For financial reporting purposes, loss before income taxes includes the following components:

	Year ended December 31,
	2020			2019			2018
United States	$	(168,480	)	$	(156,010	)	$	(42,418	)
Canada		(96,337	)		(151,736	)		(25,333	)
Portugal		(4,730	)		(11,781	)		(2,208	)
Other countries		(7,128	)		(10,092	)		(2,215	)
Total	$	(276,675	)	$	(329,619	)	$	(72,174	)

	Year ended December 31,
	2020			2019			2018
Current income tax (recoveries) expenses:
United States	$	(227	)	$	151		$	—
Canada		(88	)		112			—
Other countries		89			134			34
Total		(226	)		397			34

Deferred income tax recoveries:
United States	$	(569	)	$	(4,390	)	$	(4,485	)
Canada		(4,909	)		(3,383	)		—
Other countries		102			(1,074	)		—
Total		(5,376	)		(8,847	)		(4,485	)
Income tax benefits, net	$	(5,602	)	$	(8,450	)	$	(4,451	)

The effective tax rate differs from the U.S. federal stautory rate as follows (in thousands):

	Year ended December 31,
	2020			2019			2018
Loss before income taxes:	$	(276,675	)	$	(329,619	)	$	(72,174	)
Income tax benefits at statutory rate		(58,076	)		(69,220	)		(15,157	)
Tax impact of foreign operations		(6,035	)		(9,193	)		(1,864	)
Foreign exchange and other		(2,349	)		1,015			1,399
Non-deductible expenses		1,576			483			5,331
Changes in enacted rates		—			(3	)		—
Change in fair value of warrant liability		21,060			—			—
Stock based and other compensation		3,376			2,113			—
Change in valuation allowance		34,846			66,355			5,840
Income tax benefits, net	$	(5,602	)	$	(8,450	)	$	(4,451	)

The tax effects of the temporary differences that give rise to the deferred tax assets and liabilities are as follows (in thousands):

	Year ended December 31,
	2020			2019			2018
Deferred assets
Operating loss carryforwards - United States	$	28,575		$	5,843		$	4,173
Operating loss carryforwards - Canada		69,100			59,755			13,723
Operating loss carryforwards - Other Countries		5,806			5,158			607
Property and equipment		—			—			2,510
Currently nondeductible interest		7,658			4,915			—
Partnership interests		34,869			21,546			—
Deferred financing costs		214			208			27
Investment tax credits and related pool balance		566			180			57
Other		6,794			931			—
Total Deferred tax assets		153,582			98,536			21,097
Less valuation allowance		(149,655	)		(84,337	)		(14,433	)
Net deferred tax assets		3,927			14,199			6,664
Deferred tax liabilities
Property and equipment		(1,582	)		(5,800	)		(2,328	)
Intangible assets		(48,456	)		(54,814	)		(289	)
Equity portion of convertible notes		(3,163	)		(6,948	)		(8,471	)
Total deferred tax liabilities		(53,201	)		(67,562	)		(11,088	)
Net deferred tax liability	$	(49,274	)	$	(53,363	)	$	(4,424	)

On March 27, 2020, the Coronavirus Aid, Relief and Economic Security (“CARES”) Act was enacted and signed into law in the U.S. The CARES Act, among other things, permits U.S. net operating loss ("NOL") carryovers and carrybacks to offset 100% of U.S. taxable income for taxable years beginning before 2021. The CARES Act also contains modifications on the limitation of business interest for tax years beginning in 2019 and 2020. The modifications to Section 163(j) increase the allowable business interest deduction from 30% of adjusted taxable income to 50% of adjusted taxable income. The CARES Act results in increasing the allowable interest expense and NOL carryover deductions in 2020.

The Tax Cuts and Jobs Act (2017 Tax Act) was enacted on December 22, 2017 and reduced the U.S. statutory federal corporate tax rate from 35% to 21%. The Tax Act also contains additional provisions that are effective for the company in 2018, including a new tax on Global Intangible Low-Taxed Income (“GILTI”). Under U.S. GAAP, we are allowed to make an accounting policy choice to either (i) treat taxes due on future U.S. inclusions in taxable income related to GILTI as a current-period expense when incurred (the "period cost method"); or (ii) factor in such amounts into the measurement of our deferred taxes (the "deferred method"). The Company has made a policy decision to record GILTI tax as a current-period expense when incurred.

Effective January 1, 2018, the United States tax law provides a deduction for the foreign-source portion of dividends received from specified foreign corporations. As such, the Company does not maintain an indefinite reinvestment assertion on unremitted foreign earnings and has recorded a deferred tax liability, as necessary, for any estimated foreign, federal, or state tax liabilities associated with a future repatriation of foreign earnings.

At December 31, 2020, the Company had United States net operating loss carryforwards of approximately $135,817 that can be carried forward indefinitely and generally limited in annual use to 80% of the current year taxable income starting 2021. The Company has Canadian net operating loss carry-forwards of approximately $258,790 that can be carried forward 20 years and begin to expire in 2028. Management believes that it is more-likely-than-not that the benefit from certain United States and foreign net operating loss carryforwards will not be realized. In recognition of this risk, the Company has provided a valuation allowance on the deferred tax assets relating to these carryforwards. The net change in the total valuation allowance was an increase of $65,318 and $66,355 for the years ended December 31, 2020 and 2019, respectively.

The Company recognizes the financial statement impact of a tax position only after determining that the relevant tax authority would more-likely-than-not sustain the position following an audit. For tax positions meeting the more-likely-than-not threshold, the amount recognized in the financial statements is the largest impact that has a greater than fifty percent likelihood of being realized upon ultimate settlement with the relevant tax authority.

The total amount of gross unrecognized tax benefits (“GUTB”) was $0, $86, and $0 as of December 31, 2020, 2019 and 2018 respectively. The $86 decrease of GUTB in 2020 was attributable to unrecognized tax benefits as a result of tax positions taken during a prior period. The $86 increase of GUTB in 2019 was attributable to unrecognized tax benefits as a result of tax positions taken during a prior period. There is a reasonable possibility that the Company’s unrecognized tax benefits will change within twelve months due to audit settlements or the expiration of statute of limitations, but the Company does not expect the change to be material to the financial statements.

The Company recognizes interest and, if applicable, penalties for any uncertain tax positions. Interest and penalties are recorded as a component of income tax expenses. In the years ended December 31, 2020, 2019 and 2018, the Company recorded approximately $0, $0 and $0, respectively, of interest and penalty expenses related to uncertain tax positions. As of December 31,2020, and 2019, the Company had a cumulative balance of accrued interest and penalties on unrecognized tax positions of $0 and $0, respectively.

The Company and its subsidiaries are subject to United States federal income tax as well as the income tax of multiple state and foreign jurisdictions. The Company is not currently under audit in any jurisdiction for any period. Major jurisdictions where there are wholly owned subsidiaries of Tilray, Inc. which require income tax filings include the Canada, Portugal, Germany, and Australia. The earliest periods open for review by local taxing authorities are fiscal years 2016 for Canada, 2017 for Portugal, 2016 for Germany, 2017 for Australia, and 2018 for United States.