Cannabis News
$113,000,000 and Counting in IRS 280E Tax Refunds
In October, Cannabis.net covered the fact that the cannabis industry could be sitting on billions of dollars in tax refunds if the IRS 280E tax code is altered or eliminated for the marijuana industry.
With towns and cities starting to refund excess taxes collected from cannabis companies in the name of “social impact fees”, for things such as extra police work and trash pick up due to dispensaries entering their town, it appears the Federal government is also starting to give back taxes to the cannabis industry.
Trulieve Cannabis Corp, headquartered in Florida, has unveiled its financial performance for the fourth quarter and fiscal year, concluding on December 31, 2023. The reports reveal a dip in revenues and increased annual losses as the company strategically navigates its financial landscape through tax adjustments.
Building on initiatives announced in the preceding year, Trulieve executed amended federal tax returns for 2019, 2020, and 2021, vying for substantial refunds totaling $143 million. Concurrently, the company took steps to address state tax matters, submitting corresponding returns and aiming for an extra $31 million in refunds.
The tangible outcomes materialized in the fourth quarter, where Trulieve successfully secured $62 million in refunds. This significantly contributed to the overall tally, reaching an impressive $113 million in refunds accumulated thus far. However, the company encountered a minor setback as a $1.2 million refund claim was rejected.
The 280E Approach
Trulieve’s tax approach centers around the section 280E tax provision, a move CEO Kim Rivers hinted might be explained if and when they get to a court filing. During a recent investor call, Rivers emphasized the confidentiality of their position, considering it a trade secret tied to the company’s unique standing. She explained the decision not to disclose publicly, citing potential litigation concerns.
In January, an additional $50.3 million in refunds bolstered Trulieve’s financial landscape, stemming from their tax strategy. This infusion notably contributes to the growth of unrecognized tax benefits. However, this bold approach towards tax refunds has inherent risks.
Trulieve, in its filings, openly acknowledged the elevated scrutiny from the Internal Revenue Service (IRS), foreseeing an increased likelihood of audits, mainly targeting cannabis-related businesses. The recent flurry of refund claims, especially for multiple subsidiaries, further amplifies this risk, adding a layer of complexity to the company’s tax maneuvering.
Additionally, the company acknowledged the potential fallout from any ensuing audit, anticipating the emergence of additional tax liabilities, encompassing interest, penalties, and escalated legal and accounting expenses. This ongoing challenge has resulted in taxes being placed in an uncertain tax position, as outlined in the company’s earnings call presentation.
Despite the persisting uncertainty, Trulieve adheres to customary tax payments as a U.S. taxpayer, excluding costs associated with Section 280E of the tax code until a conclusive resolution is achieved. Regulatory filings disclose a substantial amount of $180.4 million designated as “uncertain tax position liabilities,” with a noteworthy portion, specifically $152.1 million, linked to the contested applicability of Section 280E to Trulieve.
Financial Results
In the latest financial update, the company experienced a 4% dip in quarterly revenue, registering at $287 million, down $89 million from the previous period. Remarkably, this exceeded the average expectations of Yahoo analysts by $19 million, constituting roughly 7%. In comparison, the company raked in $298 million during the corresponding period last year, with most sales stemming from its retail operations.
Despite the revenue setback, there’s a silver lining: a net loss improvement. The company reported a net loss of $33 million for the quarter, indicating a significant 57% enhancement compared to last year’s $77 million loss in the same quarter. On a more nuanced scale, the company disclosed an adjusted net loss of $23 million when adjusting for specific financial items.
Reflecting on the fiscal performance, CEO Kim Rivers highlighted the company’s successful execution of a resilience plan implemented last year. This strategic focus emphasized cash generation and preservation, concurrently making investments to fortify future growth prospects.
Positive shifts in consumer trends drove the momentum in the fourth quarter. As they stepped into 2024, the company found itself in a position of considerable strength, significantly as the industry’s growth and reform outlook brightened. Armed with robust cash generation and a well-defined strategy, Trulieve is the prime contender for the upcoming surge in substantial growth catalysts.
Looking at the broader picture, Trulieve’s annual revenue reached $1.13 billion, marking a 7% decline from the previous year’s $1.22 billion. The net loss for the whole year tallied up to $527 million, marking a 114% increase from the $246 million net loss in 2022. Accounting for certain adjustments, the adjusted net loss settled at $70 million, reflecting a 139% surge compared to the preceding year.
Exploring the financial details, the operational cash flow for the quarter surged to $131 million, with a parallel free cash flow of $122 million. By December 31, 2023, the company’s cash and cash equivalents reached $201.4 million, revealing a noteworthy spike of $178.7 million compared to the net cash of $23.1 million in the prior year.
The marked improvement can be attributed to the company’s effective execution of the inventory wind-down strategy, as highlighted in its filings. The impact of income tax accruals, reductions in sales and marketing, and general and administrative expenses further contributed to this positive shift.
On the front of its debt management approach, Trulieve successfully redeemed $130 million of senior secured notes and secured an additional $25 million through a mortgage financing deal. Looking into the future, the company anticipates a cash flow from operations of at least $225 million in 2024.
In terms of operational developments, Trulieve provided insights into opening 17 new dispensaries over the year, expanding its nationwide presence to 192 locations. Simultaneously, strategic decisions led to the company exiting the California and Massachusetts markets.
The company’s push for recreational legalization in Florida this election season, spearheaded by Smart & Safe Florida, has gained significant traction. Trulieve has emerged as the primary financial supporter of the campaign, channeling tens of millions of dollars to bolster the initiative.
The Florida Supreme Court is expected to decide on the ballot placement by April 1, despite staunch resistance from the state’s attorney general. CEO Kim Rivers conveyed to investors that the court’s stance appeared favorable, providing a positive outlook for the campaign.
Conclusion
Trulieve’s recent financial reports indicate a mixed landscape, marked by a fourth-quarter revenue dip and substantial strides in net loss improvement. The company’s strategic tax adjustments and inventory wind-down have played pivotal roles in shaping its financial narrative. Additionally, Trulieve’s proactive debt management and operational expansion underscore a forward-looking approach.
The company’s significant involvement in advocating for recreational legalization in Florida is noteworthy, reflecting a commitment to shaping industry landscapes beyond its financial performance. With potential ballot approval and industry developments, the coming months will be crucial in determining Trulieve’s trajectory.
280E COULD BE A GAME CHANGER FOR THE WEED BIZ, READ ON…
BILLIONS OF DOLLARS OF TAX CREDITS COMING TO THE CANNABIS INDUSTRY?
“How Long Does One Puff of Weed Stay in Your System?”… This topic can be difficult to answer since it is dependent on elements such as the size of the hit and what constitutes a “one hit.” If you take a large bong pull then cough, it might linger in your system for 5-7 days. A moderate dose from a joint can last 3-5 days, whereas a few hits from a vaporizer may last 1-3 days.
The length of time that marijuana stays in the body varies based on a number of factors, including metabolism, THC levels, frequency of use, and hydration.
Delta-9-tetrahydrocannabinol, or THC, is the primary psychoactive component of cannabis. THC and its metabolites, which remain in your body long after the effects have subsided, are detected by drug tests.
Since these metabolites are fat-soluble, they cling to bodily fat molecules. They could thus take a while to fully pass through your system, particularly if your body fat percentage is higher.
THC is absorbed by tissues and organs (including the brain, heart, and fat) and converted by the liver into chemicals such as 11-hydroxy-THC and carboxy-THC. Cannabis is eliminated in feces at a rate of around 65%, while urine accounts for 20%. The leftover amount might be kept within the body.
THC deposited in bodily tissues ultimately re-enters the circulation and is processed by the liver. For frequent users, THC accumulates in fatty tissues quicker than it can be removed, thus it may be detectable in drug tests for days or weeks following consumption.
The detection time varies according to the amount and frequency of cannabis usage. Higher dosages and regular usage result in longer detection times.
The type of drug test also affects detection windows. Blood and saliva tests typically detect cannabis metabolites for shorter periods, while urine and hair samples can reveal use for weeks or even months. In some cases, hair tests have detected cannabis use over 90 days after consumption.
Detection Windows for Various Cannabis Drug Tests
Urine Tests
Among all drug tests, urine testing is the most commonly used method for screening for drug use in an individual.
Detection times vary, but a 2017 review suggests the following windows for cannabis in urine after last use:
– Single-use (e.g., one joint): up to 3 days
– Moderate use (around 4 times a week): 5–7 days
– Chronic use (daily): 10–15 days
– Chronic heavy use (multiple times daily): over 30 days
Blood Tests
Blood tests generally detect recent cannabis use, typically within 2–12 hours after consumption. However, in cases of heavy use, cannabis has been detected up to 30 days later. Chronic heavy use can extend the detection period in the bloodstream.
Saliva Tests
THC can enter saliva through secondhand cannabis smoke, but THC metabolites are only present if you’ve personally smoked or ingested cannabis.
Saliva testing has a short detection window and can sometimes identify cannabis use on the same day. A 2020 review found that THC was detectable in the saliva of frequent users for up to 72 hours after use, and it may remain in saliva longer than in blood following recent use.
In areas where cannabis is illegal, saliva testing is often used for roadside screenings.
Hair Tests
Hair follicle tests can detect cannabis use for up to 90 days. After use, cannabinoids reach the hair follicles through small blood vessels and from sebum and sweat surrounding the hair.
Hair grows at approximately 0.5 inches per month, so a 1.5-inch segment of hair close to the scalp can reveal cannabis use over the past three months.
Factors Affecting THC and Metabolite Retention
The length of time THC and its metabolites stay in your system depends on various factors. Some, like body mass index (BMI) and metabolic rate, relate to individual body processing, not the drug itself.
Other factors are specific to cannabis use, including:
– Dosage: How much you consume
– Frequency: How often you use cannabis
– Method of consumption: Smoking, dabbing, edibles, or sublingual
– THC potency: Higher potency can extend detection time
Higher doses and more frequent use generally extend THC retention. Cannabis consumed orally may remain in the system slightly longer than smoked cannabis, and stronger cannabis strains, higher in THC, may also stay detectable for a longer period.
How Quickly Do the Effects of Cannabis Set In?
When smoking cannabis, effects appear almost immediately, while ingested cannabis may take 1–3 hours to peak.
The psychoactive component THC produces a “high” with common effects such as:
– Altered senses, including perception of time
– Mood changes
– Difficulty with thinking and problem-solving
– Impaired memory
Other short-term effects can include:
– Anxiety and confusion
– Decreased coordination
– Dry mouth and eyes
– Nausea or lightheadedness
– Trouble focusing
– Increased appetite
– Rapid heart rate
– Restlessness and sleepiness
In rare cases, high doses may lead to hallucinations, delusions, or acute psychosis.
Regular cannabis use may have additional mental and physical effects. While research is ongoing, cannabis use may increase the risk of:
– Cognitive issues like memory loss
– Cardiovascular problems including heart disease and stroke
– Respiratory illnesses such as bronchitis or lung infections
– Mood disorders like depression and anxiety
Cannabis use during pregnancy can negatively impact fetal growth and development.
Duration of Effects
Short-term effects generally taper off within 1–3 hours, but for chronic users, some long-term effects may last days, weeks, or even months. Certain effects may even be permanent.
Bottom Line
The amount of time that cannabis remains in your system following a single use varies greatly depending on individual characteristics such as body fat, metabolism, frequency of use, and mode of intake. Frequent users may maintain traces of THC for weeks, whereas infrequent users may test positive for as little as a few days. Hair tests can disclose usage for up to 90 days, while blood and saliva tests identify more recent use. Urine tests are the most popular and have varying detection durations. The duration that THC and its metabolites are detectable will ultimately depend on a number of factors, including dose, strength, and individual body chemistry.
PEE IN A CUP COMING UP, READ ON..
Is kratom addictive? Discover the potential for dependence on Kratom, the risks involved with its use, and how to approach its consumption responsibly.
From 2011 to 2017, over 1,800 calls to poison centers involved kratom in the U.S. This significant number highlights the concern regarding kratom addiction.
However, without Food and Drug Administration (FDA) oversight, and due to various consumption methods like teas and capsules, there are significant health risks. Safe use of kratom is now in question due to these issues.
Research debates how dependence develops, outlining signs like loss of control and withdrawal symptoms. These signs are seen in regular kratom users. Ironically, some people switch from drugs like heroin to kratom, looking for a legal alternative.
Understanding Kratom: Origins and Prevalence
Kratom comes from the Mitragyna speciosa tree in Southeast Asia. It can act like a stimulant or like opioids, based on how much you take. People use it in different ways, for a small energy boost or stronger effects at higher doses.
The legal status of kratom in the U.S. is complicated and changing. It’s a hot topic because some worry about its misuse. It’s still legal in several states. This shows how different places handle drug rules. The National Institute on Drug Abuse is looking into its medical benefits. But, the FDA hasn’t approved it for medical use yet. The DEA calls it a “drug of concern,” which means policies might change.
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From 2011 to 2017, poison control centers in the U.S. got over 1,800 reports about kratom. This shows it’s widely used and might pose health risks.
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Kratom’s main ingredients bind to opioid receptors very strongly, stronger than morphine even. This fact is key to understanding its effects.
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As more people use kratom, more are reporting serious health problems. These include liver and heart issues, and tough withdrawal symptoms, particularly in those already sick.
The statistics show mounting worries about kratom in the U.S. As its use grows, it’s becoming more important to health policies and laws. What happens next will depend on further research and legal decisions.
Is Kratom Addictive: Investigating the Substance’s Nature
The question of kratom’s addictiveness focuses on how it affects brain receptors and its long-term health implications. The ongoing debate highlights concerns about dependence and the risk of addiction. Scientists are closely looking at these issues.
How Kratom Works in the Brain
Kratom’s main alkaloids, mitragynine and 7-hydroxymitragynine, bind to the brain’s opioid receptors, similar to painkillers and narcotics. This connection suggests a potential risk of dependence. These alkaloids are key to kratom’s pain relief but also point to possible addiction concerns, especially with frequent, high-dose usage.
Patterns and Consequences of Long-term Use
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Using kratom often, especially in large doses, can increase the risk of dependence and intense withdrawal symptoms, similar to opioid withdrawal.
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Although some use it for pain or to improve mood, long-term kratom users might see serious health problems, like liver damage and mental health issues.
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Withdrawal symptoms, including irritability, nausea, and sleep problems, show kratom’s impact on one’s physical and mental health.
Assessment of Addiction Risks
Studies indicate a significant risk of addiction to kratom, especially with high doses or frequent use. Dependence develops as the body gets used to kratom, leading to tolerance and a need for more to feel its effects. Withdrawal symptoms emphasize this risk, as highlighted by health experts.
Physiological Effects: Kratom’s Impact on the Body
There is a lot of debate about the safety and use of kratom. This herbal extract comes from the Mitragyna speciosa plant. It has drawn attention for its possible harmful effects on the body. The FDA has issued many warnings about kratom, raising safety concerns.
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Kratom Adverse Effects: Kratom users have reported side effects like nausea, vomiting, and confusion. More serious issues include high blood pressure and liver damage. These problems highlight the risks of using kratom.
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Herbal Extract Safety: Some kratom products contain heavy metals and pathogens. These can cause severe health issues, including death. This shows the importance of safety in herbal products.
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FDA Warnings and Regulations: The FDA has linked kratom to over 35 deaths and warns against using it. They point out the lack of medical uses and the risk of addiction.
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Physiological Impact: Kratom’s effects depend on the dose and the user’s body. Yet, it can lead to dangerous outcomes like liver damage and seizures.
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Safety Concerns from Authorities: Federal agencies like the DEA are worried about kratom’s safety. Although not a controlled substance, monitoring suggests users should be careful.
Kratom might offer temporary relief for some ailments, but it comes with significant risks. The FDA’s warnings should make people think twice. If considering kratom, it’s crucial to talk to a doctor first. Experts stress the need for safety and caution with herbal extracts.
Conclusion
Kratom’s role in health and regulation is complex, with views and research findings widely varied. Some people use kratom for its claimed health benefits, but it’s a hot topic. Experts advise caution and suggest consulting a doctor before using kratom due to the unclear effects.
Clinical studies using scores like SOWS and COWS haven’t confirmed withdrawal symptoms from kratom. This adds to the debate, especially when some users report withdrawal. This makes kratom a controversial subject among different findings and user experiences.
When it comes to treating opioid addiction, kratom can be both helpful and harmful. Some have used it successfully to fight addiction. Yet, some states have banned it. This highlights the need for regulations and consistent product quality. It also raises questions about kratom’s legal status due to mixed actions by authorities.
The situation shows how complex kratom is in the realm of substance use and law. Without clear evidence supporting either its benefits or risks, it poses a challenge. More research is needed to guide regulations and health advice. For now, anyone thinking of using kratom should be careful, seek medical advice, and keep up with laws and health guidelines.
WHAT IS KRATOM ANYWAY? READ ON…
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