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INCOME TAXES | 3 Months Ended
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Mar. 31, 2026
Income Tax Disclosure [Abstract] |
INCOME TAXES | The following table summarizes the Company’s income tax expense and effective tax rates for the three months ended March 31, 2026 and 2025:
| For the Three Months Ended March 31,
| 2026 |  | 2025
Income (Loss) before Income Taxes | $ | (6,200) |  |  | $ | 5,834 |
Income Tax Expense | (11,623) |  |  | (17,349) |
Effective Tax Rate | (187) | % |  | 297 | %
The effective tax rates for the three months ended March 31, 2026 and 2025 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 $12,483 and $9,065 were recorded during the three months ended March 31, 2026 and 2025, respectively. Discrete items recorded during the three months ended March 31, 2026 and 2025 primarily relate to penalties and interest on unpaid tax liabilities and remeasurement of deferred taxes for state tax rate changes. The U.S. Internal Revenue Service has taken the position that cannabis companies are subject to the limits of Section 280E of the Internal Revenue Code of 1986, as amended (“Section 280E”) 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. The Company records an uncertain tax liability in uncertain tax positions (“UTP”) on the Condensed Consolidated Balance Sheets for tax positions taken based on legal interpretations that challenge the Company's tax liability under Section 280E. Refer for Note 17 - Subsequent Events for further discussion. During the three months ended March 31, 2026, the Company’s income taxes paid, net of refunds, were as follows:
|  | For the Three Months Ended March 31, 2026
U.S. Federal |  | $ | (236) |
U.S. State |  |
Arizona(1) |  | (634) |
Arkansas(1) |  | (125) |
West Virginia(1) |  | (232) |
Other |  | (71) |
Total U.S. State |  | (1,062) |
Total Income Taxes Paid, net of Refunds |  | $ | (1,298) |
(1)Income taxes paid, net of refunds exceeds 5% of total income taxes paid, net of refunds, in this jurisdiction. Taxes paid during the three months ended March 31, 2025 were $32,485.

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