Income taxes

9 Months Ended

Sep. 30, 2026

Income Tax Disclosure [Abstract]

Income taxes

Note 23 — Income taxes

The Company computed its provision for income taxes for the three and nine months ended September 30, 2026 using the actual effective tax rate for each respective interim period, taking into consideration the impact of the Rescheduling Order, issued by the U.S. Department of Justice on April 23, 2026 and effective April 28, 2026, which reclassified certain state-licensed medical marijuana products and FDA-approved marijuana products from Schedule I to Schedule III under the Controlled Substance Act. Therefore, the Company’s effective income tax rates for the three and nine months ended September 30, 2026 and 2025 are not indicative of the effective income tax rate for each respective fiscal year of 2026 and 2025. The Company’s effective income tax rate differs significantly from the applicable statutory income tax rates due in part to (i) uncertain tax position liabilities associated with the Section 280E Position relating to adult-use cannabis activities, qualifying medical cannabis activities occurring before April 28, 2026, (ii) interest and penalties associated with uncertain tax positions, and (iii) state income taxes. These items were partially offset during the three and nine months ended September 30, 2026 by the release of $121.2 million of previously recorded uncertain tax positions related to the treatment of certain costs in our U.S. consolidated tax return and approximately $60.5 million release of valuation allowance following the reassessment of the realizability of certain deferred tax assets after the Rescheduling Order.

The IRS has historically taken the position that cannabis companies are subject to the limitations of Section 280E, under which cannabis companies are only allowed to deduct expenses directly and indirectly related to the production of inventory. The Rescheduling Order provides that qualifying medical cannabis activities conducted by state-licensed entities are no longer subject to the deduction disallowance imposed by Section 280E.

The Rescheduling Order also established an expedited process for state-licensed medical cannabis entities, including medical marijuana dispensaries, to register with the DEA, enabling qualifying registrants to engage in the manufacture, distribution and/or dispensing of cannabis for medical purposes under federal law. The Company has submitted DEA registration applications for its medical and mixed-use operations, and all such applications remain pending as of the date of this Quarterly Report.

The Rescheduling Order further provides that the U.S. Department of the Treasury and the IRS will issue formal guidance addressing the federal income tax implications of the Rescheduling Order, including transition and allocation matters. As of the date of this Quarterly Report, the U.S. Department of the Treasury and the IRS have not issued any formal guidance. The IRS did, however, issue a press release on April 23, 2026 indicating that the rescheduling would generally apply for federal income tax purposes for the entire taxable year that includes the effective date of the Rescheduling Order. Management considered the press release but, because it does not constitute authoritative guidance, concluded that it does not provide sufficient technical support to meet the more-likely-than-not recognition threshold under ASC 740 for tax benefits attributable to periods before the effective date. Based on the Rescheduling Order and the facts and circumstances existing as of September 30, 2026, management concluded that, beginning on the April 28, 2026 effective date, Section 280E does not limit deductions and credits attributable to the Company's qualifying state-licensed medical cannabis activities and that the related tax benefits meet the more-likely-than-not recognition threshold. Accordingly, the Company did not record an uncertain tax position for deductions and credits attributable to qualifying state-licensed medical cannabis activities occurring on or after April 28, 2026. The Company continued to record uncertain tax positions for deductions attributable to adult-use cannabis activities, qualifying medical cannabis activities occurring before April 28, 2026, and tax positions relating to prior taxable years. The Company will reassess its conclusions and methodology upon the issuance of formal guidance or other relevant legal or regulatory developments.

For the three months ended September 30, 2026, the Company recorded income tax expense of $14.5 million on pre-tax loss from continuing operations of $22.9 million. The tax rate was impacted by uncertain tax position liabilities and related interest associated with the Section 280E Position for adult use cannabis activities and prior taxable years, state income taxes, non-deductible expenses such as executive compensation and lobbying expenses, and the U.S. tax impact of foreign operations.

For the nine months ended September 30, 2026, the Company recorded income tax benefit of $123.0 million on pre-tax loss from continuing operations of $77.8 million. The tax rate was impacted by the release of uncertain tax positions during the first quarter of 2026 related to the treatment of certain costs in the Company’s U.S. consolidated tax return and the release of valuation allowance following the reassessment of the realizability of certain deferred

tax assets after the Rescheduling Order, offset by non-deductible expenses due to Section 280E, executive compensation and lobbying expenses, and the U.S. tax impact of foreign operations.

For the three months ended September 30, 2025, the Company recorded income tax expense of $32.8 million on pre-tax loss from continuing operations of $21.4 million. The tax rate was impacted by increased uncertain tax position liabilities and interest due to the Company's Section 280E Position, and state income taxes in certain separate filing jurisdictions.

For the nine months ended September 30, 2025, the Company recorded income tax expense of $98.3 million on pre-tax loss from continuing operations of $54.1 million. The tax rate was impacted by increased uncertain tax position liabilities and interest due the Company's Section 280E Position, and state income taxes in certain separate filing jurisdictions.

Management assesses all available positive and negative evidence to determine whether sufficient future taxable income will be generated to realize existing deferred tax assets. During the second quarter of 2026, the reclassification of certain medical cannabis products to Schedule III under the Rescheduling Order, effective April 28, 2026, constituted a change in circumstances that caused management to reassess the realizability of certain U.S. federal and state deferred tax assets. Based on that reassessment, management determined that it is more likely than not that a portion of those deferred tax assets will be realized due to reversing deferred tax liabilities resulting in sufficient future taxable income, and released the associated valuation allowance of $60.5 million in that period. The reassessment did not reflect retroactive application of the Rescheduling Order to qualifying state-licensed medical cannabis activities occurring before April 28, 2026. A valuation allowance is retained against the remaining deferred tax assets for which realization does not meet the more-likely-than-not threshold.

The Company files its income tax returns as prescribed by the tax laws of the jurisdictions in which it operates. In the normal course of business, the Company is subject to examination by federal, state and foreign taxing authorities, where applicable. As of September 30, 2026, the Company is under audit for years ranging from 2020 to 2024 by the IRS, certain U.S. states and Canada. The statutes of limitations for federal, state and foreign taxing jurisdictions remain open from tax year 2020.

Global Minimum Tax Rules - Pillar Two

Numerous foreign jurisdictions have enacted or are in the process of enacting legislation to adopt a minimum effective tax rate, as described in Pillar Two issued by the Organization for Economic Co-operation and Development. Under Pillar Two, a minimum effective tax rate of 15% applies to multinational companies with consolidated revenues above €750 million. Pillar Two became effective for fiscal years beginning on or after January 1, 2024, in several jurisdictions in which the Company operates. Pillar Two has not had a material impact on the Company’s Condensed Consolidated Financial Statements.