What changed in this filing

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Item 1. Financial Statements

2025-05-08 compared with 2024-11-12 · 408 added, 529 removed, 471 unchanged (67% of the section changed)

Financial Statements

Condensed Consolidated Balance Sheets as of September 30, 2024 (Unaudited) and December 31, 202 3

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) for the three and nine months ended September 30, 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30, 2024 and 2023 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the nine months ended September 30, 2024 and 2023 (Unaudited)

Condensed Consolidated Balance Sheets as of March 31, 2025 (Unaudited) and December 31, 202 4

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) for the three months ended March 31 , 202 5 and 202 4 (Unaudited)

Condensed Consolidated Statements of Changes in Equity for the three months ended March 31 , 202 5 and 202 4 (Unaudited)

Condensed Consolidated Statements of Cash Flows for the three months ended March 31 , 202 5 and 202 4 (Unaudited)

Notes to Condensed Consolidated Financial Statements (Unaudited)

3 unchanged sentences

dollars, except share amounts, unaudited)

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Current assets

9 unchanged sentences

Total current assets 918,581 936,113

Equity method investments, net — 19,488

Other investments 2,755 2,813

4 unchanged sentences

Intangible assets, net 10,625 11,257

Other assets 130 45

Deferred tax assets 2,506 2,571

Total assets $ 1,153,827 $ 1,166,312

5 unchanged sentences

Derivative liabilities 13 40

Current portion due to non-controlling interests — 373

Total current liabilities 33,048 49,700

1 unchanged sentence

Non-current portion of lease obligation 840 993

Deferred tax liability 11,143 —

Deferred tax liabilities 4,563 3,564

Total liabilities 39,062 55,330

Shareholders’ equity

Share capital (authorized for issue as of September 30, 2024 and December 31, 2023:

shares outstanding as of September 30, 2024 and December 31, 2023:

Share capital and additional paid-in capital (no par value;

authorized for issue as of March 31, 2025 and December 31, 2024:

shares outstanding as of March 31, 2025 and December 31, 2024:

385,406,395 and 382,530,780 , respectively)

669,036 669,879

Additional paid-in capital 51,523 48,449

Retained earnings 463,816 457,709

Accumulated other comprehensive gain (loss) ( 361 ) 20,678

Accumulated other comprehensive loss ( 66,449 ) ( 63,525 )

Total equity attributable to shareholders of Cronos Group 1,066,403 1,064,063

7 unchanged sentences

dollars, except share and per share amounts, unaudited)

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31,

Net revenue, before excise taxes $ 41,898 $ 35,367

2 unchanged sentences

Cost of sales 18,528 20,805

Inventory write-down 312 716 707 716

Gross profit 13,734 4,483

11 unchanged sentences

Share of income from equity method investments — 1,448

Gain on revaluation of loan receivable 11,804 — 11,804 —

Gain on revaluation of equity method investment 32,469 — 32,469 —

Loss on revaluation of financial instruments ( 293 ) ( 5,291 ) ( 6,550 ) ( 7,856 )

Gain (loss) on revaluation of financial instruments 49 ( 2,642 )

Impairment loss on other investments — ( 12,734 )

Foreign currency transaction gain (loss) ( 7,432 ) 8,816 12,370 3,999

Loss on held-for-sale assets ( 10,422 ) — ( 10,422 ) —

Foreign currency transaction gain 1,583 13,259

Other, net 43 ( 670 )

2 unchanged sentences

Income tax benefit ( 455 ) ( 558 )

Income (loss) from continuing operations 7,324 ( 1,590 ) ( 3,919 ) ( 25,288 )

Loss from discontinued operations — ( 182 ) — ( 4,238 )

Net income (loss) 7,723 ( 2,484 )

Net loss attributable to non-controlling interest ( 1,025 ) ( 128 ) ( 1,270 ) ( 353 )

Net income (loss) attributable to non-controlling interest 1,601 ( 243 )

Net income (loss) attributable to Cronos Group $ 6,122 $ ( 2,241 )

Cronos Group Inc.

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)

(In thousands of U.S.

dollars, except share and per share amounts, unaudited)

Comprehensive income (loss)

1 unchanged sentence

Other comprehensive income (loss)

Foreign exchange gain (loss) on translation 12,408 ( 20,090 ) ( 20,113 ) ( 1,096 )

Foreign exchange loss on translation ( 3,082 ) ( 22,361 )

Comprehensive income (loss) 4,641 ( 24,845 )

Comprehensive loss attributable to non-controlling interests ( 269 ) ( 41 ) ( 344 ) ( 136 )

Comprehensive income (loss) attributable to non-controlling interests 1,443 ( 133 )

Comprehensive income (loss) attributable to Cronos Group $ 3,198 $ ( 24,712 )

Net income (loss) per share

Basic - continuing operations

$ 0.02 $ — $ ( 0.01 ) $ ( 0.07 )

Basic - discontinued operations

— — — ( 0.01 )

Basic net income (loss) per share attributable to Cronos Group

$ 0.02 $ ( 0.01 )

Diluted - continuing operations

$ 0.02 $ — $ ( 0.01 ) $ ( 0.07 )

Diluted - discontinued operations

— — — ( 0.01 )

Diluted net income (loss) per share attributable to Cronos Group

3 unchanged sentences

Condensed Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2024 and 2023

For the three months ended March 31, 2025 and 2024

(In thousands of U.S.

dollars, except share amounts, unaudited)

Number of shares Share capital Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Non-controlling interests Total shareholders’ equity

Number of shares Share capital and additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Non-controlling interests Total shareholders’ equity

Balance as of December 31, 2024

1 unchanged sentence

Activities relating to share-based compensation 2,875,615 ( 843 ) ( 15 ) — — ( 858 )

Net loss — — — ( 2,241 ) — ( 243 ) ( 2,484 )

Foreign exchange gain (loss) on translation — — — — ( 22,471 ) 110 ( 22,361 )

Balance as of March 31, 2024 382,011,178 $ 615,625 $ 48,048 $ 414,478 $ ( 1,793 ) $ ( 3,580 ) $ 1,072,778

Activities relating to share-based compensation 269,547 754 1,250 ( 71 ) — — 1,933

Net loss — — — ( 8,757 ) — ( 2 ) ( 8,759 )

Foreign exchange gain (loss) on translation — — — — ( 10,220 ) 60 ( 10,160 )

Balance as of June 30, 2024 382,280,725 $ 616,379 $ 49,298 $ 405,650 $ ( 12,013 ) $ ( 3,522 ) $ 1,055,792

Non-controlling interest resulting from business combination

— — — — — 53,542 53,542

Activities relating to share-based compensation 13,982 24 2,225 ( 4 ) — — 2,245

Net income (loss) — — 6,122 — 1,601 7,723

Foreign exchange gain on translation — — — — 11,652 756 12,408

Balance as of September 30, 2024 382,294,707 $ 616,403 $ 51,523 $ 413,995 $ ( 361 ) $ 49,751 $ 1,131,311

Cronos Group Inc.

Condensed Consolidated Statements of Changes in Equity

For the nine months ended September 30, 2024 and 2023

(In thousands of U.S.

dollars, except share amounts, unaudited)

Number of shares Share capital Additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Non-controlling interests Total shareholders’ equity

Foreign exchange loss on translation — — — ( 2,924 ) ( 158 ) ( 3,082 )

Balance as of March 31, 2025 385,406,395 $ 669,036 $ 463,816 $ ( 66,449 ) $ 48,362 $ 1,114,765

Number of shares Share capital and additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Non-controlling interests Total shareholders’ equity

Balance as of December 31, 2023

1 unchanged sentence

Activities relating to share-based compensation 712,325 1,499 — — — 1,499

Net loss — — — ( 19,169 ) — ( 88 ) ( 19,257 )

Foreign exchange gain on translation — — — — 2,334 80 2,414

Balance as of March 31, 2023 380,815,921 $ 612,235 $ 44,044 $ 471,513 $ 1,537 $ ( 2,929 ) $ 1,126,400

Activities relating to share-based compensation 273,436 917 1,273 — — — 2,190

Net loss — — — ( 8,360 ) — ( 137 ) ( 8,497 )

Foreign exchange gain on translation — — — — 16,530 50 16,580

Balance as of June 30, 2023 381,089,357 $ 613,152 $ 45,317 $ 463,153 $ 18,067 $ ( 3,016 ) $ 1,136,673

Activities relating to share-based compensation 24,207 138 1,816 — — — 1,954

Net loss — — — ( 1,644 ) — ( 128 ) ( 1,772 )

Net income (loss) — — ( 2,241 ) — ( 243 ) ( 2,484 )

Foreign exchange gain (loss) on translation — — — ( 22,471 ) 110 ( 22,361 )

Balance as of September 30, 2023 381,113,564 $ 613,290 $ 47,133 $ 461,509 $ ( 2,110 ) $ ( 3,057 ) $ 1,116,765

Balance as of March 31, 2024 382,011,178 $ 663,673 $ 414,478 $ ( 1,793 ) $ ( 3,580 ) $ 1,072,778

See notes to condensed consolidated interim financial statements.

3 unchanged sentences

dollars, except share amounts, unaudited) Table of Contents

Nine months ended September 30,

Three months ended March 31,

Operating activities

Net loss $ ( 3,919 ) $ ( 29,526 )

Adjustments to reconcile net loss to cash used in operating activities:

Net income (loss) $ 7,723 $ ( 2,484 )

Adjustments to reconcile net income (loss) to net cash used in operating activities:

Share-based compensation 2,088 2,015

4 unchanged sentences

Changes in expected credit losses on long-term financial assets 9 ( 191 )

Revaluation of equity method investment ( 32,469 ) —

Revaluation of loan receivable ( 11,804 ) —

Loss on held-for-sale assets

Inventory step-up recorded to cost of sales

Foreign currency transaction gain ( 1,583 ) ( 13,259 )

( 12,370 ) ( 3,999 )

Other non-cash operating activities, net 779 1,084

4 unchanged sentences

Prepaids and other current assets ( 60 ) ( 985 )

Inventory 7,162 976

Inventory, net ( 1,631 ) ( 777 )

Accounts payable ( 1,637 ) ( 2,775 )

1 unchanged sentence

Accrued liabilities ( 8,878 ) ( 5,062 )

Cash flows provided by (used in) operating activities 11,123 ( 59,650 )

Net cash used in operating activities ( 2,096 ) ( 2,204 )

Investing activities

Purchase of short-term investments — ( 537,186 )

Proceeds from short-term investments — 188,872

Cash acquired in business combinations

Dividends received from equity method investment — 1,301

Dividend proceeds

Advances on loans receivable

Purchase of short-term investments ( 40,000 ) —

Proceeds from repayment on loans receivable — 2,678

Purchase of property, plant and equipment ( 8,868 ) ( 1,287 )

Purchase of intangible assets ( 578 ) ( 344 )

Other investing activities — 862

Cash flows provided by (used in) investing activities 180,181 ( 141,392 )

Purchase of property, plant and equipment, net of disposals ( 15,258 ) ( 1,724 )

Purchase of intangible assets, net of disposals ( 98 ) ( 270 )

Net cash provided by (used in) investing activities ( 55,356 ) 189,556

Financing activities

Withholding taxes paid on share-based awards ( 2,930 ) ( 645 )

Cash flows used in financing activities ( 918 ) ( 812 )

Net cash used in financing activities ( 2,930 ) ( 645 )

Effect of foreign currency translation on cash and cash equivalents ( 604 ) ( 884 )

27 unchanged sentences

In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included.

Operating results for the three and nine months ended September 30, 2024 are not necessarily indicative of the results that may be expected for any other reporting period.

Operating results for the three months ended March 31, 2025 are not necessarily indicative of the results that may be expected for any other reporting period.

These condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”).

Certain prior period amounts have been reclassified to conform to the current year presentation of our condensed consolidated interim financial statements.

Certain prior period amounts have been reclassified to conform to the current period presentation of our condensed consolidated interim financial statements.

These reclassifications had no effect on the reported results of operations and ending shareholders’ equity.

In the second quarter of 2023, the Company exited its U.S.

hemp-derived cannabinoid product operations.

The exit of the U.S.

operations represented a strategic shift that had a major effect on the Company’s operations and financial results, and as such, qualifies for reporting as discontinued operations in our condensed consolidated statements of net income (loss) and comprehensive income (loss).

Prior period amounts have been reclassified to reflect the discontinued operations classification of the U.S.

For more information, see Note 3 “ Discontinued Operations.

(d) Segment information

Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”) manages the business, makes operating decisions and assesses the Company’s performance.

Prior to the second quarter of 2023, the Company reported results for two reportable segments, the U.S.

and Rest of World.

In the second quarter of 2023, as a result of the Company’s exit of its then-existing U.S.

operations, the Company determined that it has one operating segment and therefore one reportable segment, which is comprised of operations in Canada and Israel and is involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets .

All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Form 10-Q.

These reclassifications had no effect on our consolidated financial statements in any period presented.

(e) Revenue recognition

The following tables present the Company’s revenue by major product category for continuing operations:

Three months ended September 30,

Cannabis flower $ 26,328 $ 17,414

Cannabis extracts 7,789 7,268

Other 147 128

Net revenue $ 34,264 $ 24,810

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Nine months ended September 30,

The Company has determined that it has one operating segment and therefore one reportable segment, which is comprised of operations in Canada and Israel and is involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets .

(d) Revenue recognition

The following tables present the Company’s revenue by major product category:

Three months ended March 31,

Cannabis flower $ 23,344 $ 17,525

Cannabis extracts 8,608 7,727

Other 220 275

Net revenue $ 32,262 $ 25,288

Net revenue attributed to a geographic region based on the location of the customer were as follows for continuing operations:

Three months ended September 30,

Canada $ 24,067 $ 18,738

Israel 7,259 5,673

Other countries 2,938 399

Net revenue $ 34,264 $ 24,810

Nine months ended September 30,

Net revenue attributed to a geographic region based on the location of the customer were as follows:

Three months ended March 31,

Canada $ 20,130 $ 18,871

2 unchanged sentences

Net revenue $ 32,262 $ 25,288

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

(e) Short-term Investments

Short-term investments are classified as held-to-maturity and recorded at cost.

Interest earned on short-term investments is recorded in other receivables on the consolidated balance sheets and interest income, net on the condensed consolidated statements of net income (loss) and comprehensive income (loss).

Cash inflows and outflows related to the purchase and maturity of short-term investments are classified as investing activities in the Company’s consolidated statements of cash flows.

(f) Concentration of risk

1 unchanged sentence

The Company is exposed to credit risk from its operating activities, primarily accounts receivable and other receivables, and its investing activities, including cash held with banks and financial institutions, short-term investments and loans receivable.

The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $ 911,713 and $ 966,442 as of September 30, 2024 and December 31, 2023, respectively.

The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $ 885,163 and $ 904,101 as of March 31, 2025 and December 31, 2024, respectively.

An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses.

3 unchanged sentences

Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan, and a failure to make contractual payments for a period of greater than 120 days past due.

As of September 30, 2024 and December 31, 2023, the Company had $ 14 and $ 3 , respectively, in expected credit losses that have been recognized on receivables from contracts with customers.

As of September 30, 2024, the Company assessed that there is a concentration of credit risk, as 29 % of the Company’s accounts receivable were due from one customer with an established credit history with the Company.

As of March 31, 2025 and December 31, 2024, the Company had $ 33 and $ 7 , respectively, in expected credit losses that have been recognized on receivables from contracts with customers.

As of March 31, 2025, the Company assessed that there is a concentration of credit risk, as 20 % of the Company’s accounts receivable were due from one customer with an established credit history with the Company.

As of December 31, 2024, 27 % of the Company’s accounts receivable were due from one customer with an established credit history with the Company.

1 unchanged sentence

Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s net revenue before excise taxes.

During the three months ended September 30, 2024, the Company earned a total net revenue before excise taxes of $ 21,993 from two major customers, together accounting for 48 % of the Company’s total net revenue before excise taxes.

During the three months ended September 30, 2023, the Company earned a total net revenue before excise taxes of $ 22,618 from three major customers, together accounting for 67 % of the Company’s total net revenue before excise taxes.

During the nine months ended September 30, 2024, the Company earned a total net revenue before excise taxes of $ 71,846 from three customers, together accounting for 59 % of the Company’s total net revenue before excise taxes.

During the nine months ended September 30, 2023, the Company earned a total net revenue before excise taxes of $ 57,398 from three major customers, together accounting for 67 % of the Company’s total net revenue before excise taxes.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

During the three months ended March 31, 2025, the Company earned a total net revenue before excise taxes of $ 17,751 from two major customers, together accounting for 42 % of the Company’s total net revenue before excise taxes.

During the three months ended March 31, 2024, the Company earned a total net revenue before excise taxes of $ 21,866 from three major customers, together accounting for 62 % of the Company’s total net revenue before excise taxes.

(g) New accounting pronouncements not yet adopted

In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2023-07”).

ASU 2023-07 enhances reportable segment disclosures by requiring disclosures such as significant segment expenses, information on the CODM and disclosures for entities with a single reportable segment.

Additionally, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and contain other disclosure requirements.

ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and we expect to adopt ASU 2023-07 retrospectively.

The Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements.

In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740):

3 unchanged sentences

The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements.

(h) Adoption of new accounting pronouncements

On January 1, 2024, the Company adopted ASU 2022-03, Fair Value Measurement (Topic 820):

Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU 2022-03”).

ASU 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered in measuring fair value.

The amendments also require additional disclosures for equity securities subject to contractual sale restrictions.

The adoption of ASU 2022-03 did not have a material impact on the Company’s condensed consolidated interim financial statements.

With respect to the adoption of ASU 2022-03, see Note 5 “ Investments ” for discussion of the contractual restrictions related to the PharmaCann Option (as defined below).

In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Segment Reporting (Topic 280):

Improvements to Reportable Segment Disclosures (“ASU 2024-03”).

ASU 2024-03 adds an obligation under ASC 220-40 to require a footnote disclosure about specific expenses by requiring public business entities to disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses:

(1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities or other types of depletion expenses.

The tabular disclosure would also include certain other expenses, when applicable.

ASU 2024-03 does not change or remove existing expense disclosure requirements;

however, it may affect where that information appears in the footnotes to the financial statements.

ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027.

Early adoption is permitted, and applicable entities are required to adopt ASU 2024-03 prospectively;

however, companies are permitted to apply the amendments in ASU 2024-03 retrospectively.

The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements.

In January 2025, the effective date was further clarified with the issuance of ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40):

Clarifying the Effective Date (“ASU 2025-01”).

No guidance was changed with ASU 2025-01, but the issuance simply ensures that all public business entities have a clear and consistent timeline for implementing the enhanced expense disaggregation disclosures.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Business Combination

On July 1, 2024, the Company obtained majority control of the board of directors of Cronos Growing Company Inc.

(“Cronos GrowCo”), a cannabis cultivation company, which qualified as a business combination under ASC 805 (the “Cronos GrowCo Transaction”).

Prior to this date, our investment in Cronos GrowCo consisted of an investment accounted for under the equity method and loans receivable from Cronos GrowCo.

Cronos Growing Company Inc.

(“Cronos GrowCo”) was formed under the Canada Business Corporations Act on June 14, 2018, with the objective of cultivating and commercializing cannabis and cannabis products.

Cronos GrowCo is licensed to sell certain cannabis products to other license holders in the wholesale channel, as well as to provincial cannabis control authorities.

It is also licensed to export dried flower to Israel.

In connection with the Cronos GrowCo Transaction, the Company provided an approximately $ 51,000 secured non-revolving credit facility to Cronos GrowCo to fund the expansion of Cronos GrowCo’s cultivation and processing facilities (the “Phase 2 Expansion”), and the Company entered into a new supply agreement (the “Supply Agreement”) with Cronos GrowCo.

Pursuant to the Supply Agreement, prior to the commencement of sales from Cronos GrowCo’s Phase 2 Expansion area, the Company and its controlled affiliates (other than Cronos GrowCo) have the right, but not the obligation, to purchase an aggregate total quantity of 80 % of Cronos GrowCo’s production.

Cronos GrowCo holds Global GAP and ICANN GAP certifications (equivalent to IMC-GAP) for the export of dried flower to Israel.

In the third quarter of 2024, the Company obtained majority control of the board of directors of Cronos GrowCo, which qualified as a business combination under ASC 805 Accounting for Business Combinations (the “Cronos GrowCo Transaction”).

Prior to the Cronos GrowCo Transaction, the Company’s investment in Cronos GrowCo consisted of an investment accounted for under the equity method and loans receivable from Cronos GrowCo.

In connection with the Cronos GrowCo Transaction, the Company provided an approximately $ 51,000 secured non-revolving credit facility to Cronos GrowCo to fund the expansion of Cronos GrowCo’s cultivation and processing facilities (such area, the “Phase 2 Expansion Area”) and entered into a new supply agreement with Cronos GrowCo (the “Cronos GrowCo Supply Agreement”).

Pursuant to the Cronos GrowCo Supply Agreement, prior to the commencement of sales from the Phase 2 Expansion Area, the Company and its controlled affiliates (other than Cronos GrowCo) have the right, but not the obligation, to purchase an aggregate total quantity of 80 % of Cronos GrowCo’s production.

Thereafter, the Company and its controlled affiliates (other than Cronos GrowCo) will have the right, but not the obligation, to purchase 70 % of Cronos GrowCo’s forecasted production capacity over a given period and 70 % of Cronos GrowCo’s actual production in a given month.

The Cronos GrowCo Transaction is intended to support the Company’s current and future biomass supply requirements.

As there was no cash consideration paid, the Cronos GrowCo Transaction has been valued with reference to the fair value of our existing equity method investment of $ 53,542 , as well as the effective settlement of various preexisting relationships between the Company and Cronos GrowCo.

Cronos GrowCo’s production is intended to support the majority of the Company’s current and future biomass supply requirements.

As there was no cash consideration paid, the Cronos GrowCo Transaction was valued with reference to the fair value of our preexisting equity method investment of $ 53,542 , as well as the effective settlement of various preexisting relationships between the Company and Cronos GrowCo.

These preexisting relationships are now classified as intercompany transactions and eliminated upon consolidation.

In the three and nine months ended September 30, 2024, we recorded a gain of $ 32,469 on the condensed consolidated statements of net income (loss) and comprehensive income (loss) from remeasuring our equity method investment in Cronos GrowCo.

We also recorded $ 11,804 to gain on revaluation of loan receivable on the condensed consolidated statements of net income (loss) and comprehensive income (loss) in the three and nine months ended September 30, 2024, from remeasuring our outstanding loans receivable with Cronos GrowCo.

Additionally, the consideration also included the effective settlement of various preexisting trade receivables and payables and other related accounts that are now classified as intercompany transactions and eliminated upon consolidation.

The effective settlement of the preexisting trade receivables, payables, and related accounts did not result in the recognition of any gain or loss on settlement.

As of the date of the Cronos GrowCo Transaction, the fair value of the non-controlling interest in Cronos GrowCo was $ 53,542 .

The Company used the income approach to estimate both the fair value of the Company’s equity method investment in Cronos GrowCo and the fair value of the non-controlling interest in Cronos GrowCo.

Under the income

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

approach, significant assumptions used in the discounted cash flow method that required the use of judgment were the discount rate, growth rates and cash flow projections.

The Company used the income approach to estimate the fair value of the Company’s loan receivable with Cronos GrowCo.

Under the income approach, significant assumptions used that required the use of judgment were the credit spread and interest rate volatility.

The table below summarizes the unaudited provisional estimates of the fair values of the identifiable assets acquired and liabilities assumed in the Cronos GrowCo Transaction.

The Company's preliminary estimates and the allocation of the purchase price to the assets acquired and liabilities assumed may change as the Company completes the valuation process, which may result in an adjustment, which could be material, to the preliminary values presented below.

The Company expects to complete the purchase price allocation as soon as reasonably possible, but not to exceed one year from the date of completion of the Cronos GrowCo Transaction.

Under the income approach, significant assumptions used in the discounted cash flow method that required the use of judgment were the discount rate, growth rates and cash flow projections.

During the fourth quarter of 2024, the Company completed the allocation of the purchase price to the assets acquired and liabilities assumed.

The final allocation of the purchase price to the fair values of the assets acquired and liabilities assumed was:

Accounts receivable 2,437

1 unchanged sentence

Prepaids and other current assets 795

Intangible assets 8,008

Goodwill 65,269

4 unchanged sentences

Total purchase price

The inventory acquired in the Cronos GrowCo Transaction of $ 31,041 includes a step-up to fair value of $ 17,908 .

For both the three and nine months ended September 30, 2024, the Company recognized $ 7,116 of this inventory step-up into cost of sales on the condensed consolidated statements of income (loss) and comprehensive income (loss).

The inventory acquired in the Cronos GrowCo Transaction of $ 15,754 included a step-up to fair value of $ 5,605 .

For the three months ended March 31, 2025, the Company recognized $ 517 of this inventory step-up into cost of sales on the condensed consolidated statements of income (loss) and comprehensive income (loss).

As of March 31, 2025, none of the inventory step-up was remaining in the Company’s inventory on the condensed consolidated balance sheet.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

The following table presents details of the property, plant and equipment acquired by major category:

4 unchanged sentences

Construction in progress

The Company’s results of operations for the three and nine months ended September 30, 2024, included three months of the operating results of Cronos GrowCo, which was comprised of revenue of $ 4,268 and loss before income taxes of $ 1,606 .

Business combination-related costs of $ 334 and $ 530 were incurred in relation to the Cronos GrowCo Transaction in the three and nine months ended September 30, 2024, respectively, and were reported in general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss).

As part of the Cronos GrowCo Transaction, the Company preliminarily recorded goodwill of $ 36,421 , none of which is deductible for income tax purposes.

The goodwill acquired was primarily attributable to the ability to secure a long-term supply of cannabis and to take advantage of growth opportunities from the expansion of Cronos GrowCo’s cultivation and processing facilities.

The following table presents unaudited supplemental pro forma results for the three and nine months ended September 30, 2024 and 2023, respectively, as if the Cronos GrowCo Transaction had occurred as of January 1, 2023.

The unaudited pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the business combination had taken place at such time.

The unaudited pro forma results presented below include adjustments such as amortization of inventory step-up, amortization charges for acquired intangible assets, depreciation adjustments for property, plant and equipment that has been revalued, adjustment of interest expense and interest income resulting from the effective settlement of pre-existing debt financing in connection with the Cronos GrowCo Transaction and adjustments for certain business combination-related charges.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

$ 34,264 $ 31,249 $ 94,788 $ 76,258

( 3,540 ) 3,686 14,124 ( 881 )

Operating expenses

37,266 27,036 82,715 77,107

( 6,002 ) 17,416 8,892 74,788

Net income (loss) attributable to Cronos Group $ ( 29,447 ) $ ( 3,914 ) $ ( 39,578 ) $ ( 10,786 )

Material nonrecurring pro forma adjustments directly attributable to the Cronos GrowCo Transactions include the following:

• Acquired inventory fair value step-up of $ 18,283 is assumed to be recorded at January 1, 2023.

As such, historical amortization of the acquired inventory step-up of $ 7,116 recognized in the historical three month period ended September 30, 2024 was removed from pro forma net income for the three months and nine months ended September 30, 2024.

The entire inventory fair value step-up of $ 18,283 was recognized as an incremental product cost in the nine months ended September 30, 2023, with $ 4,583 recognized in the three months ended September 30, 2023 as the inventory acquired at the business combination date is expected to turnover within eight months.

• Pre-business combination revenues for sales from Cronos GrowCo to the Company of $ 2,664 and $ 15,489 were adjusted out for the three months and nine months ended September 30, 2023, respectively, and $ 14,776 of pre-business combination revenues were adjusted out for the nine months ended September 30, 2024 as these amounts would have been eliminated in consolidation.

Company pre-business combination cost of sales of $ 4,232 and $ 12,147 were adjusted out for the three and nine months ended September 30, 2023, respectively, and $ 11,386 of pre-business combination cost of sales were adjusted out for the nine months ended September 30, 2024, as these amounts would have been eliminated in consolidation.

• The gain on the revaluation of the equity method investment and loan receivable relating to the Cronos GrowCo Transaction of $ 32,469 and $ 11,804 , respectively, were adjusted out for the three months and nine months ended September 30, 2024 and added into the nine months ended September 30, 2023 as this revaluation is assumed to have occurred on January 1, 2023.

Discontinued Operations

In the second quarter of 2023, the Company exited its then-existing U.S.

hemp-derived cannabinoid product operations.

Accordingly, the net loss of the U.S.

operations for the three and nine months ended September 30, 2023 are reported separately as loss from discontinued operations on the condensed consolidated statements of net income (loss) and comprehensive income (loss).

There was no activity in discontinued operations for the three and nine months ended September 30, 2024.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

The following table presents the major components comprising loss from discontinued operations in the condensed consolidated statements of operations for the three and nine months ended September 30, 2023:

Three months ended September 30, Nine months ended September 30,

Net revenue $ — $ 1,029

Cost of sales — 2,044

Inventory write-down (i)

Gross profit — ( 1,854 )

Operating expenses

Sales and marketing — 518

Research and development

General and administrative 190 926

Restructuring costs 28 562

Share-based compensation ( 4 ) 17

Depreciation and amortization — 13

Impairment loss on long-lived assets (ii)

Total operating expenses 214 2,261

Interest income 1 9

Other, net (iii)

Total other income (loss)

Loss before income taxes ( 182 ) ( 4,238 )

Income tax expense (benefit) — —

Net loss from discontinued operations $ ( 182 ) $ ( 4,238 )

(i) For the nine months ended September 30, 2023, Inventory write-down relates to the disposal of obsolete inventory as a result of the exit of the U.S.

(ii) During the nine months ended September 30, 2023, as a result of the exit of the U.S.

operations, the Company recognized an impairment charge of $ 205 related to the right-of-use lease assets associated with the Company’s former U.S.

manufacturing facility in Los Angeles, California.

(iii) For the three and nine months ended September 30, 2023, Other, net related to loss on disposal of assets that were part of the U.S.

The following tables present the Company’s discontinued operations revenue by major product category:

Three months ended September 30, Nine months ended September 30,

Cannabis extracts — 1,029

Net revenue $ — $ 1,029

The following tables summarize the Company’s discontinued operations restructuring activity for the three and nine months ended September 30, 2023:

Accrual as of June 30, 2023 Expenses Payments/Write-offs Accrual as of September 30, 2023

Employee Termination Benefits $ 219 $ 28 $ ( 169 ) $ 78

Other Restructuring Costs 92 — ( 92 ) —

Total $ 311 $ 28 $ ( 261 ) $ 78

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Accrual as of December 31, 2022 Expenses Payments/Write-offs Accrual as of September 30, 2023

Employee Termination Benefits $ — $ 470 $ ( 392 ) $ 78

Other Restructuring Costs — 92 ( 92 ) —

Total $ — $ 562 $ ( 484 ) $ 78

The Company had no assets or liabilities presented in the condensed consolidated balance sheets related to its discontinued operations as of both September 30, 2024 and December 31, 2023.

For the nine months ended September 30, 2024, there were no purchases of property plant and equipment related to discontinued operations.

For the nine months ended September 30, 2023, purchases of property plant and equipment related to discontinued operations were $ 67 .

The following table presents details of the intangible assets acquired:

Fair value at date of acquisition

Amortization period (in years)

For the three months ended March 31, 2025, net revenue attributable to Cronos GrowCo was $ 2,885 and income before income taxes attributable to Cronos GrowCo was $ 791 .

Business combination-related costs of $ 40 were incurred in relation to the Cronos GrowCo Transaction in the three months ended March 31, 2025 and were reported in general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss).

As a result of the Cronos GrowCo Transaction, the Company recorded goodwill of $ 65,269 , none of which is deductible for income tax purposes.

The goodwill acquired was primarily attributable to the ability to realize synergies, enhance Cronos’ supply capabilities and support future growth opportunities from the expansion of Cronos GrowCo’s cultivation and processing facilities.

Inventory, net

Inventory, net is comprised of the following items:

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

Raw materials $ 5,216 $ 5,400

4 unchanged sentences

As a result of the Cronos GrowCo Transaction, the Company recorded a step-up to Cronos GrowCo’s existing inventory of $ 5,605 to bring the inventory balance acquired by the Company to its fair value.

For more information, see Note 2 “ Business Combination.

(a) Equity method investments, net

As a result of the Cronos GrowCo Transaction, the existing equity method investment in Cronos GrowCo was remeasured at its fair value.

In both the three and nine months ended September 30, 2024, we recorded a gain of $ 32,469 on the condensed consolidated statements of net income (loss) and comprehensive income (loss) from remeasuring our equity method investment in Cronos GrowCo.

For more information, see Note 2 “ Business Combination ”

As of March 31, 2025, none of the inventory step-up was remaining in the Company’s inventory on the condensed consolidated balance sheets.

See Note 2 “ Business Combination ” for further information.

Cronos Group Inc.

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dollars, except share amounts) Table of Contents

A reconciliation of the carrying amount of the investments in equity method investees, net is as follows:

Ownership interest As of September 30, 2024 As of December 31, 2023

Cronos GrowCo (i)

50 % $ — $ 19,488

(i) The Company obtained control of Cronos GrowCo on July 1, 2024, and, as a result, the investment in Cronos GrowCo is now accounted for as an intercompany transaction and eliminated upon consolidation from the business combination date onwards.

(a) Investments in equity method investments, net

The following is a summary of the Company’s share of net income from equity investments accounted for under the equity method of accounting:

For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

Three months ended March 31, 2024

Cronos GrowCo (i)

$ — $ 1,057 $ 2,365 $ 831

See Note 2 “Business Combination” for further information.

(b) Other investments

5 unchanged sentences

The Company measures the PharmaCann Option at cost less accumulated impairment charges, if any, and subsequently adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer.

As of September 30, 2024 and December 31, 2023, based on updated information provided by PharmaCann in the third quarter, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 5.8 % and 6.6 %, respectively.

As of March 31, 2025 and December 31, 2024, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 3.4 % and 5.8 %, respectively.

The decrease in ownership percentage in the first quarter of 2025 was the result of the exercise of a convertible note by a PharmaCann shareholder unrelated to Cronos.

The decrease in the Company’s ownership percentage since acquisition does not materially affect the Company’s rights under the PharmaCann Option.

The PharmaCann Option is measured at fair value on a non-recurring basis and is a level 3 asset.

See Note 13 “ Fair Value Measurements ” for more information on the fair value hierarchy.

The PharmaCann Option is reported as Other investments on the consolidated balance sheet as of September 30, 2024 and December 31, 2023.

During the first and second quarters of 2024, the Company identified adverse forecast changes in the financial performance of PharmaCann as indicators of impairment related to the PharmaCann Option and conducted analyses comparing the PharmaCann Option’s carrying amount to its estimated fair value.

The net book value of the PharmaCann Option was zero as of March 31, 2025 and December 31, 2024.

During the first quarter of 2024, the Company identified adverse forecast changes in the financial performance of PharmaCann as indicators of impairment related to the PharmaCann Option and conducted an analysis comparing the PharmaCann Option’s carrying amount to its estimated fair value.

The fair value was estimated using the market approach.

Under the market approach, the key assumptions are the selected multiples and the discount for lack of marketability.

As a result of these analyses, the Company recorded non-cash impairment charges of $ 12,734 and $ 12,916 in the first and second quarters of 2024, respectively, as the difference between the carrying amount of the PharmaCann Option and its estimated fair value, in the condensed consolidated statements of net income (loss) and comprehensive income (loss) for the nine months ended September 30, 2024.

As a result of the analysis, the Company recorded a non-cash impairment charge of $ 12,734 in the first quarter of 2024, as the difference between the carrying amount of the PharmaCann Option and its estimated fair value, in the condensed consolidated statements of net loss and comprehensive income (loss) for the three months ended March 31, 2024.

The Company may sell, transfer or dispose of the PharmaCann Option without PharmaCann’s prior written consent, subject to the following conditions :

4 unchanged sentences

and (v) subject to certain exceptions, in the event that the Company (or a Permitted Transferee of the whole PharmaCann Option) transfers less than all of the PharmaCann Option to any third party that is not a Permitted Transferee, certain governance and information rights terminate immediately, unless waived by the PharmaCann board of directors in its sole and absolute discretion.

Additionally, in the event of an initial underwritten public offering of PharmaCann’s common stock pursuant to an effective registration statement, to the extent that holders of PharmaCann common stock are subject to any lock-up period imposed by the underwriter in connection therewith, the Company will, if applicable, execute a customary lock-up agreement on the same material terms and conditions as the other holders of common stock are subject to or as otherwise agreed between PharmaCann and the Company, subject to certain conditions with respect to the duration of the lock-up period.

Cronos Group Inc.

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dollars, except share amounts) Table of Contents

terms and conditions as the other holders of common stock are subject to or as otherwise agreed between PharmaCann and the Company, subject to certain conditions with respect to the duration of the lock-up period.

Vitura Health Limited (formerly known as Cronos Australia)

The Company owns approximately 10 % of the outstanding common shares of Vitura Health Limited (“Vitura”).

On February 12, 2025, Vitura Health Limited (“Vitura”) issued an additional 74,814,757 common shares diluting the Company’s ownership in Vitura from approximately 10 % to approximately 8.3 %.

As of March 31, 2025, the Company’s ownership percentage in Vitura remained at approximately 8.3 % of its outstanding common shares.

The investment is considered an equity security with a readily determinable fair value.

1 unchanged sentence

The following table summarizes the Company’s other investments activity:

As of June 30, 2024 Unrealized loss Impairment charges Foreign exchange effect As of September 30, 2024

PharmaCann $ — $ — $ — $ — $ —

Vitura 3,168 ( 371 ) — 103 2,900

$ 3,168 $ ( 371 ) $ — $ 103 $ 2,900

As of December 31, 2023 Unrealized loss Impairment charges Foreign exchange effect As of September 30, 2024

PharmaCann $ 25,650 $ — $ ( 25,650 ) $ — $ —

Vitura 9,601 ( 6,468 ) — ( 233 ) 2,900

$ 35,251 $ ( 6,468 ) $ ( 25,650 ) $ ( 233 ) $ 2,900

As of June 30, 2023 Unrealized loss Impairment charges Foreign exchange effect As of September 30, 2023

PharmaCann $ 49,000 $ — $ — $ — $ 49,000

As of December 31, 2024 Unrealized loss Impairment charges Foreign exchange effect As of March 31, 2025

Vitura 2,813 ( 68 ) — 10 2,755

$ 2,813 $ ( 68 ) $ — $ 10 $ 2,755

As of December 31, 2022 Unrealized loss Impairment charges Foreign exchange effect As of September 30, 2023

As of December 31, 2023 Unrealized loss Impairment charges Foreign exchange effect As of March 31, 2024

PharmaCann $ 25,650 $ — $ ( 12,734 ) $ — $ 12,916

1 unchanged sentence

$ 35,251 $ ( 2,342 ) $ ( 12,734 ) $ ( 417 ) $ 19,758

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Loans Receivable, net

Loans receivable, net consists of the following:

As of September 30, 2024 As of December 31, 2023

GrowCo Credit Facility (i)

As of March 31, 2025 As of December 31, 2024

Current portion of Mucci Promissory Note accrued interest $ 737 $ 618

Total current portion of loans receivable, net

GrowCo Credit Facility (i)

Mucci Promissory Note

4 unchanged sentences

15,587 15,526

Total loans receivable, net (i)

$ 16,319 $ 74,577

(i) The Company obtained control of Cronos GrowCo on July 1, 2024, and, as a result, the loans receivable from Cronos GrowCo are now accounted for as intercompany transactions and eliminated upon consolidation from the business combination date onwards.

Total loans receivable, net $ 16,324 $ 16,144

Cronos GrowCo Credit Facility

2 unchanged sentences

In August 2021, the GrowCo Credit Facility was amended to increase the aggregate principal amount available to C$ 105,000 .

During the three months ended March 31, 2024, Cronos GrowCo repaid C$ 1,667 ($ 1,231 ) in principal and paid C$ 1,943 ($ 1,435 ) in interest related to the GrowCo Credit Facility.

In June 2024, the GrowCo Credit Facility was amended to increase the aggregate principal amount available by C$ 70,000 by providing a second secured non-revolving credit facility (“Term Loan B”).

3 unchanged sentences

Prior to July 1, 2024, only C$ 12,000 of the C$ 70,000 increased principal availability could be drawn, which Cronos GrowCo drew in full on June 20, 2024.

As of June 30, 2024 and December 31, 2023, Cronos GrowCo had drawn C$ 116,000 and C$ 104,000 ($ 84,833 and $ 78,532 , respectively), respectively from the GrowCo Credit Facility.

For the six months ended June 30, 2024, Cronos GrowCo repaid C$ 3,333 ($ 2,447 ) in principal and C$ 3,862 ($ 2,835 ) in interest related to the GrowCo Credit Facility.

As of June 30, 2024, Cronos GrowCo had repaid an aggregate C$ 14,833 ($ 10,848 ) and C$ 24,384 ($ 17,832 ) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.

As a result of the Cronos GrowCo Transaction on July 1, 2024, the existing loans receivable under the GrowCo Credit Facility were remeasured at their fair value and effectively settled.

We recorded a gain of $ 11,804 to revaluation gain on loan receivable on the condensed consolidated statements of net income (loss) and comprehensive income (loss) in the three and nine months ended September 30, 2024, from remeasuring our outstanding loans receivable with GrowCo.

For more information, see Note 2 “ Business Combination.

See Note 2 “ Business Combination ” for further information regarding the Cronos GrowCo Transaction.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Mucci Promissory Note

1 unchanged sentence

The Mucci Promissory Note is secured by a general security agreement covering all the assets of Mucci.

Prior to July 1, 2022, interest accrued on the Mucci Promissory Note was capitalized as part of the principal balance.

On September 30, 2022, the Mucci Promissory Note was amended and restated to increase the interest rate from 3.95 % to the Canadian Prime Rate plus 1.25 %, change the interest payments from quarterly to annual, and defer Mucci’s initial cash interest payment from September 30, 2022 to July 1, 2023.

2 unchanged sentences

As of July 1, 2024, interest is accrued and to be paid in cash beginning on July 1, 2025.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Prior to July 1, 2022, interest accrued on the Mucci Promissory Note was capitalized as part of the principal balance.

As of July 1, 2022, interest was accrued and to be paid in cash beginning on July 1, 2023.

Prior to 2023, there were no repayments of principal or interest on the Mucci Promissory Note.

For the three and nine months ended September 30, 2023, Mucci made a payment of C$ 1,750 (approximately $ 1,322 ) under the Mucci Promissory Note, with C$ 1,187 ($ 897 ) related to accrued interest and C$ 563 ($ 425 ) related to outstanding principal.

For the three and nine months ended September 30, 2024, there were no repayments of principal or interest on the Mucci Promissory Note.

For both the three months ended March 31, 2025 and March 31, 2024, there were no repayments of principal or interest on the Mucci Promissory Note.

Cannasoul Collaboration Loan

As of both September 30, 2024 and December 31, 2023, Cannasoul Lab Services Ltd.

has received ILS 8,297 (approximately $ 2,175 and $ 2,294 , respectively), from the Cannasoul Collaboration Loan.

Expected credit loss allowances on the Company’s long-term financial assets for the nine months ended September 30, 2024 and 2023 were comprised of the following items:

As of June 30, 2024

Increase (decrease) (ii)

Foreign exchange effect As of September 30, 2024

GrowCo Credit Facility (i)

$ 11,838 $ ( 11,804 ) $ ( 34 ) $ —

The Company holds a variable interest in Cannasoul Lab Services Ltd.

CLS is a wholly owned subsidiary of Cannasoul Analytics Ltd., which is in the process of establishing a commercial cannabis analytical testing laboratory (the “Cannasoul Laboratory”) located on the premises of Cronos Israel (the “Cannasoul Collaboration”).

Cronos Israel agreed to advance up to ILS 8,297 ($ 2,231 ) by a non-recourse loan (the “Cannasoul Collaboration Loan”) to CLS over a period of two years from April 1, 2020 for the capital and operating expenditures of the Cannasoul Laboratory.

The Cannasoul Collaboration Loan bears interest at 3.5 % annually.

Cronos Israel will receive 70 % of the profits of the Cannasoul Laboratory until such time as it has recovered 150 % of the amounts advanced to CLS, after which time it will receive 50 % of the Cannasoul Laboratory profits.

As a result, the Company is exposed to economic variability from CLS’s performance.

The Company does not consolidate CLS as it does not have the power to direct the activities that most significantly impact the entity’s economic performance;

thus, the Company is not considered the primary beneficiary of the entity.

The carrying amount of the Cannasoul Collaboration Loan is recorded under loans receivable and the full loan amount, ILS 8,297 , represents the Company’s maximum potential exposure to losses through the Cannasoul Collaboration.

As of both March 31, 2025 and December 31, 2024, CLS has received ILS 8,297 (approximately $ 2,231 and $ 2,272 , respectively), from the Cannasoul Collaboration Loan.

Expected credit loss allowances on the Company’s long-term financial assets for the three months ended March 31, 2025 and 2024 were comprised of the following items:

As of December 31, 2024 Increase (decrease) (ii)

Foreign exchange effect As of March 31, 2025

Mucci Promissory Note $ 88 $ 5 $ — $ 93

1 unchanged sentence

$ 623 $ 9 $ ( 10 ) $ 622

As of December 31, 2023

Increase (decrease) (ii)

Foreign exchange effect As of September 30, 2024

As of December 31, 2023 Increase (decrease) (iii)

Foreign exchange effect As of March 31, 2024

GrowCo Credit Facility (i)

3 unchanged sentences

$ 11,789 $ ( 191 ) $ ( 251 ) $ 11,347

As of June 30, 2023

Increase (decrease) (iii)

Foreign exchange effect As of September 30, 2023

GrowCo Credit Facility $ 11,579 $ ( 199 ) $ ( 283 ) $ 11,097

Mucci Promissory Note 86 2 ( 2 ) 86

Cannasoul Collaboration Loan 503 4 ( 14 ) 493

$ 12,168 $ ( 193 ) $ ( 299 ) $ 11,676

As of December 31, 2022

Increase (decrease) (iii)

Foreign exchange effect As of September 30, 2023

GrowCo Credit Facility $ 12,455 $ ( 1,348 ) $ ( 10 ) $ 11,097

Mucci Promissory Note 89 ( 3 ) — 86

Cannasoul Collaboration Loan 522 12 ( 41 ) 493

$ 13,066 $ ( 1,339 ) $ ( 51 ) $ 11,676

(ii) During the three and nine months ended September 30, 2024, $ 5 and $ 1,026 , respectively, were recorded as increases to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses.

During both the three and nine months ended September 30, 2024, $ 11,804 was recorded as a gain on revaluation of loans receivable on the condensed consolidated statements of net income (loss) and comprehensive income (loss) from remeasuring our outstanding loans receivable with Cronos GrowCo as a result of the Cronos GrowCo Transaction.

(iii) During the three and nine months ended September 30, 2023, $ 193 and $ 1,339 , respectively, were recorded as decreases to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses.

See Note 2 “ Business Combination ” for further information.

(ii) During the three months ended March 31, 2025, $ 9 was recorded as an increase to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses.

(iii) During the three months ended March 31, 2024, $ 191 was recorded as a decrease to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses.

Cronos Group Inc.

4 unchanged sentences

Property, plant and equipment, net consisted of the following:

September 30, 2024 December 31, 2023

As of March 31, 2025 As of December 31, 2024

Land $ 6,347 $ 6,389

3 unchanged sentences

Construction in progress 37,270 28,710

Total Cost 299,492 199,238

accumulated depreciation ( 30,167 ) ( 29,798 )

accumulated impairment charges ( 103,295 ) ( 103,599 )

Total $ 162,516 $ 59,468

Property, Plant, and Equipment, net $ 139,185 $ 133,189

During the first quarter of 2024, the Company ceased operations at its Winnipeg, Manitoba facility (“Cronos Fermentation”) and performed an assessment under ASC 360 of the recoverability of the carrying value of the Cronos Fermentation assets, and determined the carrying value of the assets was not fully recoverable.

The fair value was estimated using a combination of the market and income approaches.

As a result of this analysis, an impairment loss on long-lived assets of $ 1,631 was recorded to the condensed consolidated statements of net income loss and comprehensive loss in the nine months ended September 30, 2024.

In addition, the Cronos Fermentation assets were classified as held-for-sale in the first quarter of 2024 at a fair value less costs to sell of $ 19,398 .

For more information, see Note 9, “ Restructuring .”

For the three and nine months ended September 30, 2024, depreciation expense on property, plant and equipment was $ 2,552 and $ 3,861 , respectively.

For the three and nine months ended September 30, 2023, depreciation expense on property, plant and equipment was $ 1,158 and $ 3,766 , respectively.

This depreciation expense was included in cost of sales as well as depreciation and amortization in operating expenses on the consolidated statements of net loss and comprehensive loss.

The following table presents details of the property, plant and equipment acquired on July 1, 2024, in the Cronos GrowCo Transaction by major category:

Fair value at date of Cronos GrowCo Transaction

Building and leasehold improvements 49,356

Machinery and Equipment 53,573

Furniture and fixtures 580

Construction in progress

Total $ 119,600

For more information, see Note 2 “ Business Combination.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

As a result of this analysis, an impairment loss on long-lived assets of $ 1,631 was recorded to the condensed consolidated statements of net income (loss) and comprehensive income (loss) in the three months ended March 31, 2024.

As of both March 31, 2025 and December 31, 2024, the Cronos Fermentation assets were classified as held-for-sale on the condensed consolidated balance sheets.

See Note 8 “ Restructuring ” for further information.

For the three months ended March 31, 2025, depreciation expense on property, plant and equipment was $ 2,144 .

For the three months ended March 31, 2024, depreciation expense on property, plant and equipment was $ 757 .

This depreciation expense was included in cost of sales as well as depreciation and amortization in operating expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss).

As of March 31, 2025 and December 31, 2024, the Company had $ 2,774 and $ 8,828 , respectively, of unpaid purchases of property, plant and equipment accrued in accounts payable on the condensed consolidated balance sheets.

Goodwill and Intangible Assets, net

As a result of the Cronos GrowCo Transaction, the Company preliminarily recorded goodwill of $ 36,421 , none of which is deductible for income tax purposes.

The goodwill recognized was primarily attributable to the ability to secure a long-term supply of cannabis and to take advantage of growth opportunities from the expansion of Cronos GrowCo’s cultivation and processing facilities.

See Note 2 “ Business Combination ” for additional information.

Goodwill is comprised of the following items as of September 30, 2024 and December 31, 2023:

September 30, 2024

Goodwill is comprised of the following items as of March 31, 2025 and December 31, 2024:

As of March 31, 2025

Cost Accumulated impairment charges Net

5 unchanged sentences

Peace Naturals $ 976 $ — $ 976

Cronos GrowCo 62,477 — 62,477

$ 63,453 $ — $ 63,453

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

(b) Intangible assets, net

In the third quarter of 2024, the Company determined that it was no longer utilizing and had no current plans to utilize the intellectual property associated with its exclusive licenses with Ginkgo Bioworks Holdings, Inc.

As a result, the remaining net book value of $ 14,258 was impaired and recorded to impairment loss on long-lived assets on the condensed consolidated statements of income (loss) and comprehensive income (loss) in both the three and nine months ended September 30, 2024.

Intangible assets, net are comprised of the following items as of September 30, 2024 and December 31, 2023:

Useful life (in years) As of September 30, 2024

Intangible assets, net are comprised of the following items as of March 31, 2025 and December 31, 2024:

As of March 31, 2025

Cost Accumulated amortization Accumulated impairment charges Net

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276 ( 77 ) — 199

Know-how (ii)

7,643 ( 573 ) — 7,070

Total definite-lived intangible assets 48,700 ( 12,634 ) ( 26,941 ) 9,125

Lord Jones ® brand

N/A 64,000 — ( 62,500 ) 1,500

Trademarks N/A 142 — ( 142 ) —

64,000 — ( 62,500 ) 1,500

Trademarks 142 — ( 142 ) —

Total intangible assets $ 112,842 $ ( 12,634 ) $ ( 89,583 ) $ 10,625

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Useful life (in years) As of December 31, 2023

As of December 31, 2024

Cost Accumulated amortization Accumulated impairment charges

4 unchanged sentences

281 ( 76 ) — 205

Know-how (ii)

7,665 ( 383 ) — 7,282

Total definite-lived intangible assets 48,883 ( 12,107 ) ( 27,019 ) 9,757

Lord Jones ® brand

N/A 64,000 — ( 62,500 ) 1,500

Trademarks N/A 142 — ( 142 ) —

64,000 — ( 62,500 ) 1,500

Trademarks 142 — ( 142 ) —

Total intangible assets $ 113,025 $ ( 12,107 ) $ ( 89,661 ) $ 11,257

(i) The Israeli codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities.

As of September 30, 2024, the estimated future amortization of definite-lived intangible assets is as follows:

As of September 30, 2024

(ii) Know-how was acquired as part of the Cronos GrowCo Transaction.

See Note 2 “ Business Combination ” for further information.

Amortization costs associated with the know-how intangible asset are recorded to cost of sales on the consolidated statements of net income (loss) and comprehensive income (loss).

As of March 31, 2025, the estimated future amortization of definite-lived intangible assets is as follows:

As of March 31, 2025

Remainder of 2025 (9 months) $ 1,457

Thereafter 3,576

Impairment of Intangible Assets

Accumulated impairment charges on intangible assets, net consist of:

As of December 31, 2023 Impairment charges Foreign exchange effect As of September 30, 2024

Software $ ( 78 ) $ — $ 2 $ ( 76 )

Health Canada licenses ( 6,650 ) — 138 ( 6,512 )

Ginkgo exclusive license ( 7,968 ) ( 14,258 ) 145 ( 22,081 )

Lord Jones ® brand

( 62,500 ) — — ( 62,500 )

Trademarks ( 142 ) — — ( 142 )

$ ( 77,338 ) $ ( 14,258 ) $ 285 $ ( 91,311 )

As of December 31, 2022 Impairment charges Foreign exchange effect As of December 31, 2023

Software $ ( 76 ) $ — $ ( 2 ) $ ( 78 )

Health Canada licenses ( 6,498 ) — ( 152 ) ( 6,650 )

Ginkgo exclusive license ( 4,434 ) ( 3,366 ) ( 168 ) ( 7,968 )

Lord Jones ® brand

( 62,500 ) — — ( 62,500 )

Trademarks ( 142 ) — — ( 142 )

$ ( 73,650 ) $ ( 3,366 ) $ ( 322 ) $ ( 77,338 )

Cronos Group Inc.

4 unchanged sentences

In the first quarter of 2022, the Company initiated a strategic plan to realign the business around its brands, centralize functions and evaluate the Company’s supply chain (the “Realignment”).

As part of the Realignment, on February 28, 2022, the Board approved plans to leverage the Company’s strategic partnerships to improve supply chain efficiencies and reduce manufacturing overhead by exiting its production facility in Stayner, Ontario, Canada (the “Peace Naturals Campus”).

On February 27, 2023, the Board approved revisions to the Realignment, which were expected to result in the Company maintaining select components of its operations at the Peace Naturals Campus, namely distribution warehousing, certain research and development activities and manufacturing of certain of the Company’s products, while seeking to sell and lease back all or some of the Peace Naturals Campus or to lease certain portions of the Peace Naturals Campus to third parties.

In the third quarter of 2023, the Board approved revisions to the Realignment to wind-down operations at Cronos Fermentation, list the Company’s Winnipeg, Manitoba facility (the “Cronos Fermentation Facility”) for sale, and implement additional organization-wide cost reductions as the Company continues its Realignment initiatives.

The Realignment initiatives were intended to position the Company to drive profitable and sustainable growth over time.

As part of the Realignment, on February 28, 2022, the Company’s Board of Directors (the “Board”) approved plans to leverage the Company’s strategic partnerships to improve supply chain efficiencies and reduce manufacturing overhead by exiting its production facility in Stayner, Ontario, Canada (the “Peace Naturals Campus”).

On February 27, 2023, the Board approved revisions to the Realignment, under which the Company is maintaining select components of its operations at the Peace Naturals Campus, namely distribution warehousing, certain research and development activities and manufacturing of certain of the Company’s products.

In the third quarter of 2023, the Board approved revisions to the Realignment to wind-down operations at Cronos Fermentation, list the Cronos Fermentation Facility for sale, and implement additional organization-wide cost reductions as the Company continues its Realignment initiatives.

In the first quarter of 2025, the Company continued its Realignment initiatives to transform its IT infrastructure and finance departments to drive long-term cost efficiencies, improve cross-functional collaboration, and support global scalability.

These actions include leadership transitions, consolidation of certain roles, and assessment of, and investment in, critical IT infrastructure.

The Realignment initiatives are intended to position the Company to drive profitable and sustainable growth over time.

On November 26, 2023, the Company entered into an agreement with Future Farmco Canada Inc.

1 unchanged sentence

This agreement was subsequently terminated pursuant to its terms during the second quarter of 2024.

The Company is continuing to evaluate its strategic options for the Peace Naturals Campus, which may include continuing and expanding operations at the facility.

During the first quarter of 2024, the Company ceased operations at Cronos Fermentation and performed an assessment under ASC 360 of the recoverability of the carrying value of the Cronos Fermentation assets, and determined the carrying value of the assets was not fully recoverable.

The Company plans to continue and expand operations at the Peace Naturals Campus.

During the first quarter of 2024, the Company ceased operations at Cronos Fermentation and performed an assessment under ASC 360 Property, Plant and Equipment of the recoverability of the carrying value of the Cronos Fermentation assets, and determined the carrying value of the assets was not fully recoverable.

The fair value was estimated using a combination of the market and income approaches.

As a result of this analysis, an impairment loss on long-lived assets of $ 1,631 was recorded to the condensed consolidated statements of net loss and comprehensive loss in the nine months ended September 30, 2024.

In addition, the Cronos Fermentation assets were classified as held-for-sale in the first quarter of 2024 at a fair value less costs to sell of $ 19,398 and continue to be classified as held-for-sale as of September 30, 2024.

During the third quarter of 2024, the Company adjusted its sales strategy for the Cronos Fermentation assets to market the assets to a broader buyer pool, which resulted in the recognition of a loss on held-for-sale assets of $ 10,422 on the condensed consolidated statements of net income (loss) and comprehensive income (loss) in both the three and nine months ended September 30, 2024.

During the three and nine months ended September 30, 2024, the Company incurred nil and $ 630 of restructuring costs in its continuing operations in connection with the Realignment.

Charges related thereto include shutdown costs at the Cronos Fermentation Facility, as well as employee-related costs such as severance and other termination benefits.

During both the three and nine months ended September 30, 2023, the Company incurred $ 1,423 of restructuring costs in its continuing operations in connection with the Realignment.

Charges related thereto include employee-related costs such as severance and other termination benefits.

Restructuring costs incurred in the Company’s discontinued operations during the three and nine months ended September 30, 2023 is presented in Note 3 “ Discontinued Operations .”

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

The following table summarizes the Company’s restructuring activity for the three and nine months ended September 30, 2024:

Accrual as of June 30, 2024 Expenses Payments/Write-offs Accrual as of September 30, 2024

Employee Termination Benefits $ 24 $ — $ ( 24 ) $ —

Other Restructuring Costs 547 — ( 547 ) —

Total $ 571 $ — $ ( 571 ) $ —

Accrual as of December 31, 2023 Expenses Payments/Write-offs Accrual as of September 30, 2024

Employee Termination Benefits $ 150 $ 62 $ ( 212 ) $ —

Other Restructuring Costs — 568 ( 568 ) —

Total $ 150 $ 630 $ ( 780 ) $ —

Accrual as of June 30, 2023 Expenses Payments/Write-offs Accrual as of September 30, 2023

As a result of this analysis, an impairment loss on long-lived assets of $ 1,631 was recorded to the condensed consolidated statements of net loss and comprehensive loss in the three months ended March 31, 2024.

In addition, the Cronos Fermentation assets were classified as held-for-sale in the first quarter of 2024 and continue to be classified as held-for-sale as of March 31, 2025.

During the three months ended March 31, 2025, the Company incurred $ 555 restructuring costs in connection with the Realignment.

During the three months ended March 31, 2024, the Company incurred $ 83 of restructuring costs in connection with the Realignment.

Charges related thereto include employee-related costs such as severance and other termination benefits, as well as other related costs.

The following table summarizes the Company’s restructuring activity for the three months ended March 31, 2025:

Accrual as of December 31, 2024

Expenses Payments/Write-offs Accrual as of March 31, 2025

Employee Termination Benefits $ — $ 257 $ — $ 257

1 unchanged sentence

Total $ — $ 555 $ ( 115 ) $ 440

Accrual as of December 31, 2022 Expenses Payments/Write-offs Accrual as of September 30, 2023

The following table summarizes the Company’s restructuring activity for the three months ended March 31, 2024:

Accrual as of December 31, 2023

Expenses Payments/Write-offs Accrual as of March 31, 2024

Employee Termination Benefits $ 150 $ 62 $ ( 174 ) $ 38

1 unchanged sentence

Total $ 150 $ 83 $ ( 195 ) $ 38

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Share-based Compensation

(a) Share-based award plans

The Company has granted stock options, restricted share units (“RSUs”) and deferred share units (“DSUs”) to employees and non-employee directors under the 2018 Stock Option Plan dated June 28, 2018 (the “2018 Stock Option Plan”), the Employment Inducement Award Plan #1 (the “Employment Inducement Award Plan”), the 2020 Omnibus Equity Incentive Plan dated March 29, 2020 (the “2020 Omnibus Plan”) and the DSU Plan dated August 10, 2019 (the “DSU Plan”).

The Company can no longer make grants under the 2018 Stock Option Plan or the Employment Inducement Award Plan.

The following table summarizes the total share-based compensation expense associated with the Company’s stock options and RSUs for the three and nine months ended September 30, 2024 and 2023:

For the three months ended September 30, For the nine months ended September 30,

2024 2023 2024 2023

The Company has granted stock options, restricted share units (“RSUs”) and deferred share units (“DSUs”) to employees and non-employee directors under the 2018 Stock Option Plan dated June 28, 2018 (the “2018 Stock Option Plan”), the 2020 Omnibus Equity Incentive Plan dated March 29, 2020 (the “2020 Omnibus Plan”) and the DSU Plan dated August 10, 2019 (the “DSU Plan”).

The Company can no longer make grants under the 2018 Stock Option Plan.

The following table summarizes the total share-based compensation expense associated with the Company’s stock options and RSUs for the three months ended March 31, 2025 and 2024:

For the three months ended March 31,

Stock options $ 74 $ 34

2 unchanged sentences

(b) Stock options

Vesting conditions for grants of options are determined by the Compensation Committee of the Company’s Board of Directors.

Vesting conditions for grants of options are determined by the Compensation Committee of the Board.

The typical vesting for stock option grants made under the 2020 Omnibus Plan is annual vesting over three to five years with a maximum term of ten years .

1 unchanged sentence

The 2018 Stock Option Plan did not, and the 2020 Omnibus Plan does not, authorize grants of options with an exercise price below fair market value.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

The following is a summary of the changes in stock options for the nine months ended September 30, 2024 and 2023:

The following is a summary of the changes in stock options for the three months ended March 31, 2025 and 2024:

Weighted-average exercise price (C$) (i)

1 unchanged sentence

Balance as of December 31, 2024

Cancellation, forfeiture and expiry of options

$ 5.63 717,264 3.65

Balance as of September 30, 2024 $ 5.63 717,264 3.90

Exercisable as of September 30, 2024 $ 6.39 535,469 3.42

Balance as of March 31, 2025 $ 5.63 717,264 3.40

Exercisable as of March 31, 2025 $ 6.20 573,253 3.04

Weighted-average exercise price (C$) (i)

2 unchanged sentences

$ 14.50 2,103,201 1.84

Issuance of options 2.96 188,317

Cancellation, forfeiture and expiry of options

23.93 ( 9,501 )

Balance as of September 30, 2023 $ 14.50 2,103,201 2.09

Exercisable as of September 30, 2023 $ 16.02 1,845,841 1.50

Balance as of March 31, 2024 $ 14.46 2,093,700 1.59

Exercisable as of March 31, 2024 $ 15.72 1,874,123 1.10

(i) The weighted-average exercise price reflects the conversion of foreign currency-denominated stock options translated into C$ using the average foreign exchange rate as of the date of issuance.

The following table summarizes stock options outstanding:

As of September 30, 2024 As of December 31, 2023

As of March 31, 2025 As of December 31, 2024

2020 Omnibus Plan 702,264 702,264

1 unchanged sentence

Total stock options outstanding 717,264 717,264

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

The following is a summary of the changes in RSUs for the nine months ended September 30, 2024 and 2023:

The following is a summary of the changes in RSUs for the three months ended March 31, 2025 and 2024:

Weighted-average grant date fair value (C$) (ii)

2 unchanged sentences

$ 3.50 8,382,213

2.73 1,775,668

Vested and issued 4.00 ( 4,459,280 )

Cancellation and forfeitures 3.47 ( 134,999 )

Balance as of September 30, 2024 $ 3.53 8,394,896

Balance as of March 31, 2025 $ 2.86 5,563,602

Weighted-average grant date fair value (C$) (ii)

5 unchanged sentences

Cancellation and forfeitures 2.95 ( 65,662 )

Balance as of September 30, 2023 $ 3.86 7,334,572

Balance as of March 31, 2024 $ 3.55 8,259,619

(i) RSUs granted in the period vest annually in equal installments over a three-year period from either the grant date or after a three or five year “cliff-period.” All RSUs are subject to such holder’s continued employment through each vesting date.

1 unchanged sentence

(ii) The weighted-average grant date fair value reflects the conversion of foreign currency-denominated RSUs translated into C$ using the foreign exchange rate as of the date of issuance.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

(d) Deferred share units

The following is a summary of the changes in DSUs for the nine months ended September 30, 2024 and 2023:

Financial liability Number of DSUs

Balance as of December 31, 2023 $ 1,092 521,679

Granting and vesting of DSUs 450 193,965

DSU liabilities settled ( 359 ) ( 155,383 )

Loss on revaluation 59 —

Balance as of September 30, 2024 $ 1,242 560,261

The following is a summary of the changes in DSUs for the three months ended March 31, 2025 and 2024:

Financial liability Number of DSUs

1 unchanged sentence

$ 1,129 560,261

Granting and vesting of DSUs 450 255,947

Gain on revaluation ( 120 ) —

Balance as of September 30, 2023 $ 1,042 521,679

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Income (Loss) per Share

Basic and diluted income (loss) per share from continuing and discontinued operations are calculated as follows (in thousands, except share and per share amounts):

Three months ended September 30, Nine months ended September 30,

2024 2023 2024 2023

Basic income (loss) per share computation

Net income (loss) from continuing operations attributable to the shareholders of Cronos Group $ 8,349 $ ( 1,462 ) $ ( 2,649 ) $ ( 24,935 )

Weighted-average number of common shares outstanding for computation for basic income (loss) per share 382,285,589 381,100,005 381,963,097 380,900,334

Basic income (loss) from continuing operations per share $ 0.02 $ ( 0.00 ) $ ( 0.01 ) $ ( 0.07 )

Loss from discontinued operations attributable to the shareholders of Cronos Group $ — $ ( 182 ) $ — $ ( 4,238 )

Weighted-average number of common shares outstanding for computation of basic loss from discontinued operations per share 382,285,589 381,100,005 381,963,097 380,900,334

Basic loss from discontinued operations per share $ — $ ( 0.00 ) $ — $ ( 0.01 )

Diluted income (loss) per share computation

Net income (loss) from continuing operations attributable to the shareholders of Cronos Group $ 8,349 $ ( 1,462 ) $ ( 2,649 ) $ ( 24,935 )

Weighted-average number of common shares outstanding used in the computation of basic income (loss) per share 382,285,589 381,100,005 381,963,097 380,900,334

Dilutive effect of RSUs 3,408,093 — — —

Dilutive effect of Top-up Rights – market price 290,725 — — —

Weighted-average number of common shares for computation of diluted income (loss) from continuing operations per share (i)

Balance as of March 31, 2025 $ 1,009 560,261

Financial liability Number of DSUs

Balance as of December 31, 2023

$ 1,092 521,679

Diluted income (loss) from continuing operations per share $ 0.02 $ ( 0.00 ) $ ( 0.01 ) $ ( 0.07 )

Loss from discontinued operations attributable to the shareholders of Cronos Group $ — $ ( 182 ) $ — $ ( 4,238 )

Weighted-average number of common shares for computation of diluted loss from discontinued operations per share 385,984,407 381,100,005 381,963,097 380,900,334

Diluted loss from discontinued operations per share $ 0.00 $ ( 0.00 ) $ 0.00 $ ( 0.01 )

(i) In computing diluted loss per share, incremental common shares are not considered in periods in which a net loss is reported as the inclusion of the common share equivalents would be anti-dilutive.

For the three months ended September 30, 2024 and 2023, total securities of 15,065,666 and 23,340,811 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive.

For the nine months ended September 30, 2024 and 2023, total securities of 20,926,402 and 27,399,000 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive.

Loss on revaluation 277 —

Balance as of March 31, 2024 $ 1,369 521,679

Commitments and Contingencies

1 unchanged sentence

There have been no material changes in the information regarding commitments as disclosed in the Company’s Annual Report.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

(b) Contingencies

2 unchanged sentences

Although the outcome of these matters cannot be predicted with certainty, the Company does not believe these legal proceedings, individually or in the aggregate, will have a material adverse effect on its financial condition but could be material to its results of operations for a quarterly period depending, in part, on its results for that quarter.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

(i) Class action complaints relating to restatement of 2019 interim financial statements

2 unchanged sentences

The court consolidated the cases, and the consolidated amended complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, promulgated thereunder, against all defendants, and Section 20(a) of the Exchange Act against the individual defendants.

The consolidated amended complaint generally alleges that certain of the Company’s prior public statements about revenue and internal controls were incorrect based on the Company’s disclosures relating to the Audit Committee of the Board of Directors’ review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel.

The consolidated amended complaint generally alleges that certain of the Company’s prior public statements about revenue and internal controls were incorrect based on the Company’s disclosures relating to the Audit Committee of the Board’s review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel.

The consolidated amended complaint does not quantify a damage request.

2 unchanged sentences

On December 1, 2023, the shareholder plaintiffs sought reconsideration of the dismissal, requesting that the court instead dismiss the action without prejudice and permit the plaintiffs to seek leave to further amend the complaint.

The reconsideration motion is pending.

On December 3, 2024, the Court issued an opinion and order granting the plaintiffs’ motion for reconsideration, and on January 10, 2025, the plaintiffs filed a second amended class action complaint.

The defendants are moving to dismiss the second amended class action complaint.

On June 3, 2020, an alleged shareholder filed a Statement of Claim, as amended on August 12, 2020, in the Ontario Superior Court of Justice in Toronto, Ontario, Canada, seeking, among other things, an order certifying the action as a class action on behalf of a putative class of shareholders and damages of an unspecified amount.

The Amended Statement of Claim named (i) the Company, (ii) its Chief Executive Officer, (iii) former Chief Financial Officer, (iv) former Chief Financial Officer and Chief Commercial Officer, and (v) current and former members of the Board as defendants and alleged breaches of the Ontario Securities Act, oppression under the Ontario Business Corporations Act and common law misrepresentation.

The Amended Statement of Claim generally alleged that certain of the Company’s prior public statements about revenue and internal controls were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of the Board of Directors was conducting a review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel, and the Company’s subsequent restatement.

The Amended Statement of Claim generally alleged that certain of the Company’s prior public statements about revenue and internal controls were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of the Board was conducting a review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel, and the Company’s subsequent restatement.

The Amended Statement of Claim did not quantify a damage request.

8 unchanged sentences

SEC Settlement

On October 24, 2022, the SEC issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8(a) of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21(c) of the Exchange Act, Making Findings, and Imposing a Cease-and-Desist Order (the “Settlement Order”) resolving the Restatements.

The Company agreed to settle with the SEC, without admitting or denying the allegations described in the Settlement Order.

1 unchanged sentence

The Settlement Order required the Company to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Sections 10(b), 13(a), 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 13a-13, 13a-15(a), 13a-16 and 12b-20 thereunder.

As a result of the Settlement Order, the Company (i) lost its status as a well-known seasoned issuer for a period of three years, (ii) is unable to rely on the private offering exemptions provided by Regulations A and D under the Securities Act for a period of five years and (iii) is unable to rely on the safe harbor provisions of the U.S.

Private Securities Litigation Reform Act of 1995 for a period of three years.

Cronos Group Inc.

2 unchanged sentences

dollars, except share amounts) Table of Contents

Private Securities Litigation Reform Act of 1995 for a period of three years.

OSC Settlement

14 unchanged sentences

The Company responded to requests for information from the Ministry.

On November 10, 2024, the Trade Levies Commissioner published final findings under which the Company would be subject to a proposed duty of 175%.

The Commissioner’s findings were then evaluated by an ad hoc advisory committee.

On December 12, 2024, the Minister of Economy announced a conflict of interest and recused himself from the evaluation of whether to impose a duty.

On April 10, 2025, notwithstanding the previous recusal, the Minister of Economy approved a duty of up to 165% on imports of cannabis from Canada, including the Company’s imports.

On April 25, 2025, the Minister of Finance released a memorandum opposing the imposition of the duty, which acted as a veto of the Minister of Economy’s approval.

On April 29, 2025, the Minister of Economy released a memorandum stating that notwithstanding the veto, he intends to proceed with the process of imposing the duty.

A provisional duty is not being imposed at this time.

The Company cannot predict further proceedings or determinations of the Ministers of Economy or Finance, or the Finance Committee of the Knesset and cannot predict whether a duty will ultimately be imposed on its products.

On July 25, 2024, a group of cannabis cultivators filed an administrative petition in the District Court of Jerusalem, Israel, against the Trade Levies Commissioner and certain Israeli and Canadian businesses.

The administrative petition seeks a court order requiring the Trade Levies Commissioner to impose a temporary duty on cannabis imported from Canada during the pendency of the investigation until the date on which a final determination is made by the Ministry whether to impose a duty.

The administrative petition sought a court order requiring the Trade Levies Commissioner to impose a temporary duty on cannabis imported from Canada during the pendency of the investigation until the date on which a final determination is made by the Ministry of Economy whether to impose a duty.

On September 9, 2024, the Company filed a motion to join the litigation;

the court granted the Company’s motion on September 23, 2024.

On November 10, 2024, the Trade Levies Commissioner published final findings under which the Company would be subject to a proposed duty of 175%.

A provisional duty is not being imposed at this time.

The Commissioner’s findings will now be evaluated by an ad hoc advisory committee, which is expected to make recommendations to the Ministers of Economy and Finance and the Finance Committee of the Knesset of whether to impose a duty.

The Company cannot predict the outcome of the ad hoc committee’s review or the determinations of the Ministers of Economy or Finance, or the Finance Committee of the Knesset.

On February 6, 2025, the court dismissed the administrative petition.

We expect litigation and regulatory proceedings relating to the marketing, distribution, import and sale of our products to increase.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Segment Information

Segment reporting is prepared on the same basis that the CODM manages the business, makes operating decisions and assesses the Company’s performance.

The CODM is the Company’s Chief Executive Officer.

The Company operates as a single segment with the purpose of providing high-quality cannabis products to adult-use, wholesale, and medical market customers globally.

The consolidated results are regularly reviewed by the CODM to assess the performance of the Company’s single segment operations and make decisions regarding the allocation of resources.

The CODM reviews adjusted earnings (loss) before interest, tax, depreciation and amortization (“Adjusted EBITDA”) as the measure of segment profit or loss to evaluate performance of and allocate resources for its reportable segment.

Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and non-cash items and items that do not reflect management’s assessment of ongoing business performance.

The CODM believes Adjusted EBITDA provides the most useful insight into underlying business trends and results and provides a more meaningful comparison of period-over-period results.

In addition, certain significant expenses are regularly reviewed by the CODM and considered for business decisions and allocation of resources;

these significant expenses include:

sales and marketing, research and development, general and administrative, depreciation and amortization, and share-based compensation expense, which are presented within operating expenses on the Company’s condensed consolidated statements of net income (loss) and comprehensive income (loss).

Furthermore, the CODM regularly reviews total cash and short-term investments to aid in capital allocation decisions.

The table below sets forth consolidated Adjusted EBITDA and significant expenses for our single segment:

Three months ended March 31,

Adjusted EBITDA $ 2,289 $ ( 10,669 )

Significant expenses:

Sales and marketing 4,565 5,332

Research and development 793 997

General and administrative 9,309 8,907

Share-based compensation 2,088 2,015

Depreciation and amortization 496 1,123

Total significant expenses 17,251 18,374

Restructuring costs 555 83

Impairment loss on long-lived assets — 1,974

Total operating expense $ 17,806 $ 20,431

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

The following tables set forth a reconciliation of net income (loss) as determined in accordance with U.S.

GAAP to Adjusted EBITDA for the periods indicated:

Three months ended March 31, 2025

Interest income, net ( 9,665 )

Income tax benefit

Depreciation and amortization 2,840

Gain on revaluation of financial instruments (ii)

Foreign currency transaction gain ( 1,583 )

Transaction costs (iv)

Other, net (v)

Restructuring costs (vi)

Share-based compensation (vii)

Financial statement review costs (viii)

Inventory step-up recorded to cost of sales (ix)

Israel Ministry of Economy and Industry dumping inquiry expense (x)

Adjusted EBITDA $ 2,289

Three months ended March 31, 2024

Net loss $ ( 2,484 )

Interest income, net ( 14,245 )

Income tax benefit ( 558 )

Depreciation and amortization 1,731

EBITDA ( 15,556 )

Share of income from equity method investments ( 1,448 )

Impairment loss on long-lived assets (i)

Loss on revaluation of financial instruments (ii)

Impairment loss on other investments (iii)

Foreign currency transaction gain ( 13,259 )

Other, net (v)

Restructuring costs (vi)

Share-based compensation (vii)

Financial statement review costs (viii)

Adjusted EBITDA $ ( 10,669 )

(i) For the three months ended March 31, 2024, impairment loss on long-lived assets was primarily the result of the cessation of operations at Cronos Fermentation during the quarter.

(ii) For the three months ended March 31, 2025 and 2024, the (gain) loss on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura.

(iii) For the three months ended March 31, 2024, impairment loss on other investments represents the fair value change on the PharmaCann Option.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

(iv) For the three months ended March 31, 2025, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction.

These costs are included in general and administrative expenses on the condensed consolidated statement of net income (loss) and comprehensive income (loss).

(v) For the three months ended March 31, 2025 and 2024, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.

(vi) For the three months ended March 31, 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment.

For the three months ended March 31, 2024, restructuring costs related to employee-related severance costs and other restructuring costs associated with the Realignment, as described in Note 8 “ Restructuring .”

(vii) For the three months ended March 31, 2025 and 2024, share-based compensation related to the non-cash expenses of share-based compensation awarded to employees under the Company’s share-based award plans as described in Note 9 “ Share-based Compensation.

(viii) For the three months ended March 31, 2025 and 2024, financial statement review costs include costs and reserves taken related to the Restatements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to the Restatements and legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement.

(ix) For the three months ended March 31, 2025, inventory step-up recorded to cost of sales represents the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the condensed consolidated statements of income (loss) and comprehensive income (loss).

(x) For the three months ended March 31, 2025, Israel Ministry of Economy and Industry dumping inquiry expense included expenditures relating to the regulatory inquiry about alleged dumping of medical cannabis products in Israel and related litigation and external relations expenses.

The following table presents the Company’s revenue by major product category for our single segment:

Three months ended March 31,

Cannabis flower $ 23,344 $ 17,525

Cannabis extracts 8,608 7,727

Net revenue $ 32,262 $ 25,288

Net revenue attributed to a geographic region based on the location of the customer was as follows:

Three months ended March 31,

Canada $ 20,130 $ 18,871

Israel 9,229 6,417

Other countries 2,903 —

Net revenue $ 32,262 $ 25,288

The table below sets forth total cash and cash equivalents and short-term investments for our single segment:

As of March 31, 2025 As of December 31, 2024

Total cash and cash equivalents and short-term investments $ 837,819 $ 858,805

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Property, plant and equipment, net were physically located in the following geographic regions:

As of March 31, 2025 As of December 31, 2024

Canada $ 124,007 $ 117,329

Israel 15,178 15,860

Total $ 139,185 $ 133,189

Intangibles, net were physically located in the following geographic regions:

As of March 31, 2025 As of December 31, 2024

Canada $ 10,279 $ 10,887

Israel 346 370

Total $ 10,625 $ 11,257

For additions to our property, plant and equipment, net and intangibles, net for the three months ended March 31, 2025 and March 31, 2024, please see Note 6 “ Property, Plant and Equipment, net ” and the condensed consolidated statements of cash flows.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Income (Loss) per Share

Basic and diluted income (loss) per share are calculated as follows (in thousands, except share and per share amounts):

Three months ended March 31,

Basic income (loss) per share computation

Net income (loss) attributable to the shareholders of Cronos Group $ 6,122 $ ( 2,241 )

Weighted-average number of common shares outstanding for computation for basic income (loss) per share 382,958,797 381,442,597

Basic income (loss) per share $ 0.02 $ ( 0.01 )

Diluted income (loss) per share computation

Net income (loss) attributable to the shareholders of Cronos Group $ 6,122 $ ( 2,241 )

Weighted-average number of common shares outstanding used in the computation of basic income (loss) per share 382,958,797 381,442,597

Dilutive effect of RSUs 3,823,127 —

Dilutive effect of Top-up Rights – market price 181,761 —

Weighted-average number of common shares for computation of diluted income (loss) from continuing operations per share (i)

386,963,685 381,442,597

Diluted income (loss) per share $ 0.02 $ ( 0.01 )

For the three months ended March 31, 2025 and 2024, total securities of 18,273,597 and 24,580,665 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive.

Fair Value Measurements

9 unchanged sentences

The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis:

September 30, 2024

March 31, 2025

Level 1 Level 2 Level 3 Total

6 unchanged sentences

Cash and cash equivalents $ 858,805 $ — $ — $ 858,805

Short-term investments 192,237 — — 192,237

Other investments (i)

1 unchanged sentence

Derivative liabilities — — 40 40

(i) As of September 30, 2024 and December 31, 2023, the Company’s influence on Vitura is deemed non-significant and the investment is considered an equity security with a readily determinable fair value.

See Note 5 “ Investments ” for additional information.

There were no transfers between fair value categories during the periods presented.

The following tables present information about the Company’s assets that are measured at fair value on a non-recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value:

As of December 31, 2023

Level 1 Level 2 Level 3 Total

Other investments (i)

$ — $ — $ 25,650 $ 25,650

(i) On June 14, 2021, the Company purchased an option to acquire 473,787 shares of Class A Common Stock of PharmaCann, a vertically integrated cannabis company in the United States, at an exercise price of $ 0.0001 per share, representing approximately 10.5 % of PharmaCann’s issued and outstanding capital stock on a fully diluted basis as of the date of the PharmaCann Option, for an aggregate purchase price of approximately $ 110,392 .

As of September 30, 2024 and December 31, 2023, based on updated information provided by PharmaCann in the first quarter, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 5.8 % and 6.6 %.

In the second quarter of, 2024, the PharmaCann Option was impaired to zero.

See Note 5 “ Investments .”

(i) As of March 31, 2025 and December 31, 2024, the Company’s influence on Vitura is deemed non-significant and the investment is considered an equity security with a readily determinable fair value.

See Note 4 “ Investments ” for further information.

There were no transfers between fair value categories during the periods presented.

Related Party Transactions

(a) Vendor Agreement

(a) Cronos GrowCo

The Company holds both ownership of 50 % of Cronos GrowCo’s common shares and senior secured debt in Cronos GrowCo and these were historically accounted for as related party transactions.

Effective July 1, 2024, the Company obtained majority control of the board of directors of Cronos GrowCo, which is now accounted for as an intercompany relationship and all intercompany activity is eliminated upon consolidation.

See Note 2 “ Business Combination ” for further information regarding the Cronos GrowCo Transaction.

Three months ended March 31, 2024

Cronos GrowCo – purchases

(b) Vendor Agreement

In November 2022, the Company entered into an agreement with an external vendor whereby the vendor would provide certain manufacturing services to the Company.

The vendor then subcontracted out a portion of those services to another company whose chief executive officer is an immediate family member of an executive of the Company.

The Company purchased $ 406 and $ 1,842 of products and services under this subcontracted agreement for the three and nine months ended September 30, 2023.

The Company had $ 0 and $ 28 in outstanding payables related to the subcontracted agreement as of September 30, 2024 and December 31, 2023, respectively.

In November 2023, the Company negotiated a direct contract with the related-party vendor.

During the three and nine months ended September 30, 2024, the Company purchased $ 410 and $ 1,346 of products and services under this agreement and had outstanding accounts payable related to the agreement of $ 82 and $ 11 as of September 30, 2024 and December 31, 2023, respectively.

(b) Consulting Agreement

During the three months ended March 31, 2025 and 2024, the Company purchased $ 189 and $ 772 , respectively, of products and services under this agreement and had outstanding accounts payable related to the agreement of $ 117 and $ 149 as of March 31, 2025 and December 31, 2024, respectively.

In connection with the Cronos GrowCo Transaction, Cronos GrowCo entered into a consulting services agreement with a consulting firm managed by a member of the group of investors holding the remaining 50 % ownership of Cronos GrowCo, pursuant to which the consulting firm provides management services to Cronos GrowCo.

During both the three and nine months ended September 30, 2024, the Company incurred $ 220 of expense under this agreement.

As of September 30, 2024, the Company had $ 665 in outstanding payables related to this agreement, which included $ 444 that were acquired in the Cronos GrowCo Transaction.

During the three months ended March 31, 2025, the Company incurred $ 209 of expense under this agreement.

As of March 31, 2025, the Company had no outstanding payables related to this agreement.

Cronos Group Inc.

Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S.

dollars, except share amounts) Table of Contents

Subsequent Events

(a) Share Repurchase Authorization

On May 7, 2025, the Board authorized a share repurchase program of up to $ 50 million.

The share repurchase program is expected to commence on May 14, 2025 and terminate on May 13, 2026, unless earlier terminated.

Repurchases under the program may be made from time to time, either through open market purchases at then-prevailing market prices through the facilities of the NASDAQ Global Market or other U.S.

published markets, privately negotiated transactions or otherwise.

Open market repurchases will not exceed 19,270,951 common shares, being 5 % of the outstanding common shares as of May 7, 2025.

The timing and amount of repurchases are subject to market conditions, compliance with applicable laws and regulations and any other factors management of the Company may deem relevant.

The program does not obligate Cronos to acquire any specific dollar amount or number of shares and may be modified, suspended, or discontinued at any time.

All shares repurchased under this program will be retired and cancelled upon settlement.

As a result, the repurchased shares will be removed from issued and outstanding share capital, reducing the number of shares outstanding.

The value of the retired shares will be charged against share capital and additional paid in capital and, if necessary, to retained earnings, in accordance with ASC 505-30.

The Company intends to fund repurchases using available cash resources.

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 1. Financial Statements