Income Taxes (Tables)
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12 Months Ended |
Dec. 31, 2022 |
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| Income Tax Disclosure [Abstract] |
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| Schedule of Income before Income Tax, Domestic and Foreign |
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For the year ended December 31, |
| (in thousands) |
2022 |
|
2021 |
| United States |
$ |
(117,755) |
|
|
$ |
(51,109) |
|
| Foreign |
$ |
(8,116) |
|
|
$ |
(2,304) |
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| Total |
$ |
(125,871) |
|
|
$ |
(53,413) |
|
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| Schedule of Components of Income Tax Expense (Benefit) |
The income tax (benefit) expense for the years ended December 31, 2022 and 2021 consisted of the following:
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For the year ended December 31, 2022 |
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For the year ended December 31, 2021 |
| (in thousands) |
Federal |
Foreign |
State |
Total |
|
Federal |
Foreign |
State |
Total |
| Current tax (benefit) expense |
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| Current year |
$ |
— |
|
$ |
(13) |
|
$ |
— |
|
$ |
(13) |
|
|
$ |
— |
|
$ |
(10) |
|
$ |
20 |
|
$ |
10 |
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| Total current year |
— |
|
(13) |
|
— |
|
(13) |
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— |
|
(10) |
|
20 |
|
10 |
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| Deferred tax (benefit) expense |
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| Current year |
(20,552) |
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(2,029) |
|
(6,816) |
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(29,397) |
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|
(6,624) |
|
(636) |
|
(2,211) |
|
(9,471) |
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| Change in valuation allowance |
25,944 |
|
2,029 |
|
9,971 |
|
37,944 |
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|
30,255 |
|
636 |
|
12,095 |
|
42,986 |
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| Change in tax rate |
72 |
|
— |
|
(344) |
|
(272) |
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|
101 |
|
— |
|
(479) |
|
(378) |
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| Tax conversion of Operating Company |
2,990 |
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— |
|
1,022 |
|
4,012 |
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— |
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— |
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— |
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— |
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| Up-C consolidation |
(10,097) |
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— |
|
(3,440) |
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(13,537) |
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|
(5,733) |
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— |
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(1,901) |
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(7,634) |
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| KushCo merger |
1,643 |
|
— |
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(393) |
|
1,250 |
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(17,999) |
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— |
|
(7,504) |
|
(25,503) |
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| Total deferred tax (benefit) expense |
— |
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— |
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— |
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— |
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— |
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— |
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— |
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— |
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| Income tax (benefit) expense |
$ |
— |
|
$ |
(13) |
|
$ |
— |
|
$ |
(13) |
|
|
$ |
— |
|
$ |
(10) |
|
$ |
20 |
|
$ |
10 |
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| Schedule of Effective Income Tax Rate Reconciliation |
A reconciliation of the income tax (benefit) expense computed at the U.S. federal statutory income tax rate to the income tax expense recognized is as follows:
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For the year ended December 31, |
| (in thousands) |
2022 |
|
2021 |
| Expected federal income tax (benefit) expense at statutory rate |
$ |
(26,433) |
|
|
$ |
(11,216) |
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| State tax expense, net of federal benefit |
(5,813) |
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|
(2,125) |
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| Loss attributable to non-controlling interests |
2,121 |
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|
3,475 |
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| Change in valuation allowance |
37,944 |
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|
42,986 |
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| Tax conversion of Operating Company |
4,012 |
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— |
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| Up-C consolidation |
(13,537) |
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|
(7,634) |
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| KushCo merger |
1,250 |
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|
(25,503) |
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| Other, net |
443 |
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|
27 |
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| Income tax (benefit) expense |
$ |
(13) |
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$ |
10 |
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| Schedule of Deferred Tax Assets and Liabilities |
The components of deferred tax assets and liabilities were as follows:
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As of December 31, |
| (in thousands) |
2022 |
|
2021 |
| Deferred tax assets: |
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| Goodwill and other intangible assets |
$ |
23,901 |
|
|
$ |
16,285 |
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| Inventory |
5,858 |
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|
— |
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| Allowance for doubtful accounts |
833 |
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— |
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| Operating lease liability |
862 |
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— |
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| Equity-based compensation |
2,576 |
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— |
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| Business interest carryforward |
5,342 |
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— |
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| Net operating loss carryforwards |
57,136 |
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|
44,424 |
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| Other |
576 |
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|
4,351 |
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| Total deferred tax assets |
97,084 |
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|
65,060 |
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| Valuation allowance |
(96,042) |
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|
(58,098) |
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| Net deferred tax assets |
1,042 |
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|
6,962 |
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| Deferred tax liability: |
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| Fixed assets |
(227) |
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|
— |
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| Right of use assets |
(815) |
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— |
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| Basis difference in investment in the Operating Company |
— |
|
|
(6,962) |
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| Total deferred tax liabilities |
(1,042) |
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|
(6,962) |
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| Net deferred tax assets and liabilities |
$ |
— |
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|
$ |
— |
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