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Multistate cannabis operator Ascend Wellness Holdings says it has filed amended federal tax returns for several years and expects to receive refunds, becoming the latest U.S. marijuana company to seek the return of tariffs paid under Section 280E of the Internal Revenue Code.
Ascend revealed limited details of its tax strategy during a Tuesday earnings call to discuss its fourth-quarter earnings.
Chief Financial Officer Mark Cassebaum said the New York-based company has amended its federal tax returns for 2020, 2021 and 2022.
“We plan to file (our) 2023 federal return as a normal corporate taxpayer, excluding 280E,” Cassebaum said during his prepared remarks.
“As a result of these amendments, we expect these refunds to cover our 2023 federal tax obligations.”
Rebecca Koar, Ascend’s executive vice president of investor relations and strategy, confirmed in an email to MJBizDaily that the anticipated tax “refunds are mostly pertaining to 280E obligations.”
“If refunds are received, we expect the refunds will cover our non-280E 2023 tax obligations,” Koar added.
“Going forward we expect to begin to pay our non-280E (tax) obligations in 2024, but still withhold the 280E obligation.”
Ascend did not specify how much it expects to receive in tax refunds.
Florida-headquartered MSO Trulieve Cannabis surprised the regulated marijuana industry in late February when it reported receiving $113 million in refunds for taxes paid under 280E.
Then, a Curaleaf Holdings executive said last week that company was “(continuing) to evaluate our stance on legal challenges to the application of 280E.”
Ascend leadership on Tuesday touted the company’s positive cash from operations and free cash flow.
“This puts us in a very strong position, as we recently began active discussions to refinance our debt, which is due in August of 2025,” Ascend Executive Chair and founder Abner Kurtin said in prepared remarks.
Ascend’s fourth-quarter net revenue was $140.2 million, increasing 25% over the same quarter in 2022 and decreasing 0.8% from the previous quarter.
CFO Cassebaum attributed the flat sequential revenue to “declines in Illinois retail, being partially offset by wholesale growth in New Jersey and Massachusetts, as well as the opening of three new stores within the quarter and strengthening of our Pennsylvania retail stores.”
Ascend posted a net loss of $19.3 million for the quarter ended Dec. 31, 28.5% higher than its net loss for the fourth quarter of 2022.
On a full-year basis, net revenue grew 27.8% in 2023 to $518.6 million.
Ascend’s net loss for all of 2023 was $48.2 million, 40.4% lower than its 2022 full-year net loss.
The firm reported $72.5 million in cash at the quarter’s end.
Solomon Israel can be reached at solomon.israel@mjbizdaily.com.
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