Verano Q3 2026 Results: Cash Flow Hits Four-Year High as Revenue Climbs to $212 Million

Burn After Reading The 30-second intel for operators and investors ⏱ 0:30

Verano reports Q3 revenue of $212.4 million, up 5%, and $49 million in operating cash flow, its strongest quarter on that measure in four years. Net loss narrows to $4.1 million, but adjusted EBITDA falls 5% to $50.4 million.

• Operators: Cash generation improved even as SG&A rose to about $85 million from $81 million. Verano raises full-year capex guidance to $54 million to $60 million while building retail, beverage and packaged goods capacity ahead of Virginia's July 1, 2027 adult-use start.
• Investors: Cash flow and net loss improved, but part of the gain came from lower tax expense, which fell from $28.4 million to $7.3 million. Adjusted EBITDA margin slipped to about 24%, and total debt stands at $390 million.
• Do now: Compare operating cash flow, adjusted EBITDA and tax effects side by side when reviewing multistate operators, rather than relying on net loss improvement alone.

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The multistate cannabis operator nearly doubled quarterly operating cash flow and sharply reduced its net loss, even as adjusted EBITDA declined. The company increased its capital spending outlook ahead of Virginia’s anticipated adult-use launch.

Verano Holdings Corp. (Cboe CA: VRNO) (OTCQX: VRNO) reported third-quarter revenue of $212.4 million, up 5% from a year earlier, while generating $49 million in operating cash flow, its strongest quarterly performance on that measure in four years.

The results, released Thursday, October 29, showed a substantial improvement in cash generation and a sharp reduction in net losses. However, adjusted EBITDA declined year over year, and operating expenses continued to rise.

The Chicago-based cannabis operator reported a net loss of $4.1 million, compared with $43.8 million in the same period last year. Adjusted EBITDA declined 5% to $50.4 million, representing a margin of approximately 24%, down from 26% a year earlier.

For Verano, the quarter highlights a distinction increasingly important to cannabis investors: stronger cash generation does not necessarily translate into higher adjusted operating earnings.

“I am proud of our teams for delivering another strong quarter,” said George Archos, Verano’s founder, chairman and CEO, pointing to revenue growth, retail performance and the company’s four-year high in operating cash flow.

Cash Generation Takes Center Stage

Verano’s operating cash flow reached $49 million during the quarter, compared with $26 million in the third quarter of 2025, an increase of approximately 88%.

After $13 million in capital expenditures, the company generated approximately $36 million in operating cash flow less capital expenditures, a simplified measure of free cash flow.

That performance stands out against the broader earnings picture. While revenue increased and net losses narrowed, adjusted EBITDA fell from $53.1 million to $50.4 million.

Gross profit increased to $100 million from $95.2 million, with gross margins holding relatively steady at 47%.

Selling, general and administrative expenses rose to approximately $85 million from $81 million, remaining at 40% of revenue.

Operating income increased to $11.9 million from $9.3 million, suggesting that the company’s core operations improved despite the decline in adjusted EBITDA.

The sharp reduction in net losses also reflects factors beyond revenue growth. Income tax expense fell from $28.4 million to $7.3 million, while net interest expense declined from $13.2 million to $10.8 million.

Those changes contributed materially to the year-over-year improvement in reported profitability.

Revenue Growth Across an Expanding Retail Footprint

Verano’s third-quarter revenue increased by approximately $9.6 million compared with the prior-year period, reaching $212.4 million.

The company attributed the improvement to stronger retail performance and organic growth across its operations.

During the quarter, Verano expanded its Florida retail footprint with the opening of MÜV Bradfordville, its 86th dispensary in the state and 163rd location nationwide.

The company also entered the cannabis beverage category with Easy Landings, its first national beverage brand, extending its product portfolio beyond traditional flower, concentrates and edibles.

Following the quarter, Verano opened a relocated Zen Leaf dispensary in Meriden, Connecticut, and announced the opening of Zen Leaf Ephrata in Pennsylvania for October 30.

The company currently operates across 13 states, with 163 dispensaries, 14 production facilities and more than 1.1 million square feet of cultivation capacity.

That footprint provides exposure to established adult-use markets and medical programs where regulatory changes could create additional retail opportunities.

Debt, Liquidity and Higher Capital Spending

Verano ended September with $102 million in cash and cash equivalents, up from $82.7 million at the end of 2025.

Working capital stood at approximately $301 million, while total debt, net of issuance costs, reached $390 million.

The company also raised its full-year capital expenditure guidance to between $54 million and $60 million.

Through the first nine months of 2026, Verano had spent approximately $40 million on capital expenditures, compared with $32 million during the corresponding period last year.

The increased spending outlook comes as management continues investing in retail and consumer packaged goods infrastructure while preparing for potential market expansion.

Verano’s balance sheet remains an important consideration. Although operating cash generation improved significantly, the company continues carrying substantial debt and faces ongoing investment requirements.

For the first nine months of 2026, operating cash flow totaled $98 million, compared with $39 million a year earlier. Revenue increased 4% to $638.5 million, while adjusted EBITDA declined to $150.6 million from $173.7 million.

The year-to-date figures reinforce the quarter’s central theme: improved liquidity and cash generation alongside pressure on adjusted operating profitability.

Virginia Emerges as a 2027 Growth Opportunity

Looking ahead, Verano identified Virginia’s anticipated adult-use cannabis market as one of its important growth catalysts.

The state is scheduled to begin recreational cannabis sales on July 1, 2027, potentially creating new opportunities for existing medical cannabis operators.

Virginia’s transition has become increasingly relevant to multistate operators with an established presence in the state, particularly as mature markets experience pricing pressure and slower growth.

Archos pointed to the anticipated Virginia launch alongside planned retail and product improvements as reasons for optimism entering 2027.

The opportunity comes with execution risks, however. Regulatory implementation, infrastructure requirements, competitive conditions and the timing of market access will influence how quickly operators can translate the new market into additional revenue.

Verano’s increased capital spending guidance also raises questions about how companies will balance investment in future growth with debt reduction and cash preservation.

A Stronger Cash Position, but Not a Complete Turnaround

Verano’s third-quarter results offer evidence of improving financial flexibility, with operating cash flow nearly doubling and net losses declining sharply.

At the same time, adjusted EBITDA contracted, administrative expenses increased and capital expenditures are expected to rise.

For investors, the question is whether Verano can sustain its improved cash generation while supporting new product categories, expanding its retail network and preparing for emerging adult-use markets.

The company’s performance also illustrates the changing priorities of the U.S. cannabis industry, where generating cash and maintaining access to capital have become as important as expanding revenue.

The intersection of state-level expansion, federal cannabis policy, and capital availability will also be a focus at IgniteIt’s Cannabis Capital & Policy Summit on November 18 in Washington, D.C., bringing together industry executives, investors, and policymakers to examine the next phase of the U.S. cannabis market.