, it's the reason we went into the hemp market, so that we can at least produce products that are federally compliant and be able to distribute them on a national basis.

But hemp is the real cause of the problem, particularly the synthetic products that are coming through hemp, are the real cause of what we're seeing as price compression in the regulated market. The regulated market has testing costs, tax costs, regulatory costs, all the types of costs you do in the standard CPG business. The hemp market has very, very different cost because it doesn't have state-by-state manufacturing costs, doesn't have state-by-state growing costs. It doesn't have any of the tax costs. It doesn't have any of the testing that we have to do in the regulated market.

And so it's very difficult to compete against that product. And that product is permeating into almost every [ diag ] and every store around the country. And that's what's been the real price pressure on the regulated cannabis sector. I don't believe myself that, that will be allowed to continue. I do believe that there will be regulation in the hemp sector. And I do believe that will happen over the next 12 months. I don't believe they'll shut it down, which I think is the right thing. But I do think that there'll be regulation of hemp products, particularly synthetic products and particularly flower products that today, people are claiming or compliant but really aren't compliant.

And so I think that we will get regulation. And I do think we'll get federal reform in the regulated part of the business. And so I think things will hopefully start getting better in terms of price compression in the regulated market. In the meantime, it's forced all of us to get better at what we're doing, and we continue to get better at.

[Operator Instructions] Our next question comes from Pablo Zuanic with Zuanic & Associates.

This is H. Mohammed on for Pablo. Going back to Germany, do you have an estimate of 4/20's market share in Germany? And can you remind us of your plans about the 45% stake that you do not own of 4/20?

We will be buying that stake. We have both a put and call option on that. So that stake will be bought as we bought the stake in our International business, which represented 31% earlier this year. We'll be buying the 4/20 stake as well in the first quarter of next year. And sorry, what was the other question on Germany?

Our market share, it's very difficult to tell. It's not public information there, but we reckon our market share is somewhere between 15% and 20%.

And my second question is about Florida. How confident are you that Florida will have a ballot on recreation of sales by November 2026?

Listen, I think that Kim and Trulieve are doing a gallant effort in getting the signatures. And we also know that midterm elections are better for cannabis reform. We had this very similar problem in Arizona, where we failed on the first round. And we also had a 60% hurdle threshold, and we were able to get it passed in the midterm elections 2 years later. So given that, I'm cautiously optimistic we'll be able to get it done as long as we can get all the signatures and get it on the ballot. But I think Trulieve and Kim Rivers are better to ask that question. She's on top of that issue and owns that issue completely.

And this will conclude our question-and-answer session. I'd like to turn the conference back over to Camilo Lyon for any closing remarks.

Thanks, everyone, for joining us today. We will catch up again in 90 days.

The conference has now concluded. Thank you for attending today's presentation. You may now disconnect your lines at this time.

Good morning. My name is Camilo Lyon, Chief Investment Officer of Curaleaf Holdings, Inc. And on behalf of our management and directors, I would like to welcome you to the Annual General Meeting of Shareholders of Curaleaf Holdings, Inc. I will be acting as Chair of the Meeting today. On behalf of the Board, I wish to express thanks to those shareholders who have submitted their proxies in advance of today's meeting. This year, again, the meeting is being held virtually via live webcast only.

The company views the use of technology enhanced shareholder communications as a method to facilitate individual investor participation, making the meeting more accessible and engaging for all involved by permitting a broader base of shareholders to participate in the meeting which is consistent with the goals of the regulators, stakeholders and others invested in the corporate governance process.

As this meeting is being held virtually via live webcast, we think it is necessary to set a few ground rules for the orderly conduct of the meeting. One, registered shareholders and duly appointed proxy holders who wish to communicate with the members of the management team and the Board or who wish to present or ask a question in respect of a motion may do so using instant messaging on the Lumi virtual interface. Two, as described in our management proxy circular, duly appointed proxy holders were holders were required to register with our transfer agent and obtain a control number prior to this meeting in order to participate, vote and ask questions during the meeting.

Three, when asking a question, please indicate which entity you represent, if any, and confirm that you are a registered shareholder or a duly appointed proxy holder. Four, questions asked during the meeting will only be addressed at the end of the meeting unless they relate to procedural matters or are directly related to the motions presented before the meeting. Five, questions or comments containing inappropriate language or that are otherwise disruptive to the orderly conduct of the meeting for all shareholders will not be answered.

Six, questions which were already answered or that are redundant or repetitive will not be answered. Seven, for the purposes of the meeting today, voting on all matters will be conducted by a single electronic ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on all business items at the same time. This will allow you to choose to vote on each resolution as soon as voting opens or wait until the conclusion of the discussion on each resolution prior to casting your votes. Only registered shareholders and duly appointed proxy holders of the company are permitted to participate in the voting.

Please note that only registered holders of subordinate voting shares and multiple voting shares of record as of April 29, 2025, or their duly appointed proxy holders are permitted to participate, ask questions and vote at this meeting. The formal part of the meeting should last around 20 minutes. We will end the meeting with a short, moderated questions-and-answers period to answer a few questions from shareholders. It should be noted that based on the proxies already received by the company prior to the meeting, the required level of shareholders approval to adopt each of the resolutions to be presented to the shareholders at today's meeting has already been obtained.

To expedite the formal part of the meeting, I will move and second all motions as permitted under the company's articles. We will now proceed to the formal portion of today's meeting. Please note that voting is now open and will remain open throughout the formal portion of the meeting. I call to order the Annual General Meeting of the company's shareholders. With the consent of the meeting, I appoint Peter Clateman, Chief Legal Officer, to act as Secretary of the meeting.

In addition, and with the consent of the meeting, I appoint Odyssey Trust Company through Paul Keyes as scrutineer. The scrutineer will report on the number of subordinate voting shares and multiple voting shares represented in person and by proxy at this meeting, tabulate the votes and report the results. The scrutineer has provided me with a copy of their report, which indicates that at least 2 shareholders of the company are present represented by proxy. This meets the quorum requirements in the company's articles and as such, we are permitted to proceed with the meeting.

A copy of the final report on attendance will be filed with the records of the meeting. I have here the certificate of our transfer agent, Odyssey Trust Company, indicating that proper Notice of Meeting has been given in accordance with applicable corporate and securities laws and the articles of the company. Accordingly, unless there is an objection, I will dispense with the reading of the Notice of Meeting. I direct that a copy of the notice with proof of mailing be kept by the secretary with the records of the meeting.

The purposes of today's meeting are set out in detail in the Management Information Circular dated April 29, 2025. Copies of the circular were made available to shareholders on or around May 14, 2025. Together with the Notice of the Meeting and the formal proxy, copies of the Management Information Circular and other meeting materials are available under the company's profile under the SEDAR+ website.

For the purposes of the meeting today, voting on all matters will be conducted by a single ballot. Registered shareholders and duly appointed proxy holders will be asked to vote on each business item after the presentation of all such business items. After you have registered your votes for all business items of today's meeting, the scrutineer will complete the votes in respect of each business item. You should know that proxies lodged before this meeting allow management of the company to cast a significant number of votes.

Based on the number of shares represented at this meeting, the members of management here with me today will be able to determine the outcome of all motions that will go to a vote today. I may, therefore, declare the motions which will go to a vote today as carried, even though all the votes may have not been counted or a final report may not yet be available. I shall do this to keep up the pace of the meeting. Under the company's articles, the Chair of the Meeting can propose motions and no motion proposed at a Meeting of Shareholders is required to be seconded.

In order to expedite the meeting, I will propose certain motions and will not call for a seconder. But this is in no way intended to inhibit any questions or discussions with respect to the motions. I now declare that this meeting was properly called and duly constituted for the transaction of business.

The first item of business is the presentation of the company's consolidated financial statements for the fiscal year ended December 31, 2024, as well as the auditor's report thereon. These financial statements and the auditor's report were made available on the SEDAR+ website under the company's profile on March 3, 2025. The financial statements were also made available on a dedicated site hosted by our transfer agent, Odyssey Trust Company as required under the notice and access regimen. Unless there is an objection, I will dispense with the reading of the auditor's report. We will entertain any questions with respect to the financial statements in the general question period.

We now move to the next item on today's agenda. The articles of the company require a minimum of 3 directors of the company. There are currently 8 directors of the company. At this meeting, it is proposed that 6 directors be reelected. Mr. Peter Derby and Dr. Jaswinder Grover will retire from the Board at the conclusion of the meeting and are therefore not standing up for reelection at the meeting. On behalf of the Board of Directors of the company, I would like to extend our most heartfelt gratitude to them for their service and dedication to the company over the last several years.

I now move to set the number of directors on the Board of Directors of the company at 10. In accordance with the articles of the company, the Board will have discretion to select suitable candidates and appoint them as directors of the company to fill in the 4 vacancies that will remain following the meeting. And such directors will hold office until the next general -- Annual General Meeting of Shareholders or until they are otherwise replaced. The motion is now on the floor. Is there any discussion on the motion?

As mentioned at the beginning of this meeting, voting today will be conducted by a single electronic ballot. Unless there are any questions or discussions, we will now continue with the next item of business. The next matter to be acted upon is the election of 6 individuals to the Board of Directors. The term of office of the directors is from today until the next Annual General Meeting of Shareholders or until such time as their successors have been duly elected or appointed. The circular contains information each of the 6 nominees recommended for election as directors. As outlined in the circular, the following individuals have each been nominated to hold office until the close of the next Annual Meeting of Shareholders or until their successors are duly elected or appointed.

They are Boris Jordan, currently the Chair of the Board and Chief Executive Officer of the company; Joseph Lusardi; currently the Executive Vice Chair of the Board; Karl Johansson, Mitchell Kahn, Shasheen Shah and Michelle Bodner. Each of the persons nominated has confirmed that he or she is prepared to serve as a director. Each of them qualifies to serve as a director under the provisions of the British Columbia Business Corporations Act. Given that no nominations were received in accordance with the provisions contained in the company's articles, I declare the nominations to be closed.

I move to nominate the directors as set forth in the circular. The motion is now on the floor. Proxies have been solicited for each of the 6 proposed qualified persons listed in the circular. The form of proxy for voting on the election of directors sets out each proposed nominee separately and allows shareholders to vote for each director individually. Is there any discussion on the motion?

As mentioned at the beginning of this meeting, voting today will be conducted by a single electronic ballot. Unless there are any questions or discussions, I will now move to the next item of business.

The next item of business is the appointment of the auditors of the company for the ensuing year and to authorize the directors of the company to fix the remuneration of the auditors. I move that PKF O'Connor Davies, LLP be appointed auditors of the company until the next Annual General Meeting of Shareholders and that the directors be authorized to fix their remuneration. Is there any discussion on the motion?

As previously mentioned, voting today is conducted by a single electronic ballot. Voting opened at the beginning of the formal part of the meeting. If you have not yet cast your vote in respect of each of today's business items of this meeting, please to do so now. Please register your votes by accessing the voting page when prompted and by pressing on the For or Against buttons next to the resolution with respect to the setting of the number of directors of the company at 10, and by pressing on the For or Withhold buttons next to the name of each proposed director and next to the resolution, with respect to the appointment of PKF O'Connor Davies, LLP as the company's auditors.

Once the electronic balloting closes, the voting page will disappear and your votes will automatically be submitted. We will wait a few moments for the completion of the electronic ballots and then move on with the remainder of the meeting. We will provide registered shareholders and duly appointed proxy holders approximately one minute to complete the electronic ballots. Once voting is completed, I would ask that the scrutineer compile the preliminary report on ballots regarding the preliminary results of voting on all business matters.

[Voting]

Now that voting is completed, we will take a short break of a minute or 2 so that the scrutineer can compile preliminary ballot results. We will reconvene in a few moments with the scrutineers' preliminary ballot results. Once the preliminary results have been compiled, Paul Keyes from Odyssey Trust Company will announce them.

[Break]

Thank you for waiting. In my capacity as scrutineer of this meeting, I am pleased to confirm the following: the number of directors of the company has been set at 10; each of the 6 nominees have been elected as directors of the company to serve until the next Annual General Meeting of Shareholders or until their successors are elected or appointed; the appointment of PKF O'Connor Davies, LLP as the auditors of the company has been approved, and the Board of Directors of the company has been authorized to fix their remuneration.

Thank you, Mr. Keyes. I direct that the results of the poll be included in the minutes of this meeting. If there is no further business to be brought before this meeting, I move that the formal portion of today's meeting be concluded. And I now declare the formal part of the meeting closed.

We will now open the floor for a question-and-answer period. I ask that all attendees who would like to ask a question use the instant messaging feature of the virtual platform to do so. We will answer as many questions as time permits. When asking your question, please state your name, the entity you represent, if any, and confirm if you are a registered shareholder or a duly appointed proxy holder. Please limit your questions to the topics relating to today's subject matter, and keep your questions short and to the point.

There being no questions, we are now concluding the question-and-answer portion of this meeting.

On behalf of management, our Board of Directors and our employees, I would like to take the opportunity to thank everyone for attending the meeting today. I would like to thank all of our shareholders for their commitment and continued support. We look forward to your attendance again next year. We encourage all shareholders to regularly consult the investors presentations that we published to the Investor Relations section of our website at www.curaleaf.com.