LEEF Brands Reports Q2 2026 Financial Results

VANCOUVER – LEEF Brands Inc. posted gross profit up 62% and gross margin that nearly doubled year-over-year, even as top-line revenue fell by 16%. Net revenue reached $7.3 million, down from $8.7 million in Q2 2025, primarily reflecting lower volumes while the company operated with a temporary biomass gap between 2025 and 2026 harvests from Salisbury Canyon Ranch.

During that window, LEEF was leaning on third-party sourcing rather than its own low-cost cultivation inputs. Gross profit still climbed to $2.4 million, with gross margin expanding from 17% to 33%, driven by disciplined procurement and a growing contribution from hydrocarbon products, which became the company’s largest revenue category for the first time.

Net loss improved from $2.9 million in Q2 2025 to $1.3 million, driven by margin and non-cash gains on derivative liabilities. Adjusted EBITDA decreased to negative $631,000 from negative $1.3 million a year earlier. Across H1 2026, adjusted EBITDA turned positive at $1.7 million, compared with a deficit of $2.1 million over the same period in 2025.

CFO Kevin Wilson said margins reached 33% “without our own biomass from the ranch,” compared with approximately 50% during the preceding three quarters when Salisbury Canyon Ranch material was running through extraction.

LEEF closed Q2 with $5 million in cash and an $8.7 million working capital surplus, both up sharply from year-end 2025. Management noted that liquidity gives the company room to hold its new harvest and sell selectively, rather than into depressed spot prices.

Shortly after the quarter ended, LEEF completed the largest harvest in its history at Salisbury Canyon Ranch, bringing in nearly one million plants. The first distillate cleared California’s elevated CAT 4 pesticide screening and tested at approximately 95% THC. Sales are expected to begin this month. The ranch stood at approximately 80 acres as of spring, with an additional supply agreement covering 21 contracted acres at a similar cost structure; total internal and contracted cultivation is targeted to reach around 122 acres by late 2026 [an 88% increase year-over-year] ahead of the full 180-acre permitted footprint in 2027.

The April acquisition of Himalaya, a California concentrates brand, contributed approximately $1 million in revenue during its first partial quarter with LEEF. The company views it as a platform for extracting higher CPG margins using its own manufactured inputs, rather than selling biomass into the bulk market.

On the regulatory front, LEEF filed DEA registration applications across its California and Nevada licenses and is preparing its cultivation and manufacturing operations to meet applicable GACP and destination-market GMP standards, with a goal of producing export-ready products in 2027. Total capital raised in 2026 reached approximately $14.2 million through the reporting period, including a $5.2 million financing in July to fund a dedicated biomass processing and storage facility.

The company’s Q2 is best read as a deliberate gap, one LEEF entered knowingly and is now closing as its largest-ever harvest enters the extraction line. The 33% gross margin achieved without in-house biomass sets a credible floor; if Salisbury Canyon Ranch material delivers the 50% margin performance management has consistently referenced, H2 2026 will look materially different from the first.