Cronos Group Inc. 10-Q

Item 1. Financial Statements Table of Contents Condensed Consolidated Balance Sheets as of June 30 , 2025 (Unaudited) and December 31, 202 4 4 Condensed Consolidated Statements of Net Loss and Comprehensive Income (Loss) for the three and six months ended June 30 , 2025 and 2024 (Unaudited) 5 Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30 , 2025 and 2024 (Unaudited) 6 Condensed Consolidated Statements of Cash Flows for the six months ended June 30 , 2025 and 2024 (Unaudited) 7 Notes to Condensed Consolidated Financial Statements (Unaudited) 8 3 Cronos Group Inc. Condensed Consolidated Balance Sheets (In thousands of U.S. dollars, except share amounts, unaudited) Table of Contents As of June 30, 2025 As of December 31, 2024 Assets Current assets Cash and cash equivalents $ 794,416 $ 858,805 Short-term investments 40,000 — Accounts receivable, net 26,619 15,462 Interest receivable 3,228 8,690 Other receivables 9,529 5,000 Current portion of loans receivable, net — 618 Inventory, net 42,142 33,149 Prepaids and other current assets 5,191 6,277 Held-for-sale assets 6,022 8,112 Total current assets 927,147 936,113 Other investments 2,251 2,813 Non-current portion of loans receivable, net 13,767 15,526 Property, plant and equipment, net 150,243 133,189 Right-of-use assets 1,677 1,390 Goodwill 66,918 63,453 Intangible assets, net 10,565 11,257 Deferred tax assets 2,659 2,571 Total assets $ 1,175,227 $ 1,166,312 Liabilities Current liabilities Accounts payable $ 12,136 $ 16,973 Income taxes payable 14 9 Accrued liabilities 24,637 31,653 Current portion of lease obligation 822 1,025 Derivative liabilities 3 40 Total current liabilities 37,612 49,700 Non-current portion due to non-controlling interests 680 1,073 Non-current portion of lease obligation 1,189 993 Deferred tax liabilities 5,540 3,564 Total liabilities 45,021 55,330 Shareholders’ equity Share capital and additional paid-in capital (no par value; authorized for issue as of June 30, 2025 and December 31, 2024: unlimited; shares outstanding as of June 30, 2025 and December 31, 2024: 383,806,912 and 382,530,780 , respectively) 666,614 669,879 Retained earnings 424,080 457,709 Accumulated other comprehensive loss ( 8,404 ) ( 63,525 ) Total equity attributable to shareholders of Cronos Group 1,082,290 1,064,063 Non-controlling interests 47,916 46,919 Total shareholders’ equity 1,130,206 1,110,982 Total liabilities and shareholders’ equity $ 1,175,227 $ 1,166,312 See notes to condensed consolidated interim financial statements. 4 Cronos Group Inc. Condensed Consolidated Statements of Net Loss and Comprehensive Income (Loss) (In thousands of U.S. dollars, except share and per share amounts, unaudited) Table of Contents Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Net revenue, before excise taxes $ 44,252 $ 38,678 $ 86,150 $ 74,045 Excise taxes ( 10,797 ) ( 10,916 ) ( 20,433 ) ( 20,995 ) Net revenue 33,455 27,762 65,717 53,050 Cost of sales 18,865 21,070 37,393 41,875 Inventory write-down 86 395 86 395 Gross profit 14,504 6,297 28,238 10,780 Operating expenses Sales and marketing 5,347 4,330 9,912 9,662 Research and development 929 962 1,722 1,959 General and administrative 10,536 12,767 19,845 21,674 Restructuring costs 768 547 1,323 630 Share-based compensation 1,381 2,236 3,469 4,251 Depreciation and amortization 867 1,016 1,363 2,139 Impairment loss on long-lived assets — — — 1,974 Total operating expenses 19,828 21,858 37,634 42,289 Operating loss ( 5,324 ) ( 15,561 ) ( 9,396 ) ( 31,509 ) Other income (expense) Interest income, net 8,997 13,451 18,662 27,696 Share of income from equity method investments — 917 — 2,365 Loss on revaluation of financial instruments ( 640 ) ( 3,615 ) ( 591 ) ( 6,257 ) Impairment loss on other investments — ( 12,916 ) — ( 25,650 ) Foreign currency gain (loss) ( 39,538 ) 6,543 ( 37,955 ) 19,802 Loss on held-for-sale assets ( 2,501 ) — ( 2,501 ) — Other, net ( 1 ) 248 42 ( 422 ) Total other income (expense) ( 33,683 ) 4,628 ( 22,343 ) 17,534 Loss before income taxes ( 39,007 ) ( 10,933 ) ( 31,739 ) ( 13,975 ) Income tax benefit ( 525 ) ( 2,174 ) ( 980 ) ( 2,732 ) Net loss ( 38,482 ) ( 8,759 ) ( 30,759 ) ( 11,243 ) Net income (loss) attributable to non-controlling interest 1,229 ( 2 ) 2,830 ( 245 ) Net loss attributable to Cronos Group $ ( 39,711 ) $ ( 8,757 ) $ ( 33,589 ) $ ( 10,998 ) Comprehensive income (loss) Net loss $ ( 38,482 ) $ ( 8,759 ) $ ( 30,759 ) $ ( 11,243 ) Other comprehensive income (loss) Foreign exchange gain (loss) on translation 60,228 ( 10,160 ) 57,146 ( 32,521 ) Comprehensive income (loss) 21,746 ( 18,919 ) 26,387 ( 43,764 ) Comprehensive income (loss) attributable to non-controlling interests 3,412 58 4,855 ( 75 ) Comprehensive income (loss) attributable to Cronos Group $ 18,334 $ ( 18,977 ) $ 21,532 $ ( 43,689 ) Net loss per share Basic net loss per share attributable to Cronos Group $ ( 0.10 ) $ ( 0.02 ) $ ( 0.09 ) $ ( 0.03 ) Diluted net loss per share attributable to Cronos Group $ ( 0.10 ) $ ( 0.02 ) $ ( 0.09 ) $ ( 0.03 ) See notes to condensed consolidated interim financial statements. 5 Cronos Group Inc. Condensed Consolidated Statements of Changes in Equity For the six months ended June 30, 2025 and 2024 (In thousands of U.S. dollars, except share amounts, unaudited) 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 382,530,780 $ 669,879 $ 457,709 $ ( 63,525 ) $ 46,919 $ 1,110,982 Activities relating to share-based compensation 2,875,615 ( 843 ) ( 15 ) — — ( 858 ) Net income — — 6,122 — 1,601 7,723 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 Activities relating to share-based compensation 275,468 1,190 ( 25 ) — — 1,165 Share repurchases ( 1,874,951 ) ( 3,612 ) — — — ( 3,612 ) Dividend paid to non-controlling interest — — — — ( 3,858 ) ( 3,858 ) Net income (loss) — — ( 39,711 ) — 1,229 ( 38,482 ) Foreign exchange gain on translation — — — 58,045 2,183 60,228 Balance as of June 30, 2025 383,806,912 $ 666,614 $ 424,080 $ ( 8,404 ) $ 47,916 $ 1,130,206 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 381,298,853 $ 662,174 $ 416,719 $ 20,678 $ ( 3,447 ) $ 1,096,124 Activities relating to share-based compensation 712,325 1,499 — — — 1,499 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 $ 663,673 $ 414,478 $ ( 1,793 ) $ ( 3,580 ) $ 1,072,778 Activities relating to share-based compensation 269,547 2,004 ( 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 $ 665,677 $ 405,650 $ ( 12,013 ) $ ( 3,522 ) $ 1,055,792 See notes to condensed consolidated interim financial statements. 6 Cronos Group Inc. Condensed Consolidated Statements of Cash Flows (In thousands of U.S. dollars, except share amounts, unaudited) Table of Contents Six months ended June 30, 2025 2024 Operating activities Net loss $ ( 30,759 ) $ ( 11,243 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Share-based compensation 3,469 4,251 Depreciation and amortization 7,042 3,244 Impairment loss on long-lived assets — 1,974 Impairment loss on other investments — 25,650 Loss from investments 700 3,732 Changes in expected credit losses on long-term financial assets ( 11 ) 1,021 Loss on held-for-sale assets 2,501 — Inventory step-up recorded to cost of sales 517 — Foreign currency (gain) loss 37,955 ( 19,802 ) Other non-cash operating activities, net 1,329 829 Changes in operating assets and liabilities: Accounts receivable, net ( 9,794 ) ( 2,723 ) Interest receivable 6,240 1,174 Other receivables ( 4,071 ) ( 1,009 ) Prepaids and other current assets 1,386 ( 5 ) Inventory, net ( 6,717 ) 292 Accounts payable ( 1,056 ) ( 4,482 ) Income taxes payable 4 ( 47 ) Accrued liabilities ( 8,013 ) ( 3,316 ) Net cash provided by (used in) operating activities 722 ( 460 ) Investing activities Proceeds from short-term investments — 187,447 Purchase of short-term investments ( 40,000 ) — Advances on loans receivable — ( 8,836 ) Proceeds from repayment on loans receivable 2,855 5,298 Purchase of property, plant and equipment, net of disposals ( 19,095 ) ( 2,453 ) Purchase of intangible assets, net of disposals ( 99 ) ( 457 ) Net cash provided by (used in) investing activities ( 56,339 ) 180,999 Financing activities Repurchases of common stock ( 3,612 ) — Dividend paid to non-controlling interest ( 3,858 ) — Withholding taxes paid on share-based awards ( 3,146 ) ( 905 ) Net cash used in financing activities ( 10,616 ) ( 905 ) Effect of foreign currency translation on cash and cash equivalents 1,844 ( 736 ) Net change in cash and cash equivalents ( 64,389 ) 178,898 Cash and cash equivalents, beginning of period 858,805 669,291 Cash and cash equivalents, end of period $ 794,416 $ 848,189 Supplemental cash flow information Interest paid $ — $ — Interest received $ 24,451 $ 28,291 Income taxes paid $ 59 $ 614 See notes to condensed consolidated interim financial statements. 7 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 1. Background, Basis of Presentation, and Summary of Significant Accounting Policies (a) Background Cronos Group Inc. (“Cronos” or the “Company”) is incorporated in the province of British Columbia under the Business Corporations Act (British Columbia) with principal executive offices at 4491 Concession Rd 12, Stayner, Ontario, L0M 1S0. The Company’s common shares are listed on the Toronto Stock Exchange (“TSX”) and Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CRON.” Cronos is an innovative global cannabinoid company committed to building disruptive intellectual property by advancing cannabis research, technology and product development. With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach ® , PEACE NATURALS ® and Lord Jones ® . (b) Basis of presentation These condensed consolidated interim financial statements of Cronos are unaudited. They have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and with applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) relating to interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. 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 six months ended June 30, 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 period presentation of our condensed consolidated interim financial statements. These reclassifications had no effect on the reported results of operations and ending shareholders’ equity. (c) 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. 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 June 30, 2025 2024 Cannabis flower $ 25,025 $ 20,661 Cannabis extracts 8,360 7,064 Other 70 37 Net revenue $ 33,455 $ 27,762 Six months ended June 30, 2025 2024 Cannabis flower $ 48,369 $ 38,186 Cannabis extracts 16,968 14,791 Other 380 73 Net revenue $ 65,717 $ 53,050 8 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents Net revenue attributed to a geographic region based on the location of the customer were as follows: Three months ended June 30, 2025 2024 Canada $ 19,150 $ 19,844 Israel 9,376 6,889 Other countries 4,929 1,029 Net revenue $ 33,455 $ 27,762 Six months ended June 30, 2025 2024 Canada $ 39,280 $ 38,715 Israel 18,605 13,306 Other countries 7,832 1,029 Net revenue $ 65,717 $ 53,050 (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 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. As of June 30, 2025, the Company’s short-term investments of $ 40,000 were comprised of Guaranteed Investment Certificates held in Canada. (f) Concentration of risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. 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 $ 887,559 and $ 904,101 as of June 30, 2025 and December 31, 2024, respectively. An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on the days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Accounts receivable are written off when there is no reasonable expectation of recovery. 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 June 30, 2025 and December 31, 2024, the Company had $ 7 and $ 7 , respectively, in expected credit losses that have been recognized on receivables from contracts with customers. As of June 30, 2025, the Company assessed that there is a concentration of credit risk, as 33 % of the Company’s accounts receivable were due from two customers 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. The Company sells products to a limited number of major customers. 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 June 30, 2025, the Company earned a total net revenue before excise taxes of $ 18,112 from two major customers, together accounting for 41 % of the Company’s total net revenue before excise taxes. During the three months ended June 30, 2024, the Company earned a total net revenue before excise taxes of $ 19,941 from two major customers, together accounting for 52 % of the Company’s total net revenue before excise taxes. During the six months ended June 30, 2025, the Company earned a total net revenue before excise taxes of $ 35,856 from two major customers, together accounting for 42 % of the Company’s total net revenue before excise taxes. During the six months ended June 30, 2024, the Company earned a total net revenue before excise taxes of $ 45,482 from three major customers, together accounting for 62 % of the Company’s total net revenue before excise taxes. 9 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (g) New accounting pronouncements not yet adopted In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the existing income tax disclosures to provide additional information to better assess how an entity’s operations, related tax risks and tax planning, and operational opportunities affect its tax rate and prospects for future cash flows. ASU 2023-09 is effective for fiscal years beginning after December 15, 2024, and interim periods within fiscal years beginning after December 15, 2025, and we expect to adopt ASU 2023-09 prospectively. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements. 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. 2. Business Combination 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. 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. 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. 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 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. 10 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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: Cash $ 5,993 Accounts receivable 2,437 Inventory 15,754 Prepaids and other current assets 795 Intangible assets 8,008 Goodwill 65,269 Property, plant and equipment 87,630 Accounts payable ( 2,913 ) Accrued liabilities ( 2,757 ) Deferred income tax liability ( 1,337 ) Total purchase price $ 178,879 The inventory acquired in the Cronos GrowCo Transaction of $ 15,754 included a step-up to fair value of $ 5,605 . For the three and six months ended June 30, 2025, the Company recognized nil and $ 517 , respectively, of this inventory step-up into cost of sales on the condensed consolidated statements of net loss and comprehensive income (loss). As of June 30, 2025, none of the inventory step-up was remaining in the Company’s inventory on the condensed consolidated balance sheet. The following table presents details of the property, plant and equipment acquired by major category: Fair value at date of Cronos GrowCo Transaction Land $ 4,557 Building and leasehold improvements 49,356 Machinery and equipment 21,603 Furniture and fixtures 580 Construction in progress 11,534 Total $ 87,630 The following table presents details of the intangible assets acquired: Fair value at date of acquisition Amortization period (in years) Know-how $ 8,008 10 Total $ 8,008 For the three and six months ended June 30, 2025, net revenue attributable to Cronos GrowCo was $ 2,211 and $ 5,096 , respectively and income before income taxes attributable to Cronos GrowCo was $ 56 and $ 847 , respectively. Business combination-related costs of $ 32 and $ 72 were incurred in relation to the Cronos GrowCo Transaction in the three and six months ended June 30, 2025, respectively, and were reported in general and administrative expenses on the condensed consolidated statements of net 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. 11 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 3. Inventory, net Inventory, net is comprised of the following items: As of June 30, 2025 As of December 31, 2024 Raw materials $ 5,831 $ 5,400 Work-in-progress 23,707 14,350 Finished goods 12,432 13,248 Supplies and consumables 172 151 Total $ 42,142 $ 33,149 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 the three and six months ended June 30, 2025, the Company recognized nil and $ 517 , respectively, of this inventory step-up into cost of sales on the condensed consolidated statements of net loss and comprehensive income (loss). As of June 30, 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. 4. Investments (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: Three months ended June 30, 2024 Six months ended June 30, 2024 Cronos GrowCo (i) $ 917 $ 2,365 $ 917 $ 2,365 (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. See Note 2 “ Business Combination ” for further information. (b) Other investments Other investments consist of investments in common shares and options of two companies in the cannabis industry. PharmaCann Option On June 14, 2021, the Company purchased an option (the “PharmaCann Option”) to acquire 473,787 shares of Class A Common Stock of PharmaCann, Inc. (“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 . The PharmaCann Option is classified as an investment in an equity security without a readily determinable fair value. 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 June 30, 2025 and December 31, 2024, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 0.8 % and 5.8 %, respectively. The decrease in ownership percentage in the six months ended June 30, 2025, was the result of the exercise of convertible notes by PharmaCann shareholders unrelated to Cronos in the first quarter of 2025, and an increase in the amount of shares that can be converted from PharmaCann’s existing convertible notes in the second quarter of 2025. The decrease in the Company’s ownership percentage since acquisition does not materially affect the Company’s rights under the PharmaCann Option. The net book value of the PharmaCann Option was nil as of both June 30, 2025 and December 31, 2024. 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 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 loss and comprehensive income (loss) for the six months ended June 30, 2024. 12 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents The Company may sell, transfer or dispose of the PharmaCann Option without PharmaCann’s prior written consent, subject to the following conditions : (i) any transferee of any part of the PharmaCann Option must comply with and commit to comply with all regulations issued by a governmental entity applicable to such transferee in all material respects; (ii) any transferee of any part of the PharmaCann Option must agree to be bound by the terms of the Option Purchase Agreement, dated as of June 14, 2021 (the “Option Purchase Agreement”), as a “Purchaser” thereunder; (iii) the Company may not split and/or transfer the PharmaCann Option, in the aggregate, to more than four persons (with certain exceptions); (iv) no transferee may be a Prohibited Assignee (as defined in the Option Purchase Agreement); 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. 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 June 30, 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. Changes in the fair value of the investment are recorded as loss on revaluation of financial instruments on the condensed consolidated statements of net loss and comprehensive income (loss). The following table summarizes the Company’s other investments activity: As of March 31, 2025 Unrealized loss Impairment charges Foreign exchange effect As of June 30, 2025 Vitura $ 2,755 $ ( 632 ) $ — $ 128 $ 2,251 $ 2,755 $ ( 632 ) $ — $ 128 $ 2,251 As of December 31, 2024 Unrealized loss Impairment charges Foreign exchange effect As of June 30, 2025 Vitura $ 2,813 $ ( 700 ) $ — $ 138 $ 2,251 $ 2,813 $ ( 700 ) $ — $ 138 $ 2,251 As of March 31, 2024 Unrealized loss Impairment charges Foreign exchange effect As of June 30, 2024 PharmaCann $ 12,916 $ — $ ( 12,916 ) $ — $ — Vitura 6,842 ( 3,755 ) — 81 3,168 $ 19,758 $ ( 3,755 ) $ ( 12,916 ) $ 81 $ 3,168 As of December 31, 2023 Unrealized loss Impairment charges Foreign exchange effect As of June 30, 2024 PharmaCann $ 25,650 $ — $ ( 25,650 ) $ — $ — Vitura 9,601 ( 6,097 ) — ( 336 ) 3,168 $ 35,251 $ ( 6,097 ) $ ( 25,650 ) $ ( 336 ) $ 3,168 13 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 5. Loans Receivable, net Loans receivable, net consists of the following: As of June 30, 2025 As of December 31, 2024 Current portion of Mucci Promissory Note accrued interest $ — $ 618 Total current portion of loans receivable, net — 618 Mucci Promissory Note 11,497 13,464 Cannasoul Collaboration Loan 1,874 1,736 Add: Long-term portion of accrued interest 396 326 Total long-term portion of loans receivable, net 13,767 15,526 Total loans receivable, net $ 13,767 $ 16,144 Cronos GrowCo Credit Facility On August 23, 2019, the Company, as lender, and Cronos GrowCo, as borrower, entered into a senior secured credit agreement for an aggregate principal amount of C$ 100,000 (the “GrowCo Credit Facility”). The GrowCo Credit Facility is secured by substantially all present and after-acquired personal and real property of Cronos GrowCo. In August 2021, the GrowCo Credit Facility was amended to increase the aggregate principal amount available to C$ 105,000 . For the three months ended June 30, 2024, Cronos GrowCo repaid C$ 1,667 ($ 1,216 ) in principal and paid C$ 1,920 ($ 1,401 ) in interest related to the GrowCo Credit Facility. For the six months ended June 30, 2024, Cronos GrowCo repaid C$ 3,333 ($ 2,447 ) in principal and paid C$ 3,862 ($ 2,835 ) 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”). The funds from Term Loan B have been used to expand Cronos GrowCo’s purpose-built cannabis facility and Term Loan B will mature 10 years after the commencement of sales from the Phase 2 Expansion Area. Principal will be repaid under Term Loan B on a quarterly basis after the commencement of sales from the Phase 2 Expansion Area. Interest on Term Loan B is payable on a quarterly basis until maturity beginning after the first borrowing under Term Loan B. 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 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. See Note 2 “ Business Combination ” for further information regarding the Cronos GrowCo Transaction. Mucci Promissory Note On June 28, 2019, the Company entered into a promissory note receivable agreement (the “Mucci Promissory Note”) for C$ 16,350 (approximately $ 12,015 ) with the Cronos GrowCo joint venture partner (“Mucci”). 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. On June 20, 2024, the Mucci Promissory Note was amended and restated. As a result, interest accrued on the Mucci Promissory Note between July 1, 2023 and July 1, 2024 was capitalized as part of the principal balance. As of July 1, 2024, interest is accrued and to be paid in cash beginning on July 1, 2025. For both the three and six months ended June 30, 2025, Mucci made principal repayments of $ 2,855 and interest payments of $ 1,003 on the Mucci Promissory Note. For both the three and six months ended June 30, 2024, there were no repayments of principal or interest on the Mucci Promissory Note. Cannasoul Collaboration Loan The Company holds a variable interest in Cannasoul Lab Services Ltd. (“CLS”). 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 ($ 2,463 ) 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 14 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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 June 30, 2025 and December 31, 2024, CLS has received ILS 8,297 (approximately $ 2,463 and $ 2,272 , respectively), from the Cannasoul Collaboration Loan. Expected credit loss allowances on the Company’s long-term financial assets for the three and six months ended June 30, 2025 and 2024 were comprised of the following items: As of March 31, 2025 Increase (decrease) (ii) Foreign exchange effect As of June 30, 2025 Mucci Promissory Note $ 93 $ ( 24 ) $ 5 $ 74 Cannasoul Collaboration Loan 529 4 56 589 $ 622 $ ( 20 ) $ 61 $ 663 As of December 31, 2024 Increase (decrease) (ii) Foreign exchange effect As of June 30, 2025 Mucci Promissory Note $ 88 $ ( 19 ) $ 5 $ 74 Cannasoul Collaboration Loan 535 8 46 589 $ 623 $ ( 11 ) $ 51 $ 663 As of March 31, 2024 Increase (decrease) (iii) Foreign exchange effect As of June 30, 2024 GrowCo Credit Facility (i) $ 10,740 $ 1,207 $ ( 109 ) $ 11,838 Mucci Promissory Note 89 1 — 90 Cannasoul Collaboration Loan 518 4 ( 16 ) 506 $ 11,347 $ 1,212 $ ( 125 ) $ 12,434 As of December 31, 2023 Increase (decrease) (iii) Foreign exchange effect As of June 30, 2024 GrowCo Credit Facility (i) $ 11,176 $ 1,010 $ ( 348 ) $ 11,838 Mucci Promissory Note 89 3 ( 2 ) 90 Cannasoul Collaboration Loan 524 8 ( 26 ) 506 $ 11,789 $ 1,021 $ ( 376 ) $ 12,434 (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. See Note 2 “ Business Combination ” for further information. (ii) During the three and six months ended June 30, 2025, $ 20 and $ 11 , respectively, were recorded as decreases to general and administrative expenses on the condensed consolidated statements of net loss and comprehensive income (loss) as a result of adjustments to our expected credit losses. (iii) During the three and six months ended June 30, 2024, $ 1,212 and $ 1,021 were recorded as increases to general and administrative expenses on the condensed consolidated statements of net loss and comprehensive income (loss) as a result of adjustments to our expected credit losses. 15 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 6. Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following: As of June 30, 2025 As of December 31, 2024 Cost Land $ 6,875 $ 6,389 Building and leasehold improvements 239,415 192,059 Machinery and Equipment 45,420 36,741 Furniture and fixtures 2,652 2,687 Construction in progress 634 28,710 Less: accumulated depreciation ( 35,608 ) ( 29,798 ) Less: accumulated impairment charges ( 109,145 ) ( 103,599 ) Property, Plant and Equipment, net $ 150,243 $ 133,189 During the first quarter of 2024, the Company ceased operations at its Winnipeg, Manitoba facility (“Cronos Fermentation”), 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 loss and comprehensive income (loss) in the six months ended June 30, 2024. As of both June 30, 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 and six months ended June 30, 2025, depreciation expense on property, plant and equipment was $ 3,467 and $ 5,611 , respectively. For the three and six months ended June 30, 2024, depreciation expense on property, plant and equipment was $ 551 and $ 1,308 , respectively. 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 loss and comprehensive income (loss). As of June 30, 2025 and December 31, 2024, the Company had $ 4,090 and $ 8,828 , respectively, of unpaid purchases of property, plant and equipment accrued in accounts payable on the condensed consolidated balance sheets. 7. Goodwill and Intangible Assets, net (a) Goodwill Goodwill is comprised of the following items as of June 30, 2025 and December 31, 2024: As of June 30, 2025 Cost Accumulated impairment charges Net Peace Naturals $ 1,029 $ — $ 1,029 Cronos GrowCo 65,889 — 65,889 $ 66,918 $ — $ 66,918 As of December 31, 2024 Cost Accumulated impairment charges Net Peace Naturals $ 976 $ — $ 976 Cronos GrowCo 62,477 — 62,477 $ 63,453 $ — $ 63,453 16 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 Intangible assets, net are comprised of the following items as of June 30, 2025 and December 31, 2024: As of June 30, 2025 Cost Accumulated amortization Accumulated impairment charges Net Software $ 7,347 $ ( 5,696 ) $ ( 76 ) $ 1,575 Health Canada licenses 8,236 ( 1,764 ) ( 6,472 ) — Ginkgo exclusive licenses 27,567 ( 5,620 ) ( 21,947 ) — Israeli codes (i) 305 ( 90 ) — 215 Know-how (ii) 8,083 ( 808 ) — 7,275 Total definite-lived intangible assets 51,538 ( 13,978 ) ( 28,495 ) 9,065 Lord Jones ® brand 64,000 — ( 62,500 ) 1,500 Trademarks 142 — ( 142 ) — Total intangible assets $ 115,680 $ ( 13,978 ) $ ( 91,137 ) $ 10,565 As of December 31, 2024 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,988 $ ( 4,646 ) $ ( 72 ) $ 2,270 Health Canada licenses 7,810 ( 1,673 ) ( 6,137 ) — Ginkgo exclusive licenses 26,139 ( 5,329 ) ( 20,810 ) — Israeli codes (i) 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 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. (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 loss and comprehensive income (loss). As of June 30, 2025, the estimated future amortization of definite-lived intangible assets is as follows: As of June 30, 2025 Remainder of 2025 (6 months) $ 938 2026 1,596 2027 1,059 2028 841 2029 839 Thereafter 3,792 $ 9,065 17 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 8. Restructuring 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 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. for the sale and leaseback of the Peace Naturals Campus. This agreement was subsequently terminated pursuant to its terms during the second quarter of 2024. 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, 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 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 June 30, 2025. During the second quarter of 2025, the Company revised its listing price and reassessed the fair value of the Cronos Fermentation assets, which resulted in the recognition of a loss on held-for-sale assets of $ 2,501 on the condensed consolidated statements of net loss and comprehensive income (loss) in both the three and six months ended June 30, 2025. The fair value was estimated using a combination of the market and income approaches. Under the market approach, the key assumptions are the selected comparable transactions and adjustments made based on age, condition and type of sale. Under the income approach, the key assumptions are the market rent and capitalization rate. During the three and six months ended June 30, 2025, the Company incurred $ 768 and $ 1,323 , respectively, in restructuring costs in connection with the Realignment. During the three and six months ended June 30, 2024, the Company incurred $ 547 and $ 630 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 IT infrastructure and finance transformation costs associated with the Realignment. 18 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 summarize the Company’s restructuring activity for the three and six months ended June 30, 2025: Accrual as of March 31, 2025 Expenses Payments/Write-offs Accrual as of June 30, 2025 Employee Termination Benefits $ 257 $ 363 $ ( 516 ) $ 104 Other Restructuring Costs 183 405 ( 480 ) 108 Total $ 440 $ 768 $ ( 996 ) $ 212 Accrual as of December 31, 2024 Expenses Payments/Write-offs Accrual as of June 30, 2025 Employee Termination Benefits $ — $ 620 $ ( 516 ) $ 104 Other Restructuring Costs — 703 ( 595 ) 108 Total $ — $ 1,323 $ ( 1,111 ) $ 212 The following tables summarize the Company’s restructuring activity for the three and six months ended June 30, 2024: Accrual as of March 31, 2024 Expenses Payments/Write-offs Accrual as of June 30, 2024 Employee Termination Benefits $ 38 $ — $ ( 14 ) $ 24 Other Restructuring Costs — 547 — 547 Total $ 38 $ 547 $ ( 14 ) $ 571 Accrual as of December 31, 2023 Expenses Payments/Write-offs Accrual as of June 30, 2024 Employee Termination Benefits $ 150 $ 62 $ ( 188 ) $ 24 Other Restructuring Costs — 568 ( 21 ) 547 Total $ 150 $ 630 $ ( 209 ) $ 571 9. 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 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 and six months ended June 30, 2025 and 2024: For the three months ended June 30, For the six months ended June 30, 2025 2024 2025 2024 Stock options $ 79 $ 33 $ 154 $ 67 RSUs 1,302 2,203 3,315 4,184 Total share-based compensation $ 1,381 $ 2,236 $ 3,469 $ 4,251 (b) Stock options 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 . The typical vesting for stock option grants made under the 2018 Stock Option Plan is quarterly vesting over three to five years with a maximum term of seven years . 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. 19 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 six months ended June 30, 2025 and 2024: Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of December 31, 2024 $ 5.63 717,264 3.65 Balance as of June 30, 2025 $ 5.63 717,264 2.51 Exercisable as of June 30, 2025 $ 5.98 634,875 2.22 Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of December 31, 2023 $ 14.50 2,103,201 1.84 Cancellation, forfeiture and expiry of options 19.05 ( 1,381,696 ) Balance as of June 30, 2024 $ 5.78 721,505 4.13 Exercisable as of June 30, 2024 $ 6.59 520,820 3.58 (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 June 30, 2025 As of December 31, 2024 2020 Omnibus Plan 702,264 702,264 2018 Stock Option Plan 15,000 15,000 Total stock options outstanding 717,264 717,264 (c) Restricted share units The following is a summary of the changes in RSUs for the six months ended June 30, 2025 and 2024: Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of December 31, 2024 $ 3.50 8,382,213 Granted (i) 2.74 2,633,793 Vested and issued 3.91 ( 4,844,056 ) Cancellation and forfeitures 3.34 ( 508,967 ) Balance as of June 30, 2025 $ 2.81 5,662,983 Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of December 31, 2023 $ 3.77 7,381,541 Granted (i) 2.95 2,503,835 Vested and issued 3.53 ( 1,343,425 ) Cancellation and forfeitures 2.98 ( 91,726 ) Balance as of June 30, 2024 $ 3.57 8,450,225 (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. The vesting of such RSUs is not subject to the achievement of any performance criteria. (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. 20 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 six months ended June 30, 2025 and 2024: Financial liability Number of DSUs Balance as of December 31, 2024 $ 1,129 560,261 Gain on revaluation ( 54 ) — Balance as of June 30, 2025 $ 1,075 560,261 Financial liability Number of DSUs Balance as of December 31, 2023 $ 1,092 521,679 DSU liabilities settled ( 359 ) ( 155,383 ) Loss on revaluation 122 — Balance as of June 30, 2024 $ 855 366,296 10. Share Repurchase Program On May 7, 2025, the Board authorized a share repurchase program of up to $ 50,000 . The repurchase program commenced on May 14, 2025 and is expected to 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 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 common shares and may be modified, suspended, or discontinued at any time. During the three and six months ended June 30, 2025, the Company repurchased 1,874,951 common shares for $ 3,612 . All common shares repurchased under this program were retired and cancelled upon settlement. As a result, the repurchased common shares were removed from issued and outstanding share capital, reducing the number of common shares outstanding. The value of the retired common shares were charged against share capital and additional paid in capital. The Company funded the repurchases using available cash resources. 11. Commitments and Contingencies (a) Commitments There have been no material changes in the information regarding commitments as disclosed in the Company’s Annual Report. (b) Contingencies The Company is subject to various legal proceedings in the ordinary course of its business and in connection with its marketing, distribution and sale of its products. Many of these legal proceedings are in the early stages of litigation and seek damages that are unspecified or not quantified. 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. 21 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 On March 11 and 12, 2020, two alleged shareholders of the Company separately filed two putative class action complaints in the U.S. District Court for the Eastern District of New York against the Company and its Chief Executive Officer and former Chief Financial Officer. 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’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. The defendants moved to dismiss on February 8, 2021. On November 17, 2023, the court entered an order granting the motion and dismissed the case with prejudice. 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. 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 May 30, 2025, the parties jointly informed the court that they had reached an agreement-in-principle to settle the action and requested that the Court stay all deadlines in the action, which the Court ordered on June 3, 2025. The proposed settlement remains subject to preliminary and final approval by the court and certain other conditions not within the Company’s control. 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 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. On June 28, 2021, the Court dismissed motions brought by the plaintiff for leave to commence a claim for misrepresentation under the Ontario Securities Act and for certification of the action as a class action. The plaintiff appealed the Court’s dismissal of the motions only with respect to the Company, the Chief Executive Officer, and the now former Chief Financial Officer; the remaining defendants were dismissed from the matter with prejudice and the Company and all individual defendants agreed not to seek costs from plaintiff in connection with the dismissal of the motions. On September 26, 2022, the Court of Appeal for Ontario reversed the Superior Court’s dismissal of the leave and certification motions, granted the plaintiff leave to proceed to bring a claim for misrepresentation under the Ontario Securities Act, and remitted the certification motion back to the Superior Court. On April 11, 2023, the plaintiff filed a Fresh as Amended Statement of Claim, which reflected the dismissal of the defendants for which an appeal was not sought, the removal of the claims for oppression under the Ontario Business Corporations Act and common law misrepresentation, as well as shortening the proposed class period. On October 10, 2023, the Superior Court certified the action on behalf of a class of persons or entities who acquired shares in the secondary market, including on the TSX and Nasdaq, during the period from May 9, 2019 to March 30, 2020, other than certain excluded persons. (ii) Regulatory reviews relating to restatements On October 24, 2022, the Company announced regulatory settlements as follows: 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 of our 2019 and 2021 interim financial statements (the “Restatements”). The Company agreed to settle with the SEC, without admitting or denying the allegations described in the Settlement Order. The Settlement Order fully and finally disposed of the investigation of the Company by the SEC into the Restatements without the payment of any civil penalty or other amount. 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 22 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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. OSC Settlement On October 24, 2022, the Ontario Capital Markets Tribunal approved a settlement agreement (the “Settlement Agreement”) between the Company and the staff of the Ontario Securities Commission (the “OSC”), resolving the Restatements. Pursuant to the terms of the Settlement Agreement, which fully and finally disposed the investigation of the Company by the OSC, Cronos agreed to pay a total of C$ 1.34 million to fully settle the matter, and acknowledged that it had failed to comply with the requirement under Section 77 of the Ontario Securities Act to file interim financial reports in the manner set out therein and had acted in a manner contrary to the public interest. (iii) Litigation and regulatory inquiries relating to marketing, distribution, import and sale of products On April 17, 2023, a group of plaintiffs led by the Green Leaf (Ale Yarok) political party filed a Statement of Claim and Request for Approval of a Class Action on behalf of a purported class of Israeli cannabis consumers in the District Court of Tel Aviv, Israel, against 26 cannabis-related parties, including three Cronos Israel entities. The Statement of Claim alleges that the defendants violated certain laws relating to the marketing of medical cannabis products, including marketing to unlicensed cannabis consumers. The lawsuit seeks a total of ILS 420 million. The Cronos Israel defendants moved to dismiss the action on August 13, 2023. The court granted the motion (and similar motions filed by other defendants) on May 16, 2024, dismissing the plaintiffs’ petition for class certification without prejudice and their individual claims with prejudice, and ordering the plaintiffs to pay ILS 10 thousand to each of the defendants for costs. On July 14, 2024, the plaintiffs appealed to the Supreme Court of Israel seeking to overturn both the dismissal of plaintiffs’ individual claims and the award of costs. The appeal is pending. On January 18, 2024, the Company was notified that the Trade Levies Commissioner of the Israel Ministry of Economy and Industry initiated a public investigation of alleged dumping of medical cannabis imports from Canada into Israel. On July 9, 2024, the Commissioner announced a preliminary determination proposing to impose an anti-dumping duty on Canadian licensed producers. Under the proposal, the Company would have been subject to a proposed duty of 369%. The Commissioner determined not to impose a provisional duty at that time pending the conclusion of the Ministry’s investigation. 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. On July 3, 2025, the Ministry of Justice issued a memorandum sustaining the Minister of Finance’s veto. 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 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 February 6, 2025, the court dismissed the administrative petition. On June 12, 2025, a group of cannabis cultivators initiated a second administrative proceeding against the government and certain importers, including the Company’s subsidiaries in Israel, asking the court to declare the Minister of Finance’s veto void and order the Minister of Economy to impose an anti-dumping duty. On June 26, 2025, the cultivators moved the court for an interim injunction, which the court denied on July 13, 2025. As of the date of this filing, the petition for a final injunction is pending before the court. We expect litigation and regulatory proceedings relating to the marketing, distribution, import and sale of our products to increase. 23 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 12. 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 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 June 30, Six months ended June 30, 2025 2024 2025 2024 Adjusted EBITDA $ 1,688 $ ( 11,051 ) $ 3,977 $ ( 21,720 ) Significant expenses: Sales and marketing 5,347 4,330 9,912 9,662 Research and development 929 962 1,722 1,959 General and administrative 10,536 12,767 19,845 21,674 Share-based compensation 1,381 2,236 3,469 4,251 Depreciation and amortization 867 1,016 1,363 2,139 Total significant expenses 19,060 21,311 36,311 39,685 Restructuring costs 768 547 1,323 630 Impairment loss on long-lived assets — — — 1,974 Total operating expense $ 19,828 $ 21,858 $ 37,634 $ 42,289 24 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 loss as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated: Three months ended June 30, 2025 Net loss $ ( 38,482 ) Interest income, net ( 8,997 ) Income tax benefit ( 525 ) Depreciation and amortization 4,202 EBITDA ( 43,802 ) Loss on revaluation of financial instruments (ii) 640 Foreign currency loss 39,538 Transaction costs (iv) 32 Loss on held-for-sale assets (v) 2,501 Other, net (vi) 1 Restructuring costs (vii) 768 Share-based compensation (viii) 1,381 Financial statement review costs (ix) 391 Israel Ministry of Economy and Industry dumping inquiry expense (xi) 238 Adjusted EBITDA $ 1,688 Three months ended June 30, 2024 Net loss $ ( 8,759 ) Interest income, net ( 13,451 ) Income tax benefit ( 2,174 ) Depreciation and amortization 1,513 EBITDA ( 22,871 ) Share of income from equity method investments ( 917 ) Loss on revaluation of financial instruments (ii) 3,615 Impairment loss on other investments (iii) 12,916 Foreign currency gain ( 6,543 ) Transaction costs (iv) 196 Other, net (vi) ( 248 ) Restructuring costs (vii) 547 Share-based compensation (viii) 2,236 Financial statement review costs (ix) 18 Adjusted EBITDA $ ( 11,051 ) 25 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents Six months ended June 30, 2025 Net loss $ ( 30,759 ) Interest income, net ( 18,662 ) Income tax benefit ( 980 ) Depreciation and amortization 7,042 EBITDA ( 43,359 ) Loss on revaluation of financial instruments (ii) 591 Foreign currency loss 37,955 Transaction costs (iv) 72 Loss on held-for-sale assets (v) 2,501 Other, net (vi) ( 42 ) Restructuring costs (vii) 1,323 Share-based compensation (viii) 3,469 Financial statement review costs (ix) 438 Inventory step-up recorded to cost of sales (x) 517 Israel Ministry of Economy and Industry dumping inquiry expense (xi) 512 Adjusted EBITDA $ 3,977 Six months ended June 30, 2024 Net loss $ ( 11,243 ) Interest income, net ( 27,696 ) Income tax benefit ( 2,732 ) Depreciation and amortization 3,244 EBITDA ( 38,427 ) Share of income from equity method investments ( 2,365 ) Impairment loss on long-lived assets (i) 1,974 Loss on revaluation of financial instruments (ii) 6,257 Impairment loss on other investments (iii) 25,650 Foreign currency gain ( 19,802 ) Transaction costs (iv) 196 Other, net (vi) 422 Restructuring costs (vii) 630 Share-based compensation (viii) 4,251 Financial statement review costs (ix) ( 506 ) Adjusted EBITDA $ ( 21,720 ) (i) For the six months ended June 30, 2024, impairment loss on long-lived assets related to the winding down of operations at Cronos Fermentation. (ii) For the three and six months ended June 30, 2025 and 2024, the loss on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura. (iii) For the three and six months ended June 30, 2024, impairment loss on other investments represents the fair value change on the PharmaCann Option. 26 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 and six months ended June 30, 2025 and 2024, 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 loss and comprehensive income (loss). (v) For the three and six months ended June 30, 2025, loss on held for sale assets related to a revaluation of the Cronos Fermentation held-for-sale asset group. (vi) For the three and six months ended June 30, 2025, other, net related to (gain) loss on revaluation of derivative liabilities. For the three and six months ended June 30, 2024, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities. (vii) For the three and six months ended June 30, 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 8 “ Restructuring .” For the three months ended June 30, 2024, restructuring costs related to employee-related severance costs and other restructuring costs associated with the Realignment, as described in Note 8 “ Restructuring .” (viii) For the three and six months ended June 30, 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. ” (ix) For the three and six months ended June 30, 2025 and 2024, financial statement review costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement. (x) For the six months ended June 30, 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 loss and comprehensive income (loss). (xi) For the three and six months ended June 30, 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 tables present the Company’s revenue by major product category for our single segment: Three months ended June 30, 2025 2024 Cannabis flower $ 25,025 $ 20,661 Cannabis extracts 8,360 7,064 Other 70 37 Net revenue $ 33,455 $ 27,762 Six months ended June 30, 2025 2024 Cannabis flower $ 48,369 $ 38,186 Cannabis extracts 16,968 14,791 Other 380 73 Net revenue $ 65,717 $ 53,050 Net revenue attributed to a geographic region based on the location of the customer was as follows: Three months ended June 30, 2025 2024 Canada $ 19,150 $ 19,844 Israel 9,376 6,889 Other countries 4,929 1,029 Net revenue $ 33,455 $ 27,762 Six months ended June 30, 2025 2024 Canada $ 39,280 $ 38,715 Israel 18,605 13,306 Other countries 7,832 1,029 Net revenue $ 65,717 $ 53,050 The table below sets forth total cash and cash equivalents and short-term investments for our single segment: As of June 30, 2025 As of December 31, 2024 Total cash and cash equivalents and short-term investments $ 834,416 $ 858,805 27 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 June 30, 2025 As of December 31, 2024 Canada $ 133,894 $ 117,329 Israel 16,349 15,860 Total $ 150,243 $ 133,189 Intangibles, net were physically located in the following geographic regions: As of June 30, 2025 As of December 31, 2024 Canada $ 10,204 $ 10,887 Israel 361 370 Total $ 10,565 $ 11,257 For additions to our property, plant and equipment, net and intangibles, net for the six months ended June 30, 2025 and June 30, 2024, please see Note 6 “ Property, Plant and Equipment, net ” and the condensed consolidated statements of cash flows. 28 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 13. Loss per Share Basic and diluted loss per share are calculated as follows (in thousands, except share and per share amounts): Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Basic loss per share computation Net loss attributable to the shareholders of Cronos Group $ ( 39,711 ) $ ( 8,757 ) $ ( 33,589 ) $ ( 10,998 ) Weighted-average number of common shares outstanding for computation for basic loss per share 385,306,213 382,157,555 384,138,987 381,800,078 Basic loss per share $ ( 0.10 ) $ ( 0.02 ) $ ( 0.09 ) $ ( 0.03 ) Diluted loss per share computation Net loss attributable to the shareholders of Cronos Group $ ( 39,711 ) $ ( 8,757 ) $ ( 33,589 ) $ ( 10,998 ) Weighted-average number of common shares for computation of diluted loss from continuing operations per share (i) 385,306,213 382,157,555 384,138,987 381,800,078 Diluted loss per share $ ( 0.10 ) $ ( 0.02 ) $ ( 0.09 ) $ ( 0.03 ) (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 June 30, 2025 and 2024, total securities of 15,812,953 and 28,769,758 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive. For the six months ended June 30, 2025 and 2024, total securities of 19,045,720 and 29,428,093 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive. 14. Fair Value Measurements The Company complies with ASC 820 Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values are determined by: • Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. • Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. 29 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 present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis: June 30, 2025 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 794,416 $ — $ — $ 794,416 Other investments (i) 2,251 — — 2,251 Derivative liabilities — — 3 3 December 31, 2024 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 858,805 $ — $ — $ 858,805 Other investments (i) 2,813 — — 2,813 Derivative liabilities — — 40 40 (i) As of June 30, 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. 15. Related Party Transactions (a) Cronos GrowCo The Company holds 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 June 30, 2024 Six months ended June 30, 2024 Cronos GrowCo – purchases $ 9,942 $ 16,952 (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. In November 2023, the Company negotiated a direct contract with the related-party vendor. Three months ended June 30, Six months ended June 30, 2025 2024 2025 2024 Related party – purchases of products and services $ 173 $ 260 $ 362 $ 936 The Company had outstanding accounts payable related to the agreement of $ 53 and $ 149 as of June 30, 2025 and December 31, 2024, respectively. (c) Consulting Agreement 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 the three and six months ended June 30, 2025, the Company incurred $ 362 and $ 571 , respectively, of expense under this agreement. As of June 30, 2025, the Company had no outstanding payables related to this agreement. (d) Dividend to Non-controlling Interest On June 30, 2025, Cronos GrowCo made a dividend payment, of which $ 3,858 was paid to its non-controlling shareholders. The dividend distribution was funded from excess operating cash flows and is presented in the financing section of the statement of cash flows. 30 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 16. Subsequent Events (a) Agreement with High Tide Inc. On July 16, 2025, the Company, as lender, and High Tide Inc. (“High Tide”), as borrower, entered into a loan agreement for junior secured convertible debt with a principal amount of C$ 30,000 and an original issue discount of 16 % (the “Junior Secured Loan”). The Junior Secured Loan bears interest at 4 % per annum, payable in cash quarterly, and provides for conversion of the debt into common shares of High Tide at a price of C$ 4.20 per common share. The Junior Secured Loan is convertible only upon the agreement of the Company and High Tide. The Junior Secured Loan has a term of five years and may be repaid early with no penalty. Additionally, the Company received a common share purchase warrant (the “Warrant”), which is exercisable into up to 3,836,317 common shares (the “Warrant Shares”) of High Tide at an exercise price of C$ 3.91 per Warrant Share. (b) Principal Accounting Officer Appointment Effective immediately following the filing of this Quarterly Report, the Board appointed Lloyd Wilson, Vice President, Controller, as the Company’s Principal Accounting Officer. Additional information regarding this appointment will be provided in a Current Report on Form 8-K to be filed by the Company within the period required by applicable SEC rules. 31 Table of Contents