Company: JUSHF
Filing Date: 2025-08-05
Form Type: 10-Q
Source: 0001628280-25-037797
Chunk: 38

Company: Jushi Holdings Inc.
Filing Date: 2025-08-05
Form: 10-Q
Item: Item 1
Chunk 38
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%126.2 %181.1 %1567.5 %The Company has computed its provision for income taxes based on the actual effective rate for the three and six months ended June 30, 2025 and 2024 as the Company believes this is the best estimate for the annual effective tax rate. Therefore, the Company’s effective income tax rates for the three and six months ended June 30, 2025 and 2024 are not indicative of the effective income tax rate for each respective fiscal year of 2025 and 2024. The Company’s effective income tax rate is significantly higher than the statutory income tax rates due in part to (i) an increase in the uncertain tax position liability due to tax positions based on legal interpretations that challenge the Company’s tax liability under Internal Revenue Code Section 280E (“280E”), (ii) interest and penalties accrual for tax liabilities, and (iii) state income taxes.The IRS has taken the position that cannabis companies are subject to the limitation of 280E, a position held by state tax regulators in Nevada, Ohio and Virginia. Under the IRS’s interpretation of 280E, cannabis companies are only allowed to deduct expenses directly and indirectly related to the production of inventory. In connection with the preparation and filing of the fiscal 2022 income tax return, the Company changed its previous application of 280E to exclude certain parts of its business. In regards to fiscal years 2023, 2024, and 2025 tax years, the Company has taken the position that it does not owe taxes attributable to the application of 280E. However, since the Company’s tax positions on 280E may be challenged by taxing authorities, the Company elected to treat the deductibility of these related expenses as an uncertain tax position. 

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Table of ContentsJUSHI HOLDINGS INC. Notes to the Unaudited Condensed Consolidated Financial Statements(Amounts Expressed in Thousands of U.S. dollars, Except Share and Per Share Amounts)

The Company has a liability for unrecognized tax benefits of $162,785 and $143,688 as of June 30, 2025 and December 31, 2024, respectively, inclusive of interest and penalties. The Company anticipates that it is reasonably possible that its new tax position on 280E may require changes to the balance of unrecognized tax benefits within the next 12 months. However, an estimate of such changes cannot reasonably be made.The total amount of interest and penalties related