Verano (VRNO) investor relations material

Regulatory and economic outlook

• Anticipated federal reform could bring major regulatory changes, including 280E tax relief and access to credit card payments, significantly impacting business economics and industry growth.

• Retroactive tax relief is expected following the ALJ hearing, potentially easing the uncertain tax provisions (UTP) and benefiting the entire sector.

• The administration is seen as pro-business, fostering positive momentum for regulatory improvements and industry normalization.

• Interest rate reductions and improved debt facilities are expected with rescheduling, enhancing financial flexibility and enabling more efficient share repurchases.

• Debt structure is designed for flexibility, with real estate-backed loans and prepayment options to capitalize on regulatory shifts.

Market expansion and growth strategies

• Florida is viewed as a major growth market due to population influx and potential regulatory changes, with preparations for adult use (AU) already underway.

• Unlocking additional medical form factors and patient count in Florida is expected to drive significant growth, with vertical integration enabling rapid scale-up.

• Virginia is positioned for a major market launch in July 2027, with expanded facilities and strategic store relocations to handle increased demand.

• The Virginia market is expected to be more thoughtfully regulated, with limited store counts and phased expansion, setting a precedent for the Southeast.

• Texas represents a long-term opportunity, with initial focus on oil-based products and plans to expand as regulations evolve, targeting significant growth post-2028.

Hemp market and enforcement

• The hemp market's regulatory loophole has diverted $25–$30 billion from legal cannabis, but upcoming enforcement and federal action are expected to recapture market share and drive double-digit industry growth.

• State-level enforcement, as seen in Ohio and Nevada, is increasing, with a greater focus on product safety and market control.

• Education and legislative engagement are ongoing to ensure safe, tested products and to address the proliferation of unregulated dispensaries.

• The influx of new THC users from the hemp market is expected to accelerate growth in states like Texas and Florida.