~~• Distributing branded products through branded retail locations and wholesale network by:~~

We own or lease our facility locations including cultivation, processing, retail and corporate office locations. We do not have any one lease representing over 10% of our consolidated leasing costs and, as a result, do not consider any of our leases to be material. In Florida, we have 111 operational dispensaries, of which 109 are leased, and we have fourteen cultivation, manufacturing and distribution facilities, of which six are leased. In Arizona, we have seventeen operational dispensaries, of which thirteen are leased. In California, we have five operational dispensaries, of which three are leased. We have a single operational manufacturing facility in Colorado that is leased. We have one operational dispensary in Connecticut that is leased. In Georgia, we own land that is in the process of being developed into a cultivation facility. In Massachusetts, we operate two operational dispensaries, both of which are leased, and operate two separate cultivation properties, one of which is leased. We have three operational dispensaries in Maryland, of which two are leased, and we also operate a cultivation, manufacturing and distribution facility on adjacent leased properties. In Nevada, we lease a single cultivation, distribution and manufacturing facility. In Pennsylvania, there are eighteen operational affiliated dispensaries, seventeen of which are leased, and there are three affiliated cultivation and manufacturing facilities, of which a portion of one is leased. In West Virginia, we have two dispensaries and a cultivation facility that are leased and we own real property where additional cultivation operations are being be developed.

We recruit talented individuals to join the Trulieve team. Our employees have a wide range of skill sets, including employees with PhD and master’s degrees. Many of our employees are college graduates and have specific skills related to their job function. We intend to continue to build out our research and development team with scientists and other technical specialists. We use a variety of recruiting techniques, including online resources as well as recruiting professionals, to assist with filling specialized roles.

We have varying degrees of vertical operations in the markets in which we operate. In the Florida market, our operations are fully vertically integrated as required by state regulations. In other markets we may operate within one or more segment of the cannabis value chain. In the normal course of our business we purchase input materials and components that we utilize in the cultivation, processing, manufacture and distribution of our products. No individual suppliers represent a significant portion of our purchases or represent a material risk to our operations.

We have built brand recognition throughout our markets. One of our key business objectives is to build brand equity in the Trulieve brand name through our branded retail stores and interactions with our customers. We intend to rebrand acquired and affiliated locations over time as part of our plan to expand our branded retail reach. Trulieve maintains a consistent approach to the design of its retail stores and endeavors to create a uniform experience for its customers.

We regularly seek to protect our intellectual property rights in connection with our operating names and our brand names. The U.S. trademark statute, The Lanham Act, allows for the protection of trademarks and service marks on products and services used, or intended for use, lawfully. Because cannabis-related products and services remain illegal at the federal level under the Controlled Substances Act, we are not able to fully protect our intellectual property at the federal level; therefore, we currently seek trademark protections at the state level where commercially feasible. Nonetheless, our success depends upon other areas of our business such as product development and design, production and marketing and not exclusively upon trademarks and trade secrets.

We have developed proprietary cultivation techniques. We have also developed certain proprietary intellectual property for production best practices, procedures and methods. This requires specialized skills in cultivation, extraction and refining.

We rely on non-disclosure/confidentiality agreements to protect our intellectual property rights. Where commercially feasible, we will proactively seek intellectual property protection for newly developed brands as well as for expansion of existing brands across current markets and into new markets. We own several website domains numerous, social media accounts across all major platforms and various phone and web application platforms.

Our business operates year-round. Operations and sales trends in select markets where we operate do follow seasonal trends with various times of the year providing an opportunity for outdoor cultivation, seasonal impacts on sales in summer and winter months in markets in the Southwest and Northeast and promotional activity increases around specific industry and holiday ~~events.~~events including 4/20, 7/10, and Green Wednesday (the Wednesday before Thanksgiving).

•

~~retention~~Retention of employees from the acquired company;

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•

~~cultural~~Cultural challenges associated with integrating employees from the acquired company into our organization;

•

~~integration~~Integration of the acquired company's accounting, management information, human resources, and other administrative systems;

•

~~the~~The need to implement or improve controls, procedures, and policies at a business that prior to the acquisition may have lacked effective controls, procedures, and policies;

•

~~potential~~Potential write-offs of intangible assets or other assets acquired in transactions that may have an adverse effect on our operating results in a given period;

•

~~liability~~Liability for activities of the acquired company before the acquisition, including patent and trademark infringement claims, violations of laws, commercial disputes, tax liabilities, and other known and unknown liabilities; and

•

~~litigation~~Litigation or other claims in connection with the acquired company, including claims from terminated employees, consumers, former stockholders, or other third parties.

Our failure to address these risks or other problems encountered in connection with any future acquisitions or investments could cause us to fail to realize the anticipated benefits of these acquisitions or investments, cause us to incur unanticipated liabilities, and harm our business generally. Future acquisitions could also result in the incurrence of debt, contingent liabilities, amortization expenses, or the impairment of goodwill, any of which could harm our financial condition.

We may issue additional Subordinate Voting Shares in connection with such transactions, which would dilute our other shareholders’ interests in us. The presence of one or more material liabilities of an acquired company that are unknown to us at the time of acquisition could have a material adverse effect on our business, results of operations, prospects and financial condition. A strategic transaction may result in a significant change in the nature of our business, operations and strategy. In addition, we may encounter unforeseen obstacles or costs in implementing a strategic transaction or integrating any acquired business into our operations.

If we cannot manage our growth, it could have a material adverse effect on our business, financial condition and results of operations.

We may be subject to growth-related risks, including capacity constraints and pressure on our internal systems and controls. Our ability to manage growth effectively will require us to continue to implement and improve our operational and financial systems and to expand, train and manage our employee base. Our inability to successfully manage our growth may have a material adverse effect on our business, financial condition, results of operations or prospects.

Anti-Money Laundering Laws in the United States may limit access to funds from banks and other financial institutions.

In February 2014, the Financial Crimes Enforcement Network, or FinCEN, bureau of the United States Treasury Department issued guidance (which is not law) with respect to financial institutions providing banking services to cannabis businesses, including burdensome due diligence expectations and reporting requirements. While the guidance advised prosecutors not to focus their enforcement efforts on banks and other financial institutions that serve marijuana-related businesses, so long as they meet certain conditions, this guidance does not provide any safe harbors or legal defenses from examination or regulatory or criminal enforcement actions by the United States Department of Justice, or DOJ, FinCEN or other federal regulators. Because of this and the fact that the guidance may be amended or revoked at any time, most banks and other financial institutions have not been willing to provide banking services to cannabis-related businesses. In addition to the foregoing, banks may refuse to process debit card payments and credit card companies generally refuse to process credit card payments for cannabis-related businesses. As a result, we may have limited or no access to banking or other financial services in the United States and may have to operate our United States business on an all-cash basis. If we are unable or limited in our ability to open or maintain bank accounts, obtain other banking services or accept credit card and debit card payments, it may be difficult for us to operate and conduct our business as planned. Although, we are actively pursuing alternatives that ensure our operations will continue to be compliant with the FinCEN guidance (including requirements related to disclosures about cash management and U.S. federal tax reporting), we may not be able to meet all applicable requirements.

We are also subject to a variety of laws and regulations in the U.S. that involve money laundering, financial recordkeeping and proceeds of crime, including the Currency and Foreign Transactions Reporting Act of 1970 (commonly

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known as the Bank Secrecy Act), as amended by Title III of the Uniting and Strengthening America by Providing Appropriate Tools Required to Intercept and

Obstruct Terrorism Act of 2001, or the USA PATRIOT Act, and any related or similar rules, regulations or guidelines, issued, administered or enforced by governmental authorities in the U.S.

In the event that any of our operations or related activities in the United States were found to be in violation of money laundering legislation or otherwise, those transactions could be viewed as proceeds of crime under ~~‎one~~one or more of the statutes noted above or any other applicable legislation. This could restrict or otherwise jeopardize our ability to declare or pay dividends or effect other distributions.

We maintain cash deposits in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial performance.

We maintain domestic cash deposits in Federal Deposit Insurance Corporation (“FDIC”) insured banks that exceed the FDIC insurance limits. Bank failures, events involving limited liquidity, defaults, non-performance, or other adverse developments that affect financial institutions, or concerns or rumors about such events, may lead to liquidity constraints. There can be no assurance that our deposits in excess of the FDIC or other comparable insurance limits will be backstopped by the United States government, or that any bank or financial institution with which we do business will be able to obtain needed liquidity from other banks, government institutions, or by acquisition in the event of a failure or liquidity crisis.

For example, on March 10, 2023, Silicon Valley Bank was closed by the California Department of Financial Protection and Innovation, which appointed the FDIC as receiver. Similarly, on March 12, 2023, Signature Bank and Silvergate Capital Corp. were each swept into receivership. Although we do not have any accounts at or business relationships with these banks, we may be negatively impacted by other disruptions to the United States banking system caused by these or similar developments and due to the fact that most banks and other financial institutions have not been willing to provide banking services to cannabis-related businesses, where available, we tend to rely upon smaller, regional banks and may be negatively impacted by other disruptions to the United States banking system caused by these or similar developments. The failure of a bank, or other adverse conditions in the financial or credit markets impacting financial institutions at which we maintain balances, could adversely impact our liquidity and financial performance.

The re-classification of cannabis or changes in U.S. controlled substance laws and regulations could have a material adverse effect on our business, financial condition, and results of operations.

If cannabis is re-classified as a Schedule II or lower controlled substance under the CSA, the ability to conduct research on the medical benefits of cannabis would most likely be more accessible; however, if cannabis is re-categorized as a Schedule II or lower controlled substance, the resulting re-classification would result in the need for approval by United States Food and Drug Administration, or FDA, if medical claims are made about our medical cannabis products. As a result of such a re-classification, the manufacture, importation, exportation, domestic distribution, storage, sale and use of such products could become subject to a significant degree of regulation by the United States Drug Enforcement Administration, or DEA. In that case, we may be required to be registered to perform these activities and have the security, control, recordkeeping, reporting and inventory mechanisms required by the DEA to prevent drug loss and diversion. Obtaining the necessary registrations may result in delay of the manufacturing or distribution of our products. The DEA conducts periodic inspections of registered establishments that handle controlled substances. Failure to maintain compliance could have a material adverse effect on our business, financial condition and results of operations. The DEA may seek civil penalties, refuse to renew necessary registrations, or initiate proceedings to restrict, suspend or revoke those registrations. In certain circumstances, violations could lead to criminal proceedings.

Potential regulation by the FDA could have a material adverse effect on our business, financial condition and results of operations.

Should the United States federal government legalize cannabis, it is possible that the FDA would seek to regulate it under the Food, Drug and Cosmetics Act of 1938. Additionally, the FDA may issue rules and regulations, including good manufacturing practices related to the growth, cultivation, harvesting and processing of medical cannabis. Clinical trials may be needed to verify efficacy and safety of our medical cannabis products. It is also possible that the FDA would require that facilities where medical-use cannabis is grown register with the agency and comply with certain federally prescribed regulations. In the event that some or all of these regulations are imposed, the impact on the cannabis industry is uncertain and could include the imposition of new costs, requirements, and prohibitions. If we are unable to comply with the regulations or registration as prescribed by the FDA, it may have an adverse effect on our business, operating results, and financial condition.

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Our contractual arrangements may not be as effective in providing control over the variable interest entities as direct ownership.

We rely on contractual arrangements with certain of our entities to operate dispensaries or own our licenses or cultivation assets in certain states in which our direct ownership of operations is restricted or prohibited. If our variable interest entities or their equity holders fail to perform their respective obligations under the contractual arrangements, we may have to incur substantial costs and expend additional resources to enforce such arrangements. Accordingly, these contractual arrangements may not be as effective as direct ownership in providing us with control over our variable interest entities.

Under our contractual arrangements, we may not be able to directly change the members of the boards of directors of these entities and would have to rely on the variable interest entities and the variable interest entity equity holders to perform their obligations in order to exercise our control over the variable interest entities. The variable interest entity equity holders may have conflicts of interest with us and they may not act in our best interests or may not perform their obligations under these contracts. For example, our variable interest entities and their respective equity holders could breach their contractual arrangements with us by, among other things, failing to conduct their operations (including failing to maintain licenses or comply with applicable ownership or reporting requirements) or taking other actions that are detrimental to our interests. If any equity holder is uncooperative and any dispute relating to these contracts or the replacement of the equity holders remains unresolved, we will have to enforce our rights under the contractual arrangements and through arbitral or judicial agencies, which may be costly and time-consuming and may be limited by legal principles preventing the enforcement of a contract it involves a violation of law or public policy. See –"There is doubt regarding our ability to enforce contracts.” If we are unable to enforce the contractual arrangements, we may not be able to exert effective control over the variable interest entities, and our ability to conduct our business, as well as our financial condition and results of operations, may be materially and adversely affected.

We could be materially adversely impacted due to restrictions under U.S. border entry laws.

Because cannabis remains illegal under U.S. federal law, those investing in Canadian companies with operations in the U.S. cannabis industry could face detention, denial of entry or lifetime bans from the United States as a result of their business associations with U.S. cannabis businesses. Entry into the United States happens at the sole discretion of United States Customs and Border Patrol, or CBP, officers on duty, and these officers have wide latitude to ask questions to determine the admissibility of a non-U.S. citizen or foreign national. The government of Canada has started warning travelers on its website that previous use of cannabis, or any substance prohibited by U.S. federal law, could mean denial of entry to the United States. Business or financial involvement in the cannabis industry in the United States could also be reason enough for denial of entry into the United States. On September 21, 2018, the CBP released a statement outlining its current position with respect to enforcement of the laws of the United States. It stated that Canada’s legalization of cannabis will not change CBP enforcement of U.S. laws regarding controlled substances. According to the statement, because cannabis continues to be a controlled substance under U.S. law, working in or facilitating the proliferation of the marijuana industry in U.S. states where it is legal under state law may affect admissibility to the United States. On October 9, 2018, the CBP released an additional statement regarding the admissibility of Canadian citizens working in the legal cannabis industry in Canada. CBP stated that a Canadian citizen working in or facilitating the proliferation of the legal cannabis industry in Canada who seeks to come into the United States for reasons unrelated to the cannabis industry will generally be admissible to the United States; however, if such person is found to be coming into the United States for reasons related to the cannabis industry, such person may be deemed inadmissible. As a result, the CBP has affirmed that employees, directors, officers, and managers of and investors in companies involved in business activities related to cannabis in the United States (such as Trulieve), who are not U.S. citizens face the risk of being barred from entry into the United States for life.

As a cannabis company, we may be subject to heightened scrutiny in Canada and the United States that could materially adversely impact the liquidity of the Subordinate Voting Shares.

Our existing operations in the United States, and any future operations, may become the subject of heightened scrutiny by regulators, stock exchanges and other authorities in the United States and Canada.

Given the heightened risk profile associated with cannabis in the United States, the Canadian Depository for Securities, or CDS, may implement procedures or protocols that would prohibit or significantly impair the ability of CDS to settle trades for companies that have cannabis businesses or assets in the United States.

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On February 8, 2018, following discussions with the Canadian Securities Administrators and recognized Canadian securities exchanges, the TMX Group, the parent company of CDS, announced the signing of a Memorandum of Understanding, which we refer to as the TMX MOU, with Aequitas NEO Exchange Inc., the CSE, the Toronto Stock Exchange, and the TSX Venture Exchange. The TMX MOU outlines the parties’ understanding of Canada’s regulatory framework applicable to the rules, procedures, and regulatory oversight of the exchanges and CDS as it relates to issuers with cannabis-related activities in the U.S. The TMX MOU confirms, with respect to the clearing of listed securities, that CDS relies on the exchanges to review the conduct of listed issuers. As a result, there is no CDS ban on the clearing of securities of issuers with cannabis-related activities in the U.S. However, there can be no assurances given that this approach to regulation will continue in the future. If such a ban were to be implemented, it would have a material adverse effect on the ability of holders of the Subordinate Voting Shares to settle trades. In particular, the Subordinate Voting Shares would become highly illiquid until an alternative was implemented, and investors would have no ability to effect a trade of the Subordinate Voting Shares through the facilities of a stock exchange.

We expect to incur significant ongoing costs and obligations related to our investment in infrastructure, growth, regulatory compliance and operations.

We expect to incur significant ongoing costs and obligations related to our investment in infrastructure and growth and for regulatory compliance, which could have a material adverse impact on our results of operations, financial condition and cash flows. In addition, future changes in regulations, more vigorous enforcement thereof or other unanticipated events could require extensive changes to our operations, increase our compliance costs or give rise to material liabilities, which could have a material adverse effect on our business, results of operations and financial condition. Our efforts to grow our business may be more costly than expected, and we may not be able to increase our revenue enough to offset these higher operating expenses. We may incur significant losses in the future for a number of reasons, including unforeseen expenses, difficulties, complications and delays, and other unknown events. If we are unable to achieve and sustain profitability, the market price of our securities may significantly decrease.

The market for the Subordinate Voting Shares may be limited for holders of our securities who live in the United States.

Given the heightened risk profile associated with cannabis in the United States, capital markets participants may be unwilling to assist with the settlement of trades for U.S. resident securityholders of companies with operations in the U.S. cannabis industry, which may prohibit or significantly impair the ability of securityholders in the United States to trade our securities. In the event residents of the United States are unable to settle trades of our securities, this may affect the pricing of such securities in the secondary market, the transparency and availability of trading prices and the liquidity of these securities.

~~The COVID-19 pandemic could adversely affect our business, financial condition and results of operations.~~

The global outbreak of the novel strain of the coronavirus known as COVID-19 has resulted in governments worldwide enacting emergency measures to combat the spread of the virus. These measures, which include the implementation of travel bans, self-imposed quarantine periods and social distancing, have caused material disruption to businesses globally, resulting in an economic slowdown. Global equity markets have experienced significant volatility and weakness. Governments and central banks have reacted with significant monetary and fiscal interventions designed to stabilize economic conditions. The duration and impact of the COVID-19 outbreak is unknown at this time, as is the efficacy of the government and central bank interventions. It is not possible to reliably estimate the length and severity of these developments or their impact on our financial results and condition. Thus far, the COVID-19 pandemic has not had a material adverse effect on our business, financial condition and results of operations.

Nonetheless, our business could be materially and adversely affected by the risks, or the public perception of the risks, related to the continuing COVID-19 pandemic. The risk of a pandemic, or public perception of such a risk, could cause customers to avoid public places, including retail properties, and could cause temporary or long-term disruptions in our supply chains and/or delays in the delivery of our products. These risks could also adversely affect our customers' financial condition, resulting in reduced spending for the products we sell. Moreover, any epidemic, pandemic, outbreak or other public health crisis, including COVID-19, could cause our employees to avoid our properties, which could adversely affect our ability to adequately staff and manage our businesses. “Shelter-in-place” or other such orders by governmental entities could also disrupt our operations if employees who cannot perform their responsibilities from home are not able to report to work. Risks related to an epidemic, pandemic or other health crisis, such as COVID-19, could also lead to the complete or partial closure of one or more of our stores or other facilities.

The ultimate extent of the impact of any epidemic, pandemic or other health crisis on our business, financial condition and results of operations will depend on future developments, which are highly uncertain and cannot be predicted, including new information that may emerge concerning the severity of such epidemic, pandemic or other health crisis and actions taken to contain or prevent its

further spread, among others. These and other potential impacts of an epidemic, pandemic or other health crisis, such as COVID-19, could therefore materially and adversely affect our business, financial condition, growth strategies and results of operations.

We may not be able to locate and obtain the rights to operate at preferred locations.

In certain markets the local municipality has authority to choose where any cannabis ~~‎establishment~~establishment will be located. These authorized areas are frequently removed from other retail operations. Because ~~‎the~~the cannabis industry remains illegal under U.S. federal law, the disadvantaged tax status of businesses ~~‎deriving~~deriving their income from cannabis, and the reluctance of the banking industry to support cannabis businesses, it ~~‎may~~may be difficult for us to locate and obtain the rights to operate at various preferred locations. Property ~~‎owners~~owners may violate their mortgages by leasing to us, and those property owners that are willing to allow ~~‎use~~use of their facilities may require payment of above fair market value rents to reflect the scarcity of such locations ~~‎and~~and the risks and costs of providing such facilities.

As a cannabis business, we are subject to certain tax provisions that have a material adverse effect on our business, financial condition and results of operations.

Under Section 280E of the U.S. Internal Revenue Code of 1986, as amended, or the IRC, “no deduction or credit shall be allowed for any amount paid or incurred during the taxable year in carrying on any trade or business if such trade or business (or the activities which comprise such trade or business) consists of trafficking in controlled substances (within the meaning of schedule I and II of the Controlled Substances Act) which is prohibited by Federal law or the law of any State in which such trade or business is conducted.” This provision has been applied by the United States Internal Revenue Service, or the IRS, to cannabis operations, prohibiting them from deducting expenses directly associated with cannabis businesses. Section 280E may have a lesser impact on cannabis cultivation and manufacturing operations than on sales operations. Section 280E and related IRS enforcement activity has had a significant impact on the operations of cannabis companies. As a result, an otherwise profitable business may, in fact, operate at a loss, after taking into account its United States income tax expenses. The Company has taken a position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code.

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We expect to be subject to taxation in both Canada and the United States, which could have a material adverse effect on our financial condition and results of operations.

We are a Canadian corporation, and as a result generally would be classified as a non-United States corporation under the general rules of U.S. federal income taxation. IRC Section 7874, however, contains rules that can cause a non-United States corporation to be taxed as a United States corporation for U.S. federal income tax purposes. Under IRC Section 7874, a corporation created or organized outside of the United States will nevertheless be treated as a United States corporation for U.S. federal income tax purposes, which is referred to as an inversion, if each of the following three conditions are met: (i) the non-United States corporation acquires, directly or indirectly, or is treated as acquiring under applicable U.S. Treasury regulations, substantially all of the assets held, directly or indirectly, by a United States corporation, (ii) after the acquisition, the former stockholders of the acquired United States corporation hold at least 80% (by vote or value) of the shares of the non-United States corporation by reason of holding shares of the acquired United States corporation, and (iii) after the acquisition, the non-United States corporation’s expanded affiliated group does not have substantial business activities in the non-United States corporation’s country of organization or incorporation when compared to the expanded affiliated group’s total business activities.

Pursuant to IRC Section 7874, we are classified as a U.S. corporation for U.S. federal income tax purposes and are subject to U.S. federal income tax on our worldwide income. Regardless of any application of IRC Section 7874, however, we expect to be treated as a Canadian resident company for purposes of the Canadian Income Tax Act, as amended. As a result, we are subject to taxation both in Canada and the U.S., which could have a material adverse effect on our financial condition and results of operations.

We may be at a higher risk of IRS audit

We believe there is a greater likelihood that the Internal Revenue Service will audit the tax returns of cannabis-related businesses. Additionally, the Company recently filed refund claims for several of its subsidiaries, which may also increase the likelihood of an audit. Any such audit of our tax returns could result in us being required to pay additional tax, interest and penalties, as well as incremental accounting and legal expenses, which could be material.

We may not have access to United States bankruptcy protections available to non-cannabis businesses.

Because cannabis is a Schedule I controlled substance under the CSA, many courts have denied cannabis businesses federal bankruptcy protections, making it difficult for lenders to be made whole on their investments in the cannabis industry in the event of a bankruptcy. If we were to experience a bankruptcy, there is no guarantee that United States federal bankruptcy protections would be available to us, which would have a material adverse effect on us and may make it more difficult for us to obtain debt financing.

We are a holding company and our ability to pay dividends or make other distributions to shareholders may be limited.

Trulieve Cannabis Corp. is a holding company and essentially all of its assets are the capital stock of its subsidiaries. We currently conduct substantially all of our business through Trulieve US, which currently generates substantially all of our revenues. Consequently, our cash flows and ability to complete current or desirable future growth opportunities are dependent on the earnings of Trulieve US and our other subsidiaries and the distribution of those earnings to Trulieve Cannabis Corp. The ability of our subsidiaries to pay dividends and other distributions will depend on those subsidiaries’ operating results and will be subject to applicable laws and regulations that require that solvency and capital standards be maintained by a subsidiary company and contractual restrictions contained in the instruments governing any current or future indebtedness of our subsidiaries. In the event of a bankruptcy, liquidation or

reorganization of Trulieve US or another of our subsidiaries, holders of indebtedness and trade creditors of that subsidiary may be entitled to payment of their claims from that subsidiary’s assets before we or our shareholders would be entitled to any payment or residual assets.

There is doubt regarding our ability to enforce contracts.

It is a fundamental principle of law that a contract will not be enforced if it involves a violation of law or public policy. Because cannabis remains illegal at a federal level in the United States, judges in multiple states have on a number of occasions refused to enforce contracts for the repayment of money when the loan was used in connection with activities that violate U.S. federal law, even if there is no violation of state law. There remains doubt and uncertainty that we will be able to legally enforce our contracts. If we are unable to realize the benefits of or otherwise enforce the contracts into which we enter, it could have a material adverse effect on our business, financial condition and results of operations.

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We face increasing competition that may materially and adversely affect our business, financial condition and results of operations.

We face competition from companies that may have greater capitalization, access to public equity markets, more experienced management or more maturity as a business. The vast majority of both manufacturing and retail competitors in the cannabis market consists of localized businesses (those doing business in a single state), although there are a few multistate operators with which we compete directly. Aside from this direct competition, out-of-state operators that are capitalized well enough to enter markets through acquisitive growth are also part of the competitive landscape. Similarly, as we execute our growth strategy, operators in our future state markets will inevitably become direct competitors. We are likely to continue to face increasing and intense competition from these companies. Increased competition by larger and better financed competitors could materially and adversely affect our business, financial condition and results of operations.

If the number of users of adult-use and medical marijuana in the United States increases, the demand for products will increase. Consequently, we expect that competition will become more intense as current and future competitors begin to offer an increasing number of diversified products to respond to such increased demand. To remain competitive, we will require a continued investment in research and development, marketing, sales and client support. We may not have sufficient resources to maintain sufficient levels of investment in research and development, marketing, sales and client support efforts to remain competitive, which could materially and adversely affect our business, financial condition and results of operations.

The cannabis industry is undergoing rapid growth and substantial change, which has resulted in an increase in competitors, consolidation and the formation of strategic relationships. Acquisitions or other consolidating transactions could harm us in a number of ways, including losing customers, revenue and market share, or forcing us to expend greater resources to meet new or additional competitive threats, all of which could harm our operating results. As competitors enter the market and become increasingly sophisticated, competition in our industry may intensify and place downward pressure on retail prices for our products and services, which could negatively impact our profitability.

We are subject to limits on our ability to own the licenses necessary to operate our business, which will adversely affect our ability to grow our business and market share in certain states.

In certain states, the cannabis laws and regulations limit not only the number of cannabis licenses issued, but also the number of cannabis licenses that one person or entity may own in that state. Such limitations on the acquisition of ownership of additional licenses within certain states may limit our ability to grow organically or to increase our market share in affected states.

Our subsidiaries may not be able to obtain or maintain necessary permits and authorizations.

Our subsidiaries may not be able to obtain or maintain the necessary licenses, permits, certificates, authorizations or accreditations to operate their respective businesses, or may only be able to do so at great cost. In addition, our subsidiaries may not be able to comply fully with the wide variety of laws and regulations applicable to the cannabis industry. Such laws and regulations include requirements to use state mandated information technology reporting systems that may not fully integrate with our information technology systems. Failure to comply with or to obtain the necessary licenses, permits, certificates, authorizations or accreditations could result in restrictions on a subsidiary’s ability to operate in the cannabis industry, which could have a material adverse effect on our business, financial condition or results of operations.

We may not be able to accurately forecast our operating results and plan our operations due to uncertainties in the cannabis industry.

Because U.S. federal and state laws prevent widespread participation in and otherwise hinder market research in the medical and adult-use cannabis industry, the third-party market data available to us is limited and unreliable. Accordingly, we must rely largely on our own market research to forecast sales as detailed forecasts are not generally obtainable from other sources at this early stage of the cannabis industry. Our market research and projections of estimated total retail sales, demographics, demand, and similar consumer research are based on assumptions from limited and unreliable market data, and generally represent the personal opinions of our

management team. A failure in the demand for our products to materialize as a result of competition, technological change or other factors could have a material adverse effect on our business, results of operations, financial condition or prospects.

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We are subject to risks related to growing an agricultural product.

Our business involves the growing of cannabis, an agricultural product. Such business is subject to the risks inherent in the agricultural business, such as losses due to infestation by insects or plant diseases and similar agricultural risks. Although much of our growing is expected to be completed indoors, there can be no assurance that natural elements will not have a material adverse effect on our future production.

We may encounter unknown environmental risks.

There can be no assurance that we will not encounter hazardous conditions, such as asbestos or lead, at the sites of the real estate used to operate our businesses, which may delay the development of our businesses. Upon encountering a hazardous condition, work at our facilities may be suspended. If we receive notice of a hazardous condition, we may be required to correct the condition prior to continuing construction. If additional hazardous conditions were present, it would likely delay construction and may require significant expenditure of our resources to correct the conditions. Such conditions could have a material impact on our investment returns.

We may not be able to adequately protect our intellectual property.

As long as cannabis remains illegal under U.S. federal law as a Schedule I controlled substance under the CSA, the benefit of certain federal laws and protections that may be available to most businesses, such as federal trademark and patent protection, may not be available to us. As a result, our intellectual property may never be adequately or sufficiently protected against the use or misappropriation by third parties. In addition, since the regulatory framework of the cannabis industry is in a constant state of flux, we can provide no assurance that we will ever obtain any protection for our intellectual property, whether on a federal, state or local level.

Our property is subject to risk of civil asset forfeiture.

Because the cannabis industry remains illegal under U.S. federal law, any property owned by participants in the cannabis industry that is either used in the course of conducting or comprises the proceeds of a cannabis business could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owner of the property were never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal process, it could become subject to forfeiture.

Our internal controls over financial reporting ~~may~~have not behistorically been effective, and our independent auditors may not be able to certify as to their effectiveness, which could ~~have a significant~~adversely affect our business results and ~~adverse effect on our business.~~operations.

~~We are subject to various SEC reporting and other regulatory requirements.~~

We have incurred and will continue to incur expenses and, to a lesser extent, diversion of our management’s time in our efforts to comply with Section 404 of the Sarbanes-Oxley Act of 2002 regarding internal controls over financial reporting. Effective internal controls over financial reporting are necessary for us to provide reliable financial reports and, together with adequate disclosure controls and procedures, are designed to prevent fraud. Any failure to implement required new or improved controls, or difficulties encountered in their implementation could cause us to fail to meet our reporting obligations. In addition, any testing by us conducted in connection with Section 404 of the Sarbanes-Oxley Act of 2002, or the subsequent testing by our independent registered public accounting firm when required, may reveal deficiencies in our internal controls over financial reporting that are deemed to be material weaknesses or that may require prospective or retrospective changes to our consolidated financial statements or identify other areas for further attention or improvement. Inferior internal controls could also cause investors to lose confidence in our reported financial information, which could have a negative effect on the trading price of our Subordinate Voting Shares.

~~We have~~

As discussed in Part II, Item 9A “Controls and Procedures” in this Annual Report on Form 10-K, in connection with the audit of our consolidated financial statements as of and for the year ended December 31, 2023, we identified acertain material ~~weakness~~weaknesses in our internal control over financial reporting, and our management has concluded that our disclosure controls and procedures are not effective. While we are working to remediate any material ~~weakness~~weaknesses or significant deficiencies in our internal controls over financial reporting, we cannot assure ~~you~~ that additional material weaknesses or significant deficiencies will not occur in the future. IfWe are in the process of remediating the material weaknesses, as described in Part II, Item 9A “Controls and Procedures”. While progress has been made to enhance our internal control over financial reporting, ~~or our disclosure controls and procedures~~we are not effective, we may not be able to accurately report our financial results or prevent fraud, which may cause investors to lose confidence in our reported financial information and may lead to a decline in our stock price.

~~We have historically had a small internal accounting and finance staff. This lack of adequate accounting resources has resulted~~still in the ~~identification~~process of ~~a material weakness in~~building and enhancing our processes, procedures, and controls, as well as evaluating and enhancing our internal ~~controls over financial reporting. A “material weakness”~~policies and information technology. Additional time is ~~a deficiency, or a combination~~required to complete the remediation of ~~deficiencies,~~certain material weaknesses and to ensure the sustainability of these remediation actions. We believe the above actions as well as those being implemented currently, when complete, will be effective in ~~internal control over financial reporting such that there is a reasonable possibility that a material misstatement of our financial statements will not be prevented or detected on a timely basis.~~

As disclosed in the Company’s Form 10-Q for the quarter ended September 30, 2021 and Item 9A of this Annual Report on Form 10-K, our management team identified errors in the accounting for leases, asset acquisitions, and classification of assets. In addition, during the development of the annual tax provision an error in the tax basis of assets acquired was identified. Management reviewed these errors identifying the root cause due to the control environment component of internal control as the Company did not maintain a sufficient complement of personnel with the appropriate level of knowledge, experience, and training in certain areas important to financial reporting. During 2021, even though a material misstatement was not identified in the Company’s financial statements, it was determined that there was a reasonable possibility that a material misstatement in the Company’s financial statements would not have been prevented or detected on a timely basis.

~~We have taken actions toward~~ the remediation of the material ~~weakness~~weaknesses described in ~~our internal control over financial reporting including: adding additional positions including Chief Accounting Officer, Director~~ Part II, Item 9A.

Table of Financial Reporting, Assistant Controller, Director of Shared Services, Northeast Controller, and Tax Director to provide enhanced oversight and technical experience in certain areas important to financial reporting; engaging third party experts to assist management in assessing current processes and designing improved processes and controls for the consolidated Company; adding a Chief Technology Officer to enhance the information technology environment including automation of processes and controls and finalization of an ongoing SAP implementation; and reviewing business processes surrounding leases, acquisitions, and other complex financial reporting areas to identify and being the implementation of enhanced procedures related to internal controls. Nonetheless, the material weaknesses in the Company’s internal control over financial reporting will not be considered remediated until the controls operate for a sufficient period of time and management has concluded, through testing that these controls operate effectively. As of the date of this Annual Report on Form 10-K, management is in the process of testing and evaluating these additional controls to determine whether they are operating effectively. We plan to continue to take additional steps to remediate the material weakness and improve our financial reporting systems and implement new policies, procedures and controls. If we do not successfully remediate the material weakness described above, or if other material weaknesses or other deficiencies arise in the future, we may be unable to accurately report our financial results, which could cause our financial results to be materially misstated and require restatement. Contents

We are highly dependent on certain key personnel.

We depend on key managerial personnel, including Kim Rivers, our Chief Executive Officer, for our continued success, and our anticipated growth may require additional expertise and the addition of new qualified personnel. Qualified individuals within the cannabis industry are in high demand and we may incur significant costs to attract and retain qualified management personnel, or be unable to attract or retain personnel necessary to operate or expand our business. The loss of the services of existing personnel or our failure to recruit additional key managerial personnel in a timely manner, or at all, could harm our business development programs and our ability to manage day-to-day operations, attract collaboration partners, attract and retain other employees, and generate revenues, and could have a material adverse effect on our business, financial condition and results of operations.

~~We may be at a higher risk of IRS audit.~~

Based on anecdotal information, we believe there is a greater likelihood that the Internal Revenue Service will audit the tax returns of cannabis-related businesses. Any such audit of our tax returns could result in our being required to pay additional tax, interest and penalties, as well as incremental accounting and legal expenses, which could be material.

We face inherent risks of liability claims related to the use of our products.

As a distributor of products designed to be ingested by humans, we face an inherent risk of exposure to product liability claims, regulatory action and litigation if our products cause or are alleged to have caused significant loss or injury. We may be subject to various product liability claims, including, among others, that our products caused injury or illness, include inadequate instructions for use or include inadequate warnings concerning possible side effects or interactions with other substances. A product liability claim or regulatory action against us, whether or not successful, could result in materially increased costs, adversely affect our reputation with our clients and consumers generally, and have a material adverse effect on our results of operations and financial condition.

We may become party to litigation from time to time in the ordinary course of business which could adversely affect our business. Should any litigation in which we become involved be determined against us, such a decision could adversely affect our ability to continue operating and the market price for the Subordinate Voting Shares. Even if we achieve a successful result in any litigation in which we are involved, the costs of litigation and redirection of our management’s time and attention could have an adverse effect on our results of operations and financial condition.

We face risks related to our products.

We have committed and expect to continue committing significant resources and capital to develop and market existing products and new products and services. These products are relatively untested in the marketplace, and we cannot assure shareholders and investors that we will achieve market acceptance for these products, or other new products and services that we may offer in the future. Moreover, these and other new products and services may be subject to significant competition with offerings by new and existing competitors in the industry. In addition, new products and services may pose a variety of challenges and require us to attract additional qualified employees. The failure to successfully develop, manage and market these new products and services could seriously harm our business, prospects, revenue, results of operation and financial condition.

Our medical marijuana business may be impacted by consumer perception of the cannabis industry, which we cannot control or predict.

We believe that the medical marijuana industry is highly dependent upon consumer perception regarding the safety, efficacy and quality of medical marijuana distributed to those consumers. Consumer perception of our products may be significantly influenced

by scientific research or findings, regulatory investigations, litigation, media attention and other publicity regarding the consumption of medical marijuana products. There can be no assurance that future scientific research, findings, regulatory proceedings, litigation, media attention or other research findings or publicity will be favorable to the medical marijuana market or any particular product, or consistent with earlier publicity. Future research reports, findings, regulatory proceedings, litigation, media attention or other publicity that are perceived as less favorable than, or that question, earlier research reports, findings or publicity could have a material adverse effect on the demand for our products and our business, results of operations, financial condition and cash flows.

Product recalls could result in a material and adverse impact on our business, financial condition and results of operations.

Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labelling disclosure. The list includes specified vape products produced in our Pennsylvania operations. If any of our products are recalled due to an alleged product defect or

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for any other reason, we could be required to incur the unexpected expense of the recall and any legal proceedings that might arise in connection with the recall. We may lose a significant amount of sales and may not be able to replace those sales at an acceptable margin or at all. In addition, a product recall may require significant management attention. Although we have detailed procedures in place for testing our products, there can be no assurance that any quality, potency or contamination problems will be detected in time to avoid unforeseen product recalls, regulatory action or lawsuits. Additionally, if one of our significant brands were subject to recall, the image of that brand and our company generally could be harmed. Any recall could lead to decreased demand for our products and could have a material adverse effect on our results of operations and financial condition. Additionally, product recalls may lead to increased scrutiny of our operations by regulatory agencies, requiring further management attention and potential legal fees and other expenses.

~~We could be subject to criminal prosecution or civil liabilities under RICO.~~

The Racketeer Influenced Corrupt Organizations Act (“RICO”) criminalizes the use of any profits from certain defined “racketeering” activities in interstate commerce. While intended to provide an additional cause of action against organized crime, due to the fact that cannabis is illegal under U.S. federal law, the production and sale of cannabis qualifies cannabis related businesses as “racketeering” as defined by RICO. As such, all officers, managers and owners in a cannabis related business could be subject to criminal prosecution under RICO, which carries substantial criminal penalties.

RICO can create civil liability as well: persons harmed in their business or property by actions which would constitute racketeering under RICO often have a civil cause of action against such “racketeers,” and can claim triple their amount of estimated damages in attendant court proceedings. Trulieve or its subsidiaries, as well as its officers, managers and owners could all be subject to civil claims under RICO.

We are subject to security risks related to our products as well as our information and technology systems.

Given the nature of our product and its limited legal availability, we are at significant risk of theft at our facilities. A security breach at one of our facilities could expose us to additional liability and to potentially costly litigation, increase expenses relating to the resolution and future prevention of these breaches and may deter potential customers from choosing our products.

In addition, we collect and store personal information about our customers and we are responsible for protecting that information from privacy breaches. We store certain personally ~~‎identifiable~~identifiable information and other confidential information of our ~~‎customers~~customers on our systems and applications. Though we maintain ~~‎robust,~~robust, proprietary security protocols, we may experience attempts by third parties to ~~‎obtain~~obtain unauthorized access to the personally identifiable information and other ~~‎confidential~~confidential information of our customers. This information could also be otherwise exposed through ~~‎human~~human error or malfeasance. The unauthorized access or compromise of this personally identifiable information and other confidential information could have a material adverse ~~‎impact~~impact on our business, financial condition and results of operations.‎

A privacy breach may occur through procedural or process failure, information technology malfunction, or deliberate unauthorized intrusions. Theft of data for competitive purposes, particularly customer lists and preferences, is an ongoing risk whether perpetrated via employee collusion or negligence or through deliberate cyber-attack. Any such theft or privacy breach would have a material adverse effect on our business, financial condition and results of operations.

Our operations depend and will depend, in part, on how well we protect our networks, equipment, information technology, or IT, systems and software against damage from a number of threats, including, natural disasters, intentional damage and destruction, fire, power loss, hacking, computer viruses, vandalism and theft. Our operations also depend and will continue to depend on the timely maintenance, upgrade and replacement of networks, equipment, IT systems and software, as well as preemptive expenses to mitigate the risks of failures. Any of these and other events could result in information system failures, delays and/or increase in capital expenses. The failure of information systems or a component of information systems could, depending on the nature of any such failure, adversely impact our reputation and results of operations.

We face exposure to fraudulent or illegal activity by employees, contractors, consultants and agents, which may subject us to investigations and actions.

We are exposed to the risk that any of the employees, independent contractors and consultants of our company and our subsidiaries may engage in fraudulent or other illegal activity. Misconduct by these parties could include intentional, reckless and/or negligent conduct or disclosure of unauthorized activities to us that violates, (i) government regulations, (ii) manufacturing standards, (iii) federal and local healthcare fraud and abuse laws and regulations, or (iv) laws that require the true, complete and accurate reporting of financial information or data. It may not always be possible for us to identify and deter misconduct by our employees and other third parties, and the precautions taken by us to detect and prevent this activity may not be effective in controlling unknown or unmanaged risks or losses or in protecting us from governmental investigations or other actions or lawsuits stemming from a failure to be in compliance with such laws or regulations. We cannot provide assurance that our internal controls and compliance systems will protect us from acts committed by our employees, agents or business partners in violation of U.S. federal or state or local laws. If any such actions are instituted against us, and we are not successful in defending or asserting our rights, those actions could have a material impact on our business, including the imposition of civil, criminal and administrative penalties, damages, monetary fines, contractual damages, reputational harm, diminished profits and future earnings, and curtailment of our operations, any of which could have a material adverse effect on our business, financial condition, results of operations or prospects.

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Our reputation and ability to do business may be negatively impacted by the improper conduct by our business partners, employees or agents.

In certain states, we depend on third-party suppliers to produce and ship our orders. Products purchased from our suppliers are resold to our customers. These suppliers could fail to produce products to our specifications or quality standards and may not deliver units on a timely basis. Any changes in our suppliers’ production or product availability could impact our ability to fulfill orders and could also disrupt our business due to delays in finding new suppliers.

Furthermore, we cannot provide assurance that our internal controls and compliance systems will protect us from acts committed by our employees, agents or business partners in violation of U.S. federal or state or local laws. Any failure by third-party suppliers to fulfill our production requirements or any improper acts by employees or ~~allegations~~third-parties acting on our behalf could, ~~damage~~depending on the nature of any such failure, adversely impact our reputation and subject us to civil or criminal investigations and related stockholder lawsuits, could lead to substantial civil and criminal monetary and non-monetary penalties and could cause us to incur significant legal and investigatory fees.

results of operations.

We may have increased labor costs based on union activity.

Labor unions are working to organize workforces in the cannabis industry in general. Currently, ~~there is no~~ labor ~~organization that has~~organizations have been recognized as a representative of our employees ~~with the exception of the employees at~~in both our affiliated Reading, Pennsylvania cultivation and processing ~~facility. However, it~~facility and our affiliated Harvest of Southwest PA, LLC d/b/a Trulieve Pittsburgh (Federal Street), dispensary location. It is possible that additional certain retail and/or manufacturing locations will be organized in the future, which could lead to work stoppages or increased labor costs and adversely affect our business, profitability and our ability to reinvest into the growth of our business. We cannot predict how stable our relationships with U.S. labor organizations would be or whether we would be able to meet any unions’ requirements without impacting our financial condition. Labor unions may also limit our flexibility in dealing with our workforce. Work stoppages and instability in our union relationships could delay the production and sale of our products, which could strain relationships with customers and cause a loss of revenues which would adversely affect our operations.

We ~~face risks related to our products.~~

The Racketeer Influenced Corrupt Organizations Act (“RICO”) criminalizes the use of any profits from certain defined “racketeering” activities in interstate commerce. While intended to provide an additional cause of action against organized crime, due to the fact that cannabis is illegal under U.S. federal law, the production and sale of cannabis qualifies cannabis related businesses as “racketeering” as defined by ~~new~~RICO. As such, all officers, managers and ~~existing competitors~~owners in ~~the industry. In addition, new products~~a cannabis related business could be subject to criminal prosecution under RICO, which carries substantial criminal penalties.

RICO can create civil liability as well: persons harmed in their business or property by actions which would constitute racketeering under RICO often have a civil cause of action against such “racketeers,” and ~~services may pose a variety~~can claim triple their amount of ~~challenges~~estimated damages in attendant court proceedings. Trulieve or its subsidiaries, as well as its officers, managers and ~~require us~~owners could all be subject to attract additional qualified employees. The failure to successfully develop, manage and market these new products and services could seriously harm our business, prospects, revenue, results of operation and financial condition.

civil claims under RICO.

Our significant indebtedness may adversely affect our business, financial condition and financial results.

Our ability to make certain payments or advances will be subject to applicable laws and contractual restrictions in the instruments governing our indebtedness, including the $70.0 million in aggregate principal amount of notes we issued on June 18, 2019, the $60.0 million in aggregate principal amount of notes we issued on November 7, 2019 and the $350.0 million aggregate principal amount of senior secured notes that we issued on October 6, 2021.indebtedness. The contractual restrictions in the instruments governing such ~~notes~~indebtedness include restrictive covenants that limit our discretion with respect to certain business matters. These covenants place restrictions on, among other things, our ability to create liens or other encumbrances, to pay distributions or make certain other payments, and to sell or otherwise dispose of certain assets. A failure to comply with such obligations could result in a default, which, if not cured or waived, could permit acceleration of the relevant indebtedness. Our significant indebtedness could have important consequences, including: (i) our ability to obtain additional financing for working capital, capital expenditures, or acquisitions may be limited; and (ii) all or part of our cash flow from operations may be dedicated to the payment of the principal of and interest on our indebtedness, thereby reducing funds available for operations. These factors may adversely affect our cash flow. Our inability to generate sufficient cash flow to satisfy our debt obligations, or to refinance our indebtedness on commercially reasonable terms or at all, may materially and adversely affect our business, results of operations, and financial condition.

We may be unable to obtain adequate insurance coverage.

We have obtained insurance coverage with respect to workers’ compensation, general liability, directors’ and officers’ liability, fire and other similar policies customarily obtained for businesses to the extent commercially appropriate; however, because we are engaged in and operate within the cannabis industry, there are exclusions and

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additional difficulties and complexities associated with our insurance coverage that could cause us to suffer uninsured losses, which could adversely affect our business, results of operations, and profitability. There is no assurance that we will be able to obtain insurance coverage at a reasonable cost or fully utilize such insurance coverage, if necessary.

We rely on key utility services.

Our business is dependent on a number of key inputs and their related costs, including raw materials and supplies related to our growing operations, as well as electricity, water and other local utilities. Our cannabis growing operations consume and will continue to consume considerable energy, which makes us vulnerable to rising energy costs. Accordingly, rising or volatile energy costs may, in the future, adversely impact our business and our ability to operate profitably. Additionally, any significant interruption or negative change in the availability or economics of the supply chain for our key inputs could materially impact our business, financial condition and operating results. If we are unable to secure required supplies and services on satisfactory terms, it could have a materially adverse impact on our business, financial condition and operating results.

Risks Related to Owning Subordinate Voting Shares

A return on our securities is not guaranteed.

There is no guarantee that our Subordinate Voting Shares will earn any positive return in the short term or long term. A holding of Subordinate Voting Shares is speculative and involves a high degree of risk and should be undertaken only by holders whose financial resources are sufficient to enable them to assume such risks and who have no need for immediate liquidity in their investment. A holding of Subordinate Voting Shares is appropriate only for holders who have the capacity to absorb a loss of some or all of their holdings.

Additional issuances of Multiple Voting Shares or Subordinate Voting Shares may result in further dilution and could have anti-takeover effects.

We may issue additional equity or convertible debt securities in the future, which may dilute an existing shareholder’s holdings. Our articles permit the issuance of an unlimited number of Multiple Voting Shares and Subordinate Voting Shares, and existing shareholders will have no ~~pre-emptive~~preemptive rights in connection with such further issuances. Our board of directors has discretion to determine the price and the terms of further issuances. The ability of our board of directors to issue additional Multiple Voting shares and/or Subordinate Voting Shares could also have anti-takeover effects. Moreover, we will issue additional Subordinate Voting Shares on the conversion of the Multiple Voting Shares in accordance with their terms. To the extent holders of our options, warrants or other convertible securities convert or exercise their securities and sell Subordinate Voting Shares they receive, the trading price of the Subordinate Voting Shares may decrease due to the additional amount of Subordinate Voting Shares available in the market. We cannot predict the size or nature of future issuances or the effect that future issuances and sales of Subordinate Voting Shares will have on the market price of the Subordinate Voting Shares. Issuances of a substantial number of additional Subordinate Voting Shares, or the

perception that such issuances could occur, may adversely affect prevailing market prices for the Subordinate Voting Shares. With any additional issuance of Subordinate Voting Shares, our investors will suffer dilution to their voting power and economic interest.

Sales of substantial amounts of Subordinate Voting Shares by our existing shareholders in the public market may have an adverse effect on the market price of the Subordinate Voting Shares.

Sales of a substantial number of Subordinate Voting Shares in the public market could occur at any time. These sales, or the perception in the market that holders of a large number of shares intend to sell shares, or the availability of such securities for sale, could adversely affect the prevailing market prices for the Subordinate Voting Shares. ~~As of December 31, 2021, we had an aggregate of 519,169.999 Multiple Voting Shares outstanding, which were convertible into an aggregate of 51,916,999 Subordinate Voting Shares.~~ If all or a substantial portion of our Multiple Voting Shares are converted into Subordinate Voting Shares, the potential for sales of substantial numbers of Subordinate Voting Shares may increase. A decline in the market prices of the Subordinate Voting Shares could impair our ability to raise additional capital through the sale of securities should itwe desire to do so.

The market price for the Subordinate Voting Shares has been and is likely to continue to be volatile.

The market price for the Subordinate Voting Shares may be volatile and subject to wide fluctuations in response to numerous factors, many of which will be beyond our control, including, but not limited to, the following: (i) actual or anticipated fluctuations in our quarterly results of operations; (ii) recommendations by securities research analysts; (iii)

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changes in the economic performance or market valuations of companies in the cannabis industry; (iv) additions or departures of our executive officers and other key personnel; (v) release or expiration of transfer restrictions on our issued and outstanding shares; (vi) regulatory changes affecting the cannabis industry generally and our business and operations; (vii) announcements by us and our competitors of developments and other material events; (viii) fluctuations in the costs of vital production materials and services; (ix) changes in global financial markets and global economies and general market conditions, such as interest rates and pharmaceutical product price volatility, as well as disruptions to health crisis (such as the COVID-19 pandemic), severe weather events, or armed conflicts (such as the conflict between Ukraine and ~~Russia)~~Russia or Israel and Hamas); significant acquisitions or business combinations, strategic partnerships, joint ventures or capital commitments by or involving us or our competitors; (xi) operating and share price performance of other companies that investors deem comparable to us or from a lack of market comparable companies; (xii) false or negative reports issued by individuals or companies who have taken aggressive short sale positions; and (xiii) news reports relating to trends, concerns, technological or competitive developments, regulatory changes and other related issues in our industry or target markets.

Financial markets have experienced significant price and volume fluctuations that have affected the market prices of equity securities of companies and that have often been unrelated to the operating performance, underlying asset values or prospects of those companies. Accordingly, the market price of the Subordinate Voting Shares may decline even if our operating results, underlying asset values or prospects have not changed.

These factors, as well as other related factors, may cause decreases in asset values that are deemed to be other than temporary, which may result in impairment losses. There can be no assurance that continuing fluctuations in price and volume will not occur. If such increased levels of volatility and market turmoil continue, our operations could be adversely impacted, and the trading price of the Subordinate Voting Shares could be materially adversely affected.

There may not be sufficient liquidity in the markets for our Subordinate Voting Shares.

Our Subordinate Voting Shares are listed for trading on the CSE under the trading symbol “TRUL” and on the OTCQX Best Market under the symbol “TCNNF.” The liquidity of any market for the shares of our Subordinate Voting Shares will depend on a number of factors, including:

•

~~the~~The number of shareholders;

•

our operating performance and financial condition;

•

the market for similar securities;

•

the extent of coverage by securities or industry analysts; and

•

the interest of securities dealers in making a market in the shares.

Risks Related to Being a Public Company

We are subject to increased costs as a result of being a U.S. reporting company.

As a public issuer, we are subject to the reporting requirements and rules and regulations under the applicable Canadian securities laws and rules of any stock exchange on which our securities may be listed from time to time. In addition, we became subject

to the reporting requirements of the United States Securities Exchange Act of 1934, as amended, and the regulations promulgated thereunder on February 4, 2021. Additional or new regulatory requirements may be adopted in the future. The requirements of existing and potential future rules and regulations will increase our legal, accounting, and financial compliance costs, make some activities more difficult, time-consuming or costly and may also place undue strain on our personnel, systems and resources, which could adversely affect our business, financial condition, and results of operations.

We are an “emerging growth company” and will be able take advantage of reduced disclosure requirements applicable to emerging growth companies, which could make our Subordinate Voting Shares less attractive to investors.

We are an “emerging growth company,” as defined in the JOBS Act and, for as long as we continue to be an emerging growth company, we intend to take advantage of certain exemptions from various reporting requirements applicable to other public companies but not to emerging growth companies, including, but not limited to, not being required to comply with the auditor attestation requirements of Section 404 of the Sarbanes-Oxley Act, reduced disclosure obligations regarding executive compensation in our periodic reports and proxy statements, and exemptions from the requirements of holding a nonbinding advisory vote on executive compensation and shareholder approval of any golden parachute payments not previously approved. We could be an emerging growth company for up to five years, or until the earliest of (i) the last day of the first fiscal year in which our annual gross revenues exceed $1.07 billion, (ii) the date that we become a “large accelerated filer” as defined in Rule 12b-2 under the Exchange Act, which would occur if the market value of our Subordinate Voting Shares that are held by non-affiliates exceeds $700 million as of the last business day of our most recently completed second fiscal quarter, or (iii) the date on which we have issued more than $1 billion in non-convertible debt during the preceding three year period.

We intend to take advantage of these reporting exemptions described above until we are no longer an emerging growth company. Under the JOBS Act, emerging growth companies can also delay adopting new or revised accounting standards until such time as those standards apply to private companies. We have irrevocably elected not to avail ourselves of this exemption from new or revised accounting standards and, therefore, we will be subject to the same new or revised accounting standards as other public companies that are not emerging growth companies.

We cannot predict if investors will find our Subordinate Voting Shares less attractive if we choose to rely on these exemptions. If some investors find our Subordinate Voting Shares less attractive as a result of any choices to reduce future disclosure, there may be a less active trading market for our Subordinate Voting Shares and the price of our Subordinate Voting Shares may be more volatile.

Item 1B. Unresolved Staff Comments.

None.

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Item 1C. Cybersecurity

Trulieve recognizes the critical importance of developing, implementing, and maintaining cybersecurity measures to safeguard our information systems and protect the confidentiality, integrity, and availability of data we produce and collect.

Managing Material Risks & Overall Risk Management

We have a cross-departmental approach to addressing cybersecurity risk, including input from our employees, senior management, and Audit Committee of our Board of Directors (the “Board”). The Company devotes significant resources to cybersecurity and risk management processes to adapt to the changing cybersecurity landscape and respond to emerging threats promptly and effectively.

We have a set of Company-wide cybersecurity policies and procedures and continue building these important document libraries. Management approves initial policies and reviews them periodically for updates and changes. Our cybersecurity program follows the internationally recognized risk framework, ISO 27001. We regularly assess the threat landscape and take a holistic view of cybersecurity risks, with a multi-faceted cybersecurity strategy based on prevention, detection, and mitigation. The Company continues to work to ensure the inclusion of our cybersecurity risks are fully incorporated into the Company’s overall risk management approach.

Third-party Risk Management and oversight

As part of our cybersecurity program, we also engage with external service providers as part of our continuing cybersecurity efforts, assisting us in the evaluation and enhancement of the effectiveness of our information security policies and procedures. These partnerships enable us to leverage specialized knowledge and insights, ensuring our cybersecurity policies and procedures are comprehensive, up-to-date, and aligned with regulatory requirements.

The use of these third-party providers is regularly reviewed and monitored by the appropriate members of management. We conduct thorough assessments of all third-party providers before engagement and maintain ongoing monitoring to ensure compliance with our cybersecurity standards.

~~None.~~

Risks from Cybersecurity Threats

We have not encountered cybersecurity challenges that have materially impacted our strategic plan, operations, or financial standing. For additional information, see “Item 1A. Risk Factors - We are subject to security risks related to our products as well as our information and technology systems".

Governance

Trulieve’s cybersecurity program is managed by our Chief Technology Officer ("CTO") and our Senior Director of Information Security, whose team ("Cybersecurity Team") is responsible for facilitating the enterprise-wide cybersecurity program. Our CTO has over 20 years of experience with large information technology footprints, including cybersecurity. His in-depth knowledge and expertise are instrumental in supporting our cybersecurity program and policies and overseeing our governance and compliance programs. The Information Security Governance Committee ("IT Committee") and Audit Committee of our Board of Directors oversee management’s process for identifying and mitigating risks, including cybersecurity risks. The Audit Committee is composed of board members with diverse expertise including, risk management, technology, and finance, equipping them to oversee cybersecurity risks effectively.

Management’s role in assessing and managing material risks from cybersecurity threats involves leadership, governance, resource allocation, and proactive risk management. Management's involvement is crucial in safeguarding the Company's digital assets, reputation, and long-term success. Our Cybersecurity Team provides periodic reports to our IT Committee and Audit Committee, as well as our Chief Executive Officer, and other members of senior management as appropriate.

The IT Committee and Audit Committee actively participate in discussions with management regarding cybersecurity risks. The IT Committee and Audit Committee perform an annual assessment of the Company’s cybersecurity program, which includes a discussion of management’s actions to identify and detect threats, and scenarios for potential response or recovery situations. In addition to regularly scheduled meetings, the IT and Audit Committee and appropriate levels of senior management maintain an ongoing dialogue regarding emerging or potential cybersecurity risks. Together, they receive updates on any significant developments in the cybersecurity domain, ensuring the Board’s oversight is proactive and responsive.

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Item 2. Properties.

~~We have no material properties.~~

As of December 31, 2023, the Company operated 192 dispensaries in eight U.S. states and operated 16 cultivation and processing facilities in seven U.S. states. Substantially all of our dispensaries are leased. The cultivation, processing and related facilities provide us with approximately 4 million square feet. Certain of these owned properties are subject to commercial mortgages. Refer to Note 11. Notes Payable to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional information on our mortgages. The Company believes its facilities are suitable and adequate to meet its current needs. The Company's corporate headquarters is in Quincy, Florida.

Item 3. Legal Proceedings.

There are no actual or to our knowledge contemplated legal proceedings material to us or to which any of our or any of our subsidiaries’ property is the subject matter.

There have been no penalties or sanctions imposed against the Company by a court or regulatory authority, and the Company has not entered into any material settlement agreements before any court relating to provincial or territorial securities legislation or with any securities regulatory authority, in the three years prior to the date of this prospectus.

Item 4. Mine Safety Disclosures.

Not applicable.

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PART II

Item 5. Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities.

Trading Price and Volume

The Subordinate Voting Shares are traded on the CSE under the symbol “TRUL.” The following table sets forth trading information pulled from Bloomberg for the Subordinate Voting Shares for the periods ~~indicated for the periods~~ indicated.

Period

Low
Trading
Price
(C$)

High
Trading
Price
(C$)

Volume
(#)

Year Ended December 31, 2021

Fourth Quarter (through December 31, 2021)

$
29.05

$
43.75

27,122,860

Third Quarter (September 30, 2021)

$
29.54

$
48.34

21,068,170

Second Quarter (June 30, 2021)

$
43.20

$
59.60

22,111,976

First Quarter (March 31, 2021)

$
39.26

$
67.45

26,428,456

Year Ended December 31, 2020

Fourth Quarter (through December 31, 2020)

$
23.63

$
42.30

30,428,249

Third Quarter (September 30, 2020)

$
16.81

$
35.08

30,465,852

Second Quarter (June 30, 2020)

$
11.95

$
18.92

14,113,517

First Quarter (March 31, 2020)

$
8.09

$
15.34

18,658,398


Period	Low Trading Price (C$)		High Trading Price (C$)		Volume (#)

Year Ended December 31, 2023
Fourth Quarter (December 31, 2023)	$	5.22	$	8.43	20,003,628
Third Quarter (September 30, 2023)	4.68		10.12		30,922,434
Second Quarter (June 30, 2023)	5.20		7.63		26,217,104
First Quarter (March 31, 2023)	7.48		10.04		19,669,724

Year Ended December 31, 2022
Fourth Quarter (December 31, 2022)	$	8.72	$	21.60	31,338,044
Third Quarter (September 30, 2022)	11.53		19.77		17,985,615
Second Quarter (June 30, 2022)	14.51		27.42		24,446,760
First Quarter (March 31, 2022)	21.71		34.61		26,884,845

Source: Bloomberg.

The Subordinate Voting Shares are also traded on the OTCQX under the symbol “TCNNF.” The following table sets forth trading information pulled from Bloomberg for the Subordinate Voting Shares for the periods indicated.

Period

Low
Trading
Price
($)

High
Trading
Price
($)

Volume
(#)

Year Ended December 31, 2021

Fourth Quarter (through December 31, 2021)

$
23.10

$
34.75

26,893,469

Third Quarter (September 30, 2021)

$
23.38

$
39.01

23,772,558

Second Quarter (June 30, 2021)

$
34.52

$
47.49

20,283,884

First Quarter (March 31, 2021)

$
31.62

$
53.73

29,364,111

Year Ended December 31, 2020

Fourth Quarter (through December 31, 2020)

$
17.37

$
33.45

27,585,871

Third Quarter (September 30, 2020)

$
12.38

$
26.50

26,497,216

Second Quarter (June 30, 2020)

$
8.35

$
14.03

14,145,962

First Quarter (March 31, 2020)

$
5.74

$
11.81

14,971,972


Period	Low Trading Price ($)		High Trading Price ($)		Volume (#)

Year Ended December 31, 2023
Fourth Quarter (December 31, 2023)	$	3.85	$	6.17	23,042,292
Third Quarter (September 30, 2023)	3.45		7.45		26,647,373
Second Quarter (June 30, 2023)	3.87		5.78		19,621,301
First Quarter (March 31, 2023)	5.59		7.50		25,890,697

Year Ended December 31, 2022
Fourth Quarter (December 31, 2022)	$	6.39	$	16.11	27,927,795
Third Quarter (September 30, 2022)	8.29		15.20		15,699,686
Second Quarter (June 30, 2022)	11.28		21.99		17,861,958
First Quarter (March 31, 2022)	16.99		27.44		26,432,828

Source: Bloomberg.

The OTCQX market quotations reflect inter-dealer prices, without retail mark-up, mark-down or commission and may not necessarily represent actual transactions.

Holders of Record

As of ~~March 23, 2022,~~December 31, 2023, there were approximately ~~371~~350 shareholders of record of our Subordinate Voting Shares 34and 14 holders of record of our Multiple Voting ~~Shares, and no holders~~ Shares.

Table of ~~record of our Super Voting Shares.~~ Contents

Dividends

We have not declared dividends or distributions on Subordinate Voting Shares in the past. We currently intend to reinvest all future earnings to finance the development and growth of our business. As a result, we do not intend to pay dividends on Subordinate Voting Shares in the foreseeable future. Any future determination to pay dividends will be at the discretion of our board of directors and

will depend on the financial condition, business environment, operating results, capital requirements, any contractual restriction on the payment of dividends and any other factors the board deems relevant.

Stock ~~Price~~ Performance Graph

The following performance graph compares the cumulative total shareholder return on our Subordinate Voting Shares from September 25, 2018, when the Company began trading on the CSE, through December 31, 2021, with the comparable cumulative return of the Russell 2000 Index and a selected peer group of companies. The comparison assumes all dividends have been reinvested (if any) and an initial investment of $100 on September 25, 2018. The returns of each company in the peer group have been weighted to reflect their market capitalizations. All amounts below are disclosed in US Dollars. The stock price performance on the following graphrelated information is not ~~necessarily indicative of future stock price performance.~~

~~Below are the specific companies included in the peer group.~~

•

~~Columbia Care Inc.~~

•

~~Cresco Labs Inc.~~

•

~~Curaleaf Holdings Inc.~~

•

~~Green Thumb Industries Inc.~~

•

~~TerrAscend Corp.~~

•

~~Verano Holdings Corp.~~

During the year ended December 31, 2021, the Company determined the above identified peer group was more in line with the Company's operations and market capitalization than those identified in the prior year.

~~Historical Index~~

The following graph compares, for the period from September 25, 2018 (the day we commenced trading on the OTCQX Best Market) through December 31, 2021, the cumulative total return on our Subordinate Voting Shares, the CSE Composite Index and the Horizons Marijuana Index that consists of the North American publicly listed life sciences companies with significant business activities in the marijuana industry. The graph assumes $100 was invested on September 25, 2018, in the Subordinate Voting Shares of Trulieve, Inc., the CSE Composite Index and the Horizons Marijuana Index, and assumes the reinvestment of any dividends. The stock price performance on the following graph is not necessarily indicative of future stock price performance.

~~These performance graphs and other information furnished under this Part II Item 5 of this Form 10-K shall not be~~ deemed to be “soliciting material” or to be “filed” with the SEC or subject to Regulation 14A or 14C under the Securities Exchange Act of 1934 or to the liabilities of Section 18 of the Securities Exchange ~~Act.~~Act of 1934, and will not be deemed to be incorporated by reference into any filing under the Securities Act of 1933 or the Securities Exchange Act of 1934, except to the extent the Company specifically incorporates it by reference into such a filing: the SEC requires the Company to include a line graph presentation comparing cumulative five year stock returns with a broad-based stock index and either a nationally recognized industry index or an index of peer companies selected by the Company. The Company has chosen to use the Russell 2000 Index as the broad-based index.

The graph compares the cumulative total shareholder return on our Subordinate Voting Shares (Ticker: TCNNF) with the comparative cumulative total return of the Russell 2000 Index and our selected peer group, assuming an initial investment of $100 in cash, with reinvestment of any dividends, from December 31, 2018 through December 31, 2023. The returns of each company in the peer group have been weighted to reflect their market capitalization. The returns shown are based on historical results and are not intended to suggest future performance. The total return on our Subordinate Voting Shares was (36)% during the performance period, as compared with a total return during the same period of (16)% for the market-cap weighted average return of our selected peer group, and 61% for the Russell 2000 Index.

Our selected peer group is comprised of:

•

Cresco Labs Inc. (Ticker: CRLBF)

•Curaleaf Holdings Inc. (Ticker: CURLF)

•Green Thumb Industries Inc. (Ticker: GTBIF)

•Verano Holdings Corp. (Ticker: VRNOF) - first publicly traded in 2022 and reweighed to the peer group

Table of Contents

Recent Sales of Unregistered Securities

All sales of unregistered securities during the year ended December 31, ~~2021~~2023 were reported in a Form 8-K or Form 10-Q filed with the ~~SEC.~~

SEC, if applicable.

Item 6. [Reserved]

Not applicable.

Table of Contents

Item 7. Management’s Discussion and Analysis of Financial Condition and Results of Operations.

FINANCIAL CONDITION AND RESULTS OF OPERATIONS

The following discussion of our financial condition and results of operations should be read together with our consolidated financial statements and the related notes included elsewhere in this Annual Report on Form 10-K. This discussion contains forward-looking statements and involves numerous risks and uncertainties, including but not limited to those described in the “Risk Factors” section of this Annual Report on Form 10-K. Actual results may differ materially from those contained in any forward-looking statements. You should read “Cautionary Note Regarding Forward-Looking Statements” and “Risk Factors” contained in this Annual Report on Form 10-K.

Overview

Trul

~~Overview~~

~~Trulieve~~ieve is a vertically integrated cannabis company and multi-state operator which currently holds licenses to operate in ~~ten states and has received notice of intent to award a license in an eleventh state.~~nine states. Headquartered in Quincy, Florida, we are the ~~market leader for quality medical~~largest cannabis ~~products and services~~retailer in ~~Florida and we have~~the United States with market leading retail operations in Arizona, Florida, Georgia, Pennsylvania, and ~~Pennsylvania. By providing innovative,~~West Virginia. We are committed to delivering exceptional customer experiences through elevated service and high-quality ~~products across our brand portfolio, we~~branded products. We aim to be the brand of choice for medical and adult-use customers in all of the markets that we serve. ~~We operate~~The Company operates in highly regulated markets that require expertise in cultivation, manufacturing, ~~retail~~ and ~~logistics.~~retail. We have developed proficiencies in each of these ~~functions~~functional areas and are ~~committed to~~passionate about expanding access to ~~high quality~~regulated cannabis products through advocacy, education, and ~~delivering exceptional customer experiences.~~expansion of our distribution network.

All of the states in which we operate have ~~adopted legislation~~developed programs to permit the use of cannabis products for medicinal purposes to treat specific conditions and diseases, which we refer to as medical cannabis. Recreational ~~marijuana,~~cannabis, or adult-use cannabis, is legal ~~marijuana~~cannabis sold in licensed dispensaries to adults ages 21 and older. Thus far, of the states in which we operate, ~~only~~ Arizona, ~~California,~~ Colorado, Connecticut, ~~Massachusetts,~~Maryland, and ~~Nevada~~Ohio have ~~adopted legislation~~already or are in the process of developing and launching programs permitting the commercialization of adult-use cannabis products. Trulieve operates its business through its directly and indirectly owned subsidiaries that hold licenses and have entered into managed service agreements in the states in which they operate. As of March 16, 2022, we operated 162 dispensaries, with 113 dispensaries in Florida, 19 affiliated dispensaries in Pennsylvania, 17 dispensaries in Arizona, five dispensaries in California, three dispensaries in Maryland, two dispensaries in Massachusetts, two dispensaries in West Virginia and one dispensary in Connecticut, and we operated cultivation and processing facilities in Arizona, Colorado, Florida, Maryland, Massachusetts, Nevada, Pennsylvania, and West Virginia.

As of December 31, ~~2021,~~2023, we employed over 9,000 people and we are committed to providing patients and adult consumers, which we refer to herein as “customers,” a consistent and welcoming retail experience across Trulieve branded stores and affiliated retail locations.

~~Our business and operations center around~~operated the Trulieve brand philosophy of “Customers First” which permeates our culture beginning with high- quality and efficient cultivation and manufacturing practices, focus on the consumer experience at Trulieve branded and affiliated retail locations, at our in-house call center and where available at customer residences through a robust home delivery program. Our investments in vertically integrated operations in several of our markets afford us ownership of the entire supply chain which mitigates third-party risks and allows us to completely control product quality and brand experience. We believe that this contributes to high customer retention and brand loyalty. We successfully operate our core business functions of cultivation, production and distribution at scale, and are skilled at rapidly increasing capacity without any interruption to existing operations.

Trulieve has identified five regional geographic hubs in the U.S. and has established cannabis operations in three of the five hubs: Southeast, Northeast, and Southwest. In each of our three regional hubs we have market leading positions in cornerstone states and additional operations and assets in other state markets. Our hubs are managed by national and regional management teams supported by our corporate headquarters in Florida.

~~Southeast Hub~~

Our southeast hub operations are anchored by our cornerstone market of Florida. Trulieve was the first licensed operator in the medical market in Florida with initial sales in 2016. Publicly available reports filed with the Florida Office of Medical Marijuana Use show Trulieve has the most dispensing locations and the greatest dispensing volume across product categories out of all licensed medical marijuana businesses in the state as of December 31, 2021. Trulieve cultivates and produces all of its products in-house and distributes those products to customers in Trulieve branded stores (dispensaries) throughout Florida, as well as via home delivery.

As of December 31, 2021, Trulieve operated cultivation and processing facilities across thirteen sites and 111 retail dispensaries throughout the state. In accordance with Florida law, Trulieve grows all of its cannabis in secure enclosed indoor facilities and greenhouse structures. In furtherance of our customer-first focus, we have developed a suite of Trulieve branded products, including flower, edibles, vaporizer cartridges, concentrates, topicals, capsules, tinctures, dissolvable powders, and nasal sprays. This wide variety of products gives customers the ability to select the product that consistently delivers the desired effect and in their preferred method of delivery.

In Georgia, Trulieve received a Notice of Intent to award a Class 1 Production License from the Georgia Access to Medical Cannabis Commission in July 2021. The Notice of Intent to award is a notice of the Georgia Access to Medical Cannabis Commission’s expected contract award to Trulieve GA pending resolution of a protest process. If the contract is awarded, Trulieve GA will hold one of two Class 1 Production Licenses in the state and will be permitted to cultivate cannabis for the manufacture of low tetrahydrocannabinol, or THC oil.

~~Northeast Hub~~

~~Our northeast hub operations are anchored by our cornerstone market of Pennsylvania.~~

We conduct cultivation, processing, and retail operations through its direct and indirect subsidiaries with permits for retail operations and grower/processor operations in Pennsylvania. These subsidiaries operate cultivation and processing facilities in McKeesport, Reading, and Carmichael, Pennsylvania to support our affiliated network of retail dispensaries and wholesale distribution network across the state.

~~We operate three medical dispensaries and conducts wholesale sales supported by cultivation and processing in Hancock, Maryland.~~

We operate two retail dispensaries in Massachusetts, serving medical adult use customers in Northampton and adult use customers in Worcester. Our retail operations are supported by cultivation and manufacturing operations in Holyoke. We commenced wholesale sales in September 2021. Trulieve was the first to offer sales of clones supporting home grow for residents in the Massachusetts market in August 2021.

We operate a medical cannabis dispensary located in Bristol, Connecticut. Under Connecticut’s adult-use cannabis legislation, which was enacted July 1, 2021, Trulieve can seek regulatory approval to expand sales at this dispensary to include adult use sales.

We operate two medical dispensaries in Morgantown and Weston, West Virginia, supported by cultivation and processing operations in Huntington, West Virginia. Trulieve has been awarded and has acquired permits to operate up to a total of nine dispensaries in West Virginia.

~~Southwest Hub~~

Our southwest hub operations are anchored by our cornerstone market of Arizona. In Arizona, Trulieve holds a market-leading position, offering medical and adult use customers a wide range of branded and third-party products, including brand partner products. We also serve medical and adult use customers in California. Trulieve conducts wholesale operations in Nevada and Colorado, serving the medical and adult use markets in each state.

following:


State	Number of Dispensaries	Number of Cultivation and Processing Facilities
Florida	131	6
Arizona	21	3
Pennsylvania	20	3
West Virginia	10	1
Georgia	5	1
Maryland	3	1
Ohio	1	—
Connecticut	1	—
Colorado	—	1
Total	192	16

Components of Results of Continuing Operations

Revenue

~~We derive our revenue~~

Revenue is primarily derived from cannabis and cannabis related products ~~which~~ we ~~manufacture,~~cultivate, process, distribute, and sell ~~and distribute~~ to our customers ~~by home delivery~~ and inthrough our ~~dispensaries.~~wholesale distribution channels.

Table of Contents

Gross Profit

Gross profit includes revenue less the costs directly attributable to ~~product sales~~the cultivation and ~~includes~~production of cannabis and from wholesale purchases made from other licensed producers within the markets in which the Company operates. Costs of goods sold include the costs directly attributable to the production of inventory and amounts ~~paid to produce~~incurred in the cultivation and manufacturing process of finished goods, such as flower, concentrates, and ~~concentrates,~~edibles, as well as packaging and other supplies, fees for services and processing, and allocated overhead which includes depreciation and amortization of property and equipment associated with cultivation and production, allocations of rent, administrative salaries, utilities, and related costs. Cannabis costs are affected by various state regulations that limit the sourcing and procurement of cannabis product, which may create fluctuations in margins over comparative periods as the regulatory environment changes.

Sales and Marketing

Sales and marketing expenses primarily consist of ~~marketing~~ expenses related to advertising costs and marketing programs for our ~~products. Personnel~~products and personnel related costs ~~related~~ to ~~additional dispensaries are the primary costs of sales~~manage and ~~marketing.~~staff our dispensaries. As we continue to expand and open additional dispensaries, and gain additional customers, we expect our sales and marketing expenses to continue to increase.

General and Administrative

General and administrative expenses ~~represent costs incurred at our corporate offices,~~are primarily related to personnel costs, including salaries, incentive compensation, benefits, and other professional service costs, including legal, accounting and ~~accounting.~~acquisition related costs. We expect to

continue to invest ~~considerably~~ in this area to support our expansion plans, as we are able to access additional medical and adult-use markets, to further support the ~~increasing complexity~~growth of the cannabis ~~business. Furthermore, we expect to continue to incur acquisition~~industry. Other general and ~~transaction costs related to our expansion plans,~~administrative expenses consist of travel, general office supplies and ~~we anticipate a significant increase in compensation expenses related to recruiting~~monthly services, facilities and ~~hiring talent, accounting,~~occupancy, insurance, and ~~legal and professional fees associated with becoming compliant with the Sarbanes-Oxley Act and other public company corporate expenses.~~

director fees.

Depreciation and Amortization

Depreciation ~~expense is calculated on a straight-line basis using the estimated useful life~~and amortization consists of ~~each asset. Estimated useful life is determined by asset class~~depreciation of property and ~~is reviewed on an annual basis~~equipment and ~~revised if necessary. Amortization expense is amortized using the straight-line method over the estimated useful life~~right-of-use assets, and amortization of ~~the intangible assets. Useful lives for~~ intangible assets, are determined by type of asset with the initial determination of useful life determined during the valuation of the business combination. On an annual basis, the useful lives of each intangible class of assets are evaluated for appropriatenessincluding cannabis licenses and ~~adjusted if appropriate.~~

internally developed software.

Other Income (Expense)~~, Net~~

~~Interest and other~~

Other income (expense)~~, net consist~~ consists primarily of interest expense, interest income ~~interest expense,~~on money market accounts and notes receivable, gain on debt extinguishment, and the impact of the revaluation of the liability classified ~~warrants.~~

warrants and our interest rate swap.

Provision for Income Taxes

Provision for income taxes is calculated using the asset and liability method. Deferred income tax assets and liabilities are determined based on enacted tax rates and laws for the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized.

~~As we operate in~~ The IRS has taken the position that cannabis ~~industry, we~~companies are subject to the limits of IRC Section 280E under which wethey are only allowed to deduct expenses directly related to costs of goods sold.

The Company has taken a position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code.

Results of Continuing Operations

This section of this Form 10-K generally discusses 2023 and 2022 items and year-to-year comparisons between 2023 and 2022 and 2021 for continuing operations, except as noted. Refer to Note 19. Discontinued Operations

to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for additional financial information related to our discontinued operations.

Table of Contents

Year Ended December 31, ~~2021~~2023 Compared to Year Ended December 31, ~~2020~~

2022



	2023				2022				2023 vs. 2022
	(in thousands)
Statement of operations data:	Amount		Percentage of Revenue		Amount		Percentage of Revenue		Amount Change
Revenue	$	1,129,193	100.0	%	$	1,218,229	100.0	%	$	(89,036)
Cost of goods sold	540,565		47.9	%	529,102		43.4	%	11,463
Gross profit	588,628		52.1	%	689,127		56.6	%	(100,499)
Expenses:
Sales and marketing	240,165		21.3	%	277,563		22.8	%	(37,398)
General and administrative	145,997		12.9	%	169,471		13.9	%	(23,474)
Depreciation and amortization	109,825		9.7	%	116,381		9.6	%	(6,556)
Impairments and disposals of long-lived assets, net	6,664		0.6	%	75,547		6.2	%	(68,883)
Impairment of goodwill	307,590		27.2	%	—		0.0	%	307,590
Total expenses	810,241		71.8	%	638,962		52.5	%	171,279
(Loss) income from operations	(221,613)		(19.6	%)	50,165		4.1	%	(271,778)
Other income (expense):
Interest expense, net	(81,569)		(7.2	%)	(73,422)		(6.0	%)	(8,147)
Interest income	6,164		0.5	%	1,631		0.1	%	4,533
Gain on debt extinguishment, net	5,937		0.5	%	—		—	%	5,937
Other income, net	6,544		0.6	%	2,388		0.2	%	4,156
Total other expense, net	(62,924)		(5.6	%)	(69,403)		(5.7	%)	6,479
Loss before provision for income taxes	(284,537)		(25.2	%)	(19,238)		(1.6	%)	(265,299)
Provision for income taxes	151,358		13.4	%	163,380		13.4	%	(12,022)
Net loss from continuing operations	(435,895)		(38.6	%)	(182,618)		(15.0	%)	(253,277)
Net loss from discontinued operations, net of tax benefit of $4,101 and $12,223, respectively	(97,241)		(8.6	%)	(70,109)		(5.8	%)	(27,132)
Net loss	(533,136)		(47.2	%)	(252,727)		(20.7	%)	(280,409)
Less: net loss attributable to non-controlling interest from continuing operations	(5,147)		(0.5	%)	(3,994)		(0.3	%)	(1,153)
Less: net loss attributable to non-controlling interest from discontinued operations	(1,193)		(0.1	%)	(2,669)		-0.2	%	1,476
Net loss attributable to common shareholders	$	(526,796)	(46.7	%)	$	(246,064)	(20.2	%)	$	(280,732)

Revenue

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Revenues, net of discounts

$
938,385

$
521,533

$
416,852

80
%

Revenue for the year ended December 31, ~~2021~~2023 was ~~$938.4~~$1.13 billion, a decrease of $89.0 million ~~an increase of $416.9 million,~~or 7.3%, from ~~$521.5 million~~$1.22 billion for the year ended December 31, ~~2020. Increase~~2022. The decrease in revenue is ~~the result of increased locations, increased or new wholesale operations in specific markets, organic growth~~due to a $74.9 million decrease in retail ~~sales~~revenue and a $11.7 million decrease in wholesale revenue. The Company operated 192 and 178 dispensaries as of December 31, 2023 and December 31, 2022, respectively. We experienced increased competition and promotional activity in certain retail markets and also shed underperforming retail assets. The reduction in wholesale revenues is primarily due to ~~an increase~~a focus on higher margin retail sales in ~~products available for purchase and overall customer count and acquisitions, most notably the acquisition~~ certain markets.

Table of ~~Harvest Health & Recreation, Inc. ("Harvest") in October 2021.~~ Contents

Cost of Goods Sold

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Cost of goods sold

$
372,255

$
135,116

$
237,139

176
%
% of total revenues

40
%

26
%

Cost of goods sold for the year ended December 31, ~~2021~~2023 was ~~$372.3~~$540.6 million, an increase of ~~$237.1~~$11.5 million or 2.2%, from ~~$135.1~~$529.1 million for the year ended December 31, ~~2020,~~2022. Cost of goods sold as a percentage of revenue was 47.9% for the year ended December 31, 2023 as compared to 43.4% for the year ended December 31, 2022. The increase was primarily due to increased depreciation related to capital expenditures to support business growth totaling $10.3 million. Additional factors impacting the change include inventory reduction efforts to right-size inventory levels, the continued ramping of new production facilities in existing markets where additional economies of scale are anticipated in the future, and expansion into new markets which are not fully vertical, resulting in the sale of third-party products, which yield lower margin than our vertical markets. The Company also incurred additional costs related to excess capacity in certain temporarily idled facilities.

Gross Profit

Gross profit for the year ended December 31, 2023 was $588.6 million, a decrease of $100.5 million or 14.6%, from $689.1 million for the year ended December 31, 2022. Gross profit as a percentage of revenue was 52.1% for the year ended December 31, 2023 as compared to 56.6% for the year ended December 31, 2022, resulting from increased promotional activity in certain retail markets, price compression in certain markets, a change in product mix to value tier brands driven by customer demand, initiatives to reduce inventory levels and costs related to excess capacity in certain temporarily idled facilities.

Sales and Marketing Expense

Sales and marketing expense for the year ended December 31, 2023 was $240.2 million, a decrease of $37.4 million, or 13.5%, from $277.6 million for the year ended December 31, 2022. Sales and marketing expense as a percentage of revenue decreased 21.3% for the year ended December 31, 2023 as compared to 22.8% for the year ended December 31, 2022. The decrease is primarily due to approximately $36.3 million in savings from reduced headcount and redundant positions and reduced costs related to integration and share-based compensation, which was partially offset by increased advertising costs of $3.9 million due to adding additional marketing platforms and an increase in costs driven by the increased retail store count.

General and Administrative Expense

General and administrative expense for the year ended December 31, 2023 was $146.0 million, a decrease of $23.5 million or 13.9% from $169.5 million for the year ended December 31, 2022. General and administrative expense as a percentage of revenue decreased from 13.9% to 12.9%. The decrease is primarily due to the absence of the $18.5 million expense recognized last year related to the Watkins earnout.

Depreciation and Amortization Expense

Depreciation and amortization expense for the year ended December 31, 2023 was $109.8 million, a decrease of $6.6 million, or 5.6%, from $116.4 million for the year ended December 31, 2022. The decrease in depreciation and amortization expense was attributable to certain intangible assets becoming fully amortized in the prior year.

Impairment and Disposal of Long-lived Assets, Net

Loss on impairment and disposal of long-lived assets for the year ended December 31, 2023 was $6.7 million, a decrease of $68.9 million as compared to $75.5 million for the year ended December 31, 2022. The decrease is primarily due to the non-recurrence of 2022 impairment activities in which we exited facilities related to a legacy acquisition. Our current year activity is primarily related to asset disposals in California and Connecticut, which was partially offset with a gain on lease termination in the California market.

Table of Contents

Impairment of Goodwill

Impairment of goodwill for the year ended December 31, 2023 was $307.6 million compared to zero for the year ended December 31, 2022. Based on the results of the Company's goodwill impairment procedures in the second quarter of 2023, the Company recorded $307.6 million in goodwill impairment.

Interest Expense, Net

Interest expense, net for the year ended December 31, 2023 was $81.6 million, an increase of $8.1 million, or 11.1%, from $73.4 million for the year ended December 31, 2022. The increase is primarily the result of a full year of interest expense associated with the mortgage notes which closed in December 2022, which was partially offset by a reduction in capitalized interest of $4.9 million.

Interest Income

Interest income for the year ended December 31, 2023 was $6.2 million, an increase of $4.5 million, or 277.9%, from $1.6 million for the year ended December 31, 2022. The increase is due to an increase in overnight cash sweeps into high-yield money market fund accounts.

Gain on Extinguishment of Debt, net

Gain on extinguishment of debt, net was $5.9 million for the year ended December 31, 2023, compared to zero for the year ended December 31, 2022. The gain on debt extinguishment, net was from an open market purchase of our private placement notes, "2026 Notes - Tranche One", that resulted in the extinguishment of $57.0 million in principal at a discount of 16.5% with a recognized gain of $8.2 million on the extinguishment. This was partially offset by a $2.4 million loss on extinguishment in the fourth quarter of 2023 when we completed the early redemption of both of the "June Notes" and the "November Notes", with a principle of $130.0 million, which represented a redemption price of 100% of the principal amounts outstanding.

Other Income, Net

Other income, net was $6.5 million for the year ended December 31, 2023, an increase of $4.2 million, or 174.0%, from $2.4 million for the year ended December 31, 2022. The increase is primarily related to insignificant non-recurring settlements.

Provision for Income Taxes

The provision for income taxes for the year ended December 31, 2023 was $151.4 million, a decrease of $12.0 million from $163.4 million for the year ended December 31, 2022. Provision for income taxes as a percentage of revenue was consistent with the prior year at 13.4%.

Table of Contents

Year Ended December 31, 2022 Compared to Year Ended December 31, 2021


	Year Ended December 31,
	2022				2021				2022 vs. 2021
	(in thousands)
Statement of operations data:	Amount		Percentage of revenue		Amount		Percentage of revenue		Amount Change
Revenue	$	1,218,229	100.0	%	$	931,934	100.0	%	286,295
Cost of goods sold	529,102		43.4	%	365,360		39.2	%	163,742
Gross profit	689,127		56.6	%	566,574		60.8	%	122,553
Expenses:
Sales and marketing	277,563		22.8	%	211,905		22.7	%	65,658
General and administrative	169,471		13.9	%	99,456		10.7	%	70,015
Depreciation and amortization	116,381		9.6	%	45,791		4.9	%	70,590
Impairment and disposal of long-lived assets, net	75,547		6.2	%	5,371		0.6	%	70,176

Total expenses	638,962		52.5	%	362,523		38.9	%	276,439
Income from operations	50,165		4.1	%	204,051		21.9	%	(153,886)
Other income (expense):
Interest expense, net	(73,422)		(6.0)	%	(29,121)		(3.1	%)	(44,301)
Interest income	1,631		0.1	%	205		—	%	1,426

Other income, net	2,388		0.2	%	1,112		0.1	%	1,276
Total other expense, net	(69,403)		(5.7)	%	(27,804)		(3.0	%)	(41,599)
(Loss) income before provision for income taxes	(19,238)		(1.6)	%	176,247		18.9	%	(195,485)
Provision for income taxes	163,380		13.4	%	145,722		15.6	%	17,658
Net (loss) income from continuing operations	(182,618)		(15.0)	%	30,525		3.3	%	(213,143)
Net loss from discontinued operations, net of tax benefit (provision) of $12,223 and $(339), respectively	(70,109)		(5.8)	%	(13,080)		(1.4	%)	(57,029)
Net (loss) income	(252,727)		(20.7)	%	17,445		1.9	%	(270,172)
Less: net loss attributable to non-controlling interest from continuing operations	(3,994)		(0.3)	%	(587)		(0.1	%)	(3,407)
Less: net loss attributable to non-controlling interest from discontinued operations	(2,669)		(0.2)	%	—		—	%	(2,669)
Net (loss) income attributable to common shareholders	$	(246,064)	(20.2)	%	$	18,032	1.9	%	$	(264,096)

Revenue

Revenue for the year ended December 31, 2022, was $1.22 billion, an increase of $286.3 million or 30.7% from $931.9 million for the year ended December 31, 2021. The increase in revenue is due to contributions from acquisitions, most notably, Harvest Health & Recreation, Inc. ("Harvest") in October 2021 and Anna Holdings, LLC ("Keystone Shops") in July 2021, continued expansion into new states such as Massachusetts and West Virginia, and additional dispensaries opened in existing markets.

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Cost of Goods Sold

Cost of goods sold for the year ended December 31, 2022, was $529.1 million, an increase of $163.7 million, or 44.8%, from $365.4 million for the year ended December 31, 2021, primarily in correlation with the increase in revenues. Cost of goods sold as a percentage of revenue ~~increased from 26%~~was 43.4% for the year ended December 31, ~~2020~~2022 as compared to ~~40%~~39.2% for the year ended December 31, 2021, primarily due to increased depreciation related to capital expenditures to support business growth, new production facilities in existing markets where economies of scale are anticipated in the future, and expansion into new markets which are not fully vertical, resulting in sale of third-party products, and therefore yield lower margin than our vertical markets.

Gross Profit

Gross profit for the year ended December 31, 2022, was $689.1 million, an increase of $122.6 million, or 21.6%, from $566.6 million for the year ended December 31, 2021. Gross profit as a percentage of revenue was 56.6% for the year ended December 31, 2022 as compared to 60.8% for the year ended December 31, 2021, due to ~~our inventory step-up related to acquisitions,~~higher revenue offset by many factors including, increased wholesale business, which is generally lower margin than retail sales, increased depreciation related to capital expenditures ~~in cultivation and processing~~ to support business growth, new production facilities where economies of scale are anticipated in the future, and expansion into new markets which are not fully vertical, resulting in the sale of ~~third party~~third-party products, and therefore yield lower margin than ~~the Florida~~our vertical ~~market.~~

~~Gross Profit~~

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Gross profit

$
566,130

$
386,417

$
179,713

47
%
% of total revenues

60
%

74
%

~~Gross profit~~markets.

Sales and Marketing Expense

Sales and marketing expense for the year ended December 31, ~~2021~~2022, was ~~$566.1~~$277.6 million, ~~up $179.7~~an increase of $65.7 million, or ~~47%~~31.0%, from $386.4 million for the year ended December 31, 2020, as a result of an increase in retail sales due to an increase in the number of dispensaries and customer count. Gross profit as a percentage of revenue decreased from 74% for the year ended December 31, 2020 to 60%, for the year ended December 31, 2021. This decrease is caused by inventory step-up related to acquisitions, increased wholesale business, which is generally lower margin than retail sales, increased depreciation related to capital expenditures in cultivation and processing to support business growth, expansion into new markets which are not fully vertical and therefore yield lower margin than the Florida vertical market and macro-economic factors centered around prices and labor.

~~Sales and Marketing Expenses~~

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Sales and marketing expenses

$
215,144

$
119,395

$
95,749

80
%
% of total revenues

23
%

23
%

~~Sales and marketing expenses increased from $119.4 million for the year ended December 31, 2020, to $215.1~~$211.9 million for the year ended December 31, 2021, ~~an increase~~but remained consistent as a percentage of ~~$95.7 million.~~revenue. The increase in sales and marketing is the result of a higher headcount for the year, as we continue to add additional dispensaries in efforts to maintain and further drive higher growth in sales and market ~~share. This increased headcount resulted in higher personnel costs, which is the primary driver for the increase year over year.~~

share as well as expanding into new markets.

General and Administrative ~~Expenses~~

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

General and administrative expenses

$
100,573

$
36,056

$
64,517

179
%
% of total revenues

11
%

7
%

Expense

General and administrative ~~expenses~~expense for the year ended December 31, ~~2021 increased to $100.6~~2022, was $169.5 million, an increase of $70.0 million, or 70.4%, from ~~$36.1~~$99.5 million for the year ended December 31, ~~2020, an increase~~2021. General and administrative expense as a percentage of ~~$64.5 million.~~revenue increased from 10.7% to 13.9%. The increase in general and administrative expense is the result of ~~significant expenses incurred~~entering new markets, ramping our infrastructure to ~~acquire~~support growth initiatives, repositioning of facilities which have been temporarily idled, and ~~integrate new subsidiaries, most notably Harvest.~~

amounts related to specific non-recurring items such as legal settlements. We also contributed $20.0 million to the Smart and Safe Florida campaign in 2022.

Depreciation and Amortization Expense

Depreciation and amortization expense for the year ended December 31, 2022, was $116.4 million, an increase of $70.6 million, or 154.2%, from $45.8 million for the year ended December 31, 2021. The overall increase in depreciation and amortization expense is due to increased depreciation from acquired facilities, and increased amortization related to acquired licenses and other intangibles, from the investment in infrastructure for additional dispensaries and cultivation facilities.

Impairment and Disposal of Long-lived Assets,

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Loss on impairment and disposal of long-lived assets

$
5,371

$
63

$
5,308

8,425
%
% of total revenues

1
%

0
%

Net

Loss on impairment and disposal of long-lived assets for the year ended December 31, ~~2021 increased~~2022, was $75.5 million, an increase of $70.2 million as compared to ~~5.4~~$5.4 million ~~from $63~~ for the year ended December 31, ~~2020, an increase of 5.3 million.~~2021. The increase is primarily due to exited facilities and the ~~write off~~repositioning of assets, primarily in our Southeast hub. The activity in 2021 primarily consisted of the write-off of certain licenses in our Southwest hub due to market changes and the disposal of certain long-lived assets.

Table of Contents

~~Depreciation and Amortization Expenses~~

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Depreciation and amortization expense

$
48,096

$
12,600

$
35,496

282
%
% of total revenues

5
%

2
%

~~Depreciation and amortization expenses~~

Interest Expense, net

Interest expense, net for the year ended December 31, ~~2021~~2022 was ~~$48.1~~$73.4 million, ~~up $35.5~~an increase of $44.3 million ~~or 282%,~~ from ~~$12.6~~$29.1 million for the year ended December 31, ~~2020.~~2021. The ~~overall~~ increase ~~in depreciation~~is related to additional interest on private placement notes of $31.5 million, construction finance liabilities of $8.1 million, and ~~amortization expenses~~finance leases of $2.2 million, to support business growth.

Interest Income

Interest income for the year ended December 31, 2022 was ~~due to amortization~~$1.6 million, an increase of ~~intangibles acquired and fair valued in acquisitions, investment in infrastructure that resulted in more capitalized assets~~$1.4 million from $0.2 million for the ~~additional dispensaries. Furthermore, depreciation expense increased~~year ended December 31, 2021. The increase was primarily due to additional ~~finance leases added.~~interest earned on notes receivable acquired and entered into during the fourth quarter of 2021.

~~Total~~

Other Income, ~~(Expense),~~ Net

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Total other expense, net

$
33,440

$
60,854

$
(27,414
)

(45
)%
% of total revenues

(4
)%

(12
)%

~~Total other~~Other income, ~~(expense),~~ net for the year ended December 31, ~~2021~~2022 was ~~$33.4~~$2.4 million, ~~a decrease~~an increase of ~~$27.4~~$1.3 million ~~or (45)%,~~ from ~~$60.9~~$1.1 million for the year ended December 31, ~~2020.~~2021. The ~~overall decrease~~increase is primarily ~~driven by $42.7 million of other expense~~ due to a $2.6 million revaluation of warrants partially offset by ~~increased interest expense.~~

~~On December 10, 2020, the Company entered into~~ a Supplemental Warrant Indenture with Odyssey Trust Company pursuant to which it amended the terms of the issued and outstanding subordinate voting share purchase warrants of the Company (the “Public Warrants”) to convert the exercise price of the Public Warrants to $13.47 per share, the U.S. dollar equivalent of the Canadian dollar exercise price of the Public Warrants of C$17.25. As a result of this, the Public Warrants converted to equity and eliminated the necessity of revaluation expense on these warrants. The Company did acquire Canadian dollar warrants in the acquisition of Harvest and recorded income related to the revaluation of these warrants in the fourth quarter of the year ended December 31, 2021. Additionally, interest expense increased as a result of new debt to support business growth, additional finance leases and additional construction finance liabilities acquired in the Harvest acquisition.one time sales tax contingency.

Provision for Income Taxes

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Provision for income taxes

$
146,061

$
94,451

$
51,610

55
%
Effective tax rate

89
%

60
%

~~Income tax expense~~

The provision for income taxes for the year ended December 31, ~~2021 increased to $146.1~~2022 was $163.4 million, an increase of $17.7 million from ~~$94.5~~$145.7 million for the year ended December 31, ~~2020, an increase of $51.6 million~~2021. Provision for income taxes as a ~~result~~percentage of ~~a $179.7 million increase in gross profit for the same periods. Under IRC Section 280E, cannabis companies are only allowed~~revenue decreased from 15.6% to ~~deduct expenses that are directly related to production of the products.~~13.4%. The increase in income tax expense is primarily due to the ~~significant increase in gross profit as well as an increase in expenses with are not tax deductible under 280E~~

~~Net Income~~

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Net income and comprehensive income

$
17,445

$
62,998

$
(45,553
)

(72
)%

Net income for the year ended December 31, 2021 was $17.4 million, a decrease of $45.6 million or 72%, from $63.0 million for the year ended December 31, 2020. The decrease in net income was driven primarily by an increase in revenue due to increased dispensary locations, expansion of wholesale business, and acquisitions. This increase in revenue was offset by increased cost of goods sold driven by inventory step-up, expansion into new markets which are not fully vertical and therefore yield lower margin than Florida, and increased depreciation related to capital expenditures in cultivation and processing. In addition, increases in sales and marketing and general and administrative expenses such significant expenses incurred to acquire and integrate new subsidiaries, most notably Harvest, increases in personnel costs, dispensary expenses, depreciation and amortization, interest expense, ramping infrastructure and go-forward compliance, all contributed to the offset in net income. Income taxes also significantly increased period over period due to higher gross profit.

~~Year Ended December 31, 2020 Compared to Year Ended December 31, 2019~~

~~Revenue, Net of Discounts~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Revenues, net of discounts

$
521,533

$
252,819

$
268,714

106
%

Revenue for the year ended December 31, 2020 was $521.5 million, an increase of $268.7 million, from $252.8 million for the year ended December 31, 2019. Increase in revenue is primarily the result of an increase in our organic growth in retail sales due to the increase in products available for purchase and overall customer count. In addition, we opened 28 additional dispensaries for the year ended December 31, 2020, which increased retail sales year over year.

~~Cost of Goods Sold~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Cost of goods sold

$
135,116

$
60,982

$
74,134

122
%
% of total revenues

26
%

24
%

Cost of goods sold for the year ended December 31, 2020 was $135.1 million, an increase of $74.1 million, from $61.0 million for the year ended December 31, 2019 due to increased retail sales as a result of our increase in dispensaries and customer count. Our cost of goods sold as a percentage of revenue increased from 24% for the year ended December 31, 2019 to 26% for the year ended December 31, 2020 due to the change in product mix, expansion into new markets, one-time costs associated with the implementation of SAP, and inventory flow-through.

~~Gross Profit~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Gross profit

$
386,417

$
191,837

$
194,580

101
%
% of total revenues

74
%

76
%

Gross profit for the year ended December 31, 2020 was $386.4 million, an increase of $194.6 million, from $191.8 million for the year ended December 31, 2019. Gross profit as a percentage of revenue decreased from December 31, 2019 compared to December 31, 2020 from 76% to 74%, respectively. This decrease is caused by an increase in depreciation related to capital expenditures in cultivation and processing to support business growth, expansion into new markets, one-time costs associated with the SAP implementation, inventory flow-through and product mix.

~~Sales and Marketing Expenses~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Sales and marketing expenses

$
119,395

$
59,349

$
60,046

101
%
% of total revenues

23
%

23
%

Sales and marketing expenses increased from $59.3 million for the year ended December 31, 2019, to $119.4 million for the year ended December 31, 2020, an increase of $60.0 million. The increase in sales and marketing is the result of a higher headcount for the year, as we continue to add additional dispensaries in efforts to maintain and further drive higher growth in sales and market share. This increased headcount resulted in higher personnel costs, which is the primary driver for the increase year over year.

~~General and Administrative Expenses~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

General and administrative expenses

$
36,056

$
14,071

$
21,985

156
%
% of total revenues

7
%

6
%

General and administrative expenses for the year ended December 31, 2020 increased to $36.1 million from $14.1 million for the year ended December 31, 2019 an increase of $22.0 million. The increase in general and administrative expense is primarily the result of entering new markets and ramping up our infrastructure to support growth initiatives and go-forward compliance.

~~Impairment and Disposal of Long-lived Assets~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Loss on impairment and disposal of long-lived assets

$
63

$
67

$
(4
)

(6
)%
% of total revenues

0
%

0
%

~~During the years ended December 31, 2020 and December 31, 2019 the Company had a nominal amount of disposals on property and equipment.~~

~~Depreciation and Amortization Expenses~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Depreciation and amortization expenses

$
12,600

$
5,079

$
7,521

148
%
% of total revenues

2
%

2
%

Depreciation and amortization expenses for the year ended December 31, 2020 were $12.6 million, up $7.5 million, or 148% from $5.1 million for the year ended December 31, 2019. The overall increase in depreciation and amortization expenses was due to investment in infrastructure that resulted in more capitalized assets from the additional dispensaries. Furthermore, depreciation expense increased due to additional finance leases added.

~~Total Other Income (Expense), Net~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Total other expense

$
60,854

$
9,590

$
51,264

535
%
% of total revenues

12
%

4
%

Total other expense for the year ended December 31, 2020 was $60.9 million, an increase of $51.3 million or 535%, from $9.6 million for the year ended December 31, 2019. The overall increase is the result of our revaluation of debt warrants impacted by the increases in our stock value which were originally denominated in Canadian dollars. The expense for the year ended December 31, 2020 was $42.7 million compared to $0.8 million for the year ended December 31, 2019.

On December 10, 2020, the Company entered into a Supplemental Warrant Indenture with Odyssey Trust Company pursuant to which it amended the terms of the issued and outstanding subordinate voting share purchase warrants of the Company (the “Public Warrants”) to convert the exercise price of the Public Warrants to $13.47 per share, the U.S. dollar equivalent of the Canadian dollar exercise price of the Public Warrants of C$17.25. As a result of this, the Public Warrants converted to equity and eliminated the necessity of revaluation expense in future periods. Additionally, interest expense increased as a result of the addition of finance leases to support business growth, for the year ended December 31, 2020.

~~Provision for Income Taxes~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Provision for income taxes

$
94,451

$
50,586

$
43,865

87
%
Effective tax rate

60
%

49
%

Income tax expense for the year ended December 31, 2020 increased to $94.5 million from $50.6 million for the year ended December 31, 2019, an increase of $43.9 million as a result of a $194.6 million increase in gross profit for the same periods. Under IRC Section 280E, cannabis companies are only allowed to deduct expenses that are directly related to production of the products. The increase in income tax expense is due to the significant increase in gross profit as a result of ~~the increase in retail sales~~increased revenue, partially offset by ~~increase~~a more favorable tax position on intercompany management fees. In the third quarter of 2022, the Company adopted a more favorable tax position with respect to intercompany management fees based on an IRS position taken in ~~production~~audit of similar businesses.

Management’s Use of Non-GAAP Measures

Our management uses a financial measure that is not in accordance with generally accepted accounting principles in the U.S., or GAAP, in addition to financial measures in accordance with GAAP to evaluate our operating results. This non-GAAP financial measure should be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Adjusted EBITDA is a financial measure that is not defined under GAAP. Our management uses this non-GAAP financial measure and believes it enhances an investor’s understanding of our financial and operating performance from period to period because it excludes certain material non-cash items and certain other adjustments management believes are not reflective of our ongoing operations and performance. Adjusted EBITDA adjusts the following items from net income: interest expense, provision for income taxes, and depreciation and amortization to arrive at EBITDA. This is then adjusted for items that do not represent the operations of the core business such as inventory step-up for fair value adjustments in purchase accounting, integration and transition costs, acquisition and transaction costs, other non-recurring costs such as contributions to specific initiative campaigns (such as Smart and Safe Florida), expenses related to the COVID-19 pandemic, impairments and disposals of long-lived assets including goodwill, the results of entities consolidated as variable interest entities ("VIEs") but not legally controlled and operated by the Company, discontinued operations, share-based compensation, and other income and expense items. Integration and transition costs include those costs related to integration of acquired entities and to transition major systems or processes. Acquisition and transaction costs relate to specific transactions such as acquisitions whether contemplated or completed and regulatory filings and costs related to equity and debt issuances. Other non-recurring costs include miscellaneous items which are not expected to recur frequently such as inventory adjustments related to specific issues and unusual litigation.

We report Adjusted EBITDA to help investors assess the operating performance of the Company’s business. The financial measures noted above are metrics that have been adjusted from the GAAP net income measure in an effort to provide readers with a ~~percentage~~normalized metric in making comparisons more meaningful across the cannabis industry, as well as to remove non-recurring, irregular and one-time items that may otherwise distort the GAAP net income measure.

Table of Contents

As noted above, our Adjusted EBITDA is not prepared in accordance with GAAP, and should not be considered in isolation of, ~~revenue.~~

~~Net Income~~or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net income, which is the most directly comparable financial measure calculated and ~~Comprehensive Income~~

Year Ended

Change

December 31,

Increase / (Decrease)

2020

2019

$

%

(dollars in thousands)

Net income and comprehensive income

$
62,998

$
53,095

$
9,903

19
%

~~Net~~presented in accordance with GAAP. Because of these limitations, we consider, and you should consider, Adjusted EBITDA together with other operating and financial performance measures presented in accordance with GAAP. A reconciliation of net income, ~~for~~ the ~~year ended December 31, 2020~~most directly comparable financial measure calculated in accordance with GAAP, to Adjusted EBITDA, has been included herein immediately following our discussion of “Adjusted EBITDA”.

Adjusted EBITDA

Adjusted EBITDA was ~~$63.0 million, an increase of $9.9 million, or 19%, from $53.1~~$322.3 million for the year ended December 31, ~~2019. The increase in net income was driven primarily by an increase in retail sales as~~2023, a ~~result~~decrease of opening twenty-eight additional dispensaries in Florida during the year ended December 31, 2020. This net increase to net income was offset by gross profit which was driven by increased depreciation related to capital expenditures in cultivation and processing, expansion into new markets, one-time costs associated with the SAP implementation, inventory flow-through and product mix. In addition, increases in sales and marketing and general and administrative expenses such as personnel costs, dispensary expenses, depreciation, interest expense, costs of entering new markets, ramping up infrastructure and go-forward compliance, all contributed to the offset in net income. Income taxes also significantly increased period over period due to higher profit. Lastly, other expense increased as a result of the revaluation of our debt warrants$75.9 million, or 19%, from $398.2 million for the year ended December 31, ~~2020.~~2022. The decrease in Adjusted EBITDA in 2023 was primarily due to increased competition and margin pressure which was partially offset by efficiencies in payroll costs primarily in our retail locations and streamlining efforts.

Adjusted EBITDA was $398.2 million for the year ende

d December 31, 2022, an increase of $13.5 million, or 3%, from $384.8 million for the year ended December 31, 2021. The increase in Adjusted EBITDA in 2022 was primarily due to the acquisition of Harvest Health and Recreation in the fourth quarter of 2021 and the resulting growth in sales and synergies.

The following table presents a reconciliation of GAAP net (loss) income to non-GAAP Adjusted EBITDA, for each of the periods presented:


	Year Ended December 31,
	2023		2022		2021

	(in thousands)
Net (loss) income attributable to common shareholders	$	(526,796)	$	(246,064)	$	18,032
Add (deduct) impact of:
Interest expense, net	81,569		73,422		29,121
Interest income (1)	(6,164)		(1,631)		(205)
Provision for income taxes	151,358		163,380		145,722
Depreciation and amortization	109,825		116,381		45,791
Depreciation included in cost of goods sold	57,195		46,933		21,232
EBITDA (Non-GAAP)	$	(133,013)	$	152,421	$	259,693
Impairment of goodwill	$	307,590	$	—	$	—
Impairments and disposals of long-lived assets, net	6,664		75,547		5,371
Legislative campaign contributions	20,062		20,000		—
Integration and transition costs	26,889		21,042		25,601
Share-based compensation	10,575		18,124		13,444
Gain on debt extinguishment, net	(5,937)		—		—
Other income, net	(6,544)		(2,388)		(1,112)
Discontinued operations, net of tax, attributable to common shareholders	96,048		67,440		13,080
Acquisition and transaction costs	—		24,757		15,831
Other non-recurring costs	—		19,494		5,053
Inventory step up, fair value	—		1,048		41,189
COVID related expenses	—		783		6,188
Results of entities not legally controlled	—		(19)		458
Total adjustments	455,347		245,828		125,103
Adjusted EBITDA (Non-GAAP)	$	322,334	$	398,249	$	384,796

(1) Interest Income for the year ended December 31, 2022 and 2021, of $(1.6) million and $(0.2) million, respectively, was reclassified from other income, net to interest income in the presentation above.

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Liquidity and Capital Resources

Sources of Liquidity

Since our inception, we have funded our operations and capital spending through cash flows from product sales, third-party debt, proceeds from the sale of our capital stock and loans from affiliates and entities controlled by our ~~affiliates, third-party debt and proceeds from the sale of our capital stock.~~ affiliates. We are generating

cash from ~~sales~~operations and are deploying our capital reserves to acquire and develop assets capable of producing additional revenues and earnings over both the immediate and near term to support our business growth and expansion.Our current principal sources of liquidity are our cash and cash equivalents provided by our operations and debt and equity offerings. The Company has and expects to retain additional cash from operations, starting in the second half of 2023, due in part to the Company's position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code. Cash and cash equivalents consist primarily of cash on deposit with banks and money market funds.

Our primary uses of cash are for working capital requirements, capital expenditures, debt service payments, income tax payments, and acquisitions. Working capital is used principally to run the business including our personnel and related investments, as well as costs related to the growth, manufacture, production, and distribution of our products. Our capital expenditures consist primarily of additional facilities and dispensaries, and improvements to existing facilities. Our debt service payments consist primarily of interest payments. Acquisitions consist of expanding the cultivation and dispensary footprint.

Cash and cash equivalents were ~~$230.6 million and $146.7~~$201.4 million as of December 31, ~~2021 and 2020, respectively.~~

2023. We believe our existing cash balances will be sufficient to meet our anticipated cash requirements from the date of this Annual Report on Form 10-K through at least the next 12 months.

~~Our primary uses of cash are for working capital~~ Any additional future requirements capital expenditures and debt service payments. Additionally, from time to time, we may use capital for acquisitions and other investing and financing activities. Working capital is used principally for our personnel as well as costs related to the growth, manufacture and production of our products. Our capital expenditures consist primarily of additional facilities and dispensaries, improvements in existing facilities and product development.

~~To the extent additional funds are necessary to meet our long-term liquidity needs as we continue to execute our business strategy, we anticipate that they~~ will be ~~obtained~~funded through ~~incurrence of additional indebtedness, additional equity financings or a combination of these potential~~the following sources of ~~funds. There can be no assurance that we will be able~~capital:

•Cash from ongoing operations

•Debt - the Company has the ability to obtain additional ~~funds on terms acceptable~~debt from additional creditors

•Market offerings - the Company has the ability to ~~us, on a timely basis or at all. The failure~~offer equity to obtain ~~sufficient funds on acceptable terms when needed could have~~additional funding

In September 2023, we completed the open market repurchase of $57.0 million of our senior secured notes, due October 6, 2026, for a ~~material adverse effect on~~purchase price of $47.6 million, excluding fees and accrued interest. In December 2023, we completed the ~~results~~early redemption of our 9.75% senior secured notes due June 11, 2024 for a purchase price of $130.0 million, excluding accrued interest. These are collectively referred to as the private placement notes. In December 2023, we also completed a $25.0 million mortgage note with an interest rate of 8.31%. We expect to realize net interest savings of approximately $10.0 million as a result of these three transactions.

Cash Flows

The consolidated statements of cash flows include continuing operations and ~~financial condition.~~

~~The following table presents our cash and outstanding debt as of the dates indicated:~~

Year Ended

Year Ended

December 31,

December 31,

2021

2020

(in thousands)

Cash and cash equivalents
$
230,646

$
146,713

Outstanding debt and warrant liabilities

Notes payable

16,600

6,000

Notes payable - related party

—

12,011

Private placement notes

462,929

117,165

Warrant liabilities

2,895

—

Operating lease liabilities

131,970

31,397

Finance lease liabilities

71,429

38,935

Construction finance liabilities

176,189

82,047

Total debt and warrant liabilities
$
862,012

$
287,555

~~Cash Flows~~

discontinued operations. The table below highlights our cash flows for the periods ~~indicated.~~ended December 31:


	2023		2022		2021

	(in thousands)
Net cash provided by operating activities	$	201,841	$	23,096	$	12,898
Net cash used in investing activities	(37,470)		(215,057)		(215,184)
Net cash (used in) provided by financing activities	(175,585)		177,796		289,232
Net (decrease) increase in cash and cash equivalents	$	(11,214)	$	(14,165)	$	86,946

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Year Ended

December 31,

2021

2020

2019

(in thousands)

Net cash provided by operating activities

$
12,898

$
99,643

$
19,073

Net cash used in investing activities

(215,184
)

(174,654
)

(94,672
)
Net cash provided by financing activities

289,232

129,911

142,982

Net increase in cash and cash equivalents

86,946

54,900

67,383

Cash, cash equivalents, and restricted cash, beginning of year

146,713

91,813

24,430

Cash, cash equivalents, and restricted cash, end of year

$
233,659

$
146,713

$
91,813

Cash Flow from Operating Activities

Net cash provided by operating activities was ~~$12.9~~$201.8 million for the year ended December 31, ~~2021, a decrease~~2023, an increase of ~~$86.7~~$178.7 million, compared to ~~$99.6~~$23.1 million in net cash provided by operating activities during the year ended December 31, ~~2020. This~~2022. The improvement is ~~primarily~~ due to ~~acquisitions, most notably Harvest, and~~ the ~~resulting integration and transaction costs~~execution of the Company's inventory wind-down strategy, as well as the ~~inventory step-up~~impacts of income tax accruals and ~~increased depreciation~~the impact of lower sales & marketing and ~~amortization~~general & administrative expenses

in 2023 compared to 2022. This was offset by reduced gross margins for 2023 as compared to 2022.

Net cash provided by operating activities was ~~$99.6~~$23.1 million for the year ended December 31, ~~2020,~~2022, an increase of ~~$80.6~~$10.2 million, compared to ~~$19.1~~$12.9 million in net cash provided by operating activities ~~during~~for the year ended December 31, ~~2019.~~2021. This is primarily due ~~to organic growth~~the timing of ~~our business partially~~income tax payments that were offset by ~~net working capital including inventory, as we ramp the business to support the growth.~~

increases in inventory.

Cash Flow from Investing Activities

Net cash used in investing activities was ~~$215.2~~$37.5 million for the year ended December 31, ~~2021, an increase~~2023, a decrease of ~~$40.5~~$177.6 million, compared to ~~the $174.7~~$215.1 million in net cash used in investing activities for the year ended December 31, ~~2020.~~2022. The ~~increase is due to~~primary use of cash in both periods was the ~~increase~~purchase of property and equipment, with the prior period having significantly more purchases ~~for~~of property and equipment due to the ~~construction~~Company's build out of ~~additional dispensaries and continued expansion of~~facilities primarily at our cultivation sites in Florida and ~~processing facilities. This increase is offset by~~other markets including Pennsylvania and West Virginia. Additionally, the ~~sale~~prior period included the cash payment of ~~the Florida license that occurred simultaneously with~~$27.8 million related to the acquisition of ~~Harvest as well as~~ the ~~cash acquired through the Harvest acquisition.~~

Watkins Cultivation Operation.

Net cash used in investing activities was ~~$174.7~~$215.1 million for the year ended December 31, ~~2020, an increase~~2022, a decrease of ~~$80.0~~$0.1 million, compared to ~~the $94.7~~$215.2 million in net cash used in investing activities for the year ended December 31, ~~2019.~~2021. The ~~increase~~decrease is mainly due to ~~an acquisition in 2020 and~~ the ~~increase~~decrease of property and equipment purchases ~~for~~offset by cash provided by the ~~construction of additional dispensaries and continued expansion of our cultivation and processing facilities during the year ended December 31, 2020.~~

Harvest acquisition.

Cash Flow from Financing Activities

Net cash ~~provided by~~used in financing activities was ~~$289.2~~$175.6 million for the year ended December 31, ~~2021,~~2023, an increase of ~~$159.3~~$353.4 million, compared to ~~the $129.9~~$177.8 million in net cash provided by financing activities for the year ended December 31, ~~2020. The increase was~~2022. This change is primarily related to ~~proceeds from private placement~~$177.6 million in payments on our senior secured notes, due October 6, 2026 and ~~proceeds from~~senior secured notes due June 11, 2024, collectively referred to as the private placement ~~issuance~~notes. These notes were extinguished early in an effort to save on interest and take advantage of ~~shares offset by payments on notes that occurred for~~favorable market conditions. Additionally, a decrease in proceeds from borrowings of approximately $141.5 million further contributed to the ~~year ended December 31, 2021.~~

increase in cash used in financing activities in 2023 relative to 2022.

Net cash provided by financing activities was ~~$129.9~~$177.8 million for the year ended December 31, ~~2020,~~2022, a decrease of ~~$13.1~~$111.4 million, compared to ~~the $143.0~~$289.2 million in net cash provided by financing activities for the year ended December 31, ~~2019.~~2021. The ~~increase was~~decrease is primarily related to ~~$83.2 million of~~a decrease in proceeds ~~for~~from borrowings compared to the ~~issuance of shares offering that occurred for the year ended December 31, 2020. The increase was partially offset by the $122.2 million in net proceeds received from the debt issuance in 2019.~~

~~Funding Sources~~

~~Finance Liability, “June Warrants” and “November Warrants”~~

On June 18, 2019, we completed an offering using our Canadian prospectus of 70,000 units (the “June Units”), comprised of an aggregate principal amount of US$70.0 million of 9.75% senior secured notes maturing in 2024 (the “June Notes”) and an aggregate amount of 1,470,000 subordinate voting share warrants (each individual warrant being a “June Warrant”) at a price of US$980 per June Unit for gross proceeds of US$68.6 million. Each June Unit was comprised of one June Note issued in denominations of $1,000 and 21 June Warrants.

On November 7, 2019, we completed an offering using our Canadian prospectus of 60,000 units (the “November Units”), comprised of an aggregate principal amount of US$60.0 million of 9.75% senior secured notes maturing in 2024 (the “November Notes”) and an aggregate amount of 1,560,000 subordinate voting share warrants (each individual warrant being a “November Warrant”) at a price of US$980 per November Unit for a gross proceeds of US$61.1 million. Each November Unit was comprised of one November Note issued in denominations of $1,000 and 26 November Warrants.

~~Secured Promissory Notes~~

On October 6, 2021, the Company closed on a private placement of 8% Senior Secured Notes (the "“Notes") for aggregate gross proceeds of $350.0 million and net proceeds of $342.6 million. The Notes were issued at 100% face value, bear an interest rate of 8% per annum payable semi-annually in equal installments until the maturity date, unless earlier redeemed or repurchased. The Notes mature on October 6, 2026 and may be redeemed in whole or in part, at any time from time to time, on or after October 6, 2023 at the applicable redemption price set forth in the trust indenture dated as of June 18, 2019 (the “Base Indenture”), as supplemented by a supplemental trust indenture dated as of October 6, 2021 (the “Supplemental Indenture” and, the Base Indenture as supplemented by the Supplemental Indenture, the “Indenture”), by and between the Company and Odyssey Trust Company, as trustee. The Company used a portion of the net proceeds to redeem certain outstanding indebtedness of Harvest, and intends to use the remaining net proceeds for capital expenditures and other general corporate purposes. The Indenture governing the Notes contains covenants that, among other things, limit the ability of the Company and its restricted subsidiaries to, among other things, declare or pay dividends or make certain other payments; purchase, redeem or otherwise acquire or retire for value any equity interests or otherwise make any restricted payments; conduct certain asset sales or consolidate, merge or transfer all or substantially all of the assets of the Company and its subsidiaries on a consolidated basis; make certain restricted investments, incur certain indebtedness or grant certain liens, or enter into certain affiliate transactions. These covenants are subject to a number of other limitations and exceptions as set forth in the Indenture.

~~Unsecured Promissory Notes~~

~~On April 10, 2017, we entered into an unsecured promissory note with a 12% annual interest rate, which was amended in January 2019 to extend the maturity by three years to 2022, with a balance as~~prior year.

Balance Sheet Exposure

As of December 31, ~~2019 of $4.0 million. On December 17, 2017, we entered into a promissory note dated December 7, 2017, with a 12% annual interest rate~~2023 and ~~a balance as of December 31, 2019 of $2.0 million. Each promissory note is due in 2022. The promissory notes were repaid in full during the year ended December 31, 2021.~~

~~Related Party Promissory Notes~~

In May 2018, the Company entered into two separate unsecured promissory notes (the “Traunch Four Note” and the “Rivers Note”) for a total of $12.0 million. The Traunch Four Note was held by Traunch Four, LLC, an entity whose direct and indirect owners included Kim Rivers, the Chief Executive Officer and Chair of the Board, as well as Thad Beshears, Richard May, George Hackney, all of whom are directors of Trulieve, and certain of Richard May’s family members. The Rivers Note was held by Kim Rivers. Each promissory note had a 24-month maturity and 12% annual interest rate. The two unsecured promissory notes were repaid in November 2021.

In February 2019, the Company entered into a 24-month unsecured loan with an 8% annual interest rate with Benjamin Atkins, a former director and shareholder for $0.3 million. The loan was issued in March 2019. The Company determined that the stated interest rate was below market rates and recorded an insignificant debt discount using an annual discount interest rate of 12%.

~~Balance Sheet Exposure~~

~~At December 31, 2021 and 2020,~~2022, 100% of our balance sheet is exposed to U.S. cannabis-related ~~activities.~~activities, and substantially all our revenue is derived from U.S. cannabis operations. We believe our operations are in material compliance with all applicable state and local laws, regulations and licensing requirements in the states in which we operate. However, cannabis remains illegal under U.S. federal law. ~~Substantially all our revenue is derived from U.S. cannabis operations.~~ For information about risks related to U.S. cannabis operations, please refer to the “Risk Factors” section of this Annual Report on Form 10-K.

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Contractual Obligations

As of December 31, ~~2021,~~2023, we had the following contractual obligations to make future payments, representing material contracts and other commitments that are known and committed:


	<1 Year		1 to 3 Years		3 to 5 Years		>5 Years		Total
	(in thousands)
Notes payable	$	3,751	$	8,986	$	93,233	$	15,783	$	121,753
Private placement notes	—		368,000		—		—		368,000
Operating lease liabilities	21,452		42,180		39,532		81,820		184,984
Finance lease liabilities	14,129		27,392		24,252		34,247		100,020
Construction finance liabilities	22,498		46,941		49,659		295,672		414,770
Lease settlements	1,008		864		857		2,226		4,955
Total (1)	$	62,838	$	494,363	$	207,533	$	429,748	$	1,194,482

(1)

Includes liabilities due in relation to our discontinued operations and excludes $180.4 million of uncertain tax position liabilities as we cannot make a reasonably reliable estimate of the period of potential cash settlement with the respective taxing authorities.

<1 Year

1 to 3 Years

3 to 5 Years

>5 Years

Total

(in thousands)

Accounts payable and accrued liabilities

$
94,073

$
—

$
—

$
—

$
94,073

Notes payable

10,144

5,376

19

1,061

16,600

Private placement notes

—

130,000

350,000

—

480,000

Operating lease liabilities

21,826

42,267

40,510

110,758

215,361

Finance lease liabilities

12,102

26,281

21,234

42,311

101,928

Construction finance liabilities

22,463

47,143

48,771

427,747

546,124

Total

$
160,608

$
251,067

$
460,534

$
581,877

$
1,454,086

For additional information on our commitments for financing arrangements, future lease payments, lease guarantees, uncertain tax position, and other obligations, see Item 8, Note ~~10.~~ 11. Notes Payable, Note 12. Private Placement Notes, Note 13. Leases, Note 14. Construction Finance Liabilities, Note 18. Income Taxes, Note 19. Discontinued Operations, and Note ~~20.~~ 23. Commitments And Contingencies.

As of the date of this Annual Report on Form 10-K, we do not have any off-balance-sheet arrangements that have, or are reasonably likely to have, a current or future effect on the results of operations or financial condition of, including, and ~~Contingencies, for additional information.~~

without limitation, such considerations as liquidity and capital resources.

Critical accounting policies and estimates

Critical accounting estimates

The preparation of the consolidated financial statements in conformity with ~~GAAP~~Generally Accepted Accounting Principles ("GAAP") requires management to make judgments, estimates, and assumptions about the carrying amounts of assets and liabilities that are not readily apparent from other sources. The estimates and underlying assumptions are reviewed on an ongoing basis. The estimates and associated assumptions are based on historical experience and other factors that are considered to be relevant. Actual results may differ from these estimates, and revisions to accounting estimates are recognized in the period in which the estimate is revised.

Significant judgments, estimates, and assumptions that have the most significant effect on the amounts recognized in the consolidated financial statements are described below. See Note 3. Summary Of Significant Accounting Policies

to the consolidated financial statements included in Item 8 of this Annual Report on Form 10-K for further information.

Inventory

The net realizable value of inventories represents the estimated selling price for inventories in the ordinary course of business, less all estimated costs of completion and costs necessary to make the sale. The determination of net realizable value requires significant judgment, including consideration of factors such as shrinkage, the aging of and future demand for inventory, expected future selling price, what we expect to realize by selling the inventory and the contractual arrangements with customers. Reserves for excess and obsolete inventory are based upon quantities on hand, projected volumes from demand forecasts and net realizable value. The estimates are judgmental in nature and are made at a point in time, using available information, expected business plans and expected market conditions. As a result, the actual amount received on sale could differ from the estimated value of inventory. Periodic reviews are performed on the inventory balance. The impact of changes in inventory reserves is reflected in cost of goods sold.

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Estimated Useful Lives and Depreciation and Amortization of Property and Equipment and Intangible Assets

Depreciation and amortization of property and equipment and intangible assets are dependent upon estimates of useful lives, which are determined through the exercise of judgment. The assessment of any impairment of these assets is dependent upon estimates of recoverable amounts that take into account factors such as economic and market conditions and the useful lives of assets.

Accounting for Acquisitions and Business Combinations

Classification of an acquisition as a business combination or an asset acquisition depends on whether the assets acquired constitute a business, which can be a complex judgment. Whether an acquisition is classified as a business combination or asset acquisition can have a significant impact on the entries made on and after acquisition.

In determining the fair value of all identifiable assets, liabilities and contingent liabilities acquired, the most significant estimates relate to contingent consideration and intangible assets. Management exercises ~~judgement~~judgment in estimating the probability and timing of when earn-outs are expected to be achieved, which is used as the basis for estimating fair value. For any intangible asset identified, depending on the type of intangible asset and the complexity of determining its fair value, an independent valuation expert or management may develop the fair value, using appropriate valuation techniques, which are generally based on a forecast of the total expected future net cash flows.

Cannabis licenses are the primary intangible asset acquired in business combinations as they provide the Company the ability to operate in each market. However, some cannabis licenses are subject to renewal and therefore there is some risk of non-renewal for several reasons, including operational, regulatory, legal or economic. To appropriately consider the risk of non-renewal, the Company applies probability weighting to the expected future net cash flows in calculating the fair value of these intangible assets. The key assumptions used in these cash flow projections include discount rates and terminal growth rates. Of the key assumptions used, the impact of the estimated fair value of the intangible assets ~~have~~has the greatest sensitivity to the estimated discount rate used in the valuation. The terminal growth rate represents the rate at which these businesses will continue to grow into perpetuity. Other significant assumptions include revenue, gross profit, operating expenses and anticipated capital expenditures which are based upon the Corporation’s historical operations along with management projections.

The evaluations are linked closely to the assumptions made by management regarding the future performance of these assets and any changes in the discount rate applied.

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Income Taxes

The Company uses the asset and liability method to account for income taxes. Deferred income tax assets and liabilities are determined based on enacted tax rates and laws for the years in which the differences are expected to reverse. Deferred tax assets are reduced by a valuation allowance when, in the opinion of management, it is more likely than not that some portion or all of the deferred tax assets will not be realized. AsThe IRS has taken the ~~Company operates in the~~position that cannabis ~~industry, it is~~companies are subject to the limits of IRC Section 280E under which ~~the Company is~~they are only allowed to deduct expenses directly related to the cost of producing the products or cost of production.

The Company has taken a position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code.

Long-lived Asset Impairment ~~Assessments~~

~~Impairment assessment estimates applies to goodwill,~~Assessment

The Company reviews long-lived assets, ~~and right-of-use assets.~~

Goodwill is allocated at the date the goodwill is initially recorded. We evaluate goodwill for impairment annually or more frequently when an event occurs or circumstances change that indicates the carrying value may not be recoverable. We review our long-lived assets, such asincluding property and equipment, definite life intangible assets, and right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying ~~amount~~value of an asset ~~or asset group~~ may not be recoverable. ~~Significant judgment~~Factors which could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy of the business, a significant decrease in the market value of the assets or significant negative industry or economic trends. In accordance with ASC 360-10, when evaluating long-lived assets with impairment indicators for potential impairment, we first compare the carrying value of the asset to its estimated undiscounted cash flows. If the sum of the estimated undiscounted cash flows is less than the carrying value of the asset, we calculate an impairment loss. The impairment loss calculation compares the carrying value of the asset to its estimated fair value, which is typically based on estimated discounted future cash flows. We recognize an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value.

Goodwill Impairment Assessment

Goodwill is allocated at the date the goodwill is initially recorded. We conclude we operate one operating segment and ~~estimates~~reporting unit evaluating goodwill for impairment as one singular reporting unit. We evaluate our goodwill for impairment annually at the beginning of the fourth quarter or earlier upon the occurrence of substantive unfavorable changes in economic conditions, industry trends, costs, cash flows, or ongoing declines in market capitalization. The Company applies the guidance in Financial Accounting Standards Board (“FASB”) Accounting Standards Update (“ASU”) 2011-08 “Intangibles-Goodwill and Other-Testing Goodwill for Impairment,” which provides entities with an option to perform a qualitative assessment (commonly referred to as “Step Zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary. In performing Step Zero for the Company’s goodwill impairment test, the Company is required to make assumptions and judgments including but not limited to the following: the evaluation of macroeconomic conditions as related to the Company’s business, industry and market trends, and the overall future financial performance of its reporting units and future opportunities in the markets in which they operate. If impairment indicators are ~~required when determining~~present after performing Step Zero, the Company would perform a quantitative impairment analysis to estimate the fair value of ~~these~~goodwill.

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The quantitative impairment test requires judgment, including the identification of reporting units, the assignment of assets, ~~for~~liabilities, and goodwill to reporting units, and the determination of fair value of each reporting unit. The impairment ~~tests.~~

~~Share-Based Payment Arrangements~~

~~We use~~test requires the ~~Black-Scholes pricing model to determine~~comparison of the fair value of ~~options and warrants granted to employees and directors under share-based payment arrangements, where appropriate. In estimating~~a reporting unit with the carrying amount, including goodwill. If the Company would conclude a quantitative impairment test is required, the Company would review fair value ~~management is required~~techniques for the most appropriate technique generally applying the income approach by using discounted cash flow (“DCF”) analyses. Determining fair value requires the Company to make ~~certain assumptions~~judgments about appropriate forecasted revenue and ~~estimates such as~~related revenue growth rate, the ~~expected life~~earnings before interest, taxes, depreciation, and amortization ("EBITDA") margins rate and the weighted average cost of units, volatility of future share price, risk free rates, and future dividend yields at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results.

~~Commitments and Contingencies~~

~~From time to time, the Company may be involved in litigation relating to claims arising out of operations~~capital. The cash flows employed in the ~~normal course of business. Periodically,~~DCF analysis are based on the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in contingencies. Contingent liabilities are measured at management’s best estimate of the expenditure required to settle the obligation at the endforecast of the reporting ~~period~~unit, long-term business plan and recent operating performance. Discount rate assumptions are ~~discounted to present~~based on an assessment of the risk inherent in the future cash flows of the reporting unit and market conditions. Given the inherent uncertainty in determining the assumptions underlying a DCF analysis, actual results may differ from those used in our valuations. The reporting unit may be at risk of failing the quantitative impairment test if it has a fair value ~~where~~that is not substantially in excess of the ~~effect is material.~~carrying amount at the assessment date.

During the three months ended June 30, 2023, the Company identified one event as a risk indicator for goodwill impairment, which was a decline in the Company's share price negatively affecting the Company's market capitalization. The Company ~~performs evaluations~~concluded the decline in stock price was a triggering event to perform an interim quantitative goodwill impairment test, as of June 30, 2023, specific to the stock price decline and resulting market capitalization of the Company. As the sole risk to the value of goodwill was the stock price, the Company concluded it most appropriate to apply a market approach. The results of the Company’s interim test for impairment as of June 30, 2023, utilizing a market approach, indicated that the reporting unit's fair value fell below the carrying value. Based on the results of the goodwill impairment procedures, the Company recorded a $307.6 million goodwill impairment for the single reporting unit in the second quarter of 2023.

For the Company's 2023 annual impairment test, the Company performed a Step Zero assessment. Other than the event that existed and was isolated to the three months ending June 30, 2023, as outlined above, as of December 31, 2023, the Company did not identify ~~onerous contracts and, where applicable, records contingent liabilities for such contracts.~~

any events or changes in circumstances that would indicate the carrying amount of goodwill may be impaired. The Company did not identify any impairment of its goodwill during the years ended December 31, 2022 or 2021.

Fair Value of Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the financial statements on a recurring basis. The Company uses judgment to select the methods used to make certain assumptions and in performing the fair value calculations in order to determine (a) the values attributed to each component of a transaction at the time of their issuance; (b) the fair value measurements for certain instruments that require subsequent measurement at fair value on a recurring basis; and (c) for disclosing the fair value of financial instruments. These valuation estimates could be significantly different because of the use of judgment and the inherent uncertainty in estimating the fair value of these instruments that are not quoted in an active market.

Share-Based Payment Arrangements

We use the Black-Scholes pricing model to determine the fair value of options and warrants granted to employees and directors under share-based payment arrangements, where appropriate. In estimating fair value, management is required to make certain assumptions and estimates such as the expected life of units, volatility of future share price, risk free rates, and future dividend yields at the initial grant date. Changes in assumptions used to estimate fair value could result in materially different results.

Commitments and Contingencies

From time to time, the Company may be involved in litigation relating to claims arising out of operations in the normal course of business. Periodically, the Company reviews the status of each significant matter and assesses the potential financial exposure. If the potential loss from any claim or legal proceeding is considered probable, and the amount can be reliably estimated, such amount is recognized in contingencies. Contingent liabilities are measured at management’s best estimate of the expenditure required to settle the obligation at the end of the reporting period and are discounted to present value where the effect is material. The Company performs evaluations to identify onerous contracts and, where applicable, records contingent liabilities for such contracts.

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Critical accounting policies

Inventory

Our inventories primarily consist of raw materials, ~~internally-produced~~ work in process, and finished ~~goods and packaging materials.~~goods. Costs incurred during the growing and production process are capitalized as incurred to the extent that cost is less than net realizable value. The costs include materials, labor and manufacturing overhead used in the growing and production processes. Pre-harvest costs are capitalized. Our inventory of purchased finished goods and packing materials are initially valued at cost and subsequently at the lower of cost and net realizable value.

Leases

ASC Topic 842 is a standard that requires lessees to increase transparency and comparability among ~~organization~~organizations by requiring the recognition of Right of Use Assets “ROU” assets and lease liabilities on the balance sheet. The requirements of this standard include a significant increase in required disclosures to meet the objectives of enabling users of financial statements to assess the amount, timing, and uncertainty of cash flows arising from leases. The new standard was effective beginning January 1, 2019 and the standard was adopted using the modified retrospective transition approach, which allows us to recognize a cumulative effect adjustment to the opening balance of accumulated deficit in the period of adoption rather than restate comparative prior year periods.

Revenue Recognition

We recognize revenue in accordance with ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Through our application of the standard, we recognize revenue to depict the transfer of promised goods to our customers in an amount that reflects the consideration of which we expect to be entitled to in exchange for those goods. ~~We contract with our customers for the sale~~Revenues consist of ~~dried~~retail and wholesale sales of cannabis ~~cannabis oil~~ and ~~other~~ cannabis related products, ~~that consist of multiple performance obligations. Revenue from the direct sale of cannabis to customers for a fixed price is~~which are recognized when ~~we transfer~~ control of the goods has transferred to the customer atand collectability is reasonably assured. This is generally when goods have been delivered, which is also when the ~~point~~performance obligation has been fulfilled under the terms of ~~sale and~~ the ~~customer has paid for the goods.~~related sales contract.

Share Based Compensation

We account for share-based compensation expense in accordance with FASB ASC 718, Compensation – Stock Compensation, which requires the measurement and recognition of share-based compensation expense based on estimated fair values, for all ~~stock based~~stock-based payment awards made to employees. We measure the share-based payment awards based on its estimated fair value of the awards using the Black-Scholes option pricing model, and the fair value of the Company’s common stock on the date of grant, for the warrants and options. We measure the share-based payment awards based on its estimated fair value of the awards using the Black-Scholes option pricing model for warrants and options, and the fair value of the Company’s common stock on the date of grant for restricted stock ~~awards~~units ("RSUs").

Acquisitions

~~Off-Balance Sheet Arrangements~~We account for business combinations using the acquisition method in accordance with Accounting Standards Codification ASC 805, Business Combinations

As, which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of ~~this Annual Report~~acquisition.

Contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates, with the corresponding gain or loss recognized within the consolidated statements of operations.

Non-controlling interests in the acquiree are measured at fair value on ~~Form 10-K, we do~~acquisition date. Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred and the services are received.

Loans acquired in business combinations are initially recorded at fair value, which includes an estimate of credit losses expected to be realized over the remaining lives of the loans and, therefore, no corresponding allowance for loan losses is recorded for such loans at acquisition.

Purchase price allocations may be preliminary and, during the measurement period not ~~have any off-balance-sheet arrangements~~to exceed one year from the date of acquisition, changes in assumptions and estimates that ~~have, or~~result in adjustments to the fair value of assets acquired and liabilities assumed are ~~reasonably likely to have, a current or future effect on~~recorded in the ~~results~~ period the adjustments are determined.

Table of ~~operations or~~ Contents

Financial Instruments

We apply fair value accounting for all financial ~~condition of, including,~~assets and ~~without limitation, such considerations as liquidity and capital resources.~~

~~Management’s Use of Non-GAAP Measures~~

~~Our management uses financial measures~~liabilities that are ~~not in accordance with generally accepted accounting principles~~recognized or disclosed at fair value in the ~~U.S.,~~financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or ~~GAAP,~~paid to transfer a liability in ~~addition~~an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to ~~financial measures in accordance with GAAP to evaluate our operating results. These non-GAAP financial measures should~~ be considered supplemental to, and not a substitute for, our reported financial results prepared in accordance with GAAP. Adjusted EBITDA is a financial measure that is not defined under GAAP. Our management uses this non-GAAP financial measure and believes it enhances an investor’s understanding of our financial and operating performance from period to period because it excludes certain material non-cash items and certain other adjustments management believes are not reflective of our ongoing operations and performance. Adjusted EBITDA excludes from net income as reported interest, provision for income taxes, depreciation and amortization to arriverecorded at ~~EBITDA. This is then adjusted for items that do not represent the operations~~fair value, we consider all related factors of the ~~core business~~asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as ~~inventory step-up for fair value adjustments in purchase~~inherent risk, transfer restrictions, and credit risk.

Recent Accounting Pronouncements

A discussion of recently issued accounting ~~integration and transition costs, acquisition and transaction costs, other non-recurring costs, expenses related~~standards applicable to the ~~COVID-19 pandemic, impairments and disposals of long-lived assets,~~Company is described in Note 3. Summary Of Significant Accounting Policies, in the results of entities consolidated as VIEs but not legally controlled and operated by the Company, and other income and expense items. Integration and transition costs include those costs related to integration of acquired entities and to transition major systems or processes. Acquisition and transaction costs relate to specific transactions such as acquisitions whether contemplated or completed and regulatory filings and costs related to equity and debt issuances. Other non-recurring costs includes miscellaneous items which are not expected to reoccur frequently such as inventory adjustments related to specific issues and unusual litigation. During the year ended December 31, 2021, the Company adjusted the definition of Adjusted EBITDA to include expenses incurred as a result of the COVID-19 pandemic. Adjusted EBITDA for the year ended December 31, 2020 has been adjusted to reflect this current definition. Additionally, certain reclassifications have been made to Adjusted EBITDA for prior periods to conformnotes to the ~~current period presentation.~~

~~Trulieve reports Adjusted EBITDA to help investors assess the operating performance of the Company’s business. The~~consolidated financial ~~measures noted above are metrics that have been adjusted from the GAAP net income measure~~statements contained elsewhere in ~~an effort to provide readers with a normalized metric in making comparisons more meaningful across the cannabis industry, as well as to remove non-recurring, irregular~~this Report, and ~~one-time items that may otherwise distort the GAAP net income measure.~~

As noted above, our Adjusted EBITDA is not prepared in accordance with GAAP, and should not be considered in isolation of, or as an alternative to, measures prepared in accordance with GAAP. There are a number of limitations related to the use of Adjusted EBITDA rather than net income, which is the most directly comparable financial measure calculated and presented in accordance with GAAP. Because of these limitations, we consider, and you should consider, Adjusted EBITDA together with other operating and financial performance measures presented in accordance with GAAP. A reconciliation of Adjusted EBITDA from net income, the most directly comparable financial measure calculated in accordance with GAAP, has been included herein immediately following ourincorporate such discussion ~~of “Adjusted EBITDA”.~~by reference herein.

~~Adjusted EBITDA~~

Year Ended

Change

December 31,

Increase / (Decrease)

2021

2020

$

%

(in thousands)

Adjusted EBITDA

$
384,581

$
260,077

$
124,504

48
%

Adjusted EBITDA for the year ended December 31, 2021, was $384.6 million, an increase of $124.5 million or 48%, from $260.1 million for the year ended December 31, 2020. The following table presents a reconciliation of GAAP net income (loss) to non-GAAP Adjusted EBITDA, for each of the periods presented:

Year Ended December 31,

2021

2020

2019

(in thousands)

Net income and comprehensive income attributable to common shareholders
$
18,032

$
62,998

$
53,095

Add (deduct) impact of:

Interest expense

34,787

20,237

9,050

Provision for income taxes

146,061

94,451

50,586

Depreciation and amortization

48,096

12,600

5,079

Depreciation included in cost of goods sold

24,073

11,542

7,992

EBITDA

271,049

201,828

125,802

Inventory step up, fair value

41,189

955

—

Integration and transition costs

25,601

—

—

Acquisition and transaction costs

15,831

4,724

—

Share-based compensation and related premiums

13,444

2,765

—

Other non-recurring expenses

6,797

—

—

COVID related expenses

6,188

9,125

—

Loss on impairment and disposal of long-lived assets

5,371

63

67

Results of entities not legally controlled

458

—

—

Other expense (income), net

(1,139
)

(2,062
)

(266
)
Change in fair value of derivative liabilities - warrants

(208
)

42,679

806

Total adjustments

113,532

58,249

607

Adjusted EBITDA
$
384,581

$
260,077

$
126,409

Item 7A. Quantitative and Qualitative Disclosures About Market Risk.

Banking Risk

Notwithstanding that a majority of states have legalized medical marijuana, there has been no change in U.S. Federal banking laws related to the deposit and holding of funds derived from activities related to the marijuana industry. Given that U.S. Federal law provides that the production and possession of cannabis is illegal, there is a strong argument that banks cannot accept for deposit funds from businesses involved with the marijuana industry. Consequently, businesses involved in the marijuana industry often have difficulty accessing the U.S. banking system and traditional financing sources. The inability to open bank accounts with certain institutions may make it difficult to operate our Company, its subsidiaries and investee companies, and leaves their cash holdings vulnerable. We have banking relationships in all jurisdictions in which we operate. Concentrations of credit risk with respect to our cash and cash equivalents are limited primarily to amounts held with financial institutions in excess of federally insured limits. Adverse developments affecting financial institutions, including bank failures, could adversely affect our liquidity and financial position.

Market Risk

Strategic and operational risks arise if we fail to carry out business operations and/or to raise sufficient equity and/or debt financing. These strategic opportunities or threats arise from a range of factors that might include changing economic and political circumstances and regulatory approvals and competitor actions. The risk is mitigated by consideration of other potential development opportunities and challenges which management may undertake.

~~Currency Risk~~

Our operating results and financial position are reported in U.S. dollars. Some of our financial transactions are denominated in currencies other than the U.S. dollar. The results of operations are subject to currency transaction risks.

~~We have no hedging agreements in place with respect to foreign exchange rates. We have not entered into any agreements or purchased any instruments to hedge possible currency risks at this time.~~

Credit Risk

Management does not believe that the Company has significant credit risk related to its customers, as the Company’s revenue is generated primarily through cash transactions. The Company deals almost entirely with on demand sales and does not have any material wholesale agreements as of December 31, ~~2021. Concentrations~~2023. The Company reviews its trade receivable accounts and notes receivable regularly and reduces amounts to their expected realizable values by adjusting the allowance credit losses when management determines that the account may not be fully collectable. The Company applies ASC 326 Financial Instruments – Credit Losses for the measurement of expected credit ~~risk with respect~~losses, which uses an expected loss allowance model for all trade and notes receivables. The Company has adopted standardized credit policies and performs assessments in an effort to ~~our cash and cash equivalents are limited primarily to amounts held with financial institutions.~~minimize those risks.

Liquidity Risk

Liquidity risk is the risk that we will not be able to meet ~~its~~our financial obligations associated with financial liabilities. We manage liquidity risk through the management of ~~its~~our capital structure. Our approach to managing liquidity is to ensure that we will have sufficient liquidity to settle obligations and liabilities when due.

Table of Contents

Asset forfeiture risk

Because the cannabis industry remains illegal under U.S. federal law, any property owned by participants in the cannabis industry which are either used in the course of conducting such business, or are the proceeds of such business, could be subject to seizure by law enforcement and subsequent civil asset forfeiture. Even if the owner of the property were never charged with a crime, the property in question could still be seized and subject to an administrative proceeding by which, with minimal due process, it could be subject to forfeiture.

Interest Rate Risk

Interest rate risk is the risk that the fair value or the future cash flows of a financial instrument will fluctuate as a result of changes in market interest rates. AsOur debt exposes us to risk of fluctuations in interest rates. Fixed rate debt, where the interest rate is fixed over the life of the instrument, exposes us to changes in market interest rates reflected in the fair value of the debt and to the risk that we may need to refinance maturing debt with new debt at higher rates. Floating rate debt, where the interest rate fluctuates periodically, exposes us to short-term changes in market interest rates. We manage our debt portfolio to achieve an overall desired proportion of fixed and floating rate debts and may employ interest rate swaps ("Swaps") as a tool from time to time to achieve that position. To manage our interest rate risk exposure, we entered into one Swap contract during the year ended December 31, 2022, to hedge the floating rate term loans. Changes in market interest rates impact the fair value of our Swap contract, which was a liability of $2.3 million as of December 31, ~~2021,~~2023. In addition to our ~~cash balances consisted of bank deposits and a money market fund. Our~~ private placement ~~debt (aggregate amount of $480 million)~~notes payable and long-term debt, ~~(aggregate amount of $16.6 million) bears interest at fixed rates. As of December 31, 2021,~~ we also have lease obligations and construction finance liabilities ~~of $203.4 million and $176.2 million, respectively.~~that bare interest. Interest rates on existing leases and construction finance liabilities typically do not change unless there is a modification to an underlying agreement. Changes in market interest rates impact the fair value of our derivative liabilities of which the balance is $2.9 million as of December 31, 2021, the term of which expires in April 2023, and as such there is no significant interest rate exposure for the derivative liabilities. Therefore exposure to market risk for changes in interest rates is limited.

See Item 7, Liquidity and Capital Resources, and Item 8 of this Annual Report on Form 10-K for additional information.

Concentration Risk

Our operations are substantially located in Florida and to a lesser extent Arizona and Pennsylvania. Should economic conditions deteriorate, or competitive pressure intensify within that region, our results of operations and financial position would be negatively impacted.

General Economic Risk

Our operations could be affected by the economic context should the unemployment level, interest rates or inflation reach levels that influence consumer trends and spending and, consequently, impact our sales and profitability.

~~Banking~~

Inflation Risk

~~Notwithstanding that~~

Rising inflation could have an adverse impact on expenses, as these costs could increase at a ~~majority~~higher rate than revenues. Our costs are subject to fluctuations, particularly due to changes in the prices of ~~states have legalized medical marijuana, there has been no change~~raw product and packaging materials and the costs of labor, transportation and energy. Inflation pressures could also result in ~~U.S. federal banking laws related~~increases in these input costs. Therefore, our business results depend, in part, on our continued ability to manage these fluctuations through pricing actions, cost saving projects and sourcing decisions, while maintaining and improving margins and market share. Failure to manage these fluctuations could adversely impact our results of operations or cash flows. In addition, unfavorable macroeconomic conditions, such as a recession or continued slowed economic growth, could negatively affect consumer demand for cannabis products, which consequently, may negatively affect the ~~deposit and holding~~results of ~~funds derived from activities related~~operations. Under difficult economic conditions, consumers may seek to ~~the marijuana industry. Given that U.S. federal law provides that the production and possession~~reduce discretionary spending by forgoing purchases of cannabis ~~is illegal, there is a strong argument that banks cannot accept~~products, negatively impacting our net sales and margins. Softer consumer demand for ~~deposit funds from businesses involved with the marijuana industry. Consequently, businesses involved in the marijuana industry often have difficulty accessing the U.S. banking system~~cannabis products could reduce our profitability and traditional financing sources. The inability to open bank accounts with certain institutions may make it difficult to operate the businesses of Trulieve, its subsidiaries and investee companies, and leaves their cash holdings vulnerable. We have banking relationships in all jurisdictions in which we operate.

~~Financial Instruments and Financial Risk Management~~

~~We are exposed in varying degrees to a variety of~~could negatively affect our overall financial ~~instrument related risks. The board of directors of Trulieve mitigate these risks by assessing, monitoring and approving the risk management processes.~~

The Company’s financial instruments that are measured at fair valued on a recurring basis consist of money market funds and a warrant liability. Our financial instruments where carrying value approximates the fair value include cash, accounts payable and accrued liabilities, notes payable, notes payable related party, operating lease liability, finance lease liability, other long-term liabilities and construction finance liability. Financial instruments recorded at fair value are classified using a fair value hierarchy that reflects the significance of the inputs to fair value measurements. The three levels of hierarchy are:



~~Level 1:~~		~~Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;~~

~~Level 2:~~		~~Inputs other than quoted prices in active markets, that are observable for the asset or liability, either directly or indirectly; and~~

~~Level 3:~~		~~Unobservable inputs for which there is little or no market data requiring the Company to develop its own assumptions.~~

performance.

Item 8. Financial Statements and Supplementary Data.

The financial information required by Item 8 is located beginning on page F-1 of this ~~report.~~

Annual Report.

Item 9. Changes in and Disagreements ~~With~~with Accountants on Accounting and Financial Disclosure.

None.

Table of Contents

~~None.~~

Item 9A. Controls and Procedures.

Conclusion Regarding the Effectiveness of Disclosure Controls and Procedures

We maintain disclosure controls and procedures that are designed to ensure that information required to be disclosed in our reports under the Securities Exchange Act of 1934, as amended (the Exchange Act), is recorded, processed, summarized and reported within the time periods specified in the SEC’s rules and forms, and that such information is accumulated and communicated to management, including our Chief Executive Officer (CEO) and Chief Financial Officer (CFO), as appropriate, to allow timely decisions regarding required disclosure. In designing and evaluating the disclosure controls and procedures, management recognized that any controls and procedures, no matter how well designed and operated, can provide only reasonable assurance of achieving the desired control objectives, as ours are designed to do, and management necessarily was required to apply its judgment in evaluating the risk related to controls and procedures.

In connection with the preparation of this Form 10-K, as of December 31, ~~2021,~~2023, an evaluation was performed under the supervision and with the participation of our management, including the CEO and CFO, of the effectiveness of the design and operation of our disclosure controls and procedures (as defined in Rules 13a-15(e) and 15d-15(e) under the Exchange Act). Based on that evaluation, our management concluded that as of December 31, ~~2021,~~2023, we did not maintain effective disclosure controls and procedures because of the material ~~weakness~~weaknesses in internal control over financial reporting described below under the caption “—Material Weakness in Internal Control Over Financial Reporting.”

Management’s Report on Internal Control Over Financial Reporting

As of December 31, ~~2021,~~2023, our management carried out an evaluation, under the supervision and with the participation of our CEO and CFO, of the effectiveness of the design and operation of our ~~disclosure~~ controls over financial reporting and procedures using the criteria set forth by the Committee of Sponsoring Organizations of the Treadway Commission (“COSO”) in Internal Control-Integrated Framework (2013). Based on the foregoing evaluation, our management concluded that our internal controls over financial reporting were not effective because of the material ~~weakness~~weaknesses identified in our internal control over financial reporting discussed below, such that there is a reasonable possibility that a material misstatement of our annual or interim financial statements will not be prevented or detected on a timely basis.

Material Weakness in Internal Control Over Financial Reporting

As of December 31, 2023, the following material ~~weakness is~~weaknesses have been identified:

•Information technology general controls (ITGCs) were not designed and operating effectively to ensure (i) that access to applications and data, and the ability to make program and job changes, were adequately restricted to appropriate personnel and (ii) that the activities of individuals with access to modify data and make program and job changes were appropriately monitored. Business process controls (automated and manual) that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted;

•Ineffective design, implementation, and documentation of management review controls related to the valuation of inventory.

While the control deficiencies did not result in a ~~deficiency, or a combination~~material misstatement to the Company’s consolidated financial statements for the year ending December 31, 2023, they did represent material weaknesses as of ~~deficiencies, in internal control over financial reporting, such that~~December 31, 2023, since there isexisted a reasonable possibility that a material misstatement of ~~our~~the Company’s annual or interim financial statements ~~will~~would not be prevented or detected on a timely basis.

~~As disclosed in our Quarterly Report on Form 10-Q as of September 30, 2021 and~~ ~~"Item 1A. Risk Factors"~~ management identified errors in the accounting for leases, asset acquisitions, and classification of assets. Management reviewed these errors identifying the root cause due to the control environment component of internal control as the Company did not maintain a sufficient complement of personnel with the appropriate level of knowledge, experience, and training in certain areas important to financial reporting. During 2021, even though a material misstatement was not identified in the Company’s financial statements, it was determined that there was a reasonable possibility that a material misstatement in the Company’s financial statements would not have been prevented or detected on a timely basis.

During the testing for the Company’s audit, it was determined that the primary user access controls and program change management controls over information technology systems were not effectively designed or implemented to ensure appropriate authorization and segregation of duties.

Management’s Remediation Measures

Management is committed to maintaining a strong internal control environment. In response to the identified material ~~weakness in the overall control environment,~~weaknesses, management, with the oversight of the Audit Committee of the Board of Directors, has taken a

number of remediation actions during the year ~~ended~~ending December 31, ~~2021,~~2023, and continues to address these deficiencies. The Company will not be able to conclude that the material weaknesses are ~~continuing our actions.~~remediated until the applicable controls operate for a sufficient period of time and management has concluded, through formal testing, that the controls are operating effectively. Remediation actions taken ~~during~~include the ~~year are outlined below.~~

following:

•

~~Added additional positions including Chief Accounting Officer (“CAO”), Executive Director~~

Table of ~~Financial Reporting, Assistant Controller, Regional Controllers, and Tax Director to provide enhanced oversight and technical experience in certain areas important to financial reporting.~~ Contents

Information technology:

•

~~Engaged third party experts~~ The Company continued to ~~assist management in assessing current processes~~strengthen the design and ~~designing improved processes and controls for the consolidated Company.~~

•

~~Added a Chief Technology Officer (“CTO”) to enhance the information technology environment including automation~~implementation of ~~processes and controls and finalization of an ongoing SAP implementation. There have also been additional Directors positions added to the Information Technology organization.~~

•

~~Reviewed business processes surrounding leases, acquisitions, and other complex financial reporting areas to identify and implement enhanced procedures related to internal controls.~~

•

~~Additional program~~logical access, change management, and IT operation controls ~~over information technology systems implemented and are in the process of adding additional access and~~through proper segregation of duties, monitoring controls, ~~over financial relevant systems.~~and the development of controls around critical jobs.

• The Company procured IT subject matter experts and created an Identity and Access Management team within Information Security to improve ownership and consistency of control execution including the user provisioning process and quarterly user access reviews.

~~While significant progress~~

• The Company implemented a formal management training and remediation program, which has ~~been made~~promoted risk-based prioritization of remediating findings and a mechanism to ~~enhance~~track continuous improvement.

Inventory valuation:

The Company created a robust management review control process to:

•Document steps taken by management to perform the review, assess reasonableness, and investigate matters;

•Apply the appropriate level of precision and defined criteria to drive review and investigative procedures;

•Evidence the performance of each management review activity prescribed in the control; and

•Improve the validation of the completeness and accuracy of key reports used in inventory valuation controls.

The Company hired additional resources including:

•Additions to our cost accounting team with appropriate technical knowledge to support inventory accounting requirements;

•A leadership resource to lead internal controls efforts; and

•External resources to assist in the remediation efforts and internal control execution, as well as additional training to personnel.

Attestation Report of Independent Registered Public Accounting Firm

Marcum LLP, an independent registered public accounting firm has issued an attestation report on the effectiveness of our internal control over financial reporting ~~we are still in the process~~as of building and enhancing our processes, procedures, and controls. Additional time is required to complete the remediation of the material weaknesses and the assessment to ensure the sustainability of these remediation actions. We believe the above actions as well as those being implemented currently, when complete, will be effective in the remediation of the material weaknesses described above.December 31, 2023, which report follows below.

Changes in Internal Control Over Financial Reporting

~~Except for~~

Other than the ~~material weaknesses and the~~ongoing remediation ~~efforts described~~measures discussed above, there have been no other ~~change~~changes in our internal control over financial reporting (as defined in Rules13a-15(f) and 15d-15(f) under the Exchange Act) which occurred during the quarter ended December 31, ~~2021,~~2023, that ~~has~~have materially affected, or isare reasonably likely to materially affect, the Company’s internal control over financial reporting.

Item 9B. Other Information.

None.

Item 9C. Disclosure Regarding Foreign Jurisdictions that Prevent Inspections.

Not applicable.

Table of Contents

PART III

Item 10. Directors, Executive Officers and Corporate Governance.

The information required by this item is incorporated by reference to our Proxy Statement for our ~~2022~~2024 Annual Meeting of Stockholders to be filed with the SEC within 120 days after the end of the fiscal year ended December 31, ~~2021.~~

2023.

Item 11. Executive Compensation.

2023.

Item 12. Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters.

2023.

Item 13. Certain Relationships and Related Transactions, and Director Independence.

2023.

Item 14. Principal Accounting Fees and Services.

Table of Contents

PART IV

Item 15. Exhibits, Financial Statement Schedules.

(a)

Documents filed as a part of this Annual Report on Form 10-K:

(1)

Financial Statements—See Index to Financial Statements and Financial Statement Schedule at Item 8 of this Annual Report on Form 10-K.

(2)

Financial Statement Schedules—See Index to Financial Statements and Financial Statement Schedule at Item 8 of this Annual Report on Form 10-K. All other schedules are omitted because they are not applicable or not required.

(3)

Index to Exhibits.

EXHIBIT INDEX

Exhibit

No.

Description

2.1

Merger Agreement, dated September 11, 2018, by and between Schyan Exploration Inc./Exploration Schyan Inc., Schyan Sub, Inc., and Trulieve, Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

2.2

Arrangement Agreement, dated May 10, 2021, between Trulieve Cannabis Corp. and Harvest Health & Recreation Inc. (incorporated by reference to Exhibit 2.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 13, 2021 (File No. 000-56248))

~~2.3~~3.1

Agreement and Plan of Merger, dated September 16, 2020, by and among Pioneer Leasing and Consulting LLC, the members thereof, Raymond Boyer, as the representative of each seller thereunder, Trulieve PA Merger Sub 2 Inc. and Trulieve Cannabis Corp. (incorporated by reference to Exhibit 10.18 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~2.4~~

Agreement and Plan of Merger, dated September 16, 2020, by and among PurePenn LLC, the members thereof, Trulieve Cannabis Corp. and Trulieve PA Merger Sub 1, Inc. (incorporated by reference to Exhibit 10.20 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~3.1~~

Articles of Trulieve Cannabis Corp., as amended (incorporated by reference to Exhibit 3.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

4.1

Subordinate Voting Shares Specimen Stock Certificate (incorporated by reference to Exhibit 4.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~4.2~~4.7

Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated September 21, 2018, by and between Trulieve, Inc. and Kim Rivers (incorporated by reference to Exhibit 4.2 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~4.3~~

Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated September 21, 2018, by and between Trulieve, Inc. and George Hackney, Jr. (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~4.4~~

Amended and Restated Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated as of September 21, 2018, by and between Trulieve, Inc. and Craig Kirkland (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~4.5~~

Amended and Restated Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated as of September 21, 2018, by and between Trulieve, Inc. and the Jason B. Pernell Family Trust dated July 31, 2020 (incorporated by reference to Exhibit 4.5 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~4.6~~

Amended and Restated Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated as of September 21, 2018, by and between Trulieve Cannabis Corp. and Michael J. O’Donnell as Trustee of the Michael J. O’Donnell Revocable Trust (incorporated by reference to Exhibit 4.6 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~4.7~~

Trust Indenture, dated June 18, 2019, by and between Trulieve Cannabis Corp. and Odyssey Trust Company (incorporated by reference to Exhibit 4.7 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

4.8

Warrant Indenture, dated June 18, 2019, by and between Trulieve Cannabis Corp. and Odyssey Trust Company (incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

4.9

Supplemental Warrant Indenture, dated November 7, 2019, by and between Trulieve Cannabis Corp. and Odyssey Trust Company (incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

4.10

Supplemental Warrant Indenture, dated December 10, 2020, by and between Trulieve Cannabis Corp. and Odyssey Trust Company (incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

4.11+

Description of Securities Registered Pursuant to Section 12 of the Securities Exchange Act of 1934 (incorporated by reference to Exhibit 4.11 to the Company's Annual Report on Form 10-K filed with the SEC on March 8, 2023 (File No. 000-56248)).

4.12

Supplemental Trust Indenture, dated as of October 6, 2021, between Trulieve Cannabis Corp. and Odyssey Trust Company (incorporated by reference to Exhibit 4.1 to the Company’s Current Report on Form 8-K filed with the SEC on October 8, 2021 (File No. 000-56248))

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4.13												Supplemental Warrant Indenture, dated as of October 1, 2021, between Trulieve Cannabis Corp., Harvest Health & Recreation, Inc. and Odyssey Trust Company (assumed by Trulieve Cannabis Corp. in connection with Harvest acquisition) (incorporated by reference to Exhibit 4.8 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 21, 2022 (File No. 333-252052))

4.14												Replacement Purchase Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated October 1, 2021, issued by Trulieve Cannabis Corp. to Russon Holdings Limited (assumed by Trulieve Cannabis Corp. in connection with Harvest acquisition) (incorporated by reference to Exhibit 4.9 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 21, 2022 (File No. 333-252052))

4.15												Form of Warrant to Purchase Subordinate Voting Shares of Harvest Health & Recreation Inc., dated May 10, 2019, issued to Purchasers of 7% Unsecured Convertible Debentures (assumed by Trulieve Cannabis Corp. in connection with Harvest acquisition) (incorporated by reference to Exhibit 4.10 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 21, 2022 (File No. 333-252052))

4.16

Warrant dated April 23, 2020 issued by Harvest Health & Recreation, Inc. to Cumberland Property Leasing, LLC (assumed by Trulieve Cannabis Corp. in connection with Harvest acquisition) (incorporated by reference to Exhibit 4.11 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 21, 2022 (File No. 333-252052))

4.17‡

Restricted Share Unit Award Agreement dated as of September 15, 2021 by and between Trulieve Cannabis Corp. and Jason B. Pernell Family Trust, as the assignee of Jason Pernell (replaced the Amended and Restated Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated as of September 21, 2018, by and between Trulieve, Inc. and the Jason B. Pernell Family Trust dated July 31, 2020 (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 17, 2021 (File No. 000-56248))

4.18‡

Restricted Share Unit Award Agreement dated as of September 15, 2021 by and between Trulieve Cannabis Corp. and Kim Rivers (replaced the Warrant to Purchase Subordinate Voting Shares of Trulieve Cannabis Corp., dated September 21, 2018, by and between Trulieve, Inc. and Kim Rivers) (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 17, 2021 (File No. 000-56248))

10.1‡

Schyan Exploration Inc. Stock Option Plan (incorporated by reference to Exhibit 10.1 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

10.2‡

Form of Director and Officer Indemnity Agreement, dated September 21, 2018, by and between Trulieve Cannabis Corp. and each of Kim Rivers, Thad Beshears, George Hackney, Richard S. May, Michael J. O’Donnell and Jason Pernell (incorporated by reference to Exhibit 10.8 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

10.3‡

Form of Share Distribution Agreement (Organized Trade), dated July 2020, by and between Trulieve Cannabis Corp. and F. Ashley May, Frederick B. May Family Irrevocable Trust – 2018, John B. May Family Irrevocable Trust 2018, Elizabeth Bailey May, Elizabeth S May, Frederick B. May, Peter T. Healy, John B. May Sr., Richard S. May, Susan E Thronson, Jason Pernell, Kim Rivers, Thomas L Millner and Shade Leaf Holdings, LLC (incorporated by reference to Exhibit 10.9 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

10.4‡

Share Distribution Agreement (Trading Plan), dated July 2020, by and between Trulieve Cannabis Corp. and Thad Beshears (incorporated by reference to Exhibit 10.10 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

10.5

Lease Agreement between One More Wish, LLC and Trulieve, Inc., dated April 29, 2020 (incorporated by reference to Exhibit 10.11 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

10.6

Lease Agreement between One More Wish II, LLC and Trulieve, Inc., dated August 2018 (incorporated by reference to Exhibit 10.12 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

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10.7

Loan and Security Agreement, by and between Traunch Four, LLC, and George Hackney, Inc., dated May 24, 2018 (incorporated by reference to Exhibit 10.13 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

10.8

Promissory Note, dated May 24, 2018, by and between George Hackney, Inc., d/b/a Trulieve and Traunch Four, LLC, as amended by that certain First Amendment to Promissory Note dated as of December 31, 2019 and that certain Second Amendment to Promissory Note dated as of March 2, 2021 (incorporated by reference to Exhibit 10.14 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.9~~10.90

Consulting Agreement, dated April 21, 2020 between Dickinson & Associates, Inc., and Trulieve Holdings, Inc. (incorporated by reference to Exhibit 10.15 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.10~~

Coattail Agreement, dated September 21, 2018, by and among Trulieve Cannabis Corp., Odyssey Trust Company and holders of the Super Voting Shares (incorporated by reference to Exhibit 10.16 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.11~~10.10

Share Conversion Agreement by and between Trulieve Cannabis Corp. and Kim Rivers (incorporated by reference to Exhibit 10.17 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.12~~10.11

Registration Rights Agreement, dated November 12, 2020, by and among Trulieve Cannabis Corp., each of the shareholders set forth therein, and Raymond Boyer, as the representative of each of the shareholders set forth therein (incorporated by reference to Exhibit 10.19 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.13~~10.12

Registration Rights Agreement, dated November 12, 2020, by and among Trulieve Cannabis Corp., each of the shareholders set forth therein, and Gabriel A. Perlow, as the representative of each of the shareholders set forth therein (incorporated by reference to Exhibit 10.21 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.14~~10.13

Membership Interest Purchase Agreement, dated September 16, 2020, by and among Keystone Relief Centers LLC, the sellers set forth therein, Dr. Robert Capretto, as the representative of each seller set forth therein, Trulieve PA LLC and Trulieve Cannabis Corp. (incorporated by reference to Exhibit 10.22 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.15~~

Asset Purchase Agreement, dated October 1, 2020, by and between Life Essence, Inc. and Patient Centric of Martha’s Vineyard Ltd. (incorporated by reference to Exhibit 10.23 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.16~~

Asset Purchase Agreement, dated December 1, 2020, by and among Life Essence, Inc. Trulieve Cannabis Corp., Sammartino Investments, LLC, Natures’s Remedy of Massachusetts, Inc. and John Brady (incorporated by reference to Exhibit 10.24 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.17~~

Promissory Note, dated May 24, 2018, by and between George Hackney, Inc., d/b/a Trulieve and Kim Rivers, as amended by that certain First Amendment to Promissory Note dated as of December 31, 2019 and that certain Second Amendment to Promissory Note dated as of March 2, 2021 (incorporated by reference to Exhibit 10.25 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 12, 2021 (File No. 333-252052))

~~10.18~~10.14

Registration Rights Agreement, dated July 7, 2021, by and among Trulieve Cannabis Corp., each of the shareholders set forth therein, and Michael J. Badey, as the representative of each of the shareholders set forth therein (incorporated by reference to Exhibit 10.28 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 21, 2022 (File No. 333-252052))

~~10.19‡~~10.15‡

Executive Employment Agreement, dated September 29, 2021, by and between Trulieve Cannabis Corp. and Kimberly Rivers (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2021 (File No. 000-56248))

~~10.20‡~~10.16‡

Executive Employment Agreement, dated September 29, 2021, by and between Trulieve Cannabis Corp. and Alex D’Amico (incorporated by reference to Exhibit 10.2 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2021 (File No. 000-56248))

~~10.21‡~~10.17‡

Executive Employment Agreement, dated September 29, 2021, by and between Trulieve Cannabis Corp. and Eric Powers (incorporated by reference to Exhibit 10.3 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2021 (File No. 000-56248))

~~10.22‡~~10.18‡

Executive Employment Agreement, dated September 29, 2021, by and between Trulieve Cannabis Corp. and Rebecca Young (incorporated by reference to Exhibit 10.4 to the Company’s Current Report on Form 8-K filed with the SEC on September 30, 2021 (File No. 000-56248))

~~10.23‡~~

Executive Employment Agreement, dated September 29, 2021, by and between Trulieve Cannabis Corp. and Kyle Landrum (incorporated by reference to Exhibit 10.5 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 21, 2022 (File No. 333-252052)

~~10.24‡~~10.19‡

Executive Employment Agreement, dated September 29, 2021, by and between Trulieve Cannabis Corp. and Tim Morey (incorporated by reference to Exhibit 10.7 to the Company’s Registration Statement on Form S-1 filed with the SEC on January 21, 2022 (File No. 333-252052))

Table of Contents

~~10.25‡~~

10.20‡

Executive Employment Agreement, dated ~~December 24, 2021,~~January 3, 2023, by and between Trulieve Cannabis Corp. and ~~Steve White~~Joy Malivuk (incorporated by reference to Exhibit 10.1 toon the ~~Company’s Current~~Company's Quarterly Report on Form ~~8-K~~10-Q for the period ended March 31, 2023, as filed with the SEC on ~~December 29, 2021~~May 10, 2023 (File No. 000-56248)).

~~10.26~~

10.21+‡

Executive Employment Agreement, effective as of January 1, 2024, by and between Trulieve Cannabis Corp. and Wes Getman.

10.22+‡

Executive Employment Agreement, effective as of January 29, 2024, by and between Trulieve Cannabis Corp. and Marie Zhang.

10.23

Form of Voting Support and Lock-Up Agreement (incorporated by reference to Exhibit 10.1 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 13, 2021 (File No. 000-56248))

~~10.27~~10.24

Form of Voting Support Agreement (incorporated by reference to Exhibit 10.2 to the Company’s Quarterly Report on Form 10-Q filed with the SEC on May 13, 2021 (File No. 000-56248))

~~10.28‡~~

10.25‡

Harvest Health and Recreation Inc. 2018 Stock Incentive Plan (incorporated by reference to Exhibit 4.3 to the Company’s Registration Statement on Form S-8 filed with the SEC on October 6, 2021 (File No. 333-260098))

~~10.29‡~~

10.26‡

Harvest Health and Recreation Inc. Non-Employee Director Compensation Policy (incorporated by reference to Exhibit 4.4 to the Company’s Registration Statement on Form S-8 filed with the SEC on October 6, 2021 (File No. 333-260098))

~~10.30‡~~

10.27‡

Trulieve Cannabis Corp. 2021 Omnibus Incentive Plan (incorporated by reference to Exhibit 10.1 to the Company’s Current Report on Form 8-K filed with the SEC on June 11, 2021 (File No. 000-56248))

~~18.1~~+

10.28‡

Amended and Restated Trulieve Cannabis Corp. 2021 Omnibus Incentive Plan (incorporated by references to Exhibit 10.1 to the Registrant’s Current Report on Form 8-K (File No. 000-56248)).

~~Preferability Letter of Marcum LLP~~

~~21.1~~10.29

~~Subsidiaries of~~Loan Agreement dated December 21, 2022 between Trulieve Capps Highway LLC and Valley National Bank, as agent, and the ~~Registrant (incorporated~~lenders named therei n (inc orporated by reference to Exhibit ~~21.1~~10.31 to the ~~Company’s Registration Statement~~Company's Annual Report on Form ~~S-1~~10-K filed with the SEC on ~~January~~Ma rch 8 , 2023 (File N o. 000-56248)).

10.30

First Amendment to Loan Agreement, dated as of May 9, 2023 and effective as of December 21, 2022 (inco rporated by ref erence to Exhibit 10.2 on the Company's Quarterly Report on Form 10-Q for the period end ed March 31, 2023, as filed with the SEC on May 10, 2023 (File No. 000-56248 )).

10.31

Second Amendment to Loan Agreement, dated as of May 9, 2023 (incorporated by reference to Exhibit 10.3 on the Company's Quarterly Report on Form 10-Q for the period ended March 31, 2023, as filed with the SEC on May 10, 2023 (File No. ~~333-252052)~~000-56248)).

~~23.1~~+

10.32+

~~Consent of MNP LLP~~Loan Agreement dated December 22, 2023 between Trulieve Centaury Way, LLC and First Federal Bank

21.1+

~~23.2~~Subsidiaries of the Registrant as of December 31, 2023+

23.1+

Consent, of Marcum LLP

31.1+

Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 (incorporated by reference to Exhibit 31.1 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed the SEC on March 30, 2022 (File No. 000-56248)).~~2002.

~~31.2~~31.2++

Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of ~~2002 (incorporated by reference to Exhibit 31.21 to the Company’s Annual Report on Form 10-K for the year ended December 31, 2021 filed the SEC on March 30, 2022 (File No. 000-56248)).~~2002.

~~31.3+~~32.1+

~~Certification of Principal Executive Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

~~31.4+~~

~~Certification of Principal Financial Officer Pursuant to Rules 13a-14(a) and 15d-14(a) under the Securities Exchange Act of 1934, as Adopted Pursuant to Section 302 of the Sarbanes-Oxley Act of 2002~~

~~32.1~~+

Certification of Principal Executive Officer Pursuant to 18 U.S.C. Section 1350, as Adopted Pursuant to Section 906 of the Sarbanes-Oxley Act of 2002.

Table of Contents

~~99.1~~99.1++

Appendix A (Licenses and Permits)

101.INS

Inline XBRL Instance Document

101.SCH

Inline XBRL Taxonomy Extension Schema Document

101.CAL

Inline XBRL Taxonomy Extension Calculation Linkbase Document

101.DEF

Inline XBRL Taxonomy Extension Definition Linkbase Document

101.LAB

Inline XBRL Taxonomy Extension Label Linkbase Document

101.PRE

Inline XBRL Taxonomy Extension Presentation Linkbase Document

104

Cover Page Interactive Data File (embedded within the Inline XBRL Document)

+ Filed herein.

‡ Management contract or compensatory plan or arrangement.

Item 16. Form 10-K Summary

None.

Table of Contents

~~None.~~

SIGNATURES

Pursuant to the requirements of Section 13 or 15(d) of the Securities Exchange Act of 1934, as amended, the Registrant has duly caused this Report to be signed on its behalf by the undersigned, thereunto duly authorized.


			TRULIEVE CANNABIS CORP.

Date: ~~March 7, 2023~~ February 29, 2024	By:	/s/ Kim Rivers
			Kim Rivers
			Chief Executive Officer

POWER OF ATTORNEY

KNOW ALL PERSONS BY THESE PRESENTS, that each individual whose signature appears below constitutes and appoints each of Kim Rivers, Wes Getman and Joy Malivuk as such person’s true and lawful attorney-in-fact and agent with full power of substitution and resubstitution, for such person in such person’s name, place and stead, in any and all capacities, to sign any and all amendments to this Annual Report on Form 10-K, and to file the same, with all exhibits thereto, and other and all documents in connection therewith, with the U.S. Securities and Exchange Commission, granting unto each said attorney-in-fact and agent full power and authority to do and perform each and every act and thing requisite and necessary to be done in and about the premises, as fully to all intents and purposes as such person might or could do in person, hereby ratifying and confirming all that any said attorney-in-fact and agent, or any substitute or substitutes of any of them, may lawfully do or cause to be done by virtue hereof.

Table of Contents

Pursuant to the requirements of the Securities Exchange Act of 1934, as amended, this Report has been signed below by the following persons on behalf of the Registrant in the capacities and on the dates indicated.

Name

Title

Date

/s/ Kim Rivers

Director, Chief Executive Officer

February 29, 2024

Kim Rivers

(Principal Executive Officer)

/s/ Wes Getman

Chief Financial Officer

February 29, 2024

Wes Getman

(Principal Financial Officer)

/s/ Joy Malivuk

Chief Accounting Officer

February 29, 2024

Joy Malivuk

(Principal Accounting Officer)

/s/ Thad Beshears

Director

February 29, 2024

Thad Beshears

/s/ Peter Healy

Director

February 29, 2024

Peter Healy

/s/ Richard May

Director

February 29, 2024

Richard May

/s/ Thomas Millner

Director

February 29, 2024

Thomas Millner

/s/ Jane Morreau

Director

February 29, 2024

Jane Morreau

/s/ Gianella Alvarez

Director

February 29, 2024

Gianella Alvarez

/s/ Susan Thronson

Director

February 29, 2024

Susan Thronson

80Table of Contents

~~Trulieve Cannabis Corp.~~

TRULIEVE CANNABIS CORP.

INDEX TO CONSOLIDATED FINANCIAL STATEMENTS


Audited Financial Statements
Report of Independent Registered Public Accounting Firm (PCAOB ID No. 688)		F-2
Report of Independent Registered Public Accounting Firm ~~(PCAOB ID No.~~ on Internal Control over Financial Reporting~~688~~)			~~F-2~~
~~Report of Independent Registered Public Accounting Firm~~ (PCAOB ID No. 688)~~1930~~)	F-5		~~F-3~~
Consolidated Balance Sheets as of December 31, ~~2021~~2023 and ~~2020~~2022		F-7		~~F-4~~
Consolidated Statements of Operations ~~and Comprehensive Income~~ for the Years Ended December 31, ~~2021, 2020~~2023, 2022 and ~~2019~~2021		F-8		~~F-5~~
Consolidated Statements of Changes in Shareholders’ Equity for the Years Ended December 31, ~~2021, 2020~~2023, 2022 and ~~2019~~2021		F-9		~~F-6~~
Consolidated Statements of Cash Flows for the Years Ended December 31, ~~2021, 2020~~2023, 2022 and ~~2019~~2021		F-11		~~F-7~~
Notes to Consolidated Financial Statements		F-12		~~F-8~~

F-1

Table of Contents

~~F-1~~

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING FIRM

To the Shareholders and Board of Directors of

Trulieve Cannabis Corp.

Opinion on the Financial Statements

We have audited the accompanying consolidated balance ~~sheet~~sheets of Trulieve Cannabis Corp. (the “Company”) as of December 31, ~~2021,~~2023 and 2022, the related consolidated statements of operations, ~~and comprehensive income,~~ changes in shareholders’ equity and cash flows for each of the ~~year then~~three years in the period ended December 31, 2023, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, ~~2021,~~2023 and 2022 and the results of its operations and its cash flows for each of the ~~year then~~three years in the period ended December 31, 2023, in conformity with accounting principles generally accepted in the United States of America.

We also have audited, in accordance with the adjustments described in Note 2 that were applied to revise the 2020 financial statements and reflect the change in accounting principle related to accounting for income taxes. In our opinion, such adjustments are appropriate and have been properly applied. We were not engaged to audit, review or apply any procedures to the 2020 financial statementsstandards of the Public Company ~~other than with respect to~~Accounting Oversight Board (United States) ("PCAOB"), the ~~adjustments and, accordingly, we do not express an opinion or other form~~Company's internal control over financial reporting as of ~~assurance~~December 31, 2023, based on the ~~2020~~criteria established in Internal Control - Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (COSO) in 2013 (and our report dated February 29, 2024, expressed an adverse opinion on the effectiveness of the Company’s internal control over financial ~~statements taken as a whole.~~

reporting because of the existence of material weaknesses.

Basis for Opinion

These financial statements are the responsibility of the Company's management. Our responsibility is to express an opinion on the Company's financial statements based on our ~~audit.~~audits. We are a public accounting firm registered with the ~~Public Company Accounting Oversight Board (United States) ("PCAOB")~~PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audit~~audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the ~~audit~~audits to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its internal control over financial reporting. As part of our audit, we are required to obtain an understanding of internal control over financial reporting but not for the purpose of expressing an opinion on the effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.

Our ~~audit~~audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our ~~audit~~audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our ~~audit~~audits provides a reasonable basis for our opinion.

Critical Audit Matters

~~Change~~

The critical audit matters communicated below are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. The communication of critical audit matters does not alter in ~~Accounting Principle~~any way our opinion on the financial statements, taken as a whole, and we are not, by communicating the critical audit matters below, providing separate opinions on the critical audit matters or on the accounts or disclosures to which they relate.

Valuation of Inventory

As described in Note 7, to the consolidated financial statements, the Company’s consolidated inventory related to cannabis inventory is $213.1 million. As discussed in Note 23, the Company’s inventory consists of raw materials (including cannabis plants and packaging materials), work in process and finished goods and is valued at the lower of cost and net realizable value. Significant inputs and assumptions used in the valuation of inventory (excluding any purchased finished goods) include attrition rates of plants, average yield per plant, cumulative stage of completion in the production process and allocation of cost of goods sold. In addition, the Company records a provision for slow-moving and obsolete inventory, which can involve a high degree of judgment. The Company periodically reviews its inventory and identifies that which is excess, slow moving and obsolete by considering factors such as inventory levels, expected product life and forecasted sales demand.

F-2

Table of Contents

We identified the valuation of inventory as a critical audit matter because of the significance of this balance sheet item, the significant assumptions management makes with regards to its valuation of inventory and an increased extent of effort when performing audit procedures to evaluate the reasonableness of management’s assumptions and estimates.

Addressing the matter involved performing the procedures and evaluating audit evidence, in connection with forming our overall opinion on the consolidated financial statements Our procedures related to the valuation of inventory included, among others, the following:

•We obtained an understanding and evaluated the design of the internal controls over management’s valuation of inventory.

•We evaluated the significant assumptions stated above and tested the completeness and accuracy of the underlying data used in management’s costing and valuation.

•Tested attrition rates, average yield and cumulative stage of completion including performing physical observations of the growing cannabis and assessing quantities and growth stage compared to the plant’s life cycle.

•Tested harvest and extraction yields including performing physical observations of each process.

•Tested management’s assumptions related to costs of goods sold, sales price and expected yields including evaluating whether the assumptions used were reasonable considering (i) historical actual information (ii) independent calculations and observations of these inputs (iii) whether these assumptions were consistent with evidence obtained in other areas of the audit.

•We evaluated management’s provision for slow-moving and obsolete inventory calculation by reviewing inputs, including historical sales activity versus on-hand inventory levels and current selling prices versus current cost.

Evaluation of Impairment

As described in Note 3 to the consolidated financial statements, the Company tests goodwill for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. During the period ended March 31, 2023, the Company performed an interim quantitative impairment test over its single reporting unit due to a sustained decline in its stock price and its impact on the Company’s market capitalization. The test was based on a weighted average of the income and market approaches. The income approach estimates the fair value of a reporting unit through a discounted cash flow model which estimates future cash flows and future operating performance, which include projected revenue, long-term growth rates, gross margins, capital expenditures, discount rates and the probability of achieving the estimated cash flows. The market approach incorporates comparable public companies and market multiples. As a result of its impairment test, the Company concluded that its goodwill was not impaired as of March 31, 2023. During the period ended June 30, 2023, because of a continued decline in the Company’s stock price, the Company estimated the fair value of its single reporting unit by measuring its market capitalization and a corresponding control premium as a market approach, which was also corroborated by other valuation techniques. The Company concluded that its goodwill was impaired based on its estimate of fair value of its reporting unit being lower than its carrying value and recognized a goodwill impairment charge of $307.6 million as of June 30, 2023.

The Company reviews long-lived assets, including property and equipment, definite life intangible assets, and right-of-use assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. Factors which could trigger an impairment review include significant underperformance relative to historical or projected future operating results, significant changes in the manner of use of the assets or the strategy of the business, a significant decrease in the market value of the assets or significant negative industry or economic trends. During the period ended March 31, 2023, the Company determined that certain long-lived assets, including intangible assets, in Massachusetts were impaired due to the competitive environment in the Massachusetts cannabis industry. The Company utilized a combination of the market, income, and cost approach for its impairment testing resulting in an impairment of $30.3 million, which consisted of property and equipment and intangible assets, as of March 31, 2023.

Auditing management’s evaluation of impairment is complex due to the judgments and assumptions required to assess management’s considerations of those factors identified above. Auditing these assumptions involved extensive audit effort, including the need to involve our valuation specialists, due to the complexity of these assumptions and a high degree of auditor judgment when performing audit procedures and evaluating the results of those procedures.

The primary procedures we performed to address this critical audit matter included:

•We obtained an understanding and evaluated the design of controls over the Company’s goodwill impairment review process, including controls over management’s review of the significant assumptions described above.

F-3

Table of Contents

•We compared the Company's projected revenue growth, gross profit margins and EBITDA margins with actual results to assess the Company's ability to accurately forecast.

•We evaluated the Company’s projected revenue growth by comparing the projections to the underlying business strategies and legislative trends to assess the probability of achieving such projections.

•We performed sensitivity analyses over significant assumptions to evaluate the impact of changes in the fair value of the reporting unit.

•With the assistance of our valuation specialists, we assessed the fair value methodologies utilized and tested significant assumptions including, among other items, the weighted average cost of capital and the discount rate.

•With the assistance of our valuation specialists, we evaluated the market approach, including evaluating the reasonableness of the selected market multiples based on guideline public companies.

•In addition, we tested management’s reconciliation of the fair value of the reporting unit to the Company’s market capitalization, including evaluating the comparable public company transactions identified and the implied control premium.

•With the assistance of our valuation specialists, we evaluated the cost approach used by management in evaluating the Massachusetts property, plant, and equipment fair value, including evaluating replacement cost calculations, land valuations, and comparable sales data.

Evaluation of uncertain tax positions

As discussed in Note 3 and Note 18 to the consolidated financial statements, the Company has ~~elected~~taken uncertain tax positions based on legal interpretations that challenge its tax liability under Internal Revenue Code Section 280E and inventory costs for tax purposes in its Florida and West Virginia dispensaries. Uncertainty in a tax position may arise because tax laws are subject to ~~change~~interpretation. The Company uses significant judgment to (1) determine whether, based on the technical merits, a tax position is more likely than not to be sustained and (2) measure the amount of tax benefit that qualifies for recognition. As of December 31, 2023, the Company accrued uncertain tax position liabilities of approximately $180.4 million.

Auditing management’s estimate of the amount of tax benefit that qualifies for recognition involved especially challenging auditor judgment because management’s estimate is complex, highly judgmental and based on interpretations of tax laws and legal rulings.

The primary procedures we performed to address this critical audit matter included:

•Obtained an understanding and evaluated the design of controls over Management’s accounting process for uncertain tax positions, including the controls over management’s review of the technical merits of its ~~method~~tax positions and the measurement of the amount of tax benefits that qualify for recognition.

•With the assistance of our tax specialists, we assessed the technical merits of the Company’s tax positions, including evaluating income tax interpretations and third-party advice obtained by the Company and the Company’s process of filing tax returns with uncertain tax positions.

•Evaluated the appropriateness of the Company’s accounting for ~~deferred~~its tax ~~assets~~positions taking into consideration relevant federal and ~~liabilities in acquisitions.~~state income tax laws.

•Analyzed the Company’s assumptions and data used to determine the amount of tax benefit to recognize and tested the accuracy of the calculations.

•

Evaluated the adequacy of the Company’s financial statement disclosures related to these tax matters.

/s/ Marcum LLP

Marcum ~~llp~~LLP

~~Marcum~~ ~~llp~~

We have served as the Company’s auditor since 2021.

West Palm Beach, FL

February 29, 2024

F-4

Table of Contents
~~March 30, 2022~~

~~F-2~~

REPORT OF INDEPENDENT REGISTERED PUBLIC ACCOUNTING ~~FIRM~~

ON INTERNAL CONTROL OVER FINANCIAL REPORTING

To the Shareholders and Board of Directors ~~and Shareholders~~ of

Trulieve Cannabis Corp.

Adverse Opinion on ~~the Consolidated~~Internal Control over Financial ~~Statements~~

Reporting

We have audited before the effects of the adjustments for the Change in Accounting Principle and the Revision of Previously Issued Financial Statements described in Note 2, the accompanying consolidated balance sheet of Trulieve Cannabis Corp.’s (the ~~Company)~~"Company") internal control over financial reporting as of December 31, ~~2020,~~2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission. In our opinion, because of the effect of the material weaknesses described in the following paragraph on the achievement of the objectives of the control criteria, the Company has not maintained effective internal control over financial reporting as of December 31, 2023, based on criteria established in Internal Control-Integrated Framework (2013) issued by the Committee of Sponsoring Organizations of the Treadway Commission.

A material weakness is a control deficiency, or combination of deficiencies, in internal control over financial reporting, such that there is a reasonable possibility that a material misstatement of the Company's annual or interim financial statements will not be prevented or detected on a timely basis. The following material weaknesses have been identified and included in “Management's Annual Report on Internal Control Over Financial Reporting”:

Information technology general controls (ITGCs) were not designed and operating effectively to ensure (i) that access to applications and data, and the ability to make program and job changes, were adequately restricted to appropriate personnel and (ii) that the activities of individuals with access to modify data and make program and job changes were appropriately monitored. Business process controls (automated and manual) that are dependent on the affected ITGCs were also deemed ineffective because they could have been adversely impacted;

Ineffective design, implementation, and documentation of management review controls related to the valuation of inventory;

These material weaknesses were considered in determining the nature, timing and extent of audit tests applied in our audit of the fiscal December 31, 2023 consolidated financial statements, and this report does not affect our report dated February 29, 2024 on those consolidated financial statements.

We have also audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the consolidated balance sheets as of December 31, 2023 and 2022, the related consolidated statements of operations and comprehensive (loss) income, changes in shareholders’ equity, and cash flows for each of the three years in the ~~two-year~~ period ended December 31, ~~2020,~~2023, and ~~the~~ related notes ~~(collectively referred to as the consolidated financial statements).~~

In our opinion, the consolidated financial statements, before the effects of the adjustments for the Change in Accounting Principle and the Revision of Previously Issued Financial Statements described in Note 2, present fairly, in all material respects, the consolidated financial position of the Company, ~~as of December 31, 2020,~~ and ~~the results of~~our report dated February 29, 2024 expressed an unqualified opinion on those consolidated financial statements.

Basis for Opinion

The Company's management is responsible for maintaining effective internal control over financial reporting, and for its ~~consolidated operations and its consolidated cash flows for each~~assessment of the ~~years~~effectiveness of internal control over financial reporting, included in the ~~two-year period ended December 31, 2020, in conformity with accounting principles generally accepted in the United States of America.~~

~~We were not engaged to audit, review, or apply any procedures to the adjustments for the Change in Accounting Principle and the Revision of Previously Issued~~accompanying "Management Annual Report on Internal Control Over Financial Statements described in Note 2 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by the successor auditor.

~~Basis for Opinion~~

~~These consolidated financial statements are the responsibility of the Company's management.~~Reporting". Our responsibility is to express an opinion on the Company's ~~consolidated~~internal control over financial ~~statements~~reporting based on our ~~audits.~~audit. We are a public accounting firm registered with the ~~Public Company Accounting Oversight Board (United States) (PCAOB)~~PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB.

We conducted our ~~audits~~audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether ~~the consolidated financial statements are free of material misstatement, whether due to error or fraud. The Company is not required to have, nor were we engaged to perform, an audit of its~~effective internal control over financial ~~reporting. As part~~reporting was maintained in all material respects. Our audit of ~~our audits, we are required to obtain~~internal control over financial reporting included obtaining an understanding of internal control over financial reporting, ~~but not for~~assessing the ~~purpose~~risk that a material weakness exists, and testing and evaluating the design and operating effectiveness of ~~expressing an opinion~~internal control based on the ~~effectiveness of the Company's internal control over financial reporting. Accordingly, we express no such opinion.~~

assessed risk. Our ~~audits~~audit also included performing such other procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosuresas we considered necessary in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements.circumstances. We believe that our ~~audits provide~~audit provides a reasonable basis for our opinion.

F-5

Table of Contents

Definition and Limitations of Internal Control over Financial Reporting

A company's internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company's internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company's assets that could have a material effect on the financial statements.

Because of the inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that degree of compliance with the policies or procedures may deteriorate.

/s/ Marcum ~~MNP~~ LLP

Marcum

~~Chartered Professional Accountants;~~LLP

~~Licensed Public Accountants~~

We have served as the Company’s auditor since ~~2018.~~2021.

West Palm Beach, FL

February 29, 2024

F-6

Table of Contents

~~Ottawa, Canada~~

~~March 22, 2021~~

~~F-3~~

TRULIEVE CANNABIS CORP.

CONSOLIDATED BALANCE SHEETS

(in thousands)

2021

2020

ASSETS

Current Assets:

Cash and cash equivalents

$
230,646

$
146,713

Restricted cash

3,013

—

Accounts receivable, net

8,854

308

Inventories, net

212,188

98,312

Prepaid expenses and other current assets

68,189

16,119

Notes receivable - current portion

1,530

—

Total current assets

524,420

261,452

Property and equipment, net

779,916

314,045

Right of use assets - operating, net

125,973

30,076

Right of use assets - finance, net

66,764

36,904

Intangible assets, net

1,117,982

92,596

Goodwill

765,358

67,176

Other assets

18,312

7,527

Notes receivable, net

12,147

—

TOTAL ASSETS

$
3,410,872

$
809,776

LIABILITIES

Current Liabilities:

Accounts payable and accrued liabilities

94,073

41,199

Income tax payable

27,610

5,875

Deferred revenue

7,168

7,178

Notes payable - current portion, net

10,052

2,000

Notes payable - related party - current portion

—

12,011

Operating lease liabilities - current portion

9,840

3,277

Finance lease liabilities - current portion

6,185

3,877

Construction finance liabilities - current portion

991

—

Contingencies

13,017

704

Total current liabilities

168,936

76,121

Long-Term Liabilities:

Notes payable

6,456

4,000

Warrant liabilities

2,895

—

Operating lease liabilities

122,130

28,120

Finance lease liabilities

65,244

35,058

Private placement notes, net

462,929

117,165

Other long-term liabilities

8,400

3,915

Construction finance liabilities

175,198

82,047

Deferred tax liabilities

251,311

15,447

TOTAL LIABILITIES

1,263,499

361,873

Commitments and contingencies (see Note 20)

SHAREHOLDERS' EQUITY

Common Stock, no par value; unlimited shares authorized as of December 31, 2021 and 2020. 180,504,172 issued and outstanding as of December 31, 2021 and 119,573,998 issued and outstanding as of December 31, 2020, respectively.

—

—

Additional paid-in-capital

2,008,100

328,214

Accumulated earnings

137,721

119,689

Non-controlling interest

1,552

—

TOTAL SHAREHOLDERS' EQUITY

2,147,373

447,903

TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY

$
3,410,872

$
809,776


	Year ended December 31,
	2023		2022
ASSETS
Current Assets:
Cash and cash equivalents	$	201,372	$	207,185
Restricted cash	6,607		6,607
Accounts receivable, net	6,703		6,507
Inventories	213,120		276,505
Prepaid expenses	17,620		11,031
Other current assets	23,735		51,247
Notes receivable - current portion	6,233		728
Assets associated with discontinued operations	1,958		33,733
Total current assets	477,348		593,543
Property and equipment, net	676,352		743,260
Right of use assets - operating, net	95,910		98,926
Right of use assets - finance, net	58,537		70,495
Intangible assets, net	917,191		984,797
Goodwill	483,905		791,495
Notes receivable, net	7,423		11,992
Other assets	10,379		12,768
Long-term assets associated with discontinued operations	2,010		93,129
TOTAL ASSETS	$	2,729,055	$	3,400,405
LIABILITIES
Current Liabilities:
Accounts payable and accrued liabilities	$	83,162	$	82,023
Income tax payable	—		49,615
Deferred revenue	1,335		9,459
Notes payable - current portion	3,759		12,453

Operating lease liabilities - current portion	10,068		10,291
Finance lease liabilities - current portion	7,637		8,271
Construction finance liabilities - current portion	1,466		1,189
Contingencies	4,433		34,666
Liabilities associated with discontinued operations	2,989		2,328
Total current liabilities	114,849		210,295
Long-Term Liabilities:
Notes payable, net	115,855		94,247
Private placement notes, net	363,215		541,664

Operating lease liabilities	92,235		99,851
Finance lease liabilities	61,676		69,948
Construction finance liabilities	136,659		137,144
Deferred tax liabilities	206,964		224,903
Uncertain tax position liabilities	180,350		19,459
Other long-term liabilities	7,086		6,820
Long-term liabilities associated with discontinued operations	41,553		68,370
TOTAL LIABILITIES	1,320,442		1,472,701
Commitments and contingencies (see Note 23)
SHAREHOLDERS' EQUITY
Common stock, no par value; unlimited shares authorized. 186,235,818 and 185,987,512 shares issued and outstanding as of December 31, 2023 and December 31, 2022, respectively.	—		—
Additional paid-in-capital	2,055,112		2,045,003
Accumulated deficit	(640,639)		(113,843)
Non-controlling interest	(5,860)		(3,456)
TOTAL SHAREHOLDERS' EQUITY	1,408,613		1,927,704
TOTAL LIABILITIES AND SHAREHOLDERS' EQUITY	$	2,729,055	$	3,400,405

The accompanying notes are an integral part of these consolidated financial statements.

F-7

Table of Contents

~~F-4~~

TRULIEVE CANNABIS CORP.

CONSOLIDATED STATEMENTS OF OPERATIONS ~~AND COMPREHENSIVE INCOME~~

(in thousands, except ~~per~~for share data)

2021

2020

2019

Revenues, net of discounts

$
938,385

$
521,533

$
252,819

Cost of goods sold

372,255

135,116

60,982

Gross profit

566,130

386,417

191,837

Expenses:

Sales and marketing

215,144

119,395

59,349

General and administrative

100,573

36,056

14,071

Depreciation and amortization

48,096

12,600

5,079

Loss on impairment and disposal of long-lived assets

5,371

63

67

Total expenses

369,184

168,114

78,566

Income from operations

196,946

218,303

113,271

Other income (expense):

Interest expense

(34,787
)

(20,237
)

(9,050
)
Change in fair value of derivative liabilities - warrants

208

(42,679
)

(806
)
Other income, net

1,139

2,062

266

Total other expense

(33,440
)

(60,854
)

(9,590
)
Income before provision for income taxes and non-controlling interest

163,506

157,449

103,681

Provision for income taxes

146,061

94,451

50,586

Net income and comprehensive income

17,445

62,998

53,095

Less: Net loss and comprehensive loss attributed to non-controlling interest

(587
)

—

—

Net income and comprehensive income attributed to common shareholders

$
18,032

$
62,998

$
53,095

Basic net income per common shareholder

$
0.13

$
0.55

$
0.48

Diluted net income per common shareholder

$
0.12

$
0.53

$
0.46

Weighted average number of common shares used in computing net income per common share:

Basic

139,366,940

113,572,379

110,206,103

Diluted

146,757,286

118,325,724

115,317,942


	For the Years Ended December 31,
	2023		2022		2021
Revenue	$	1,129,193	$	1,218,229	$	931,934
Cost of goods sold	540,565		529,102		365,360
Gross profit	588,628		689,127		566,574
Expenses:
Sales and marketing	240,165		277,563		211,905
General and administrative	145,997		169,471		99,456
Depreciation and amortization	109,825		116,381		45,791
Impairment and disposal of long-lived assets, net	6,664		75,547		5,371
Impairment of goodwill	307,590		—		—
Total expenses	810,241		638,962		362,523
(Loss) income from operations	(221,613)		50,165		204,051
Other income (expense):
Interest expense, net	(81,569)		(73,422)		(29,121)
Interest income	6,164		1,631		205
Gain on debt extinguishment, net	5,937		—		—
Other income, net	6,544		2,388		1,112
Total other expense, net	(62,924)		(69,403)		(27,804)
(Loss) income before provision for income taxes	(284,537)		(19,238)		176,247
Provision for income taxes	151,358		163,380		145,722
Net (loss) income from continuing operations	(435,895)		(182,618)		30,525
Net loss from discontinued operations, net of tax benefit (provision) of $4,101, $12,223, and $(339) respectively	(97,241)		(70,109)		(13,080)
Net (loss) income	(533,136)		(252,727)		17,445
Less: net loss attributable to non-controlling interest from continuing operations	(5,147)		(3,994)		(587)
Less: net loss attributable to non-controlling interest from discontinued operations	(1,193)		(2,669)		—
Net (loss) income attributable to common shareholders	$	(526,796)	$	(246,064)	$	18,032
Net (loss) income per share - Continuing operations:
Basic	$	(2.28)	$	(0.95)	$	0.22
Diluted	$	(2.28)	$	(0.95)	$	0.21
Net loss per share - Discontinued operations:
Basic and diluted	$	(0.51)	$	(0.36)	$	(0.09)
Weighted average number of common shares used in computing net (loss) income per common share:
Basic	188,974,176		187,995,317		139,366,940
Diluted	188,974,176		187,995,317		146,757,286

The accompanying notes are an integral part of these consolidated financial statements.

F-8

Table of Contents

~~F-5~~

TRULIEVE CANNABIS CORP.

CONSOLIDATED STATEMENTS OF CHANGES IN SHAREHOLDERS’ EQUITY

(in thousands, except for share ~~amounts)~~data)


	Super Voting Shares	Multiple Voting Shares	Subordinate Voting Shares	Total Common Shares	Additional Paid-in- Capital		Accumulated Earnings (Deficit)		Non- Controlling Interest		Total
Balance, December 31, 2020	58,182,500	1,439,037	59,952,461	119,573,998	$	328,214	$	119,689	$	—	$	447,903
Share-based compensation	—	—	—	—	9,254		—		—		9,254
Exercise of stock options	—	—	75,716	75,716	352		—		—		352
Shares issued for cash - warrant exercises	—	—	569,533	569,533	7,672		—		—		7,672
Subordinate Voting Shares issued upon cashless warrant exercise	—	—	2,075,987	2,075,987	—		—		—		—
Tax withholding related to net share settlements of equity awards	—	—	(39,898)	(39,898)	(1,072)		—		—		(1,072)
Issuance of shares in private placement, net of issuance costs	—	—	5,750,000	5,750,000	217,896		—		—		217,896
Contingent consideration payable in shares	—	—	—	—	(2,800)		—		—		(2,800)
Conversion of Super Voting Shares to Subordinate Voting Shares	(3,021,100)	—	3,021,100	—	—		—		—		—
Conversion of Super Voting Shares to Multiple Voting Shares	(55,161,400)	55,161,400	—	—	—		—		—		—
Conversions of Multiple Voting to Subordinate Voting Shares	—	(4,683,438)	4,683,438	—	—		—		—		—
Adjustment of fair value of equity consideration for PurePenn, LLC	—	—	—	—	2,711		—		—		2,711
Adjustment of fair value of equity consideration for Keystone Relief Centers, LLC	—	—	—	—	1,004		—		—		1,004
Shares issued for Mountaineer Holding, LLC acquisition	—	—	60,342	60,342	2,470		—		—		2,470
Shares issued for Solevo Wellness West Virginia, LLC acquisition	—	—	11,658	11,658	445		—		—		445
Shares issued for Nature's Remedy of Massachusetts, Inc. acquisition	—	—	237,881	237,881	9,139		—		—		9,139
Shares issued for the Patient Centric of Martha's Vineyard Ltd. acquisition	—	—	258,383	258,383	10,012		—		—		10,012
Shares issued for Anna Holdings, LLC acquisition	—	—	1,009,336	1,009,336	35,385		—		—		35,385
Shares issued for Harvest Health & Recreation, Inc. acquisition	—	—	50,921,236	50,921,236	1,387,418		—		2,139		1,389,557
Net income (loss)	—	—	—	—	—		18,032		(587)		17,445
Balance, December 31, 2021	—	51,916,999	128,587,173	180,504,172	$	2,008,100	$	137,721	$	1,552	$	2,147,373

F-9

Table of Contents

Super
Voting
Shares

Multiple
Voting
Shares

Subordinate
Voting
Shares

Total
Common
Shares

Additional
Paid-in-
Capital

Accumulated
Earnings

Non- Controlling Interest

Total

Balance, January 1, 2019

85,246,600

13,750,451

11,135,117

110,132,168

75,218

3,596

—

78,814

Market interest debt

—

—

—

—

10

—

—

10

Conversions of Super and Multiple Voting Shares to
Subordinate Voting Shares

(17,433,300
)

(7,089,077
)

24,522,377

—

—

—

—

—

Shares issued for cash - warrant exercises

—

—

214,178

214,178

964

—

—

964

Net income and comprehensive income

—

—

—

—

—

53,095

—

53,095

Balance, December 31, 2019

67,813,300

6,661,374

35,871,672

110,346,346

$
76,192

$
56,691

$
—

$
132,883

Share-based compensation

—

—

—

—

2,765

—

—

2,765

Reclassification of warrants to equity

—

—

—

—

52,570

—

—

52,570

Shares issued for cash - warrant exercises

—

—

2,723,411

2,723,411

11,459

—

—

11,459

Contingent consideration payable in shares

—

—

—

—

65,000

—

—

65,000

Exercise of stock options

—

—

9,180

9,180

—

—

—

—

Issuance of shares in private placement, net of issuance costs

—

—

4,715,000

4,715,000

83,228

—

—

83,228

Shares issued for PurePenn, LLC and Solevo Wellness acquisitions

—

—

1,780,061

1,780,061

37,000

—

—

37,000

Conversions of Multiple Voting to Subordinate Voting Shares

(9,630,800
)

(5,222,337
)

14,853,137

—

—

—

—

—

Net income and comprehensive income

—

—

—

—

—

62,998

—

62,998

Balance, December 31, 2020

58,182,500

1,439,037

59,952,461

119,573,998

$
328,214

$
119,689

$
—

$
447,903

Share-based compensation

—

—

—

—

9,254

—

—

9,254

Exercise of stock options

—

—

75,716

75,716

352

—

—

352

Shares issued for cash - warrant exercises

—

—

569,533

569,533

7,672

—

—

7,672

Common stock issued upon cashless warrant exercise

—

—

2,075,987

2,075,987

—

—

—

—

Tax withholding related to net share settlements of equity awards

—

—

(39,898
)

(39,898
)

(1,072
)

—

—

(1,072
)
Issuance of shares in private placement, net of issuance costs

—

—

5,750,000

5,750,000

217,896

—

—

217,896

Contingent consideration payable in shares

—

—

—

—

(2,800
)

—

—

(2,800
)
Conversion of Super Voting Shares to Subordinate Voting Shares

(3,021,100
)

—

3,021,100

—

—

—

—

—

Conversion of Super Voting Shares to Multiple Voting Shares

(55,161,400
)

55,161,400

—

—

—

—

—

—

Conversion of Multiple Voting to Subordinate Voting Shares

(4,683,438
)

4,683,438

—

—

—

—

—

Adjustment of fair value of equity consideration for PurePenn, LLC

—

—

—

—

2,711

—

—

2,711

Adjustment of fair value of equity consideration for Keystone Relief Centers, LLC

—

—

—

—

1,004

—

—

1,004

Shares issued for Mountaineer Holding, LLC acquisition

—

—

60,342

60,342

2,470

—

—

2,470

Shares issued for Solevo Wellness West Virginia, LLC acquisition

—

—

11,658

11,658

445

—

—

445

Shares issued for Nature's Remedy of Massachusetts, Inc. acquisition

—

—

237,881

237,881

9,139

—

—

9,139

Shares issued for the Patient Centric of Martha's Vineyard Ltd. acquisition

—

—

258,383

258,383

10,012

—

—

10,012

Shares issued for Keystone Shops acquisition

—

—

1,009,336

1,009,336

35,385

—

—

35,385

Shares issued for Harvest Health & Recreation, Inc. acquisition

—

—

50,921,236

50,921,236

1,387,418

—

2,139

1,389,557

Net income and comprehensive income

—

—

—

—

—

18,032

(587
)

17,445

Balance, December 31, 2021

—

51,916,999

128,587,173

180,504,172

$
2,008,100

$
137,721

$
1,552

$
2,147,373


	Super Voting Shares	Multiple Voting Shares	Subordinate Voting Shares	Total Common Shares	Additional Paid-in- Capital		Accumulated Earnings (Deficit)		Non- Controlling Interest		Total
Share-based compensation	—	—	—	—	18,124		—		—		18,124
Exercise of stock options	—	—	59,971	59,971	156		—		—		156
Shares issued for cash - warrant exercises	—	—	1,428,262	1,428,262	19,238		—		—		19,238
Subordinate Voting Shares issued under share compensation plans	—	—	179,857	179,857	—		—		—		—
Tax withholding related to net share settlements of equity awards	—	—	(47,801)	(47,801)	(615)		—		—		(615)
Conversion of Multiple Voting Shares to Subordinate Voting Shares	—	(25,690,613)	25,690,613	—	—		—		—		—
Shares issued for PurePenn, LLC, Pioneer Leasing & Consulting LLC, and Solevo Wellness West Virginia, LLC earnout	—	—	3,626,295	3,626,295	—		—		—		—
Release of escrow shares	—	—	236,756	236,756	—		—		—		—
Distribution payable for acquisition of variable interest entity	—	—	—	—	—		(5,500)		—		(5,500)
Distribution	—	—	—	—	—		—		(50)		(50)
Divestment of variable interest entity	—	—	—	—	—		—		110		110
Measurement period adjustment - Harvest Health & Recreation, Inc.	—	—	—	—	—		—		1,595		1,595
Net loss	—	—	—	—	—		(246,064)		(6,663)		(252,727)
Balance, December 31, 2022	—	26,226,386	159,761,126	185,987,512	$	2,045,003	$	(113,843)	$	(3,456)	$	1,927,704
Share-based compensation	—	—	—	—	10,575		—		—		10,575


Subordinate Voting Shares issued under share compensation plans	—	—	334,611	334,611	—		—		—		—
Tax withholding related to net share settlements of equity awards	—	—	(86,305)	(86,305)	(466)		—		—		(466)
Distribution to variable interest entity	—	—	—	—	—		—		(50)		(50)
Consideration for purchase of variable interest entity	—	—	—	—	1,643		—		—		1,643
Deconsolidation of variable interest entity	—	—	—	—	(1,643)		—		3,862		2,219
Divestment of variable interest entity	—	—	—	—	—		—		124		124

Net loss	—	—	—	—	—		(526,796)		(6,340)		(533,136)
Balance, December 31, 2023	—	26,226,386	160,009,432	186,235,818	$	2,055,112	$	(640,639)	$	(5,860)	$	1,408,613

The accompanying notes are an integral part of these consolidated financial statements.

F-10

Table of Contents

~~F-6~~

TRULIEVE CANNABIS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS

(in thousands)

2021

2020

2019

CASH FLOW FROM OPERATING ACTIVITIES

Net income and comprehensive income

$
17,445

$
62,998

$
53,095

Adjustments to reconcile net income and comprehensive income to net cash provided by
operating activities:

Depreciation and amortization

48,096

12,600

5,079

Depreciation and amortization included in cost of goods sold

24,073

11,542

7,992

Accretion of debt discount and issuance cost

3,463

2,476

665

Loss on impairment of long-lived assets

3,571

—

—

Loss on disposal of property and equipment

1,800

63

67

Amortization of operating lease right of use assets

6,051

6,045

2,733

Accretion of construction finance liabilities

1,209

413

184

Share-based compensation

9,254

2,765

—

Change in fair value of derivative liabilities - warrants

(208
)

42,679

806

Change in legal contingencies

9,269

—

—

Deferred income tax expense

(26,262
)

(4,887
)

(908
)
Changes in operating assets and liabilities:

Inventories

(19,573
)

(22,534
)

(54,481
)
Accounts receivable

(4,901
)

1,110

—

Prepaid expenses and other current assets

(8,080
)

(4,502
)

(5,224
)
Other assets

(6,276
)

(9,685
)

147

Accounts payable and accrued liabilities

(9,659
)

298

13,586

Other current liabilities

(15,799
)

704

—

Operating lease liabilities

(4,164
)

(4,764
)

(2,825
)
Other long-term liabilities

1,210

—

3,915

Income tax payable

(12,979
)

(2,452
)

(6,735
)
Deferred revenue

(4,642
)

4,774

977

NET CASH PROVIDED BY OPERATING ACTIVITIES

12,898

99,643

19,073

CASH FLOW FROM INVESTING ACTIVITIES

Purchases of property and equipment

(275,902
)

(99,941
)

(71,834
)
Purchases of property and equipment from construction

(20,979
)

(41,116
)

(2,571
)
Capitalized interest

(9,234
)

(4,803
)

(471
)
Payments made for issuance of note receivable

(4,000
)

—

—

Purchases of internal use software

(3,716
)

—

—

Acquisitions, net of cash acquired

43,453

(27,923
)

(19,825
)
Proceeds from sale of intangible asset

54,996

—

—

Proceeds received from notes receivable

160

—

—

Proceeds from sale of property and equipment

38

16

29

Cash paid to acquire license agreement

—

(887
)

—

NET CASH USED IN INVESTING ACTIVITIES

(215,184
)

(174,654
)

(94,672
)
CASH FLOW FROM FINANCING ACTIVITIES

Proceeds from private placement notes, net of discounts

342,586

—

122,215

Proceeds from issuance of notes payable

6,032

—

—

Proceeds from shares issued pursuant to private placement, net of issuance costs

217,896

83,228

—

Proceeds from warrant exercises

7,672

11,459

964

Proceeds from stock option exercises

352

—

—

Proceeds from construction finance liabilities

13,250

41,116

23,071

Payments on notes payable

(280,788
)

—

—

Payments on notes payable - related party

(12,011
)

(941
)

(1,520
)
Payments for debt issuance costs

(251
)

—

—

Payments for taxes related to net share settlement of equity awards

(1,072
)

—

—

Payments on finance lease liabilities

(4,434
)

(4,951
)

(1,748
)
NET CASH PROVIDED BY FINANCING ACTIVITIES

289,232

129,911

142,982

NET INCREASE IN CASH, CASH EQUIVALENTS, AND RESTRICTED CASH

86,946

54,900

67,383

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, BEGINNING OF PERIOD

146,713

91,813

24,430

CASH, CASH EQUIVALENTS, AND RESTRICTED CASH, END OF PERIOD

$
233,659

$
146,713

$
91,813

SUPPLEMENTAL DISCLOSURE OF CASH FLOW INFORMATION

CASH PAID FOR

Interest

$
39,075

$
22,135

$
7,417

Income taxes

178,657

$
105,248

$
43,658

NONCASH INVESTING AND FINANCING ACTIVITIES

Value of shares issued for acquisitions

1,447,973

37,000

—

Value of shares reserved for PurePenn,LLC and Solevo Wellness acquisitions

(2,800
)

65,000

—

Acquisition fair value adjustments

3,964

—

—

Purchase of property and equipment financed with accounts payable

17,861

13,613

6,516

Purchase of property and equipment financed with notes payable - related party

—

—

257

ASC 842 lease additions - operating and finance leases

61,195

33,647

42,272

ASC 842 lease terminations

1,035

—

—

Debt discount related to below market interest debt

—

—

10


	For the Years Ended December 31,
	2023		2022		2021
Cash flows from operating activities
Net (loss) income	$	(533,136)	$	(252,727)	$	17,445
Adjustments to reconcile net (loss) income to net cash provided by operating activities:
Depreciation and amortization	110,820		121,776		48,096
Depreciation included in cost of goods sold	59,837		52,541		24,073
Non-cash interest expense, net	5,443		4,893		3,463
Gain on extinguishment of debt, net	(5,937)		—		—
Impairment and disposal of long-lived assets, net	6,664		75,547		5,371
Impairment of goodwill	307,590		—		—
Amortization of operating lease right of use assets	10,333		11,252		6,051
Accretion of construction finance liabilities	1,281		1,470		1,209
Share-based compensation	10,575		18,124		9,254
Change in fair value of derivative liabilities - warrants	(252)		(2,643)		(208)
Non-cash change in contingencies	(544)		23,017		9,269
Allowance for credit losses	2,750		3,617		—
Deferred income tax expense	(17,173)		(27,174)		(26,262)
Loss from disposal of discontinued operations	69,481		49,130		—
Changes in assets and liabilities:
Decrease/(increase) in inventories	83,304		(83,430)		(19,573)
Decrease/(increase) in accounts receivable	(1,712)		(4,206)		(4,901)
Decrease/(increase) in prepaid expenses and other current assets	6,751		5,264		(8,080)
Decrease/(increase) in other assets	2,954		2,388		(6,276)
(Decrease)/increase in accounts payable and accrued liabilities	1,635		(819)		(9,659)
(Decrease)/increase in income tax payable	(48,822)		19,756		(12,979)
(Decrease)/increase in other current liabilities	(13,263)		(1,368)		(15,799)
(Decrease)/increase in operating lease liabilities	(9,172)		(10,002)		(4,164)
(Decrease)/increase in deferred revenue	(8,232)		2,370		(4,642)
(Decrease)/increase in uncertain tax position liabilities	160,891		12,794		2,750
(Decrease)/increase in other long-term liabilities	(225)		1,526		(1,540)
Net cash provided by operating activities	201,841		23,096		12,898
Cash flows from investing activities
Purchases of property and equipment	(40,385)		(164,749)		(275,902)
Purchases of property and equipment related to construction finance liabilities	—		(13,247)		(20,979)
Capitalized interest	148		(4,732)		(9,234)
Acquisitions, net of cash	—		(27,781)		43,453
Divestments	977		2,037		—
Payments made for issuance of note receivable	(750)		—		(4,000)
Capitalized internal use software	(10,615)		(9,214)		(3,716)
Cash paid for licenses	(4,640)		(1,855)		—
Proceeds from sales of long-lived assets	5,027		739		55,034
Proceeds received from notes receivable	903		1,472		160
Proceeds from sale of held for sale assets	11,865		2,273		—
Net cash used in investing activities	(37,470)		(215,057)		(215,184)
Cash flows from financing activities
Proceeds from notes payable, net of discounts	24,718		90,541		342,586
Proceeds from private placement notes, net of discounts	—		75,635		6,032
Proceeds from shares issued pursuant to private placement notes, net of issuance costs	—		—		217,896
Proceeds from equity exercises	—		19,394		8,024
Proceeds from construction finance liabilities	—		7,047		13,250
Payments on notes payable	(11,780)		(2,928)		(280,788)
Payments on private placement notes	(177,595)		(1,874)		—
Payments on finance lease obligations	(7,588)		(7,361)		(4,434)
Payments on construction finance liabilities	(2,050)		(1,161)		—
Payments for debt issuance costs	(774)		(832)		(251)
Payments on notes payable - related party	—		—		(12,011)
Payments for taxes related to net share settlement of equity awards	(466)		(615)		(1,072)
Distributions	(50)		(50)		—
Net cash (used in) provided by financing activities	(175,585)		177,796		289,232
Net (decrease) increase in cash, cash equivalents, and restricted	(11,214)		(14,165)		86,946
Cash, cash equivalents, and restricted cash, beginning of period	213,792		229,644		146,713
Cash and cash equivalents of discontinued operations, beginning of period	5,702		4,015		—
Less: cash and cash equivalents of discontinued operations, end of period	(301)		(5,702)		(4,015)
Cash, cash equivalents, and restricted cash, end of period	$	207,979	$	213,792	$	229,644

The consolidated statements of cash flows include continuing operations and discontinued operations for the years ended December 31, 2023, 2022, and 2021.

The accompanying notes are an integral part of these consolidated financial statements.

~~F-7~~

TRULIEVE CANNABIS CORP.

CONSOLIDATED STATEMENTS OF CASH FLOWS (CONTINUED)

(in thousands)


	For the Years Ended December 31,
Supplemental disclosure of cash flow information	2023		2022		2021
Cash paid for
Interest	$	81,209	$	76,142	$	39,075
Income taxes, net of refunds	52,644		146,672		178,657
Noncash investing and financing activities
ASC 842 lease additions - operating and finance leases	$	14,323	$	41,141	$	61,195
Reclassification of assets to held for sale	18,408		—		—
Purchases of property and equipment in accounts payable and accrued liabilities	2,778		3,924		17,861
Noncash partial extinguishment of construction finance liability	18,486		—		—
Acquisition fair value adjustments	—		1,595		3,964
Acquisition of variable interest entity with note payable	—		5,500		—
Value of shares issued for acquisitions	—		—		1,447,973
Value of shares reserved for PurePenn, LLC and Solevo Wellness West Virginia, LLC acquisitions	—		—		(2,800)
Purchase of PP&E through exchange of ROU asset	—		3,355		—
Derecognition of ROU asset	—		(3,355)		—
ASC 842 lease terminations	—		—		1,035

The following table presents a reconciliation of the beginning of period and end of period cash, cash equivalents, and restricted cash reported within the consolidated balance sheets to the totals shown in the consolidated statements of cash flows for the periods indicated below:


	For the Years Ended December 31,
	2023		2022		2021
Beginning of year:
Cash and cash equivalents (1)	$	207,185	$	226,631	$	146,713
Restricted cash	6,607		3,013		—
Cash, cash equivalents and restricted cash (1)	$	213,792	$	229,644	$	146,713

End of year:
Cash and cash equivalents (2)	$	201,372	$	207,185	$	226,631
Restricted cash	6,607		6,607		3,013
Cash, cash equivalents and restricted cash (2)	$	207,979	$	213,792	$	229,644

(1)

Excludes cash associated with discontinued operations for the years ended December 31, 2023, 2022, and 2021 of $5.7 million, $4.0 million, and zero, respectively.

(2)Excludes cash associated with discontinued operations for the years ended December 31, 2023, 2022, and 2021 of $0.3 million, $5.7 million, and $4.0 million, respectively.

F-11

Table of Contents

TRULIEVE CANNABIS CORP.

NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

NOTE 1. NATURE OF BUSINESS

Trulieve Cannabis Corp. together with its subsidiaries (“~~Trulieve” or~~Trulieve", the “Company”) was incorporated in British Columbia, Canada. Trulieve ~~(through its wholly-owned licensed subsidiary, Trulieve, Inc.)~~ is a vertically integrated cannabis company which, as of December 31, ~~2021,~~2023, held and operated under licenses ~~to operate~~ in Florida, ~~California,~~ Connecticut, Pennsylvania, ~~Massachusetts,~~ West Virginia, Arizona, Colorado, Maryland, Ohio, and ~~Nevada,~~Georgia, to cultivate, produce, distribute, and sell medicinal-use cannabis products, and with respect to Arizona, ~~California,~~ Colorado, ~~Nevada,~~Connecticut and ~~Massachusetts,~~Maryland, adult-use cannabis ~~products,~~products. The Company's operations are substantially located in Florida and ~~have received notice of intent~~ to ~~award~~ a ~~license in Georgia.~~

lesser extent Arizona and Pennsylvania.

In addition to the States listed above, the Company also conducts activities in other markets. In these markets, the Company has either applied for licenses, plans on applying for licenses, or partners with other entities, but does not currently directly own any cultivation, production, or retail licenses.

~~In July 2018, Trulieve, Inc. entered into a non-binding letter agreement (“Letter Agreement”) with Schyan Exploration Inc. (“Schyan”) whereby Trulieve, Inc.~~ Further, the Company also holds licenses in states in which it is no longer currently operating due to discontinuing operations and Schyan have agreed to merge their respective businesses resulting in a reverse takeover of Schyan by Trulieve, Inc. and change the business of Schyan from a mining issuer to a marijuana issuer (the “Transaction”). The Transaction was completed in August 2018 and Schyan changed its name to Trulieve Cannabis Corp.

other strategic reasons.

The Company’s principal address is located in Quincy, Florida. The Company’s registered office is located in British Columbia. ~~Our operations are substantially located in Florida and to a lesser extent Arizona and Pennsylvania.~~

The Company is listed on the Canadian Securities Exchange (the “CSE”) and began trading on September 25, 2018, ~~,under~~under the ticker symbol “TRUL” and trades on the OTCQX market under the symbol “TCNNF”.

Regulatory compliance

The Company’s compliance with state and other rules and regulations may be reviewed by state and federal agencies. If the Company fails to comply with these regulations, the Company could be subject to loss of licenses, substantial fines or penalties, and other sanctions.

NOTE 2. BASIS OF PRESENTATION

Principles of consolidation

The accompanying consolidated financial statements for the years ended December 31, ~~2021, 2020,~~2023, 2022, and ~~2019~~2021 include the financial position and operations of Trulieve Cannabis Corp. and its subsidiaries. The consolidated financial statements were prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”) and include the assets, liabilities, revenue, and expenses of all ~~wholly-owned~~consolidated subsidiaries and variable interest entities for which ~~we have~~the Company has determined ~~that we are~~it is the primary beneficiary. Outside shareholders' interests in subsidiaries are shown on the consolidated financial statements as non-controlling interests. ~~Material intercompany~~Intercompany balances and transactions are eliminated in consolidation.

A variable interest entity (“VIE”) is a legal entity that does not have sufficient equity at risk to finance its activities without additional subordinated financial support, is structured such that equity investors lack the ability to make significant decisions relating to the entity’s operations through voting rights, or do not substantively participate in the gains and losses of the entity. Upon inception of a contractual agreement, the Company performs an assessment to determine whether the arrangement contains a variable interest in a legal entity and whether that legal entity is a VIE. The primary beneficiary has both the power to direct the activities of the VIE that most significantly impact the entity’s economic performance and the obligation to absorb losses or the right to receive benefits from the VIE entity that could potentially be significant to the VIE. Where the Company concludes it is the primary beneficiary of a VIE, the Company consolidates the accounts of that VIE. When the Company is not the primary beneficiary, the VIE is accounted for ~~using~~in accordance with the ~~equity method and is included in equity method investments on the consolidated balance sheets.~~

relevant accounting guidance.

The Company regularly reviews and reconsiders previous conclusions regarding whether it is the primary beneficiary of a VIE in accordance with FASB ASC 810. The Company also reviews and reconsiders previous conclusions regarding whether the Company holds a variable interest in a potential VIE, the status of an entity as a VIE, and whether the Company is required to consolidate such a VIE in the consolidated financial statements when a change occurs.

F-12

Table of Contents

~~F-8~~

Discontinued Operations

In June 2023, the Company exited operations in Massachusetts and in July 2022, the Company discontinued its Nevada operations. Both actions represented a strategic shift in business; therefore, the related assets and liabilities associated with the discontinued operations are classified as discontinued operations on the consolidated balance sheets and the results of the discontinued operations have been presented as discontinued operations within the consolidated statements of operations for all periods presented. Unless specifically noted otherwise, footnote disclosures only reflect the results of continuing operations. The results of discontinued operations are presented in

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTSNote 19. Discontinued Operations

Basis of Measurement

These consolidated financial statements have been prepared on the going concern basis, under the historical cost convention, except for certain financial instruments that are measured at fair value as described herein.

Functional Currency

The functional currency of the Company and its subsidiaries, as determined by management, is the United States (“U.S.”) dollar. These consolidated financial statements are presented in U.S. dollars.

Reclassifications

Certain reclassifications have been made to the consolidated financial statements of prior periods and of the of accompanying notes to conform to the current period presentation. The significant reclassifications related to updates to the classification and disaggregation of certain assets and liabilities on the consolidated balance sheet and the consolidated statements of cash flows and disaggregation of certain expenses on the consolidated statements of operations and comprehensive income.

~~Change in Accounting Principle~~

In the fourth quarter of 2021, the Company elected to change its accounting principle for measuring deferred tax assets and liabilities in acquisitions. Under the new principle, tax basis is determined by applying the relevant tax laws, whereas previously, tax basis was determined by upon the future deductibility of the recovery or settlement. This change in accounting principle resulted in a reduction of the acquired assets fair value, (or in some instances goodwill) and the corresponding deferred tax liabilities. The Company believes this change in principle is preferable as it supported by authoritative guidance and standard practice in the industry.

This change in accounting principle has been applied retrospectively, and the consolidated balance sheets reflect the effect of this accounting principle change in all years presented. This change in accounting principle had an insignificant impact on the consolidated statements of operations and comprehensive income and the consolidated statements shareholders’ equity. There was no impact on the consolidated statements of cash flows. See the table below in ~~Revision of Previously Issued Financial Statements~~ ~~for the effects of the change in principle for acquired assets on the consolidated balance sheet as of December 31, 2020.~~

~~Revision of Previously Issued Financial Statements~~

During the year ending December 31, 2021, the Company identified an error in its accounting for leases which was due to the lack of a complete lease population and the conclusions reached for the commencement date for leases not aligning with the possession date of the associated right of use asset. This resulted in an understatement of the associated right of use assets and the associated lease liabilities for the previously reported December 31, 2020, results. The Company also identified a misstatement related to the accounting for asset acquisitions that were consummated during the three months ended June 30, 2021, which was due to the Company initially valuing the equity consideration transferred using the contract value whereas the fair value as of the closing date should have been used. This resulted in an understatement of intangible assets, an understatement of the associated deferred tax liabilities and an understatement of additional paid-in-capital. Additionally, the Company identified assets not likely to be converted within a year were classified as prepaid expenses and other current assets, rather than other assets.

The Company evaluated the misstatements and concluded that the misstatements were not material, either individually or in the aggregate, to its current or previously issued consolidated financial statements.

To correct the immaterial misstatements, during the year ended December 31, 2021, the Company elected to revise its previously issued December 31, 2020, consolidated balance sheet. The revision of the historical consolidated balance sheet includes the correction of these immaterial misstatements as well as other previously identified balance sheet misclassifications. Accordingly, the accompanying annual audited consolidated balance sheet and relevant footnotes in this Annual on Form 10-K as well as the 2020 consolidated balance sheet have been revised to correct for such immaterial misstatements.

~~F-9~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Accordingly, the accompanying December 31, 2020, consolidated balance sheet has been revised to correct for such immaterial misstatements.~~

~~The impact of the revision and the change in accounting principle on the Company’s consolidated balance sheet as of December 31, 2020, is reflected in the following table:~~

Balance Sheet as of December 31, 2020

As Previously Reported

Revisions

Change in Principle

As Revised

(in thousands)

Prepaid expenses and other current assets

$
19,815

$
(3,696
)

$
—

$
16,119

         Total current assets

265,148

(3,696
)

—

261,452

Right of use assets - operating, net

28,171

1,905

—

30,076

Intangible assets, net

93,800

—

(1,204
)

92,596

Goodwill

74,100

—

(6,924
)

67,176

Other assets

3,944

3,583

—

7,527

         Total assets

816,112

1,792

(8,128
)

809,776

Operating lease liabilities, current portion

3,154

123

—

3,277

         Total current liabilities

75,998

123

—

76,121

Operating lease liabilities

26,450

1,670

—

28,120

Deferred tax liabilities

23,575

—

(8,128
)

15,447

         Total liabilities

$
368,208

$
1,793

$
(8,128
)

361,873

NOTE 3. SUMMARY OF SIGNIFICANT ACCOUNTING POLICIES

~~The significant accounting policies used by the Company are as follows:~~

Cash and Cash Equivalents

The Company considers cash deposits and all highly liquid investments with an original maturity of three months or less to be cash equivalents. Cash and cash equivalents include cash deposits in financial institutions plus cash held at retail locations. Cash held in money market investments are ~~carried~~recorded at fair ~~value, cash~~value. Cash held in financial institutions and cash held at retail locations have carrying values that approximate fair value.

Restricted Cash

Restricted cash balances are those which meet the definition of cash and cash equivalents but are not available for use by the Company. ~~As of December 31, 2021 restricted cash was $3.0~~ ~~million, which represented cash consideration set aside as a reserve in relation~~They are held by or with financial institutions pursuant to an escrow held for a pending legal settlement. Restricted cash was released subsequent to year-end as the litigation was settled in December 2021 and final escrow was released in January 2022. See further information in ~~Note 20. Commitment and Contingencies. Reconciliation of cash, cash equivalents and restricted cash reported within the consolidated balance sheets as of December 31, 2021 was $230.7~~ ~~million and $3.0~~ ~~million, respectively, which sums to the cash, cash equivalents and restricted cash reported on the consolidated statements of cash flows as of December 31, 2021 of $233.7~~ ~~million. There was~~ no ~~restricted cash as of December 31, 2020.~~

~~F-10~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

contractual arrangements.

~~Inventory~~

Inventories are primarily comprised of raw materials, internally produced work in process, finished goods and packaging materials. Inventory is valued at the lower of cost and net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion, disposal and transportation for inventories in process. Cost is determined using the weighted average cost method.

Costs incurred during the growing and production process are capitalized as incurred to the extent that cost is less than net realizable value. These costs include materials, labor and manufacturing overhead used in the growing and production processes. The Company capitalizes pre-harvest costs.

The Company periodically reviews its inventory and identifies that which is excess, slow moving and obsolete by considering factors such as inventory levels, expected product life and forecasted sales demand. Any identified excess, slow moving and obsolete inventory is written down to its net realizable value through a charge to cost of goods sold.

Accounts Receivable and Notes Receivable

The Company reports accounts receivable at their net realizable value, which is management’s best estimate of the cash that will ultimately be received from customers. The Company's notes receivable represent notes due from various third parties. The Company maintains an allowance for expected credit losses to reflect the expected ~~uncollectability~~non-collectability of accounts receivable and notes receivable based on historical collection data and specific risks identified among uncollected accounts, as well as management’s expectation of future economic conditions. The Company also considers relevant qualitative and quantitative factors to assess whether historical loss experience should be adjusted to better reflect the risk characteristics of the companies receivables and the expected future losses. If current or expected future economic trends, events, or changes in circumstances indicate that specific receivable balances may be impaired, further consideration is given to the collectability of those balances and the allowance is adjusted accordingly. ~~Trade accounts~~Accounts receivable and notes receivable are written off after exhaustive collection efforts occur and the receivable is deemed uncollectible.

F-13

Table of Contents

Concentrations of Credit Risk

Financial instruments that potentially subject the Company to concentrations of credit risk consist primarily of cash and cash equivalents and notes receivable. The Company’s cash and cash equivalents, primarily consisted of bank deposits, cash on hand, and money market funds, Concentrations of credit risk with respect to our cash and cash equivalents are limited primarily to amounts held with financial institutions in excess of federally insured limits.

The Company reviews its notes receivable regularly and reduces amounts to their expected realizable values by adjusting the allowance for credit losses when management determines that the account may not be fully collectable. The Company applies ASC 326 Financial Instruments – Credit Losses for the measurement of expected credit losses, which uses an expected loss allowance model for notes receivables. The Company has adopted standardized credit policies and performs assessments in an effort to minimize those risks.

Inventory

Inventories are comprised of raw materials (including cannabis plants and packaging materials), work in process, and finished goods. Inventory is valued at the lower of cost and net realizable value. Net realizable value is determined as the estimated selling price in the ordinary course of business less the estimated costs of completion, disposal, and transportation for inventories in process. Cost is determined using the weighted average cost method.

Costs incurred during the growing and production process are capitalized as incurred to the extent that accumulated cost is less than net realizable value. These costs include materials, labor and manufacturing overhead used in the growing and production processes. Fixed costs associated with abnormal production volume are expensed as incurred.

Property and Equipment

Property and equipment are measured at cost less accumulated depreciation. Depreciation is recognized on a straight-line basis over the following estimated useful lives:


Land			Not depreciated
Land improvements			20 to 30 years
Buildings & improvements			7 to 40 years
Furniture & equipment			3 to 10 years
Vehicles			3 to 5 years
Construction in progress			Not depreciated
Leasehold improvements			The lessor of the life of the lease or the estimated useful life of the asset

The Company capitalizes interest on debt financing invested in projects under construction. Upon the asset becoming available for use, capitalized interest costs, as a portion of the total cost of the asset, are depreciated over the estimated useful life of the related asset.

The Company classifies assets as held for sale and ceases depreciation of the assets when there is a plan for disposal of the assets and those assets meet the held for sale criteria. Gains or losses on disposal of an item are determined by comparing the proceeds from disposal with the carrying amount of the item and recognized in the statements of operations and comprehensive income. Construction in progress is transferred when available for use and depreciation of the assets commences at that point.

F-14

Table of Contents

Held for Sale

The Company ~~reviews properties~~classifies long-lived assets or disposal groups and related liabilities as held-for-sale when management having the appropriate authority, generally the Company's Board of Directors ("the Board") or certain Executive Officers, commit to a plan of sale, the disposal group is ready for ~~impairment whenever events or changes in circumstances indicate that~~immediate sale, an active program to locate a buyer has been initiated and the sale is probable and expected to be completed within one year. Once classified as held-for-sale, disposal groups are valued at the lower of their carrying amount ~~of an asset group may not be recoverable.~~

~~F-11~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Intangible Assets~~

~~Intangible assets are recorded at cost, less accumulated amortization and impairment losses, if any. Intangible assets acquired in a business combination are measured at~~or fair value at the acquisition date. Intangible assets that have indefinite useful lives are not subject to amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. Theless estimated ~~useful lives, residual values and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.~~

~~Intangible assets are amortized using the straight-line method over estimated useful lives as follows:~~


~~Licenses~~	~~15 years~~
~~Internal use software~~	3 to ~~5 years~~
~~Tradenames~~	2 to ~~10 years~~
~~Customer relationship~~	1 to ~~5 years~~
~~Non-compete~~	~~2 years~~
~~Trademarks~~	1 to ~~5 years~~

~~Impairment of long-lived assets~~

The Company reviews long-lived assets, including property and equipment and definite life intangible assets for impairment whenever events or changes in circumstances indicate that the carrying value of an asset may not be recoverable. An impairment loss is recognized when the sum of projected undiscounted cash flows is less than the carrying value of the asset group. The measurement of the impairment loss to be recognized is based on the difference between the fair value and the carrying value of the asset group.

~~Business combinations and goodwill~~

~~The Company accounts for business combinations using the acquisition method in accordance with Accounting Standards Codification ASC 805,~~ ~~Business Combinations~~ ~~which requires recognition of assets acquired and liabilities assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition.~~

Contingent consideration is measured at its acquisition-date fair value and included as part of the consideration transferred in a business combination. Contingent consideration that is classified as equity is not remeasured at subsequent reporting dates and its subsequent settlement is accounted for within equity. Contingent consideration that is classified as an asset or liability is remeasured at subsequent reporting dates,selling costs with the ~~corresponding~~ gain or loss on disposal recognized in the consolidated statements of ~~operations~~operations. Depreciation on these properties is discontinued at the time they are classified as held for sale, but operating revenues, operating expenses, and ~~comprehensive income.~~

Non-controlling interests in the acquiree are measured at fair value on acquisition date. Acquisition-related costs are recognized as expenses in the periods in which the costs are incurred and the services are received.

~~Loans acquired in business combinations are initially recorded at fair value, which includes an estimate of credit losses expected~~interest expense continues to be ~~realized over the remaining lives of the loans and, therefore,~~ no ~~corresponding allowance for loan losses is recorded for such loans at acquisition.~~

~~Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from~~recognized until the date of ~~acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined.~~

Goodwill represents the excess of the consideration transferred for the acquisition of subsidiaries over the net of the acquisition-date amounts of the identifiable assets acquired and the liabilities assumed. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

~~F-12~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

discount rates and terminal growth rates. Of the key assumptions used, the impact of the estimated fair value of the intangible assets have the greatest sensitivity to the estimated discount rate used in the valuation. The terminal growth rate represents the rate at which these businesses will continue to grow into perpetuity. Other significant assumptions include revenue, gross profit, operating expenses and anticipated capital expenditures which are based upon the Corporation’s historical operations along with management projections. The evaluations are linked closely to the assumptions made by management regarding the future performance of these assets and any changes in the discount rate applied.

~~Impairment of goodwill and indefinite-lived intangible assets~~

Goodwill is tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill may have been impaired. In order to determine that the value of goodwill may have been impaired, the Company performs a qualitative assessment to determine that it was more-likely-than-not if the reporting unit’s carrying value is less than the fair value, indicating the potential for goodwill impairment. A number of factors, including historical results, business plans, forecasts and market data are used to determine the fair value of the reporting unit. Changes in the conditions for these judgments and estimates can significantly affect the assessed value of goodwill.

~~The Company operates as~~ ~~one~~ operating segment and reporting unit and therefore, evaluates goodwill and other intangible assets with indefinite lives for impairment as one singular reporting unit annually during the fourth quarter or more often when an event occurs or circumstances indicate the carrying value may not be recoverable. The Company did no~~t identify any impairment of its goodwill during the years ended December 31, 2021, 2020, or 2019.~~

disposal.

~~Accounts Payable and Accrued Liabilities~~

Leases

~~Accounts payable and accrued liabilities consists of:~~

Year Ended December 31,

2021

2020

(in thousands)

Trade accounts payable
$
14,781

$
9,248

Accrued payroll

24,728

11,030

Accrued property and equipment

6,507

3,210

Accrued property and equipment - related party

11,353

10,403

Accrued inventory

8,373

1,415

Accrued insurance

6,620

86

Accrued interest

6,787

—

Accrued utilities

990

202

Sales tax payable

5,352

—

Other payables and accrued liabilities

8,582

5,605

Total accounts payable and accrued liabilities
$
94,073

$
41,199

~~F-13~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~Prepaid Expenses and Other Current Assets~~

~~Prepaid Expenses and Other Current Assets consists of:~~

Year Ended December 31,

2021

2020

(in thousands)

Prepaid insurance
$
10,175

$
2,713

Prepaid expenses

17,644

7,332

Tenant improvement receivables

9,806

1,317

Held for sale assets, net

8,719

—

Deposits

9,650

1,798

Other current assets

12,195

2,959

Total prepaids and other current assets
$
68,189

$
16,119

~~Leases~~

The Company enters into leases in the normal course of business, primarily for retail space, production facilities, corporate offices, and equipment used in the production and sale of its products. Lease terms for real estate generally range from five to ten years. Most leases include options to renew for varying terms at the Company’s sole discretion. Other leased assets include passenger vehicles, trucks, and equipment. Lease terms for these assets generally range from three to five years. At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company made an accounting policy election not to recognize right-of-use assets and lease liabilities for leases with a lease term of 12 months or less. Instead lease payments for these leases are recognized as lease expense on a straight-line basis over the lease term.

The Company recognizes a lease liability equal to the present value of the remaining lease payments, and a right-of-use asset equal to the lease liability, subject to certain adjustments, such as prepaid rents. The right-of-use asset represents the right to use an underlying asset for the lease term and lease liabilities represent the Company's obligation to make lease payments arising from the lease. The Company uses its incremental borrowing rate to determine the present value of the lease payments. The Company’s incremental borrowing rate is the rate of interest that it would have to borrow on a collateralized basis over a similar term an amount equal to the lease payments in a similar economic environment.

~~We have~~

Lease agreements for some locations provide for rent escalations and renewal options. Certain real estate leases require payment for taxes, insurance and maintenance which are considered non-lease components. The Company accounts for real estate leases and the related fixed non-lease components together as a single component. The Company has lease agreements that contain both lease and non-lease components. For lease agreements entered into or reassessed after the adoption of Accounting Standard’s Codification 842, Leases,~~, we have~~ the Company elected to combine lease and non-lease components for all classes of assets.

For finance leases, from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, the right-of-use asset is amortized on a straight-line basis and the interest expense is recognized on the lease liability using the effective interest method. For operating leases, lease expense is recognized on a straight-line basis over the term of the lease and presented as a single charge in the consolidated statements of ~~operations and comprehensive income.~~

operations.

The lease term at the lease commencement date is determined based on the noncancellable period for which the Company has the right to use the underlying asset, together with any periods covered by an option to extend the lease if the Company is reasonably certain to exercise that option, periods covered by an option to terminate the lease if the Company is reasonably certain not to exercise that option and periods covered by an option to extend (or not to terminate) the lease in which the exercise of the option is controlled by the lessor. The Company considers a number of factors when evaluating whether the options in its lease contracts are reasonably certain of exercise, such as length of time before an option exercise, expected value of the leased asset at the end of the initial lease term, importance of the lease to the Company's operations, costs to negotiate a new lease, any contractual or economic penalties, and the economic value of leasehold improvements.

F-15

Table of Contents

Certain lease arrangements contain provisions requiring the Company to remove lessee installed leasehold improvements at the expiration of the lease. As this obligation is a direct result of the Company's decision to install leasehold improvements and does not arise solely because of the lease the Company excludes these obligations from lease payments and variable lease payments. The Company records these obligations as asset retirement obligations. The fair ~~values~~value of these obligations are recorded as liabilities on a discounted basis, which occurs as of lease

~~F-14~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

commencement. In the estimation of fair value, the Company uses assumptions and judgements for an asset retirement obligation. The costs associated with these liabilities are capitalized with the associated leasehold improvement and depreciated over the lease term with the liabilities accreted over the same period. ~~Asset retirement obligations related to our leases were $~~

Failed sales-leasebacks (Construction financial liabilities)~~0.8~~ ~~million and~~ ~~zero~~ ~~as of December 31, 2021, and 2020, respectively, and are included in other long-term liabilities in the consolidated balance sheets.~~

~~Revenue Recognition~~

~~Revenue is recognized by~~When the Company ~~in accordance with ASU 2014-09,~~ ~~Revenue from Contracts with Customers~~ ~~(Topic 606). Through application~~enters into sale-leaseback transactions, an assessment is performed to determine whether a contract exists and whether there is a performance obligation to transfer control of the ~~standard, the Company recognizes revenue to depict~~asset when determining whether the transfer of ~~promised goods or services to~~an asset shall be accounted for as a sale of the ~~customer in an amount that reflects~~asset. If control is not transferred based on the ~~consideration to which~~nature of the transaction, and therefore does not meet the requirements for a sale under the sale-leaseback accounting model, the Company ~~expects~~is deemed to ~~be entitled~~own this real estate and reflects these properties on our consolidated balance sheets in ~~exchange for those goods or services.~~

~~In order~~property and equipment, net and depreciates them over the assets' useful lives. The liabilities associated with these leases are recorded to ~~recognize revenue under ASU 2014-09, the Company applies the following five (5) steps:~~

•

~~Identify a customer along with a corresponding contract;~~

•

~~Identify the performance obligation(s) in the contract to transfer goods or provide distinct services to a customer;~~

•

~~Determine the transaction price the Company expects to be entitled to in exchange for transferring promised goods or services to a customer;~~

•

~~Allocate the transaction price to the performance obligation(s) in the contract;~~construction finance liabilities - current portion and

•

~~Recognize revenue when or as the Company satisfies the performance obligation(s).~~

The Company’s contracts with customers for the sale of dried cannabis, cannabis oil and other cannabis related products consist of multiple performance obligations. Revenue from the direct sale of cannabis to customers for a fixed price is recognized when the Company transfers control of the goods to the customer at the point of sale and the customer has paid for the goods. The Company has a loyalty rewards program that allows customers to earn reward credits to be used on future purchases. Loyalty reward credits issued as part of a sales transaction results in revenue being deferred until the loyalty reward is redeemed by the customer. The loyalty rewards are shown as reductions to ‘revenue, net of discounts’ line on the accompanying consolidated statements of operations and comprehensive income and included as deferred revenue construction finance liabilities on the consolidated balance ~~sheet.~~

~~Contract~~sheets.

Intangible Assets

Intangible assets are ~~defined~~recorded at cost, less accumulated amortization and impairment losses, if any. Intangible assets acquired in business combinations are measured at fair value at the ~~standard to include amounts that represent the right to receive payment for goods and services~~acquisition date. Intangible assets that have ~~been transferred~~indefinite useful lives are not subject to ~~the customer~~amortization and are tested annually for impairment, or more frequently if events or changes in circumstances indicate that they might be impaired. The estimated useful lives, residual values, and amortization methods are reviewed at each year-end, and any changes in estimates are accounted for prospectively.

Internal Use Software

The Company capitalizes certain costs in connection with ~~rights conditional upon something other than the passage of time. Contract liabilities are defined in the standard to include amounts that reflect obligations to provide goods and services~~obtaining or developing software for ~~which payment has been received. There are~~ no ~~contract assets on unsatisfied performance obligations as of December 31, 2021, and 2020. For some of its locations,~~internal use. Further, the Company ~~offers a loyalty reward program to~~capitalizes qualifying costs incurred for upgrades and enhancements that result in additional functionality or extend the assets useful life. Amortization of such costs commences when the project is substantially completed and ready for its ~~dispensary customers. A portion of the revenue generated in a sale must be allocated to the loyalty points earned. The amount allocated to the points earned is deferred until the loyalty points~~intended use. Capitalized software development costs are ~~redeemed or expire. As of December 31, 2021, and 2020, the loyalty liability totaled $6.7~~ ~~million and $5.3~~ ~~million, respectively, that is included in deferred revenue~~classified as intangible assets, net on the consolidated balance sheets.

~~Income Taxes~~


Licenses			15 years
Internal use software			3 to 5 years
Tradenames			2 to 10 years
Customer relationship			1 to 5 years
Non-compete			2 years
Trademarks			1 to 5 years

F-16

Table of ~~management, it is more likely than not that some portion or all~~Contents

Accounts Payable and Accrued Liabilities

Accounts payable and accrued liabilities consisted of the ~~deferred tax assets will~~following as of December 31:


	2023		2022

	(in thousands)
Trade accounts payable	$	28,245	$	15,857
Nontrade accrued liabilities (1)	23,829		34,662
Accrued compensation and benefits	18,113		19,451
Non income taxes payable	7,061		5,747
Other	5,914		6,306
Total accounts payable and accrued liabilities	$	83,162	$	82,023

(1)Nontrade accrued liabilities includes recurring accruals for items including but not ~~be realized.~~

~~As the Company operates in the cannabis industry, it is subject to the limits of IRC Section 280E under which the Company is only allowed to deduct expenses directly related to costs of goods sold.~~

~~F-15~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The Company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon examination by the relevant taxing authority. An uncertain income tax position will be recognized if it has less than a 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Anylimited to: interest, utilities, and ~~penalties related to unrecognized tax liabilities are presented within income tax expense in the consolidated statements of operations and comprehensive income.~~insurance.

~~Non-controlling Interest~~

Non-controlling interests (“NCI”) represent equity interests owned by outside parties. NCI may be initially measured at fair value or at the NCI’s proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement is made on a transaction-by-transaction basis. The Company has elected to measure each NCI at its proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The share of net assets attributable to NCI are presented as a component of equity. NCI's share of net income or loss is recognized directly in equity. Total income or loss of subsidiaries is attributed to the shareholders of the Company and to the NCI, even if this results in the NCI having a deficit balance. See ~~Note 21. Variable Interest Entities~~.

Financial Instruments

The Company applies fair value accounting for all financial assets and liabilities that are recognized or disclosed at fair value in the consolidated financial statements on a recurring basis. Fair value is defined as the price that would be received from selling an asset or paid to transfer a liability in an orderly transaction between market participants at the measurement date. When determining the fair value measurements for assets and liabilities that are required to be recorded at fair value, the Company considers all related factors of the asset by market participants in which the Company would transact and the market-based risk measurements or assumptions that market participants would use in pricing the asset or liability, such as inherent risk, transfer restrictions, and credit risk.

~~Classification of financial instruments~~

Derivative Financial Instruments

The Company ~~applies~~utilizes interest rate swaps for the ~~following~~sole purpose of mitigating interest rate fluctuation risk associated with floating rate debt instruments. The Company does not use any other derivative financial instruments for trading or speculative purposes. In accordance with ASC 815, Derivatives and Hedging, derivative financial instruments are recognized as assets or liabilities on the consolidated balance sheets at fair value. The Company has not designated its interest rate swap ("Swap") contracts as hedges for accounting treatment. Pursuant to U.S. GAAP, income or loss from fair value ~~hierarchy, which prioritizes~~changes for derivatives that are not designated as hedges are reflected as income or loss within interest expense on the ~~inputs used to measure fair value into three levels,~~consolidated statements of operations and ~~bases~~a corresponding asset or liability is recognized on the ~~categorization within the hierarchy upon the lowest level of input that is available and significant to~~consolidated balance sheets based on the fair value ~~measurement:~~position as of each reporting date.


~~Level 1 –~~	~~Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;~~
~~Level 2 –~~	~~Inputs other than quoted prices in active markets, that are observable for the asset or liability, either directly or indirectly; and~~
~~Level 3 –~~	~~Unobservable inputs for which there is little or no market data requiring the Company to develop its own assumptions.~~

Warrants

Warrants are accounted for in accordance with applicable accounting guidance provided in ASC 815, Derivatives and Hedging – Contracts in Entity's Own Equity, as either liabilities or as equity instruments depending on the specific terms of the warrant agreement. Warrants classified as liabilities are recorded at fair value and are remeasured at each reporting date until settlement. Changes in fair value isare recognized as a component of other ~~(expense)~~ income, innet on the consolidated statements of operations ~~and comprehensive income~~ as change in fair value of derivative liabilities - warrants. Transaction costs allocated to warrants that are presented as a liability were immediately expensed inwithin the consolidated statements of ~~operations and comprehensive income.~~operations. Warrants classified as equity instruments are initially recognized at fair value and are not subsequently remeasured.

F-17

Table of Contents

Earnings per share

Basic earnings attributable to common shareholders is computed by dividing reported net income (loss) attributable to common shareholders by the weighted average number of common shares outstanding during the reporting period. Diluted earnings per share attributable to common shareholders is computed by dividing reported net income (loss) attributable to common shareholders by the sum of the weighted average number of common shares and the number of dilutive potential common share equivalents outstanding during the period. Potential dilutive common share

~~F-16~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

equivalents consist of the incremental common shares issuable upon the exercise of share options, warrants, and RSUs and the incremental shares issuable upon conversion of similar instruments.

In computing diluted earnings per share, common share equivalents are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. See

Note 17. Earnings Per Share.

~~Internal Use Software~~

Revenue Recognition

The Company ~~capitalizes certain costs~~generates revenue from the sale of cannabis and cannabis related products. Revenue is recognized in ~~connection~~accordance with ~~obtaining~~ASU 2014-09, Revenue from Contracts with Customers (Topic 606). Revenue is recognized when control of the promised goods or ~~developing software for internal use. Further,~~services is transferred to our customers, in an amount that reflects the transaction price consideration that the Company ~~capitalizes qualifying costs incurred~~expects to receive in exchange for ~~upgrades~~those goods or services. Our revenue excludes sales, use, and ~~enhancements that result in additional functionality or extend~~excise-based taxes collected and is reported net of sale discounts. Revenue associated with any unsatisfied performance obligation is deferred until the ~~assets useful life. Amortization~~obligation is satisfied (i.e., when control of ~~such costs commences~~a product is transferred to the customer).

Revenues are primarily derived from retail and wholesale sales, which are recognized when control of the goods has transferred to the customer and collectability is reasonably assured. This is generally when goods have been delivered, which is also when the ~~project~~performance obligation has been fulfilled under the terms of the related sales contract.

Revenue from retail sales of cannabis to customers for a fixed price is ~~substantially completed~~recognized when the Company transfers control of the goods to the customer at the point of sale and ~~ready~~the customer has accepted and paid for the goods. Revenue from the wholesale of cannabis to customers is recognized upon delivery to the customer. Payment is typically due upon transferring the goods to the customer or within a specified time period permitted under the Company’s credit policy. See Note 22. Revenue Disaggregation.

Deferred Revenue

For most of its ~~intended use. Capitalized software development costs~~locations, the Company offers a loyalty reward program to its dispensary customers that allows customers to earn reward credits to be used on future purchases. Loyalty reward credits issued as part of a sales transaction results in revenue being deferred until the loyalty reward is redeemed by the customer. The loyalty rewards are ~~classified~~recorded as ~~intangible assets, net~~reductions to revenue on the consolidated statements of operations and included as deferred revenue on the consolidated balance ~~sheets and are amortized using the straight-line method over the estimated useful life~~sheets. A portion of the ~~applicable software.~~revenue generated in a sale must be allocated to the loyalty points earned. The amount allocated to the points earned is deferred until the loyalty points are redeemed or expire. The loyalty reward points expire at the end of a six month period.

During the first quarter of 2023, the Company terminated the loyalty program associated with dispensaries acquired with the October 2021 acquisition of Harvest Health & Recreation, Inc. ("Harvest"). As a result of the termination of the loyalty program at certain dispensaries, the Company recorded a reduction in the accrual of $4.7 million in revenue on the consolidated statements of operations. The remaining reduction in deferred revenue during the year ended December 31, 2023 was primarily due to increased breakage in our remaining loyalty programs.

Cost of Goods Sold

Costs of goods sold include the costs directly attributable to the production of inventory and amounts incurred in the cultivation and manufacturing process of finished goods, such as flower, concentrates, and edibles, as well as packaging and other supplies, fees for services and processing, and allocated overhead which includes depreciation and amortization, allocations of rent, administrative salaries, utilities, and related costs.

F-18

Table of Contents

Income Taxes

The IRS has taken the position that cannabis companies are subject to the limits of IRC Section 280E under which they are only allowed to deduct expenses directly related to costs of goods sold. The Company has taken a position that it does not owe taxes attributable to the application of Section 280E of the Internal Revenue Code.

The Company recognizes benefits from uncertain tax positions based on the cumulative probability method whereby the largest benefit with a cumulative probability of greater than 50% is recorded. An uncertain tax position is not recognized if it has less than a 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Any interest and penalties related to unrecognized tax liabilities are presented within provision for income taxes within the consolidated statements of operations.

Advertising Costs

Advertising costs are expensed as incurred and are included in sales and marketing expenses inon the accompanying consolidated statements of operations and ~~comprehensive income and~~ totaled $~~7.5~~$12.1 million, $~~2.1~~$8.2 million, and $~~1.9~~$7.5 million for the years ended December 31, 2023, 2022, and 2021, ~~2020, and 2019,~~ respectively.

~~Held for sale~~

~~We classify long-lived assets or disposal groups and related liabilities as held-for-sale when management having~~Share Based Compensation

Stock Options

Share-based payment awards are based on the ~~appropriate authority, generally our Board~~estimated fair value of ~~Directors or certain of our Executive Officers, commits to a plan of sale,~~ the ~~disposal group is ready for immediate sale, an active program to locate a buyer has been initiated~~awards using the Black-Scholes option pricing model and the ~~sale~~related expense is ~~probable~~recognized using the graded-vesting method over the award term. The Company estimates expected volatility using the historical volatility of the Company. In cases where there is insufficient trading history, the expected volatility is estimated using the historical volatility of other companies that the Company considers comparable that have trading and volatility history prior to the Company becoming public. The expected life in years represents the period of time that options granted are expected to be ~~completed within one year. Once classified~~outstanding and is computed using the simplified method as ~~held-for-sale disposal groups are valued at~~ the ~~lower of their carrying amount or fair value less estimated selling costs. Depreciation~~Company has insufficient historical information regarding its stock options to provide a basis for an estimate. The risk-free rate was based on ~~these properties is discontinued~~the United States bond yield rate at the time of grant of the award. The expected annual rate of dividends is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future. The Company has elected to account for forfeitures as they occur.

Restricted Stock Units

Restricted stock units ("RSUs") represent a right to receive a single Subordinate Voting Share that is both non-transferable and forfeitable unless and until certain conditions are ~~classified as held for sale, but operating revenues, operating expenses and interest expense continue~~satisfied. RSUs generally vest ratably over a two-to-three-year period subject to ~~be recognized until~~continued employment through each anniversary. The fair value of the Company’s RSUs are determined based on the stock price on the date of ~~sale. As of December 31, 2021, the Company had $8.7~~ million in net assets held for sale which is recorded in prepaid expenses and other current assets in the consolidated balance sheets. The net assets held primarily consist of property and equipment, leases and related liabilities, and a note payable. There were no ~~assets or liabilities held for sale as of December 31, 2020.~~

~~Coronavirus Pandemic~~

In March 2020, the World Health Organization categorized coronavirus disease 2019 (together with its variants, “COVID-19”) as a global pandemic. COVID-19 continues to spread throughout the U.S. and other countries across the world,grant and the ~~duration~~related expense is recognized using the graded-vesting method over the award term.

Business combinations and ~~severity of its effects are currently unknown.~~ goodwill

The Company ~~continues to implement and evaluate actions to strengthen its financial position and support~~accounts for business combinations using the ~~continuity of its business and operations.~~acquisition method in accordance with Accounting Standards Codification ASC 805,

~~The Company’s consolidated financial statements presented herein reflect estimates and assumptions made by management that affect the reported amounts~~Business Combinations, which requires recognition of assets acquired and liabilities ~~and disclosure of~~assumed, including contingent assets and liabilities, at their respective fair values on the date of acquisition.

F-19

Table of Contents

Purchase price allocations may be preliminary and, during the measurement period not to exceed one year from the date of acquisition, changes in assumptions and estimates that result in adjustments to the fair value of assets acquired and liabilities assumed are recorded in the period the adjustments are determined.

Goodwill represents the excess of the consideration transferred for the acquisition of subsidiaries over the net of the acquisition-date amounts of ~~revenue~~the identifiable assets acquired and ~~expenses during~~ the ~~periods presented. While~~liabilities assumed. Following initial recognition, goodwill is measured at cost less any accumulated impairment losses.

Cannabis licenses are the ~~Company’s~~primary intangible asset acquired in business combinations as they provide the Company the ability to operate in each market. However, some cannabis licenses are subject to renewal and therefore there is some risk of non-renewal for several reasons, including operational, regulatory, legal, or economic. To appropriately consider the risk of non-renewal, the Company applies probability weighting to the expected future net cash flows in calculating the fair value of these intangible assets. The key assumptions used in these cash flow projections include discount rates and terminal growth rates. Of the key assumptions used, the impact of the estimated fair value of the intangible assets has the greatest sensitivity to the estimated discount rate used in the valuation. The terminal growth rate represents the rate at which these businesses will continue to grow into perpetuity. Other significant assumptions include revenue, gross profit, operating expenses, and ~~operating income were not impacted during 2021, it remains uncertain of how~~anticipated capital expenditures which are based upon the Corporation’s historical operations along with management projections. The evaluations are linked closely to the assumptions made by management regarding the future ~~spread~~performance of ~~COVID-19~~these assets and ~~applicable vaccine mandates~~any changes in the discount rate applied.

Non-controlling Interest

Non-controlling interests (“NCI”) represent equity interests in subsidiaries, including VIEs, owned by outside parties. NCI may be initially measured at fair value or ~~public health~~at the NCI’s proportionate share of the recognized amounts of the acquiree's identifiable net assets. The choice of measurement is made on a transaction-by-transaction basis. The Company measures each NCI at its proportionate share of the recognized amounts of the acquiree’s identifiable net assets. The share of net assets attributable to NCI is presented as a component of equity. NCI's share of net income or loss is recognized directly in equity. Total income or loss of subsidiaries is attributed to the shareholders of the Company and to the NCI, even if this results in the NCI having a deficit balance.

Impairment of long-lived assets

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Table of Contents

In accordance with ASC 360-10, when evaluating long-lived assets with impairment indicators for potential impairment, the Company first compares the carrying value of the asset to its estimated undiscounted cash flows. If the sum of the estimated undiscounted cash flows is less than the carrying value of the asset, an impairment loss is calculated. The impairment loss calculation compares the carrying value of the asset to its estimated fair value, which is typically based on estimated discounted future cash flows. The Company recognizes an impairment loss if the amount of the asset’s carrying value exceeds the asset’s estimated fair value.

During the first quarter of 2023, the Company determined that certain long-lived assets, including intangible assets, in Massachusetts were impaired due to the competitive environment in the Massachusetts cannabis industry. The Company utilized a cost approach for its impairment testing of intangibles and property and equipment resulting in an impairment of $30.3 million recorded on the consolidated statements of operations, of which $27.6 million was for ~~reasons including~~discontinued operations and recorded in net loss from discontinued operations, net of tax benefit, and $2.7 million was for continuing operations and recorded in impairment and disposal of long-lived assets, net. The cost approach is based on market comparable data for replacement, adjusted for local variations, inflation, and other factors.

During the remaining nine-month period for the year ended December 31, 2023, the Company did not identify any events or changes in circumstances providing indication of impairment.

Impairment of goodwill

Goodwill represents the excess of the cost of an acquisition over the fair value of the net assets acquired. Goodwill is tested for impairment annually and whenever events or changes in circumstances indicate that the carrying amount of goodwill may be impaired. Examples of such events and circumstances that the company considers include the following:

•Macroeconomic conditions such as deterioration in general economic conditions, limitations on accessing capital, fluctuations in foreign exchange rates, or other developments in equity and credit markets;

•Industry and market considerations such as a deterioration in the environment in which the company operates, an increased competitive environment, a decline in market-dependent multiples or metrics (considered in both absolute terms and relative to peers), a change in the market for the company's products or services, or a regulatory or political development;

•Cost factors such as increases in inventory, labor, or other costs that have a negative effect on earnings and cash flows;

•Overall financial performance such as negative or declining cash flows or a decline in actual or planned revenue or earnings compared with actual and projected results of relevant prior periods;

•Other relevant entity-specific events such as changes in management, key personnel, strategy, or customers, contemplation of bankruptcy, or litigation;

•Events affecting a reporting unit such as a change in the composition or carrying amount of its net assets, a more likely than not expectation of selling or disposing all, or a portion, of a reporting unit, the testing for recoverability of a significant asset group within a reporting unit, or recognition of a goodwill impairment loss in the financial statements of a subsidiary that is a component of a reporting unit; and

•A sustained decrease in share price (considered in both absolute terms and relative to peers).

In order to determine that the value of goodwill may have been impaired, the Company applies the guidance in FASB ASU 2011-08, Intangibles-Goodwill and Other-Testing Goodwill for Impairment, which provides entities with an option to perform a qualitative assessment (commonly referred to as “Step Zero”) to determine whether further quantitative analysis for impairment of goodwill is necessary. The Company performs the Step Zero assessment to determine that it was more-likely-than-not if the reporting unit’s carrying value is less than the fair value, indicating the potential ~~quarantine~~for goodwill impairment. A number of factors, including historical results, business plans, forecasts, market data, and a reasonable control premium are used to determine the fair value of the reporting unit. Changes in the conditions for these judgments and estimates can significantly affect the assessed value of goodwill.

The Company operates as one operating segment and reporting unit and therefore, evaluates goodwill for impairment as one singular reporting unit annually during the fourth quarter or more often when an event occurs, or circumstances indicate the carrying value may not be recoverable.

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During the three months ended June 30, 2023, the Company identified one event included in the list above as a risk indicator for goodwill impairment, which was a decline in the Company's share price negatively affecting the Company's market capitalization. The Company concluded the decline in stock price was a triggering event to perform an interim quantitative goodwill impairment test, as of June 30, 2023, specific to the stock price decline and resulting market capitalization of the Company. As the sole risk to the value of goodwill was the stock price, the Company concluded it most appropriate to apply a market approach. The results of the Company’s ~~employees~~interim test for impairment as of June 30, 2023, utilizing a market approach, indicated that the reporting unit's fair value fell below the carrying value. Based on the results of the goodwill impairment procedures, the Company recorded a $307.6 million goodwill impairment for the single reporting unit in the second quarter of 2023.

When the Company employs the market approach in its goodwill impairment testing, the Company estimates the fair value based upon multiples of comparable public companies. Significant estimates in the market approach include identifying similar companies with comparable business factors such as size, growth, profitability, risk and return on investment, as well as assessing comparable market multiples in estimating the fair value of the reporting unit.

For the Company's 2023 annual impairment test, the Company performed a Step Zero assessment reviewing the factors listed above, including but not limited to historical results, business plans, forecasts, market data, and a reasonable control premium.

Other than the event that existed and was isolated to the three months ending June 30, 2023 as outlined above, as of December 31, 2023, the Company did not identify any events or ~~those~~changes in circumstances that would indicate the carrying amount of goodwill may be impaired. The Company did not identify any impairment of its ~~supply chain partners.~~

goodwill during the years ended December 31, 2022 or 2021.

Discontinued Operations

The Company classifies a component of an entity that has been or is to be disposed of, either by sale, abandonment, or other means, as discontinued operations when it represents a strategic shift in the Company's operations. A component of an entity is identified as operations and cash flows that can be clearly distinguished, operationally and financially, from the rest of the entity.

Critical ~~accounting estimates~~Accounting Estimates and ~~judgments~~

Judgments

The preparation of consolidated financial statements in conformity with U.S. GAAP requires management to make estimates and assumptions that affect the amounts reported in the consolidated financial statements and accompanying notes. Significant estimates in our consolidated financial statements, include, but are not limited to, inventory; accounting for acquisitions and business combinations; income taxes; initial valuation and subsequent impairment testing of goodwill, other intangible assets and ~~long lived~~long-lived assets; ~~leases;~~ fair value of financial ~~instruments, income taxes; inventory;~~instruments; share-based payment ~~arrangements,~~arrangements; and ~~commitment~~commitments and contingencies. Actual results may differ from these estimates. Estimates and underlying assumptions are reviewed on an ongoing basis.

~~F-17~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Recently Issued Accounting Pronouncements

Recent accounting pronouncements, other than those below, issued by the FASB ~~the AICPA and the SEC~~ did not or are not believed by management to have a material effect on the Company’s present or future financial ~~statements.~~statements or disclosures.

ASU 2023-07

In ~~June 2016,~~November 2023, the ~~FASB~~Financial Accounting Standards Board (“FASB”) issued Accounting Standards Update ("ASU") 2023-07, Improvements to Reportable Segment Disclosures (Topic 280). This ASU ~~2016-13, Financial Instruments - Credit Losses (Topic 326): Measurement~~updates reportable segment disclosure requirements by requiring disclosures of ~~Credit Losses on Financial Instruments.~~significant reportable segment expenses that are regularly provided to the Chief Operating Decision Maker (“CODM”) and included within each reported measure of a segment's profit or loss. This ASU ~~2016-13~~also requires disclosure of the ~~measurement~~title and position of ~~current expected credit losses for financial assets held at~~ the ~~reporting date based on historical experience, current conditions,~~individual identified as the CODM and ~~reasonable~~an explanation of how the CODM uses the reported measures of a segment’s profit or loss in assessing segment performance and ~~supportable forecasts. Adoption of~~deciding how to allocate resources. The ASU 2016-13 will require financial institutions and other organizations to use forward-looking information to better formulate their credit loss estimates. In addition, the ASU amends the accounting for credit losses on available for sale debt securities and purchased financial assets with credit deterioration. This update is effective for annual periods beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, ~~2019, including interim periods within those fiscal years. The Company~~ 2024. Early adoption is also permitted. This ASU will result in additional required disclosures when adopted, where applicable.

F-22

Table of Contents

ASU ~~2016-13 on~~ 2023-09~~January 1, 2020, and adoption did~~ no~~t have a material impact on the Company’s consolidated financial statements.~~

In ~~August 2018,~~December 2023, the FASB issued ASU ~~2018-13, Disclosure Framework - Changes~~2023-09, Improvements to ~~the Disclosure Requirements for Fair Value Measurement~~Income Tax Disclosures (Topic ~~820)~~740). The ASU ~~2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements.~~requires disaggregated information about a reporting entity’s effective tax rate reconciliation as well as additional information on income taxes paid. The ASU ~~2018-13~~ is effective on a prospective basis for annual ~~and interim~~ periods beginning after December 15, ~~2019.~~2024. Early adoption is ~~permitted. The Company~~also permitted for annual financial statements that have not yet been issued or made available for issuance. Once adopted, this ASU ~~2018-13 on~~ ~~January 1, 2020, and the adoption did~~ no~~t have a material impact on the Company’s consolidated financial statements.~~

In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740) - Simplifying the Accounting for Income Taxes, which is intended to simplify various aspects related to accounting for income taxes. ASU 2019-12 removes certain exceptions to the general principleswill result in ~~Topic 740 and also clarifies and amends existing guidance to improve consistent application. ASU 2019-12 is effective for the Company beginning January 1, 2021. The Company~~ additional disclosures.
~~adopted~~ ~~ASU 2016-13 on~~ ~~January 1, 2021, and adoption did~~ ~~not~~ ~~have a material impact on the Company’s consolidated financial statements.~~

~~In October 2021, the Company acquired a note receivable with the Harvest acquisition. The note receivable is originally dated November 2020 maturing in~~ ~~November 2025. The note had an original principal balance of $12.0~~ ~~million~~31, 2023 and ~~accrues interest at a rate of~~ ~~7.5% per annum with monthly interest and principal payments of $0.1~~ ~~million.~~

~~In October 2021, the Company acquired~~2022, respectively, which are reported as notes receivable ~~with~~- current portion and notes receivable, net on the ~~Harvest acquisition.~~Company's consolidated balance sheets. The notes receivable are ~~originally dated February 2021 maturing in~~ ~~February~~secured by certain assets. The weighted average effective interest rates were 8.05% and 8.31% as of December 31, 2023 and 2022,~~. The notes had an original principal balance of $0.9~~ ~~million and accrue interest at a rate of~~ 10~~% per annum with interest only payments due monthly. This note was repaid in full subsequent to year end and the Company received proceeds of $0.9~~ ~~million in February 2022.~~

~~As part of the acquisition of Harvest, we acquired $9.8~~ ~~million in notes receivable on October 1, 2021. There were~~ no ~~notes receivable outstanding prior to October 1, 2021.~~

~~See~~ ~~Note 3. Acquisitions~~ ~~for further details of the Harvest acquisition.~~

~~In November 2021, the Company entered into a convertible note receivable agreement for a principal amount of $4.1~~ ~~million that matures in~~ ~~November 2024. The note accrues interest monthly at~~ ~~9.75~~%, and accrued interest is added to the principal balance at each quarter end. The note is convertible to equity of the holder at our option at any time prior to maturity. Further, the note was issued at a discount of 3~~% or $0.1~~ ~~million, which is accreted to the note receivable balance over the term of the note.~~

respectively.

During the ~~year~~years ended December 31, 2023, 2022, and 2021, the Company recorded interest income of $~~0.2~~$1.2 million, $1.3 million, and $0.2 million, respectively, in ~~other~~interest income on the consolidated statements of ~~operations and comprehensive income.~~operations. The Company had accrued interest receivable of $~~0.1~~$0.1 million and $0.1 million as of December 31, ~~2021~~2023 and 2022, respectively, in ~~prepaids and~~ other current assets on the consolidated balance sheets. ~~The Company had~~ no ~~notes receivable outstanding as of December 31, 2020.~~

~~For the years ended December 31, 2021, 2020, and 2019, the Company capitalized interest of $9.2~~ ~~million, $4.8~~ ~~million, and $0.5~~ ~~million, respectively. For the years ended December 31, 2021, 2020, and 2019, the Company incurred depreciation expense of $34.8~~ ~~million, $21.1~~ ~~million, and $9.3~~ ~~million, respectively.~~

~~During~~for the year ended December ~~31, 2021, the Company recorded a loss on the disposal of property and equipment of $~~31:

~~NOTE 10. NOTES PAYABLE~~

~~As of December 31, 2021, and 2020,notes payable consisted of the following:~~

2021

2020

(in thousands)

Promissory notes dated April to July 2017, maturing between April and July 2022. Monthly interest payments due at 12% per annum. Principal balance due at maturity. The note was fully paid in the fourth quarter of 2021.
$
—

$
4,000

Promissory note dated December 2017, maturing in December 2021. Monthly interest payments due at 12% per annum. Secured by property. Principal balance due at maturity. The note was fully paid in the fourth quarter of 2021.

—

2,000

Promissory notes dated October 1, 2021, maturing in October 2022. Monthly interest payments due of 4.75%. Secured by mortgaged property with a $6 million book value.

6,156

—

Promissory note dated October 2019, maturing in October 2024. Monthly interest payments due of 5.5%. Principal balance due at maturity.

829

—

Promissory note acquired in Harvest acquisition dated August 2018, maturing in August 2024. Monthly interest payments due of 2%. Secured by certain assets.

1,022

—

Promissory note acquired in Harvest acquisition dated January 2020, maturing in May 2023. Quarterly interest payments due of 2%.

425

—

Promissory note acquired in Harvest acquisition dated January 2020, maturing in January 2023. Monthly interest payments due at 2%.

65

—

Promissory note dated July 2018, maturing in July 2023. Monthly interest payments due at 4% per annum. Secured by certain assets.

1,113

—

Promissory note acquired in Harvest acquisition dated February 2020, maturing in February 2023. Monthly interest payments due at 5.5%.

4,699

—

Promissory note acquired in Harvest acquisition dated April 2021, maturing in April 2026. Principal due at maturity. Secured by equipment.

60

—

Promissory notes of consolidated variable-interest entities acquired in Harvest Acquisition. Maturing December 2022 and 2029, interest ranging from 5.25% to 8.25%. Secured by real-estate. In the first quarter of 2022 these notes were fully paid.

2,231

—

Total notes payable

16,600

6,000

Current portion

(10,144
)

(2,000
)
Less: debt discount, current

92

—

Less: Current portion, net

(10,052
)

(2,000
)
Notes payable
$
6,456

$
4,000

(in thousands)
As of December 31, 2021 $ 765,358
Acquisition of Watkins Cultivation Operations 24,542
Measurement period adjustment of Harvest Health and Recreation, Inc. 1,595
As of December 31, 2022 $ 791,495
Impairment June 2023 (1)
(307,590)
As of December 31, 2023 $ 483,905

(1) See Note 3. Summary Of Significant Accounting Policies for further details.

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Table of Contents

NOTE 10. HELD FOR SALE

Held for sale assets primarily consist of property and equipment and are recorded in other current assets on the consolidated balance sheets. The following table shows the activity of the Company's assets held for sale:


	(in thousands)
Held for sale assets, net as of December 31, 2022	$	14,521
Assets moved to held for sale	18,694
Non-cash settlement	(2,481)
Impairments	(2,810)
Assets sold	(12,344)
Held for sale assets, net as of December 31, 2023	$	15,580

Held for sale liabilities as of December 31, 2022	$	—
Liabilities moved to held for sale	(1,997)
Liabilities settled associated with held for sale assets	1,997
Held for sale liabilities as of December 31, 2023	$	—

During the years ended December 31, 2023, 2022, and 2021, the Company recorded a loss on the impairment and disposal of held for sale assets of $3.8 million, $8.6 million, and zero, respectively, which is recorded to impairment and disposal of long-lived assets, net on the consolidated statements of operations.

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Table of Contents

NOTE 11. NOTES PAYABLE

Notes payable consisted of the following as of December 31:


	2023		2022		Stated Interest Rate		Effective Interest Rate	Maturity Date	Net Book Value of Collateral

	(in thousands)
Mortgage Notes Payable
Notes dated December 21, 2022 (1)	$	70,046	$	71,500	7.53%	(7)	7.86%	1/1/2028	$	166,932
Notes dated December 22, 2023 (2)	25,000		—		8.31%	(7)	8.48%	12/31/2028	59,677
Notes dated December 22, 2022 (3)	18,470		18,900		7.30%	(7)	7.38%	12/22/2032	9,017
Notes dated October 1, 2021 (4)	5,645		6,095		8.14%	(7)	8.29%	10/1/2027	11,860
Total mortgage notes payable	119,161		96,495
Promissory Notes Payable
Notes dated December 22, 2022 (5)	—		5,500		10.00%	(7)	10.00%	12/22/2023
Notes acquired in Harvest Acquisition in October 2021 (6)	1,707		5,338		(6)	(7)	(6)	(6)
Note of consolidated variable-interest entity dated February 1, 2022	885		1,200		8.00%	(7)	8.00%	12/31/2025
Total promissory notes payable	2,592		12,038
Total notes payable	121,753		108,533
Less: debt discount	(2,139)		(1,833)
Less: current portion of notes payable	(3,759)		(12,453)
Notes payable, net	$	115,855	$	94,247

(1)In connection with the closing of these four notes, the Company entered into an interest rate swap to fix the interest rate at 7.53% for the term of the notes. See Note 24. Financial Instruments for further details. These promissory notes contain customary restrictive covenants pertaining to our management and operations, including, among other things, limitations on the amount of debt that may be incurred and the ability to pledge assets, among other things, as well as financial covenant requirements, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements, debt service coverage ratio, and liquidity covenant test. The covenants commenced on September 30, 2023 with semi-annual measurement, except for certain covenants which were measured starting as of December 31, 2022. In May 2023, the Company amended the terms of the agreement with respect to the covenant requirements, excluding balloon payments from certain covenant calculations.

(2)This mortgage note payable contains customary restrictive covenants pertaining to our management and operations, including, among other things, limitations on the amount of debt that may be incurred and the ability to pledge assets, among other things, as well as financial covenant requirements, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements, debt service coverage ratio, and liquidity covenant test. The covenants commence on June 30, 2024 with quarterly or semi-annual measurement, except for certain covenants which were measured starting as of December 31, 2023.

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Table of Contents

(3)This mortgage note payable bears stated interest rate until December 21, 2027 and thereafter, interest will accrue at a rate equal to the five-year treasury rate in effect as of December 12, 2027 plus 3.50%. The promissory note contains customary restrictive covenants pertaining to our operations, including, among other things, limitations on the amount of debt and subsidiary debt that may be incurred and the ability to pledge assets, as well as financial covenant requirements, among other things, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements, covenant to liquidity and debt principal test, and a global debt service coverage ratio.

(4)On November 15, 2022, the Company closed on the refinancing of our mortgage notes payable dated October 1, 2021 to extend the maturity date by five years and fix the interest rate at 8.14%. In the first quarter of 2023, the Company reclassified the collateralized assets to held for sale as part of its continued efforts to optimize assets and resources in the markets the Company serves. The Company expects to sell the assets, which primarily consist of property and equipment, within the near-term.

(5)Promissory note is secured by the acquired membership interest in Formula 420 Cannabis LLC. See Note 4. Acquisitions for further details.

(6)Seven promissory notes were acquired during the year ending December 31, 2021. Interest rates range from 0.00% to 7.50%, with a weighted average interest rate of 6.60% as of December 31, 2023. Maturity dates range from October 4, 2024 to October 24, 2026.

(7)Interest payments are due monthly.

Interest expense incurred on notes payable is recorded to interest expense, net on the consolidated statements of operations. Interest expense was $8.4 million, $1.0 million, and $1.9 million for the years ended December 31, 2023, 2022, and 2021, respectively, and included accretion expense of $0.3 million, $0.1 million, and $0.1 million, for the years ended December 31, 2023, 2022, and 2021, respectively.

The Company's notes payable described above are subordinated to the private placement notes. See Note 12. Private Placement Notes for further details.

As of December 31, 2023, stated maturities of notes payables are as follows:

Year Ending December 31,

(in thousands)

2022

$
10,144

2023

4,711

2024

665

2025

14

2026

5

Thereafter

1,061

Total

$
16,600


Year Ending December 31,	(in thousands)
2024	$	3,751
2025	4,331
2026	4,655
2027	70,034
2028	23,199
Thereafter	15,783
Total	$	121,753

~~NOTE 11. NOTES PAYABLE RELATED PARTY~~

~~In February 2019, the Company entered into a~~ ~~24-month~~ ~~unsecured loan with an~~ 8~~% annual interest rate with Benjamin Atkins, a former director and shareholder for $0.3~~ ~~million. The loan was issued in March 2019. The Company~~

~~F-31~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~determined that the stated interest rate was below market rates and recorded an insignificant debt discount using an annual discount interest rate of~~ 12%.

~~In May 2018, the Company entered into~~ ~~two~~ ~~separate unsecured promissory notes (the “Traunch Four Note” and the “Rivers Note”) for a total of $12.0~~ million. The Traunch Four Note is held by Traunch Four, LLC, an entity whose direct and indirect owners include Kim Rivers, the Chief Executive Officer and Chair of the Board, as well as Thad Beshears, Richard May, George Hackney, all of whom are directors or former directors of Trulieve, and certain of Richard May’s family members. The Rivers Note is held by Kim Rivers. Each promissory note has a 24-month maturity and 12~~% annual interest rate. The two unsecured promissory notes were amended in December 2019 to extend the maturity~~ ~~one year~~ to ~~May 2021. The two unsecured promissory notes were further amended in May 2021 to extend the maturity date to~~ ~~November 2021~~.

~~As of December 31, 2020, the Company had outstanding current notes payable due to related parties of $12.0~~ ~~million. During the year end December 31, 2021, all outstanding related party notes were fully paid with~~ ~~zero~~ ~~balance outstanding as of December 31, 2021. During the years ended December 31, 2021, 2020, and 2019, the Company incurred interest expense on related party debt of $1.1~~ ~~million, $1.6~~ ~~million, and $1.7~~ ~~million, respectively.~~

NOTE 12. PRIVATE PLACEMENT NOTES

~~2024~~

June and November Notes

~~On June 18,~~

In 2019, the Company completed atwo private placement ~~financing comprising~~ notes (the “June Notes" and the “November Notes”), each comprised of 5-year senior secured promissory notes ~~(the “June Notes”)~~ with a face value of $~~70.0~~ ~~million.~~$70.0 million and $60.0 million, respectively. The ~~June Notes accrue interest at an annual rate of~~ ~~9.75~~%, ~~payable semi-annually, in equal installments, in arrears in June and December of each year, commencing in December 2019. The holders~~purchasers of the June Notes ~~also~~ received warrants to purchase 1,470,000 Subordinate Voting Shares at ~~an exercise~~a price of $~~13.47~~ ~~(the “June Warrants”~~$13.47 ("June Warrants") and the purchasers of the November Notes received warrants to purchase 1,560,000 Subordinate Voting Shares at a price of $980 per Unit, with each unit consisting of one Note issued in Denominations of $1,000 and 26 warrants ("November Warrants"), which can be exercised for approximately three years after closing (collectively the ~~closing.~~

"Public Warrants"). The ~~fair value~~remaining outstanding Public Warrants expired in June 2022.

F-37

Table of ~~the June Notes was determined to be $~~Contents

~~63.9~~
~~million using an effective interest rate of~~ ~~13.32%, which the Company estimates would have been the coupon rate required to issue the notes had the financing not included the June Warrants. The fair value of the June Warrants was determined to be $4.7~~ ~~million using the Black-Scholes option pricing model and the following assumptions: Share Price: C$14.48; Exercise Price: C$17.25; Expected Life:~~ ~~three years; Annualized Volatility:~~ ~~49.96%; Dividend yield:~~ 0~~%; Discount Rate:~~ ~~1.92%; C$ Exchange Rate:~~ ~~1.34. Issuance costs totaling $3.1~~ ~~million were allocated between the June Notes and the June Warrants based on their relative fair values with $2.9~~ ~~million allocated to the June Notes and $0.2~~ ~~million expensed as incurred.~~

~~The June Notes will accrete from their carrying value on June 18, 2019, of $61.0~~ ~~million to $70.0~~ ~~million at maturity in~~ ~~five years~~ ~~using an effective interest rate of~~ ~~13.32%. For the years ended~~

On December ~~31, 2021, 2020, and 2019 accretion expense of $1.7~~ ~~million, $1.5~~ ~~million and $0.7~~ ~~million respectively, was included in interest expense in the consolidated statements of operations and comprehensive income.~~

~~On November 7, 2019,~~1, 2023, the Company completed ~~a prospectus offering~~an early redemption of our private placement of ~~60,000~~ ~~units~~notes, both of the "June Notes" and the "November Notes", with a cash payment of $130.0 million, excluding accrued interest, which represented a redemption price of 100% of the principal amounts outstanding for both "Notes". The Company ~~(the “November Units”), comprised~~recorded a loss on extinguishment of ~~an aggregate principal~~$2.4 million representing the difference between the reacquisition price and the net carrying amount of $~~60.0~~ ~~million~~the debt as of ~~9.75% senior secured notes of the Company maturing in~~ ~~2024~~ ~~(the “November Notes”) and an aggregate amount of~~ ~~1,560,000~~ ~~Subordinate Voting Share warrants of the Company (each individual warrant being a “November Warrant”) at a price of $980~~ ~~per Unit for gross proceeds of $61.1~~ ~~million. Each Unit was comprised of~~ ~~one~~ ~~Note issued in denominations of $1,000~~ ~~and~~ 26 ~~Warrants.~~

~~The fair value of the November Notes was determined to be $54.5~~ ~~million using an effective interest rate of~~ ~~13.43~~%, which the Company estimates would have been the coupon rate required to issue the notes had the financing not included the November Warrants. The fair value of the November Warrants was determined to be $~~4.4~~ ~~million using the Black-Scholes option pricing model and the following assumptions: Share Price: C$14.29; Exercise Price: C$17.25; Expected Life:~~ ~~2.6~~ ~~years; Annualized Volatility:~~ ~~48.57%; Dividend yield:~~ 0~~%; Discount Rate:~~ ~~1.92%; C$ Exchange Rate:~~ ~~1.32. Issuance costs totaling $2.1~~ ~~million were allocated between the November Notes and the November Warrants based on their relative fair values with $2.0~~ ~~million allocated to the November Notes and $0.2~~ ~~million expensed in the consolidated statements of operations and comprehensive income.~~

~~F-32~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~The November Notes will accrete from their carrying value on November 7, 2019, of $52.5~~ ~~million to $60.0~~ ~~million at maturity in~~ ~~4.6~~ ~~years using an effective interest rate of~~ ~~13.43%. For the years ended December 31, 2021, 2020 and 2019, the Company incurred accretion expense of $1.5~~ ~~million, $1.3~~ ~~million, and $0.1~~ ~~million which is included in interest expense in the consolidated statements of operations and comprehensive income.~~

Because of the Canadian denominated exercise price, the June Warrants and November Warrants did not qualify to be classified within equity and were therefore classified as derivative liabilities at fair value with changes in fair value charged or credited to earnings in the consolidated statements of operations and comprehensive income prior to December 10, 2020.

On December 10, 2020, the Company entered into a Supplemental Warrant Indenture with Odyssey Trust Company pursuant to which it amended the terms of the June Warrants and November Warrants (the “Public Warrants”) to convert the exercise price of the Public Warrants to $~~13.47~~ ~~per share, the U.S. dollar equivalent of the Canadian dollar exercise price of the Public Warrants of C$17.25~~ ~~at the date of closing. As of December 10, 2020, the June Warrants converted to equity as per ASC 815-40, at a fair value of $25.5~~ ~~million and the November Warrants converted at a fair value of $27.1~~ ~~million, which is included in additional paid-in-capital on the consolidated statements of changes in shareholders' equity.~~

extinguishment.

2026 Notes

On October 6, 2021, the Company closed its private placement of 8% Senior Secured Notes (the "2026 ~~Notes"~~Notes - Tranche One") for aggregate gross proceeds of $~~350.0~~$350.0 million and net proceeds of $~~342.6~~$342.6 million. The ~~2026~~Company used a portion of the net proceeds to repay certain outstanding acquired indebtedness and used the remaining net proceeds for capital expenditures and other general corporate purposes. On January 28, 2022, the Company closed on a second tranche private placement of 8% Senior Secured Notes ~~were issued at~~ ~~100% face value, bear an interest rate~~(the "2026 Notes - Tranche Two") for aggregate gross proceeds of 8~~% per annum~~ ~~payable semi-annually in equal installments until~~$76.9 million and net proceeds of $75.6 million. The Company used the ~~maturity date, unless earlier redeemed or repurchased~~.net proceeds for capital expenditures and other general corporate purposes. The ~~2026 Notes mature on~~ ~~October 6, 2026, and~~notes may be redeemed in whole or in part, at the Company's option, at any time, on or after October 6, 2023, at the ~~application~~applicable redemption ~~price set forth~~price. These notes are collectively referred to as the "2026 Notes".

During the third quarter of 2023, the Company made an open market repurchase of its private placement notes, "2026 Notes - Tranche One", that resulted in the ~~Indenture. The~~extinguishment of $57.0 million in principal at a discount of 16.5%. Cash consideration paid to repurchase the principal amount outstanding, excluding accrued interest, totaled $47.6 million, and the Company ~~used~~recognized a ~~portion~~gain of $8.2 million on the extinguishment of debt.

Private placementnotes payable consisted of the following as of December 31:


	2023		2022		Stated Interest Rate	Effective Interest Rate	Maturity Date

	(in thousands)
2026 Notes - Tranche One	$	293,000	$	350,000	8.00%	8.52%	10/6/2026
2026 Notes - Tranche Two	75,000		75,000		8.00%	8.43%	10/6/2026
June Notes	—		70,000		9.75%	13.32%	6/11/2024
November Notes	—		60,000		9.75%	13.43%	6/11/2024
Total private placement notes	368,000		555,000
Less: Unamortized debt discount and issuance costs	(4,785)		(13,336)
Less: current portion of private placement notes, net	—		—
Private placement notes, net	$	363,215	$	541,664

The fair value of the private placement notes was $310.5 million as of December 31, 2023.

The private placement notes contain customary restrictive covenants pertaining to our management and operations, including, among other things, limitations on the amount of debt that may be incurred and the ability to pledge assets, as well as financial covenant requirements, that the Company comply with certain indebtedness to consolidated EBITDA (as defined) requirements and a fixed charge ratio coverage, measured from time to time when certain conditions are met.

Interest expense incurred on private placement notes is recorded to interest expense, net ~~proceeds to redeem certain outstanding indebtedness~~on the consolidated statements of ~~Harvest~~operations. Interest expense was $49.7 million, $52.0 million, and ~~intends to use~~$22.2 million for the ~~remaining net proceeds for capital expenditures and other general corporate purposes. For the year~~years ended December 31, 2023, 2022, and 2021, ~~the Company incurred~~respectively, and included accretion expense of $~~0.3~~ ~~million.~~

~~Scheduled annual~~$5.3 million, $5.2 million, and $3.5 million for the years ended December 31, 2023, 2022, and 2021, respectively.

Stated maturities of the principal portion of private placement notes outstanding as of December 31, ~~2021,~~2023 are as follows:

Year Ending December 31,
(in thousands)

2022
$
—

2023

—

2024

130,000

2025

—

2026

350,000

Thereafter

—

Total private placement notes

480,000

Less: Unamortized debt issuance costs

(17,071
)
Private placement notes, net
$
462,929

F-38

Table of Contents


Year	(in thousands)


2026	368,000



Total private placement notes	$	368,000

NOTE 13. LEASES

~~The Company leases real estate used for dispensaries, production plants, and corporate offices. Lease terms for real estate generally range from~~ ~~five~~ to ~~ten years~~. Most leases include options to renew for varying terms at the Company’s sole discretion. Other leased assets include passenger vehicles, trucks, and equipment. Lease terms for these assets generally range from ~~three~~ to ~~five years. Lease right-of-use assets and liabilities are recognized based on the present value of future minimum lease payments over the lease term at commencement date.~~

Leases with an initial term of 12 months or less are not recorded on the balance sheet. Lease agreements for some locations provide for rent escalations and renewal options. Certain real estate leases require payment for taxes, insurance and maintenance which are considered non-lease components. The Company accounts for real estate leases and the related fixed non-lease components together as a single component.

~~F-33~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The following table provides the components of lease cost ~~recognized~~for the year ended December 31:


	Location on the consolidated statements of operations	2023		2022		2021

		(in thousands)
Operating lease cost	Cost of goods sold, sales and marketing, general and administrative	$	20,291	$	20,428	$	10,754
Finance lease cost:
Amortization of lease assets	Cost of goods sold, Deprecation and amortization	10,357		10,935		7,638
Interest on lease liabilities	Interest expense	6,449		6,549		4,385
Finance lease cost		16,806		17,484		12,023
Variable lease cost	Cost of goods sold, sales and marketing, general and administrative	9,766		7,887		6,013
Short term lease expense	Cost of goods sold, sales and marketing, general and administrative	406		751		334
Total lease cost (1)		$	47,269	$	46,550	$	29,124

(1) Total lease cost recorded in cost of goods sold on the consolidated statements of operations was $3.2 million, $4.0 million, and ~~comprehensive income~~$3.6 million for the ~~year~~years ended December 31, 2023, 2022, and 2021, ~~2020, and 2019.~~

Year Ended December 31,

Statement of operations and comprehensive income location

2021

2020

2019

(in thousands)

Operating lease cost
Cost of goods sold, sales and marketing, general and administrative

$
11,574

$
5,700

$
5,542

Finance lease cost:

Amortization of lease assets
Cost of goods sold, sales and marketing, general and administrative

7,866

4,956

1,984

Interest on lease liabilities
Interest expense

4,574

2,133

960

Finance lease cost

12,440

7,089

2,944

Variable lease cost
Cost of goods sold, sales and marketing, general and administrative

6,098

222

192

Short term lease expense
Cost of goods sold, sales and marketing, general and administrative

334

—

—

Total lease cost

$
30,446

$
13,011

$
8,678

respectively.

~~Short term lease expense for~~

During the ~~year~~years ended December 31, ~~2020,~~2023, 2022, and ~~2019, was nominal. During~~2021, the ~~year ended December 31, 2021, we~~Company earned a nominal amount of sublease income which is recorded in other income, net on the consolidated statements of ~~operations and comprehensive income. During the year ended December 31, 2021, the Company terminated $1.0~~ ~~million in leases.~~

operations.

Other information related to operating and finance leases is as ~~follows:~~follows as of December 31:


	2023			2022

	(in thousands)
Cash paid for amounts included in the measurement of lease liabilities:
Operating cash flows from operating leases	$	19,283		$	21,092
Operating cash flows from finance leases	$	6,483		$	6,542
Financing cash flows from finance leases	$	7,213		$	7,042
ASC 842 lease additions and modifications
Operating leases	$	14,016		$	19,920
Finance leases	$	1,021		$	25,909
Weighted average discount rate:
Operating leases	8.33		%	9.29		%
Finance leases	8.99		%	8.66		%
Weighted average remaining lease term (in years):
Operating leases	6.95			8.32
Finance leases	7.22			7.79

F-39

Table of Contents

Year Ended December 31,

2021

2020

(in thousands)

Cash paid for amounts included in the measurement of lease liabilities:

Operating cash flows from operating leases

4,164

4,764

Operating cash flows from finance leases

4,574

2,485

Financing cash flows from finance leases

4,434

4,951

Lease assets obtained in exchange for new lease liabilities:

Operating leases

102,922

12,206

Finance leases

37,821

23,220

Weighted average discount rate:

        Operating leases

9.69
%

8.64
%
        Finance leases

8.68
%

8.36
%
Weighted average remaining lease term (in years):

        Operating leases

10.09

7.49

        Finance leases

8.16

8.51

~~F-34~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Future minimum lease payments under ~~our~~ non-cancellable leases as of December 31, ~~2021,~~2023 are as follows:


	Operating leases		Finance leases

	(in thousands)
2024	$	19,713	$	13,635
2025	19,651		13,492
2026	18,872		12,915
2027	18,232		12,047
2028	17,399		11,439
Thereafter	58,317		33,412
Total undiscounted lease liabilities	152,184		96,940
Less: Interest	(49,881)		(27,627)
Total present value of minimum lease payments	102,303		69,313
Lease liabilities - current portion	(10,068)		(7,637)
Lease liabilities	$	92,235	$	61,676

The Company recorded a loss on disposal of right of use assets of $5.7 million, $17.8 million, and nominal for the years ended December 31, 2023, 2022 and 2021, respectively, resulting from the repositioning of assets, which was recorded in impairment and disposal of long-lived assets, net on the consolidated statements of operations.

Lease Guarantees

Year Ending December 31,
Operating
leases

Finance leases

(in thousands)

2022
$
21,826

$
12,102

2023

21,371

15,039

2024

20,896

11,242

2025

20,536

10,840

2026

19,974

10,394

Thereafter

110,758

42,311

Total undiscounted lease liabilities

215,361

101,928

Less: Interest

(83,391
)

(30,499
)
Total present value of minimum lease payments

131,970

71,429

Lease liabilities- current portion

9,840

6,185

Lease liabilities
$
122,130

$
65,244

In accordance with ASC 460, Guarantees, the Company has determined that it meets the guarantor requirements under certain contractual agreements.

During the year ended December 31, 2023, the Company terminated a retail lease resulting in the Company being relieved of its primary obligation under this lease. As a result of the lease termination, a new tenant executed a new lease for the same property with the Company becoming secondarily liable. Nonperformance by the new tenant results in the Company becoming obligated to fulfill the lease conditions. The new lease has a term of approximately 6 years from December 31, 2023 with the Company serving as guarantor for an approximate term of 6 years. If the new tenant defaults on the lease obligations the Company becomes responsible for payment. The resulting maximum exposure includes $5.4 million of undiscounted future minimum lease payments plus potential additional payments to satisfy maintenance, taxes, and insurance requirements under the remaining 6 years the Company is guarantor.

During the year ended December 31, 2023, the Company determined it was no longer the primary beneficiary of one of its variable interest entities. The Company guarantees two cannabis dispensary leases of the variable interest entity. Under both leases, nonperformance by the tenant results in the Company becoming obligated to fulfill the lease conditions. The leases have a term of approximately 7 and 8 years as of December 31, 2023, with the resulting maximum exposure estimated to be $5.5 million which includes $2.4 million and $3.1 million of undiscounted future minimum lease payments plus potential additional payments to satisfy maintenance, taxes, and insurance requirements under the remaining terms the Company is guarantor, respectively.

During the year ended December 31, 2022, the Company terminated a cultivation lease resulting in the Company being relieved of its primary obligation under this lease. As a result of the lease termination, a new tenant executed a new lease for the same property with the Company becoming secondarily liable. Nonperformance by the new tenant results in the Company becoming obligated to fulfill the lease conditions. The new lease has a term of approximately 14 years from December 31, 2023 with the Company serving as guarantor for an approximate term of 10 years. If the new tenant defaults on the lease obligations the Company becomes responsible for payment. The resulting maximum exposure includes $11.7 million of undiscounted future minimum lease payments plus potential additional payments to satisfy maintenance, taxes, and insurance requirements under the remaining 10 years the Company is guarantor.

F-40

Table of Contents

NOTE 14. CONSTRUCTION FINANCE LIABILITIES

~~Holyoke~~

~~In July 2019, the Company sold property it had recently acquired in Massachusetts for $3.5~~ million, which was the cost to the Company. In connection with the sale of this location, the Company agreed to lease the location back for cultivation. This transaction was determined to be a finance lease, and therefore did not meet the definition of a sale because control was never transferred to the buyer-lessor. The transaction was treated as a failed sale-leaseback financing arrangement.

~~Included in the agreement, the Company completed the tenant improvements related to the property, for which the landlord has provided a tenant improvement allowance (“TI Allowance”) for $40.0~~ ~~million.~~

As of December 31, ~~2021,~~2023 and 2022, total construction finance liabilities were $138.1 million and $138.4 million, respectively. The contractual terms range from 10.0 years to 25.0 years with a weighted average remaining lease term of 16.8 years.

The Company recorded interest and accretion expense for the years ended December 31, ~~2020, $40.0~~2023, 2022, and 2021 of $16.4 million, $15.9 million, and $~~40.0~~$7.8 million, respectively, ~~of the TI Allowance has been provided. The initial term of the agreement~~which is ~~ten years, with~~ ~~twofive-year~~ ~~options to renew. The initial payments are equal to~~ 11~~% of the sum of the purchase price for the property and will increase when a draw is made~~included in interest expense, net on the ~~TI Allowance. In addition, a~~ 3~~% increase in payments will be applied annually after the first year. As~~consolidated statements of ~~December 31, 2021, and 2020, the total finance liability associated with this transaction is $44.6~~ ~~million and $43.9~~ ~~million, respectively.~~

~~Ben Bostic~~

~~In October 2019, the Company sold property in Florida in exchange for cash of $17.0~~ million. Concurrent with the closing of the purchase, the buyer entered into a lease agreement with the Company, for continued operation as a licensed medical cannabis cultivation facility. Control was never transferred to the buyer-lessor because the transaction was determined to be a finance lease and did not meet the requirements of a sale. The transaction was treated as a failed sale-leaseback financing arrangement.

~~The initial term of the agreement is~~ ~~ten years, with~~ ~~twofive-year~~ ~~options to renew. The initial annualized payments are equal to~~ 11~~% of the purchase price for the property. A~~ 3~~% increase in payments will be applied annually after the first year. As of December 31, 2021, and 2020, the total finance liability associated with this transaction is $17.4~~ ~~million and $17.2~~ ~~million, respectively.~~

~~McKeesport~~

~~In October 2019, prior to acquisition by the Company, PurePenn, LLC (“PurePenn”) sold their cannabis cultivation facility in Pennsylvania for $5.0~~ ~~million. Simultaneously with the closing of the sale, PurePenn agreed to lease the cultivation facility back. The transaction was treated as a failed sale-leaseback financing arrangement.~~

~~The initial term of the lease is~~ 15 ~~years, with~~ ~~twofive-year~~ ~~options to renew. The landlord has agreed to provide a TI Allowance of $21.0~~ ~~million as an additional component of base rent. Payments are made based on one twelfth (1/12)~~

~~F-35~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~of the TI allowance dispersed with~~ ~~12.75% due for the first $5.0~~ ~~million,~~ ~~13.25% for $5.0~~ ~~million to $15.0~~ ~~million and~~ ~~13.50% for $15.0~~ ~~to $21.0~~ ~~million. In 2021, the Company entered into an amendment with the landlord to increase the tenant improvement allowance by an additional $15.5~~ ~~million for a total of $36.5~~ ~~million at a rate of~~ ~~10.75% on the additional allowance in excess of $21.0~~ ~~million. As of December 31, 2021, $29.5~~ ~~million of the TI allowance has been provided.~~

~~Alachua~~

In October 2021, in connection with the acquisition of Harvest, the Company acquired a transaction in which Harvest sold a licensed cultivation and processing facility and simultaneously with the closing of the sale, agreed to lease the facility back. The transaction was treated as a failed sale-leaseback financing arrangement.

~~The initial term of the lease is~~ ~~20 years, with~~ ~~twofive-year~~ ~~options to renew. The landlord has agreed to provide a TI Allowance of $17.85~~ ~~million as an additional component of base rent. As of December 31, 2021, $15.3~~ ~~million of the TI allowance has been provided.~~

In the first quarter of 2022, the Company made the decision to discontinue the use of this facility. The Company is evaluating the impacts of this decision and remains in compliance with the associated lease obligation.

~~Hancock~~

~~The initial term of the lease is~~ ~~ten years~~ ~~with~~ ~~twooptions to extend the term the first providing a ten-year renewal option and the second providing a five year renewal option.~~ ~~The landlord has agreed to provide a TI Allowance of $12.9~~ ~~million as an additional component of base rent. As of December 31, 2021, $5.7~~ ~~million of the TI allowance has been provided.~~

Under the failed-sale-leaseback accounting model, the Company is deemed to own this real estate and will reflect the properties on our consolidated balance sheet and depreciate over the assets' remaining useful life.

operations.

Future minimum lease payments for the construction finance liabilities as of December 31, ~~2021,~~2023 are as follows:

Year Ending December 31,

(in thousands)

2022

$
22,463

2023

23,406

2024

23,737

2025

24,176

2026

24,595

Thereafter

427,747

Total future payments

546,124

Less: Interest

(369,935
)
Total present value of minimum payments

176,189

Construction finance liabilities - current portion

991

Construction finance liabilities

$
175,198


Year Ending December 31,	(in thousands)
2024	$	17,043
2025	17,521
2026	18,013
2027	18,519
2028	19,039
Thereafter	283,385
Total future payments	373,520
Less: Interest	(235,395)
Total present value of minimum payments	138,125
Construction finance liabilities - current portion	(1,466)
Construction finance liabilities	$	136,659

NOTE 15. SHARE CAPITAL

The authorized share capital of the Company is comprised of the following:

(i)Unlimited number of Subordinate Voting Shares

Holders of the Subordinate Voting Shares are entitled to notice of and to attend any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting holders of Subordinate Voting Shares shall be entitled to one vote in

~~F-36~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

respect of each Subordinate Voting Share held. Holders of Subordinate Voting Shares are entitled to receive as and when declared by the directors, dividends in cash or property of the Company. No dividend will be declared or paid on the Subordinate Voting Shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Subordinate Voting Share basis) on the Multiple Voting Shares and Super Voting Shares.

(ii)

~~(ii)~~ Unlimited number of Multiple Voting Shares

Holders of Multiple Voting shares are entitled to notice of and to attend any meetings of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company have the right to vote. At each such meeting, holders of Multiple Voting Shares are entitled to one vote in respect of each Subordinate Voting Share into which such Multiple Voting Share could ultimately then be converted (initially, 100 votes per Multiple Voting Share). The initial “Conversation Ratio” for Multiple Voting Shares is 100 Subordinate Voting shares for each Multiple Voting Share,, subject to adjustment in certain ~~event.~~events. Holders of Multiple Voting Shares have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu (on an as converted basis, assuming conversion of all Multiple Voting Shares into Subordinate Voting Shares at the Conversion Ratio) as to dividends and any declaration or payment of any dividend on the Subordinate Voting Shares.

F-41

Table of Contents

No dividend may be declared or paid on the Multiple Voting Shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Subordinate Voting Share basis) on the Subordinate Voting Shares and Super Voting Shares.

The Company's subordinate voting shares and multiple voting shares, as converted, are collectively referred to herein as common stock.

(iii)Unlimited number of Super Voting Shares

Holders of Super Voting Shares are entitled to notice of and to attend at any meeting of the shareholders of the Company, except a meeting of which only holders of another particular class or series of shares of the Company shall have the right to vote. At each such meeting, holders of Super Voting Shares are be entitled to two votes in respect of each Subordinate Voting Share into which such Super Voting Share could ultimately then be converted (initially, 200 votes per Super Voting Share). Holders of Super Voting Shares have the right to receive dividends, out of any cash or other assets legally available therefor, pari passu (on an as converted to ~~Subordinated~~Subordinate Voting Share basis) as to dividends and any declaration or payment of any dividend on the Subordinate Voting Shares. No dividend is to be declared or paid on the Super Voting Shares unless the Company simultaneously declares or pays, as applicable, equivalent dividends (on an as-converted to Subordinate Voting Share basis) on the Subordinate Voting Shares and Multiple Voting Shares. The initial “Conversion Ratio” for the Super Voting Shares is one Multiple Voting Share for each Super Voting Share,, subject to adjustment in certain events.

~~Warrants~~

~~Liability warrants~~

Number
of warrants

Weighted average exercise price
($CAD)

Weighted average
remaining contractual
life (Yrs)

Outstanding and exercisable at December 31, 2018

214,178

6.00

1.66

Granted

—

—

—

Exercised

(214,178
)

6.00

—

Outstanding and exercisable at December 31, 2019

—

—

—

Granted

—

—

—

Exercised

—

—

—

Outstanding and exercisable at December 31, 2020

—

—

—

Granted

1,679

1,125

1.31

Exercised

—

—

—

Outstanding and exercisable at December 31, 2021

1,679

1,125

1.31

~~F-37~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

~~In October 2021 we acquired~~ ~~1,679~~ ~~warrants in connection with the acquisition of Harvest ("Harvest liability warrants"). See~~ ~~Note 4. Acquisitions~~ ~~for further details. Each acquired warrant is exercisable into~~ ~~one~~ ~~Multiple~~ There were no Super Voting ~~Share. Changes in fair value are recognized~~Shares outstanding as ~~a component of other (expense) income in the consolidated statements of operations and comprehensive income as change in fair value of derivative liabilities - warrants.~~

~~Equity warrants~~

~~In connection with the Harvest acquisition, we acquired certain equity classified warrants ("equity warrants"). The warrants range in exercise price from $23.76~~ ~~to $145.24~~ ~~and expire at various dates from~~ ~~June 2022~~ ~~through~~ ~~December 2025. The warrants are exercisable into~~ ~~one~~ ~~Subordinate Voting Share. As~~ of December 31, ~~2021, there were~~ ~~1,009,416~~ ~~acquired equity warrants outstanding. Each acquired equity warrant is exercisable into~~ ~~one~~ ~~Subordinate Voting Share.~~

~~As of December 31, 2021, and 2020, there were~~ ~~2,460,367~~ ~~and~~ ~~3,029,900~~ ~~Public Warrants outstanding. See~~ ~~Note 12. Private Placement Notes~~ ~~for further details on warrants issued in connection with private placement debt in 2019.~~

~~April Offering~~

~~On April 12, 2021, the Company concluded the underwritten offer and sale of~~ ~~5,750,000~~ ~~Subordinate Voting Shares in the United States and Canada at a public offering price of $39.63~~. ~~After paying the underwriters a commission of approximately $9.1~~ ~~million, fees of $0.2~~ ~~million and issuance costs of $1.2~~ ~~million, the Company received aggregate consideration of approximately $217.9~~ ~~million.~~

~~Prospectus Offering~~

~~On September 21, 2020, the Company concluded the offer and sale of~~ ~~4,715,000~~ ~~Subordinate Voting Shares pursuant to an agreement with Canaccord Genuity Corp. (the “Underwriter”) at a price of $18.56~~ ~~per share. After paying the Underwriter a commission of approximately $4.1~~ ~~million and issuance costs of $0.1~~ ~~million, the Company received aggregate consideration of approximately $83.2~~ ~~million.~~

2023 or 2022.

NOTE 16. SHARE BASED COMPENSATION

~~Options~~

Equity Incentive Plans

The Company’s 2021 Omnibus Incentive Plan, as Amended and Restated, (the “2021 Plan”) was adopted at the annual meeting of shareholders. The 2021 Plan reserves ~~4,000,000~~14,000,000 Subordinate Voting Shares for issuance thereunder and replaced the Schyan Exploration Inc. Stock Option Plan (the “Prior Plan”). Awards previously granted under the Prior Plan ~~including equity awards granted in the first quarter of 2021 for performance in 2020,~~ remain subject to the terms of the Prior Plan. No further grants of awards shall be made under the Prior Plan. The Prior Plan is administered by the Board of Directors of the Company and the 2021 Plan is administered by the Compensation ~~Committee.~~Committee of the Board of Directors.

Options

On July 25, 2023, under the 2021 Plan, the Board awarded options to purchase shares to board members, officers, and certain management employees of the Company. The options granted to board members immediately vested and all other options granted to employees vest over a three-year period.

On January 4, 2022 and February 24, 2022, under the 2021 Plan, the Board awarded options to purchase shares to board members, officers, and certain management employees of the Company. The options granted vest immediately for board members and all other options granted vest over a two-to three-year period.

In determining the amount of share-based compensation related to options issued, ~~during the year ended December 31, 2021, and 2020,~~ the Company used the Black-Scholes pricing model to establish the fair value of the options granted with the following ~~assumptions:~~assumptions for the year-to-date periods ended December 31:


	Year Ended December 31, 2021	Year Ended December 31, 2020		2023		2022		2021
Fair value at grant date	$1.44 - $14.13	$3.11 - $3.26	Fair value at grant date	$1.83 - $2.00	$8.39 - $11.01		$1.44 - $14.13
Stock price at grant date	$25.80 - $33.42	$11.52 - $12.50
Exercise price at grant date	$9.93 - $78.76	$11.52 - $12.50
Expected life in years	3.2 - 6.2	1.58 - 2.0
Expected term (in years)			Expected term (in years)	3.30 - 3.97	3.5 - 4.5		3.20 - 6.20
Expected volatility	49.64% - 56.04%	49.10% - 50.15%	Expected volatility	60.07% - 60.85%	51.81% - 52.87%		49.64% - 56.04%
Expected annual rate of dividends	0%	0%	Expected annual rate of dividends	0%	0%		0%
Risk free annual interest rate	0.16% - 1.15%	1.40% - 1.58%	Risk free annual interest rate	4.34% - 4.53%	1.20% - 1.79%		0.16% - 1.15%

F-42

Table of Contents

The ~~expected volatility was estimated by using~~following table summarizes the historical volatility of the Company. In cases where there is insufficient trading history, the expected volatility is estimated using the historical volatility of other companies that the Company considers comparable that have trading and volatility history prior to the Company becoming public.

~~F-38~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

The expected life in years represents the period of time that options granted are expected to be outstanding and is computed using the simplified method. The risk-free rate was based on the United States bond yield rate at the time of grant of the award. Expected annual rate of dividends is based on the fact that the Company has never paid cash dividends and does not expect to pay any cash dividends in the foreseeable future.

~~On January 3, 2020, under the Prior Plan, the Board awarded options to purchase shares to directors, officers, and key employees of the Company. The January 3, 2020 options generally vest over a~~ ~~two~~ to ~~three year~~ ~~period. For founding members of the Board of Directors, the options were fully vested on the date of grant.~~

~~On January 4, 2021, under the Prior Plan, the Board awarded options to purchase shares to directors, officers, and key employees of the Company. The January 4, 2021 options generally vest over a~~ ~~two~~ to ~~three year~~ ~~period.~~

~~On September 29, 2021, under the 2021 Plan, the Board awarded options to purchase shares to officers and other select employees of the Company. The September 29, 2021 options vest over a~~ ~~three year~~ ~~period.~~

~~On October 1, 2021, the Company acquired Harvest which included consideration in the form of 1,266,641~~Company's stock ~~options (as converted) that had been issued before the acquisition date to employees and non-employees of Harvest. The post-combination options vest over a one to three year period.~~

~~On October 26, 2021, under the 2021 Plan, the Board awarded options to purchase shares to officers and other select employees of the Company. The options generally vest over a~~ ~~two~~ to ~~three year~~ ~~period.~~

~~For~~option activity for the year ended December 31, ~~2021, the~~2023:


	Number of options	Weighted average exercise price		Weighted average remaining contractual life (Yrs.)	Aggregate intrinsic value
Outstanding options, beginning of year	3,177,815	$	25.96
Granted	1,754,817	3.99

Forfeited	(735,574)	20.48

Outstanding options, end of year	4,197,058	$	17.73	4.91	$	—
Vested and Exercisable options, end of year	3,248,599	$	21.34	3.87	$	—

The Company recorded share-based compensation infor stock options as follows for the ~~amount of $7.5~~year ~~million related to stock options. This is recognized as $0.7~~ended December 31: ~~million cost of goods sold, net, $5.7~~ ~~million general and administrative and $1.1~~ ~~million sales and marketing in the consolidated statements of operations and comprehensive income.~~


Statements of operations	2023		2022		2021
	(in thousands)
Cost of goods sold	$	66	$	172	$	662
General and administrative	3,344		8,157		5,722
Sales and marketing	59		243		1,089
Total share-based compensation expense	$	3,469	$	8,572	$	7,473

As of December 31, ~~2021,~~2023, there was approximately $~~8.3~~$2.0 million of ~~total~~ unrecognized compensation cost related to ~~nonvested~~unvested stock option ~~arrangements. That cost~~arrangements which is expected to be recognized over a ~~weighted-average~~weighted average service period of ~~0.91~~0.78 years.

~~For the year ended December 31, 2020, the Company recorded share-based compensation in the amount of $2.8~~ ~~million related to stock options. This is recognized as $0.2~~ ~~million cost of goods sold, net, $2.1~~ ~~million general and administrative and $0.5~~ ~~million sales and marketing in the consolidated statements of operations and comprehensive income.~~

~~The number and weighted-average exercise prices and remaining contractual life of options at December 31, 2020, and December 31, 2021, were as follows:~~

Number
of options

Weighted
average
exercise price

Weighted average
remaining contractual
life (Yrs.)

Aggregate intrinsic value

Outstanding at January 1, 2020

—

$
—

—

—

Granted

1,252,403

11.70

Exercised

(9,180
)

11.52

Forfeited

(113,444
)

11.52

Outstanding, December 31, 2020

1,129,779

$
11.72

4.01

$
19.90

Exercisable, December 31, 2020

697,944

$
11.70

4.01

$
19.92

Outstanding at January 1, 2021

1,129,779

$
11.72

Granted

2,168,528

36.86

Exercised

(118,692
)

12.46

Forfeited

(205,720
)

46.64

Outstanding, December 31, 2021

2,973,895

$
27.61

6.26

$
—

Exercisable, December 31, 2021

1,503,051

$
17.27

3.77

$
8.94

~~F-39~~

TRULIEVE CANNABIS CORP.
NOTES TO CONSOLIDATED FINANCIAL STATEMENTS

Restricted Stock Units

Restricted stock units ("RSUs") represent a right to receive a single Subordinate Voting Share that is both non-transferable and forfeitable unless and until certain conditions are satisfied. RSUs generally vest ratably over a two to -to-three ~~year~~-year period subject to continued employment through each anniversary.

On July 25, 2023, the Board awarded RSUs to board members, officers, and certain management employees of the Company. The RSUs vest over a 30-day period for board members and all other RSUs granted vest over a two-year period. The fair value of RSUs is determined on the grant date and is amortized over the vesting ~~period on a straight-line basis.~~

period.

On ~~September 29, 2021, under the 2021 Plan,~~January 4, February 24, and March 31, 2022, the Board awarded RSUs to board members, officers, and ~~other select employees of the Company, which vest over a~~ ~~two~~ to ~~three year~~ ~~period. On October 26, 2021, under the 2021 Plan, the Board awarded RSUs to~~ certain management employees of the Company. The RSUs immediately vested for board members and all other RSUs granted vest over a two-year period.

The following table summarizes the ~~same terms as those issued on September 29, 2021.~~

~~In September 2021, the Board of Directors approved grants of RSUs~~Company's RSU activity for~~two~~ ~~executive officers as replacement awards for cancelled warrants, which vested immediately. The previously held~~ ~~3,572,514~~ ~~warrants were cancelled on September 15, 2021 with the new RSUs granted on September 15, 2021 as a replacement of the previously held warrants. The~~ ~~two~~ ~~officers were awarded a total premium of $3.1~~ ~~million, allocated between the~~ ~~two~~ officers, to incentivize the cancellation and replacement. This premium payment was recorded to general and administrative expenses in the consolidated statements of operations and comprehensive income. No ~~share-based compensation expense was recorded related to the cancellation and replacement of the previous warrants with the new RSUs during~~ the year ended December 31, ~~2021.~~2023:


Restricted Stock Unit Activity	Number of restricted stock units	Weighted-average grant date fair value
Unvested balance, beginning of year	720,707	$	22.36
Granted	2,955,177	3.99
Vested	(415,115)	23.06
Forfeited	(574,553)	6.03
Unvested balance, end of year	2,686,216	$	5.47

F-43

Table of Contents

Number of
restricted stock units

Weighted average
grant price

Unvested balance as of January 1, 2021

—

—

       Granted

3,255,424

25.45

       Vested

(2,920,336
)

25.29

       Forfeited

(2,660
)

26.88

Unvested balance as of December 31, 2021

332,428

26.86

~~During~~

The weighted-average grant date fair value of RSUs granted was $21.51 and $25.45 for the years ended December 31, 2022, and 2021, respectively. The fair value of RSUs vested was $2.1 million, $1.6 million and $73.4 million for the years ended December 31, 2023, 2022, and 2021, respectively.

The Company recorded share-based compensation for RSUs as follows for the year ended December ~~31, 2021, the Company recorded share-based compensation in the amount of $1.8~~ ~~million related to RSUs. This is recognized as $0.3~~ ~~million cost of goods sold, net, $1.2~~ ~~million general and administrative and $0.3~~ ~~million sales and marketing in the statements of operations and comprehensive income.~~

31:


Statements of operations	2023		2022		2021
	(in thousands)
Cost of goods sold	$	744	$	900	$	306
General and administrative	5,754		8,190		1,239
Sales and marketing	608		462		236
Total share based compensation expense	$	7,106	$	9,552	$	1,781

As of December 31, ~~2021,~~2023, there was approximately $~~7.6~~$9.0 million of total unrecognized compensation cost related to ~~nonvested~~unvested restricted stock ~~units. That cost~~units, which is expected to be recognized over a weighted-average service period of ~~0.86~~0.81 years.

~~Warrants~~

~~During the year ended December 31, 2018, the Company issued~~ ~~8,784,872~~ ~~warrants to certain employees and directors of the Company for past services provided. The warrants had~~ no ~~vesting conditions and are exercisable at any time for~~ ~~three years~~ ~~after the issuance, subject to certain lock-up provisions:~~ ~~(i) the warrants may not be exercised for~~ ~~18 months~~ following the Issue Date; (ii) 50% of the warrants may be exercised between months 19-24 following the Issue Date; and (iii) the remaining 50% of the warrants may be exercised at any time thereafter until expiration. ~~The warrants are exchangeable into Subordinate Voting Shares. For the years ended December 31, 2021, 2020, and 2019,~~ no ~~warrants related to employee compensation were issued.~~

~~F-40~~

~~TRULIEVE CANNABIS CORP.~~
~~NOTES TO CONSOLIDATED FINANCIAL STATEMENTS~~

~~The following table summarizes the warrants issued and outstanding to certain employees and directors of the Company as of December 31, 2021, 2020, and 2019, and the activity for the years then ended.~~

Number of warrants

Weighted average exercise price ($CAD)

Weighted average remaining contractual life (Yrs)

Outstanding as of December 31, 2018

8,784,872

6.00

2.72

Granted

—

—

—

Exercised

—

—

—

Exchanged for cashless exercise

—

—

—

Outstanding as of December 31, 2019

8,784,872

6.00

1.72

Granted

—

—

—

Exercised

2,723,311

—

—

Exchanged for cashless exercise

—

—

—

Cancelled

—

—

—

Outstanding as of December 31, 2020

6,061,561

6.00

0.72

Exercised

2,075,990

—

—

Exchanged for cashless exercise

413,057

—

—

Cancelled

3,572,514

—

—

Outstanding as of December 31, 2021

—

—

—


British Columbia						84-2231905
(State or other jurisdiction of incorporation or organization)						(I.R.S. Employer Identification No.)
6749 Ben Bostic Road Quincy,, FL						32351
(Address of principal executive offices)						(Zip Code)


☒x			ANNUAL REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934


☐o			TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934 FOR THE TRANSITION PERIOD FROM TO


					Page
PART I
Item 1.			~~Page~~Business		3
Item 1A.			~~Explanatory Paragraph~~Risk Factors		215
~~PART I~~
~~Item 1.~~	~~Business~~	4
~~Item 1A.~~	~~Risk Factors~~	38
Item 1B.	Unresolved Staff Comments			5330
Item 2. 1C.			~~Properties~~Cy bersecurity		5331
Item 3.2.			~~Legal Proceedings~~Properties		5332
Item 3.			Legal Proceedings		32
Item 4.			Mine Safety Disclosures		5332

PART II
Item 5.			Market for Registrant’s Common Equity, Related Stockholder Matters and Issuer Purchases of Equity Securities		5433
Item 6.			[Reserved]		5635
Item 7.			Management’s Discussion and Analysis of Financial Condition and Results of Operations		5736
Item 7A.			Quantitative and Qualitative Disclosures About Market Risk		7152
Item 8.			Financial Statements and Supplementary Data		7353
Item 9.			Changes in and Disagreements With Accountants on Accounting and Financial Disclosure		7353
Item 9A.			Controls and Procedures		7354
Item 9B.			Other Information		7455
Item 9C.			Disclosure Regarding Foreign Jurisdictions that Prevent Inspections		7455

PART III
Item 10.			Directors, Executive Officers and Corporate Governance		7556
Item 11.			Executive Compensation		7556
Item 12.			Security Ownership of Certain Beneficial Owners and Management and Related Stockholder Matters		7556
Item 13.			Certain Relationships and Related Transactions, and Director Independence		7556
Item 14.			Principal Accounting Fees and Services		7556

PART IV
Item 15.			Exhibits, Financial Statement Schedules		7557
Item 16			Form 10-K Summary		7961


Period	Low Trading Price (C$)		High Trading Price (C$)		Volume (#)
Year Ended December 31, 2021
Fourth Quarter (through December 31, 2021)	$	29.05	$	43.75		27,122,860
Third Quarter (September 30, 2021)	$	29.54	$	48.34		21,068,170
Second Quarter (June 30, 2021)	$	43.20	$	59.60		22,111,976
First Quarter (March 31, 2021)	$	39.26	$	67.45		26,428,456

Year Ended December 31, 2020
Fourth Quarter (through December 31, 2020)	$	23.63	$	42.30		30,428,249
Third Quarter (September 30, 2020)	$	16.81	$	35.08		30,465,852
Second Quarter (June 30, 2020)	$	11.95	$	18.92		14,113,517
First Quarter (March 31, 2020)	$	8.09	$	15.34		18,658,398


Period	Low Trading Price ($)		High Trading Price ($)		Volume (#)
Year Ended December 31, 2021
Fourth Quarter (through December 31, 2021)	$	23.10	$	34.75		26,893,469
Third Quarter (September 30, 2021)	$	23.38	$	39.01		23,772,558
Second Quarter (June 30, 2021)	$	34.52	$	47.49		20,283,884
First Quarter (March 31, 2021)	$	31.62	$	53.73		29,364,111

Year Ended December 31, 2020
Fourth Quarter (through December 31, 2020)	$	17.37	$	33.45		27,585,871
Third Quarter (September 30, 2020)	$	12.38	$	26.50		26,497,216
Second Quarter (June 30, 2020)	$	8.35	$	14.03		14,145,962
First Quarter (March 31, 2020)	$	5.74	$	11.81		14,971,972


	Year Ended				Change
	December 31,				Increase / (Decrease)
	2021		2020		$		%
	(in thousands)
Revenues, net of discounts	$	938,385	$	521,533	$	416,852		80	%


	2021			2020			2019
Revenues, net of discounts	$	938,385		$	521,533		$	252,819
Cost of goods sold		372,255			135,116			60,982
Gross profit		566,130			386,417			191,837
Expenses:
Sales and marketing		215,144			119,395			59,349
General and administrative		100,573			36,056			14,071
Depreciation and amortization		48,096			12,600			5,079
Loss on impairment and disposal of long-lived assets		5,371			63			67
Total expenses		369,184			168,114			78,566
Income from operations		196,946			218,303			113,271
Other income (expense):
Interest expense		(34,787	)		(20,237	)		(9,050	)
Change in fair value of derivative liabilities - warrants		208			(42,679	)		(806	)
Other income, net		1,139			2,062			266
Total other expense		(33,440	)		(60,854	)		(9,590	)
Income before provision for income taxes and non-controlling interest		163,506			157,449			103,681
Provision for income taxes		146,061			94,451			50,586
Net income and comprehensive income		17,445			62,998			53,095
Less: Net loss and comprehensive loss attributed to non-controlling interest		(587	)		—			—
Net income and comprehensive income attributed to common shareholders	$	18,032		$	62,998		$	53,095
Basic net income per common shareholder	$	0.13		$	0.55		$	0.48
Diluted net income per common shareholder	$	0.12		$	0.53		$	0.46
Weighted average number of common shares used in computing net income per common share:
Basic		139,366,940			113,572,379			110,206,103
Diluted		146,757,286			118,325,724			115,317,942


Balance Sheet as of December 31, 2020	As Previously Reported		Revisions			Change in Principle			As Revised
	(in thousands)
Prepaid expenses and other current assets	$	19,815	$	(3,696	)	$	—		$	16,119
Total current assets		265,148		(3,696	)		—			261,452
Right of use assets - operating, net		28,171		1,905			—			30,076
Intangible assets, net		93,800		—			(1,204	)		92,596
Goodwill		74,100		—			(6,924	)		67,176
Other assets		3,944		3,583			—			7,527
Total assets		816,112		1,792			(8,128	)		809,776
Operating lease liabilities, current portion		3,154		123			—			3,277
Total current liabilities		75,998		123			—			76,121
Operating lease liabilities		26,450		1,670			—			28,120
Deferred tax liabilities		23,575		—			(8,128	)		15,447
Total liabilities	$	368,208	$	1,793		$	(8,128	)		361,873


Consideration:	(in thousands)
Cash	$	281
Fair value of consideration exchanged	$	281
Recognized amounts of identifiable assets acquired and liabilities assumed:
Right of use asset - operating	$	170
Intangible asset	270
Favorable lease interest	11
Operating lease liabilities	(170)
Total net assets acquired	$	281


Consideration	(in thousands)
Cash	$	27,500
Fair value of consideration exchanged	$	27,500
Recognized amounts of identifiable assets acquired and liabilities assumed:
Inventories	$	2,266
Property and equipment	692
Right of use asset - operating	4,737
Goodwill	24,542
Operating lease liability	(4,737)
Total net assets acquired	$	27,500


(in thousands)
Consideration:
Trulieve Subordinated Voting Shares	$	1,369,024
Fair value of other equity instruments		18,394
Fair value of warrants classified as liabilities		3,103
Fair value of consideration exchanged	$	1,390,521
Recognized amounts of identifiable assets acquired and liabilities assumed:
Cash and cash equivalents	$	85,318
Restricted cash		3,072
Accounts receivable		3,645
Inventories		92,537
Prepaid expenses and other current assets		100,129
Notes receivable		9,805
Property and equipment		191,801
Right of use assets - operating		73,476
Intangible assets:
Dispensary license		946,000
Trademarks		27,430
Customer relationships		3,500
Other assets		5,289
Accounts payable and accrued liabilities		(58,887	)
Income tax payable		(24,863	)
Deferred revenue		(4,523	)
Operating lease liabilities		(76,558	)
Contingencies		(26,599	)
Notes payable		(285,238	)
Construction finance liabilities		(79,683	)
Other long-term liabilities		(1,085	)
Deferred tax liabilities		(253,986	)
	$	730,580

Non-controlling interest	$	(2,139	)
Goodwill		662,080
Total net assets acquired	$	1,390,521


(in thousands)
Consideration:
Shares issued upon acquisition	$	10,012
Transaction costs		18
Fair value of consideration exchanged	$	10,030
Recognized amounts of identifiable assets acquired and liabilities assumed:
Right of use asset - finance	$	1,756
Intangible asset		10,594
Finance lease liabilities		(2,320	)
Total net assets acquired	$	10,030


Year Ending December 31,	Expected principal payments
	(in thousands)
2022	$	1,530
2023		733
2024		4,913
2025		6,625
2026		—
Thereafter		—
Total		13,801
Less: discount on notes receivable		(124	)
Total	$	13,677


	December 31, 2021
(in thousands)	Beginning balance		Revisions to purchase price allocation			Additions		Disposals			Amortization expense			Ending balance
Licenses	$	83,313	$	(5,659	)	$	1,029,563	$	(3,168	)	$	(22,743	)	$	1,081,306
Internal use software		3,656		—			3,716		—			(1,117	)		6,255
Tradenames		4,937		—			100		(403	)		(1,940	)		2,694
Customer relationship		683		—			3,500		—			(1,077	)		3,106
Miscellaneous		7		—			—		—			(7	)		—
Trademarks		—		—			27,516		—			(2,895	)		24,621
	$	92,596	$	(5,659	)	$	1,064,395	$	(3,571	)	$	(29,779	)	$	1,117,982


	December 31, 2020
(in thousands)	Beginning balance		Revisions to purchase price allocation			Additions		Disposals		Amortization expense			Ending balance
Licenses	$	24,538	$	(1,204	)	$	62,287	$	—	$	(2,308	)	$	83,313
Internal use software		3,656		—			—		—		—			3,656
Tradenames		800		—			4,470		—		(333	)		4,937
Customer relationship		883		—			—		—		(200	)		683
Miscellaneous		25		—			—		—		(18	)		7
Trademarks		134		—			—		—		(134	)		—
	$	30,036	$	(1,204	)	$	66,757	$	—	$	(2,993	)	$	92,596


	2023						2022
	Gross Carrying Amount		Accumulated Amortization		Net Book Value		Gross Carrying Amount		Accumulated Amortization		Net Book Value

	(in thousands)
Licenses	$	1,046,544	$	159,084	$	887,460	$	1,044,161	$	89,367	$	954,794
Trademarks	27,430		17,609		9,821		27,430		12,530		14,900
Internal use software	26,947		7,520		19,427		16,528		3,065		13,463
Tradenames	4,861		4,461		400		4,862		3,506		1,356
Customer relationships	3,535		3,452		83		3,536		3,252		284
Total	$	1,109,317	$	192,126	$	917,191	$	1,096,517	$	111,720	$	984,797


Year Ending December 31,	Estimated amortization
	(in thousands)
2022	$	85,655
2023		80,713
2024		78,971
2025		76,944
2026		75,447
Thereafter		720,252
	$	1,117,982


(in thousands)
As of December 31, 2019	$	7,316
Acquisition of PurePenn, LLC and Pioneer Leasing & Consulting, LLC		47,311
Acquisition of Solevo Wellness		19,473
Revisions of purchase price allocations of PurePenn and Solevo Wellness		(6,924	)
As of December 31, 2020	$	67,176
Measurement period adjustments and revisions of purchase price allocation of Solevo Wellness		(2,638	)
Measurement period adjustments and revisions of purchase price allocation of PurePenn		(963	)
Acquisition of Keystone Shops		40,072
Revisions of purchase price allocation of Keystone Shops		(369	)
Acquisition of Harvest Health & Recreation, Inc.		662,080
As of December 31, 2021	$	765,358


		Year Ended December 31,
	Statement of operations and comprehensive income location	2021		2020		2019
		(in thousands)
Operating lease cost	Cost of goods sold, sales and marketing, general and administrative	$	11,574	$	5,700	$	5,542
Finance lease cost:
Amortization of lease assets	Cost of goods sold, sales and marketing, general and administrative		7,866		4,956		1,984
Interest on lease liabilities	Interest expense		4,574		2,133		960
Finance lease cost			12,440		7,089		2,944
Variable lease cost	Cost of goods sold, sales and marketing, general and administrative		6,098		222		192
Short term lease expense	Cost of goods sold, sales and marketing, general and administrative		334		—		—
Total lease cost		$	30,446	$	13,011	$	8,678


Year Ending December 31,	Operating leases			Finance leases
	(in thousands)
2022	$	21,826		$	12,102
2023		21,371			15,039
2024		20,896			11,242
2025		20,536			10,840
2026		19,974			10,394
Thereafter		110,758			42,311
Total undiscounted lease liabilities		215,361			101,928
Less: Interest		(83,391	)		(30,499	)
Total present value of minimum lease payments		131,970			71,429
Lease liabilities- current portion		9,840			6,185
Lease liabilities	$	122,130		$	65,244


	Number of warrants			Weighted average exercise price ($CAD)		Weighted average remaining contractual life (Yrs)
Outstanding and exercisable at December 31, 2018		214,178			6.00		1.66
Granted		—			—		—
Exercised		(214,178	)		6.00		—
Outstanding and exercisable at December 31, 2019		—			—		—
Granted		—			—		—
Exercised		—			—		—
Outstanding and exercisable at December 31, 2020		—			—		—
Granted		1,679			1,125		1.31
Exercised		—			—		—
Outstanding and exercisable at December 31, 2021		1,679			1,125		1.31


	Number of restricted stock units			Weighted average grant price
Unvested balance as of January 1, 2021		—			—
Granted		3,255,424			25.45
Vested		(2,920,336	)		25.29
Forfeited		(2,660	)		26.88
Unvested balance as of December 31, 2021		332,428			26.86


	Number of warrants		Weighted average exercise price ($CAD)		Weighted average remaining contractual life (Yrs)
Outstanding as of December 31, 2018		8,784,872		6.00		2.72
Granted		—		—		—
Exercised		—		—		—
Exchanged for cashless exercise		—		—		—
Outstanding as of December 31, 2019		8,784,872		6.00		1.72
Granted		—		—		—
Exercised		2,723,311		—		—
Exchanged for cashless exercise		—		—		—
Cancelled		—		—		—
Outstanding as of December 31, 2020		6,061,561		6.00		0.72
Exercised		2,075,990		—		—
Exchanged for cashless exercise		413,057		—		—
Cancelled		3,572,514		—		—
Outstanding as of December 31, 2021		—		—		—


	As of December 31, 2021				As of December 31, 2020
	Operating		Finance		Operating		Finance
	(in thousands)				(in thousands)				2023	2022

		(in thousands)

		(in thousands)

		(in thousands)
Right-of-use assets, net	$	2,082	$	2,009	$	12,003	$	3,425
Lease liabilities:
Lease liabilities:
Lease liabilities:
Lease liabilities - current portion
Lease liabilities - current portion
Lease liabilities - current portion	$	418	$	215	$	1,539	$	281
Lease liabilities		1,862		2,127		11,083		3,500
Lease liabilities
Lease liabilities
Total related party lease liabilities	$	2,280	$	2,342	$	12,622	$	3,781
Total related party lease liabilities
Total related party lease liabilities


Level 1 –			Observable inputs based on unadjusted quoted prices in active markets for identical assets or liabilities;
Level 2 –			Inputs other than quoted prices in active markets, which are observable for the asset or liability, either directly or indirectly; and
Level 3 –			Unobservable inputs for which there is little or no market data requiring the Company to develop its own assumptions.


	2023								2022
	Level 1		Level 2		Level 3		Total		Level 1		Level 2		Level 3		Total

	(in thousands)
Financial Assets (1):
Money market funds (2)	$	145,995	$	—	$	—	$	145,995	$	340	$	—	$	—	$	340
Financial Liabilities:
Interest rate swap (3)	$	—	$	2,341	$	—	$	2,341	$	—	$	2,536	$	—	$	2,536
Warrant liabilities (4)	—		—		—		—		—		252		—		252