|12 Months Ended|
Dec. 31, 2021
|Income Tax Disclosure [Abstract]|
Note 15 —Income Taxes
Income tax expense (recoveries) for the years ended December 31, 2021 and 2020 consisted of the following:
Total income tax expense differed from the amount computed by applying the federal statutory tax rate of 21.0%
for the years ended December 31, 2021 and 2020 due to the following:
The tax effects of temporary differences that give rise to significant
portionsof the deferred income tax assets and liabilities as of December 31, 2021 and 2020 are presented below:
The Company is subject to taxation in Canada and the United States. As the Company operates in state-level legal cannabis industry within the United States, the Company is subject to the limits of Internal Revenue Code (“IRC”) 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-allowableunder IRC Section 280E and a higher effective tax rate than most industries
As of December 31, 2021, the Company has Canadian
non-capitalloss carryforwards of C$135.2 million $(106.7 million
)available to offset future income which will expire in the years 2025 through 2041. As of December 31, 2021, the Company has federal net operating loss carryforwards to approximately $98.9
non-cultivatorentities are more likely than not to not be realized.
2018 through 2020,
The Company files income tax returns in Canada, Luxembourg, United States and various state and local tax jurisdictions. The Company’s income tax years open to examination for Canadian federal income taxes are from
for United States federal income taxes are from2013 through 2020, and for state and local income taxes vary from 2018 to 2020. There are no open
income taxaudits. Net operating losses arising prior to these years are also open to examination if and when utilized.
The entire disclosure for income taxes. Disclosures may include net deferred tax liability or asset recognized in an enterprise's statement of financial position, net change during the year in the total valuation allowance, approximate tax effect of each type of temporary difference and carryforward that gives rise to a significant portion of deferred tax liabilities and deferred tax assets, utilization of a tax carryback, and tax uncertainties information.
Reference 1: http://www.xbrl.org/2003/role/disclosureRef