Income Tax Expense

6 Months Ended

Jun. 30, 2022

Income Tax Disclosure [Abstract]

Income Tax Expense

INCOME TAX EXPENSE

The following table summarizes the Company’s income tax expense and effective tax rates for the three and six months ended June 30, 2022 and 2021:

		Three Months Ended June 30,				Six Months Ended June 30,
		2022		2021		2022		2021
		(in thousands)				(in thousands)
Income before Income Taxes	$	63,071	$	53,301	$	123,888	$	95,612
Income Tax Expense		38,340		30,027		69,471		60,883
Effective Tax Rate		60.8%		56.3%		56.1%		63.7%

The effective tax rates for the three and six months ended June 30, 2022 and 2021 were based on the Company’s forecasted annualized effective tax rates and were adjusted for discrete items that occurred within the periods presented.

Due to its cannabis operations, the Company is subject to the limitations of the U.S. Internal Revenue Code of 1986, as amended (“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-allowable under IRC Section 280E. Therefore, the effective tax rate can be highly variable and may not necessarily correlate with pre-tax income and provides for effective tax rates that are well in excess of statutory tax rates.

Taxes paid during the six months ended June 30, 2022 and 2021 were $64,803 thousand and $75,455 thousand, respectively.