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INCOME TAXES
 6 Months Ended
Jun. 30, 2025
Income Tax Disclosure [Abstract]  
INCOME TAXES
The following table summarizes the Company’s income tax expense and effective tax rates for the three and six months ended June 30, 2025 and 2024:
Three Months Ended June 30,Six Months Ended June 30,
2025202420252024
Income before Income Taxes$16,002 $8,766 $21,836 $15,421 
Income Tax Expense(35,152)(30,530)(52,501)(42,007)
Effective Tax Rate220 %348 %240 %272 %
The effective tax rates for the three and six months ended June 30, 2025 and 2024 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 $4,569 and $8,932 were recorded during the three months ended June 30, 2025 and 2024, respectively. Net discrete tax items of $13,634 and $8,696 were recorded during the six months ended June 30, 2025 and 2024, respectively. Discrete items recorded during the three and six months ended June 30, 2025 and 2024 primarily relate to penalties and interest on unpaid tax liabilities, impacts of prior period and return to provision adjustments, and remeasurement of deferred taxes for state tax rate changes.
The Internal Revenue Service has taken the position that cannabis companies are subject to the limits of Section 280E of the U.S. Internal Revenue Code of 1986, as amended (the “Code”) for U.S. federal income tax purposes, under which, they are only allowed to deduct expenses directly related to costs of goods sold. The Company has taken a position that its deduction of ordinary and necessary business expenses is not limited by Section 280E of the Code.
During the year ended December 31, 2024, the Company recorded an uncertain tax liability in uncertain tax positions on the Consolidated Balance Sheet for tax positions taken based on legal interpretations that challenge the Company's tax liability under Section 280E of the Code.
On July 4, 2025, the One Big Beautiful Bill Act ("OBBBA") was enacted in the U.S. The OBBBA makes key elements of the Tax Cuts and Jobs Act of 2017 permanent, including 100% bonus depreciation, domestic research cost expensing, and the business interest expense limitation. We are currently evaluating the provisions of the new legislation and the potential effects on our estimated annual effective tax rate and cash tax position for the year ending December 31, 2025.
Taxes paid during the six months ended June 30, 2025 and 2024 were $52,037 and $53,515, respectively.