INCOME TAXES

9 Months Ended

Sep. 30, 2024

Income Tax Disclosure [Abstract]

INCOME TAXES

The following table summarizes the Company’s income tax expense and effective tax rates for the three and nine months ended September 30, 2024 and 2023:

	Three Months Ended September 30,						Nine Months Ended September 30,
	2024			2023			2024			2023
Income before Income Taxes	$	2,911		$	27,033		$	18,332		$	60,734
Income Tax Expense	(45,478)			(44,797)			(87,485)			(100,796)
Effective Tax Rate	1562		%	166		%	477		%	166		%

The effective tax rates for the three and nine months ended September 30, 2024 and 2023 were based on the Company’s forecasted annualized effective tax rates and were adjusted for discrete items that occurred within the periods presented. Net discrete tax items of $9,927 and $8,517 were recorded during the three months ended September 30, 2024 and 2023, respectively. Net discrete tax items of $18,623 and $20,704 were recorded during the nine months ended September 30, 2024 and 2023, respectively. Discrete items recorded during the three and nine months ended September 30, 2024 and 2023 primarily relate to penalties and interest on unpaid tax liabilities, impacts of prior period return to provision adjustments, remeasurement of deferred taxes for state tax rate changes, and book remeasurement adjustments not recognized for tax purposes.

Due to its cannabis operations, the Company is subject to the limitations of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) Section 280E, under which the Company is only allowed to deduct expenses directly related to sales of product. This results in permanent differences between ordinary and necessary business expenses deemed non-allowable under Section 280E of the Code. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income and the Company's effective tax rates are well in excess of statutory tax rates.

Taxes paid during the nine months ended September 30, 2024 and 2023 were $74,026 and $114,659, respectively.