Income Taxes (Tables)

12 Months Ended

Dec. 31, 2021

The Company's United States and foreign operations components of income (loss) before continuing operations before income taxes are as follows:

The income tax expense for the years ended December 31, 2021 and 2020 consisted of the following:


	For the year ended December 31, 2021								For the year ended December 31, 2020
(in thousands)	Federal		Foreign		State		Total		Federal		Foreign		State		Total
Current tax expense
Current year	$	—	$	(10)	$	20	$	10	$	6	$	188	$	—	$	194
Total current year	—		(10)		20		10		6		188		—		194
Deferred tax expense
Current year	(6,624)		(636)		(2,211)		(9,471)		(2,278)		(1,898)		(657)		(4,833)
Change in valuation allowance	30,255		636		12,095		42,986		2,397		1,898		776		5,071
Change in tax rate	101		—		(479)		(378)		28		—		(132)		(104)
KushCo merger	(23,732)		—		(9,405)		(33,137)		(147)		—		13		(134)
Total deferred	—		—		—		—		—		—		—		—
Income tax expense	$	—	$	(10)	$	20	$	10	$	6	$	188	$	—	$	194

A reconciliation of the income tax expense computed at the U.S. federal statutory income tax rate to the income tax expense recognized is as follows:


	For the year ended December 31,
(in thousands)	2021		2020
Expected federal income tax (benefit) expense at statutory rate	$	(11,216)	$	(9,977)
State tax expense, net of federal benefit	(2,125)		(652)
Loss attributable to non-controlling interests	3,475		5,628
Valuation allowance	10,293		5,290
Other, net	(417)		(95)
Income tax expense	$	10	$	194

The components of deferred tax assets and liabilities were as follows:


	As of December 31,
(in thousands)	2021		2020
Deferred tax assets:
Intangible assets	$	16,285	$	9,197
Basis difference in investment in the Operating Company	—		742
Net operating loss carryforwards	44,424		5,129
Other	4,351		43
Total deferred tax assets	65,060		15,111
Valuation allowance	(58,098)		(15,111)
Net deferred tax assets	6,962		—
Deferred tax liability:
Basis difference in investment in the Operating Company	(6,962)		—
Net deferred tax assets and liabilities	$	—	$	—