What changed in this filing

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Item 2. Management’s Discussion and Analysis

2025-11-06 compared with 2025-08-07 · 287 added, 233 removed, 346 unchanged (60% of the section changed)

Management’s Discussion and Analysis of Financial Condition and Results of Operations.

The following discussion and analysis should be read together with other information, including the Company’s condensed consolidated interim financial statements and the related notes to those statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2025 (this “Quarterly Report”), consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”), Part I, Item 1A, Risk Factors, of the Annual Report and Part II, Item 1A, Risk Factors, of this Quarterly Report.

The following discussion and analysis should be read together with other information, including the Company’s condensed consolidated interim financial statements and the related notes to those statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended September 30, 2025 (this “Quarterly Report”), consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 (the “Annual Report”), Part I, Item 1A, Risk Factors, of the Annual Report and Part II, Item 1A, Risk Factors, of this Quarterly Report.

Forward-Looking Statements

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• expectations related to the German, Australian, United Kingdom (“UK”), Swiss, and Malta markets and our ability to successfully distribute the PEACE NATURALS ® brand in our overseas markets;

• expectations related to our announcement of cost-cutting measures, including our decision to wind down operations at our Winnipeg, Manitoba facility and list the facility for sale, the expected costs and benefits from the wind-down of production activities at the facility, as well as changes in strategy, metrics, investments, costs, operating expenses, employee turnover and other changes with respect thereto;

• expectations related to our announcement of cost-cutting measures, including our decision to wind down operations at our Winnipeg, Manitoba facility (the “Cronos Fermentation Facility”) the expected costs and benefits from the wind-down of production activities, and the pending the sale of the Cronos Fermentation Facility, as well as changes in strategy, metrics, investments, costs, operating expenses, employee turnover and other changes with respect thereto;

• expectations related to the impact of our decision to exit our U.S.

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• expectations regarding the potential success of, and the costs and benefits associated with, our joint ventures, strategic alliances and equity investments;

• expectations related to the transaction by which we obtained majority control of the board of directors of Cronos GrowCo (the “Cronos GrowCo Transaction”), which qualified as a business combination under Accounting Standards Codification (“ASC”) 805, and the expansion of Cronos GrowCo’s purpose-built cultivation and processing facilities;

• expectations related to the transaction by which we obtained majority control of the board of directors of Cronos GrowCo (the “Cronos GrowCo Transaction”), which qualified as a business combination under Accounting Standards Codification (“ASC”) 805, the expansion of Cronos GrowCo’s purpose-built cultivation and processing facilities and any additional supply provided, and growth (including in the wholesale market) driven, thereby;

• expectations related to the transaction by which we, as lender, obtained junior secured convertible debt (the “High Tide Loan”) from High Tide Inc.

(“High Tide”), as borrower, and a warrant (the “High Tide Warrant”) to purchase common shares of High Tide, the performance of the High Tide Loan and the High Tide Warrant, and High Tide’s ability to repay the High Tide Loan;

• our ability or plans to identify, develop, commercialize or expand our technology and research and development (“R&D”) initiatives in cannabinoids, or the success thereof;

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(iii) our ability to efficiently and effectively distribute our PEACE NATURALS ® brand in our overseas markets;

(iv) our ability to realize the expected cost-savings and other benefits related to the wind-down of our operations at our Winnipeg, Manitoba facility;

(iv) our ability to realize the expected cost-savings and other benefits related to the wind-down of our operations and pending sale of the Cronos Fermentation Facility;

(v) expectations related to the impact of our decision to exit our U.S.

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(viii) our ability to efficiently and effectively acquire raw materials on a timely and cost-effective basis from third parties or Cronos GrowCo;

(ix) our ability to realize the expected benefits related to the expansion of Cronos GrowCo’s purpose-built cannabis facility and the ability of Cronos GrowCo to repay the credit facility provided by Cronos;

(x) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our business combinations and strategic investments;

(xi) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments;

(xii) government regulation of our activities and products including, but not limited to, the areas of cannabis taxation and environmental protection;

(xiii) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses;

(xiv) consumer interest in our products;

(xv) our ability to differentiate our products, including through the utilization of rare cannabinoids;

(xvi) competition;

(xvii) anticipated and unanticipated costs;

(xviii) our ability to generate cash flow from operations;

(xix) our ability to conduct operations in a safe, efficient and effective manner;

(xx) our ability to hire and retain qualified staff and acquire equipment and services in a timely and cost-efficient manner;

(xxi) our ability to complete planned dispositions, and, if completed, obtain our anticipated sales price;

(xxii) general economic, financial market, regulatory and political conditions in which we operate;

(xxiii) management’s perceptions of historical trends, current conditions and expected future developments;

and (xxiv) other considerations that management believes to be appropriate in the circumstances.

(ix) our ability to realize the expected benefits related to the expansion of Cronos GrowCo’s purpose-built cannabis facility (including the quality of any additional supply provided thereby and the stability of pricing and demand with respect to such supply) and the ability of Cronos GrowCo to repay the credit facility provided by Cronos;

(x) High Tide’s ability to repay the High Tide Loan, the performance of the High Tide Loan and the High Tide Warrant, and our ability to realize benefits related to the performance of the High Tide Warrant;

(xi) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our business combinations and strategic investments;

(xii) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments;

(xiii) government regulation of our activities and products including, but not limited to, the areas of cannabis taxation and environmental protection;

(xiv) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses;

(xv) consumer interest in our products;

(xvi) our ability to differentiate our products, including through the utilization of rare cannabinoids;

(xvii) competition;

(xviii) anticipated and unanticipated costs;

(xix) our ability to generate cash flow from operations;

(xx) our ability to conduct operations in a safe, efficient and effective manner;

(xxi) our ability to hire and retain qualified staff and acquire equipment and services in a timely and cost-efficient manner;

(xxii) our ability to complete planned dispositions, and, if completed, obtain our anticipated sales price;

(xxiii) general economic, financial market, regulatory and political conditions in which we operate;

(xxiv) management’s perceptions of historical trends, current conditions and expected future developments;

and (xxv) other considerations that management believes to be appropriate in the circumstances.

While our management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.

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that we may not be able to successfully continue to distribute our products in Germany, Australia, the UK, Switzerland and Malta or generate material revenue from sales in those markets;

that we may not be able to achieve the anticipated benefits of the wind-down of our operations at our Winnipeg, Manitoba facility;

that we may not be able to achieve the anticipated benefits of the wind-down of our operations or pending sale of the Cronos Fermentation Facility;

that we may be unable to further streamline our operations and reduce expenses;

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that we may not be able to access raw materials on a timely and cost-effective basis from third-parties or Cronos GrowCo;

that the expected benefits of the expansion of Cronos GrowCo’s purpose-built cannabis facility may not be fully realized within a reasonable time or at all or that Cronos GrowCo may not be able to repay its borrowings under the credit facility provided by Cronos;

that the expected benefits of the expansion of Cronos GrowCo’s purpose-built cannabis facility (including any additional supply provided thereby) may not be fully realized within a reasonable time or at all or that Cronos GrowCo may not be able to repay its borrowings under the credit facility provided by Cronos;

that the expected benefits of the High Tide Warrant and the High Tide Loan may not be fully realized within a reasonable time or at all or that High Tide may not be able to repay its borrowings under the High Tide Loan;

the military conflict between Russia and Ukraine may disrupt our operations and those of our suppliers and distribution channels and negatively impact the demand for and use of our products;

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our failure to improve our internal control environment and our systems, processes and procedures;

and the factors discussed under Part I, Item 1A “Risk Factors” in our Annual Report and under Part II, Item 1A “Risk Factors” in this Quarterly Report.

and the factors discussed

under Part I, Item 1A “Risk Factors” in our Annual Report and under Part II, Item 1A “Risk Factors” in this Quarterly Report.

Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on Forward-Looking Statements.

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All references to “dollars” or “$” are to U.S.

The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of June 30, 2025, June 30, 2024, and December 31, 2024.

The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of September 30, 2025, September 30, 2024, and December 31, 2024.

Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates.

The condensed consolidated statements of net loss and comprehensive income (loss) and condensed consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the reporting period as reported on Bloomberg.

The condensed consolidated statements of net income (loss) and comprehensive income (loss) and condensed consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the reporting period as reported on Bloomberg.

The exchange rates used to translate from Canadian dollars (“C$”) to dollars is shown below:

(Exchange rates are shown as C$ per $) As of

June 30, 2025 June 30, 2024 December 31, 2024

September 30, 2025 September 30, 2024 December 31, 2024

Spot rate 1.3921 1.3525 1.4351

Average rate 1.4094 1.3581 N/A

Year-to-date average rate

1.3985 1.3601 N/A

The exchange rates used to translate from New Israeli Shekels (“ILS”) to dollars is shown below:

(Exchange rates are shown as ILS per $) As of

June 30, 2025 June 30, 2024 December 31, 2023

September 30, 2025 September 30, 2024 December 31, 2024

Spot rate 3.3122 3.7269 3.6526

Average rate 3.5954 3.6950 N/A

Year-to-date average rate

3.5126 3.6994 N/A

Business Overview

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Cronos GrowCo Expansion

The Phase 2 Expansion Area is now complete and we expect sales from the expansion in Fall 2025.

The Company believes this additional supply will fuel growth internationally and within the domestic Canadian market.

Proposed Anti-Dumping Duty in Israel

On July 3, 2025, the Israel Ministry of Justice announced that it had concluded that the Minister of Finance’s veto of the proposed anti-dumping duty was valid.

The Minister of Economy had sought to impose an anti-dumping duty of 165% on the Company’s medical cannabis imports into Israel, which the Minister of Finance subsequently vetoed.

This matter stems from an investigation launched in January 2024 into allegations of dumping of Canadian medical cannabis into Israel.

The Company strongly refuted the allegations and is pleased with the decision to veto the proposed anti-dumping duty.

Cronos will continue to advocate for a fair and equitable market structure that benefits Israel’s medical cannabis patients.

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 both parties.

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.

The Cronos GrowCo expansion is now complete and sales from the expansion commenced in Fall 2025.

The Company believes this additional supply will fuel growth internationally and within the domestic Canadian market and the wholesale market in 2026.

As with any cultivation expansion, it typically takes time to fully optimize the new facility, and while we are on-schedule and making great progress, we expect improvement over time.

Consolidated Results of Operations

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Our condensed consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods .

Three months ended June 30, Six months ended June 30,

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

2025 2024 2025 2024

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Operating loss (503) (33,655) (9,899) (65,164)

Other income (33,683) 4,628 (22,343) 17,534

27,508 38,271 5,165 55,805

Income tax benefit (1,316) (2,708) (2,296) (5,440)

Net loss (38,482) (8,759) (30,759) (11,243)

Net income (loss) 28,321 7,324 (2,438) (3,919)

Net income (loss) attributable to non-controlling interest 2,363 (1,025) 5,193 (1,270)

Net loss attributable to Cronos Group $ (39,711) $ (8,757) $ (33,589) $ (10,998)

Net income (loss) attributable to Cronos Group $ 25,958 $ 8,349 $ (7,631) $ (2,649)

Summary of select financial results

Three months ended June 30, Change Six months ended June 30, Change

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

2025 2024 $ % 2025 2024 $ %

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(i) Gross margin is defined as gross profit divided by net revenue.

For the three months ended June 30, 2025, we reported consolidated net revenue of $33.5 million, representing an increase of $5.7 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, we reported consolidated net revenue of $65.7 million, representing an increase of $12.7 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the increase was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the consolidation of Cronos GrowCo, and higher cannabis extract sales in the Canadian market.

Due to the consolidation of Cronos GrowCo’s results of operations in our financial statements beginning July 1, 2024, Cronos GrowCo contributed $2.2 million and $5.1 million, respectively, of cannabis flower sales in the three and six months ended June 30, 2025.

No such sales were recognized for both the three and six months ended June 30, 2024.

For the three months ended September 30, 2025, we reported consolidated net revenue of $36.3 million, representing an increase of $2.1 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, we reported consolidated net revenue of $102.1 million, representing an increase of $14.7 million from the nine months ended September 30, 2024.

For the three month comparative period, the increase was primarily due to higher cannabis flower sales in Israel, which carry no excise taxes, and higher cannabis extract sales in the Canadian market, partially offset by a decrease in cannabis flower sales in the Canadian market.

For the nine month comparative period, the increase was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the inclusion of a full nine months of Cronos GrowCo sales in the current period and higher cannabis extract sales in the Canadian market, partially offset by lower cannabis flower sales in the Canadian market.

Due to the consolidation of Cronos GrowCo’s results of operations in our financial statements beginning July 1, 2024, Cronos GrowCo contributed $7.0 million of cannabis flower sales in the nine months ended September 30, 2025, compared to $4.3 million of cannabis flower sales in the nine months ended September 30, 2024.

Cost of sales

For the three months ended June 30, 2025, we reported consolidated cost of sales of $18.9 million, representing a decrease of $2.2 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, we reported consolidated cost of sales of $37.4 million, representing a decrease of $4.5 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the decrease was primarily due to the consolidation of Cronos GrowCo and production efficiencies, partially offset by higher sales volumes.

For the six months ended June 30, 2025, we recognized $0.5 million of inventory step-up from the Cronos GrowCo Transaction into cost of sales.

No such costs were recognized for the three months ended June 30, 2025 or the three and six months ended June 30, 2024.

For the three months ended September 30, 2025, we reported consolidated cost of sales of $17.5 million, representing a decrease of $12.8 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, we reported consolidated cost of sales of $54.9 million, representing a decrease of $17.3 million from the nine months ended September 30, 2024.

For both the three and nine month comparative periods, the decrease was primarily due to lower amounts of inventory step-up from the Cronos GrowCo Transaction recognized into cost of sales.

For the three month comparative period, the decrease was also driven by production efficiencies and favorable inventory dynamics during the third quarter of 2025, partially offset by higher sales volumes.

For the nine month comparative period, the decrease was also driven by the consolidation of Cronos GrowCo, production efficiencies and favorable inventory dynamics during the nine months ended September 30, 2025, partially offset by higher sales volumes.

For the nine months ended September 30, 2025, we recognized $0.5 million of inventory step-up from the Cronos GrowCo Transaction into cost of sales.

No such costs were recognized for the three months ended September 30, 2025.

For both the three and nine months ended September 30, 2024, we recognized $7.1 million of inventory step-up from the Cronos GrowCo Transaction into cost of sales.

Inventory write-down

For the three and six months ended June 30, 2025, we reported inventory write-downs of $0.1 million related to the destruction of certain inventory.

For the three and six months ended June 30, 2024, we reported inventory write-downs of $0.4 million related to the destruction of certain inventory.

For the three months ended June 30, 2025, we reported gross profit of $14.5 million, representing an increase of $8.2 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, we reported gross profit of $28.2 million, representing an increase of $17.5 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the increase was primarily due to the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, and production efficiencies.

For the six months ended June 30, 2025, gross profit was reduced by $0.5 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales.

No such costs were recognized for the three months ended June 30, 2025 or the three and six months ended June 30, 2024.

For the three and nine months ended September 30, 2025, we reported inventory write-downs of $0.5 million and $0.6 million, respectively, due to write-downs resulting from unusable inventory that was scrapped in the period.

For the three and nine months ended September 30, 2024, we reported inventory write-downs of $0.3 million and $0.7 million, respectively, due to write-downs resulting from unusable inventory that was scrapped in the period.

For the three months ended September 30, 2025, we reported gross profit of $18.3 million, representing an increase of $14.7 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, we reported gross profit of $46.6 million, representing an increase of $32.2 million from the nine months ended September 30, 2024.

For both the three and nine month comparative periods, the increase was primarily due to lower amounts of inventory step-up from the Cronos GrowCo Transaction recognized into cost of sales.

For the three month comparative period, the increase was also driven by higher average sales prices driven primarily by a mix shift to Israel, higher sales volumes, production efficiencies and favorable inventory dynamics during the third quarter of 2025.

For the nine month comparative period, the increase was also driven by the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, production efficiencies and favorable inventory dynamics during the nine months ended September 30, 2025.

For the nine months ended September 30, 2025, gross profit was reduced by $0.5 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales.

No such costs were recognized for the three months ended September 30, 2025.

For both the three and nine months ended September 30, 2024, gross profit was reduced by $7.1 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales.

Operating expenses

Three months ended June 30, Change Six months ended June 30, Change

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

2025 2024 $ % 2025 2024 $ %

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General and administrative 9,254 12,760 (3,506) (27) % 29,099 34,434 (5,335) (15) %

Restructuring costs 768 547 221 40 % 1,323 630 693 110 %

Restructuring costs 212 — 212 N/A 1,535 630 905 144 %

Share-based compensation 2,333 2,262 71 3 % 5,802 6,513 (711) (11) %

Depreciation and amortization 354 1,098 (744) (68) % 1,717 3,237 (1,520) (47) %

Impairment loss on long-lived assets — — — N/A — 1,974 (1,974) N/A

Impairment loss on long-lived assets 36 14,376 (14,340) (100) % 36 16,350 (16,314) (100) %

Total operating expenses $ 18,835 $ 37,266 $ (18,431) (49) % $ 56,469 $ 79,555 $ (23,086) (29) %

Sales and marketing

For the three months ended June 30, 2025, sales and marketing expenses were $5.3 million, representing an increase of $1.0 million compared to the three months ended June 30, 2024.

For the six months ended June 30, 2025, sales and marketing expenses were $9.9 million, representing an increase of $0.3 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the increase was primarily due to higher marketing expenses, partially offset by lower salaries and benefits.

For the three months ended September 30, 2025, sales and marketing expenses were $5.3 million, representing a decrease of $0.2 million compared to the three months ended September 30, 2024.

For the nine months ended September 30, 2025, sales and marketing expenses were $15.2 million, essentially flat from the nine months ended September 30, 2024.

For the three month comparative period, the decrease was primarily due to lower marketing expenses, partially offset by higher salaries and benefits.

Research and development

For the three months ended June 30, 2025, research and development expenses were flat at $0.9 million compared to the three months ended June 30, 2024.

For the six months ended June 30, 2025, research and development expenses were $1.7 million, representing a decrease of $0.2 million from the six months ended June 30, 2024.

For the three months ended September 30, 2025, research and development expenses were $1.3 million, essentially flat compared to the three months ended September 30, 2024.

For the nine months ended September 30, 2025, research and development expenses were $3.1 million, essentially flat from the nine months ended September 30, 2024.

General and administrative

For the three months ended June 30, 2025, general and administrative expenses were $10.5 million, representing a decrease of $2.2 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, general and administrative expenses were $19.8 million, representing a decrease of $1.8 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the decrease was primarily due to lower salaries and benefits and higher expected credit loss allowance on loans receivable recorded in the prior period, partially offset by the consolidation of Cronos GrowCo.

For the three and six months ended June 30, 2025, the impact of the consolidation of Cronos GrowCo increased general and administrative expenses by $0.9 million and $1.7 million, respectively.

No such costs were recorded in the three or six months ended June 30, 2024.

For the three months ended September 30, 2025, general and administrative expenses were $9.3 million, representing a decrease of $3.5 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, general and administrative expenses were $29.1 million, representing a decrease of $5.3 million from the nine months ended September 30, 2024.

For the three month comparative period, the decrease was primarily due to lower salaries and benefits and restatement litigation costs.

For the nine month comparative period, the decrease was primarily due to lower salaries and benefits and lower expected credit loss allowances on loans receivable, partially offset by the consolidation of Cronos GrowCo.

For the nine months ended September 30, 2025, changes in expected credit loss allowances on loans receivable increased general and administrative expenses by nil.

For the nine months ended September 30, 2024, changes in expected credit loss allowances on loans receivable increased general and administrative expenses by $1.0 million.

For the nine months ended September 30, 2025, the impact of the consolidation of Cronos GrowCo increased general and administrative expenses by $2.6 million.

For the nine months ended September 30, 2024, the impact of the consolidation of Cronos GrowCo increased general and administrative expenses by $1.6 million.

Restructuring costs

For the three months ended June 30, 2025, restructuring costs were $0.8 million, representing an increase of $0.2 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, restructuring costs were $1.3 million, representing an increase of $0.7 million from the six months ended June 30, 2024.

For the three months ended September 30, 2025, restructuring costs were $0.2 million, representing an increase of $0.2 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, restructuring costs were $1.5 million, representing an increase of $0.9 million from the nine months ended September 30, 2024.

For further information, see Note 8 “ Restructuring ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Share-based compensation

For the three months ended June 30, 2025, share-based compensation expense was $1.4 million, representing a decrease of $0.9 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, share-based compensation expense was $3.5 million, representing a decrease of $0.8 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the decrease was primarily due to lower amounts of share-based compensation awards outstanding.

For the three months ended September 30, 2025, share-based compensation expense was $2.3 million, representing an increase of $0.1 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, share-based compensation expense was $5.8 million, representing a decrease of $0.7 million from the nine months ended September 30, 2024.

For the three month comparative period, the increase was primarily due to the inclusion of expense related to deferred share units (“DSUs”) in share-based compensation in the current period, partially offset by lower amounts of share-based compensation awards outstanding.

For the nine month comparative periods, the decrease was primarily due to lower amounts of share-based compensation awards outstanding, partially offset by the inclusion of expense related to DSUs in share-based compensation in the current period.

Depreciation and amortization

For the three months ended June 30, 2025, depreciation and amortization expenses were $0.9 million, representing a decrease of $0.1 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, depreciation and amortization expenses were $1.4 million, representing a decrease of $0.8 million from the six months ended June 30, 2024.

For the six month comparative period, the decrease was primarily due to lower amortization on intangible assets.

For the three months ended September 30, 2025, depreciation and amortization expenses were $0.4 million, representing a decrease of $0.7 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, depreciation and

amortization expenses were $1.7 million, representing a decrease of $1.5 million from the nine months ended September 30, 2024.

For both the three and nine month comparative periods, the decrease was primarily due to lower amortization of intangible assets.

Impairment loss on long-lived assets

For the six months ended June 30, 2024, impairment loss on long-lived assets was $2.0 million and was primarily due to the cessation of operations at Cronos Fermentation during the first quarter of 2024.

There were no such impairment losses for the three and six months ended June 30, 2025, or the three months ended June 30, 2024.

For further information, see Note 8 “ Restructuring ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

For the three and nine months ended September 30, 2025, impairment loss on long-lived assets was $36 thousand.

For the three months ended September 30, 2024, impairment loss on long-lived assets was $14.4 million and was primarily due to the impairment of Ginkgo exclusive licenses.

For the nine months ended September 30, 2024, impairment loss on long-lived assets was $16.4 million and was primarily due to the impairment of Ginkgo exclusive licenses and the cessation of operations at the Cronos Fermentation Facility during the first quarter of 2024.

For further information, see Note 8 “ Restructuring ” and Note 7 “ Goodwill and Intangible Assets, net ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Other income and income tax expense (benefit)

Three months ended June 30, Change Six months ended June 30, Change

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

2025 2024 $ % 2025 2024 $ %

Interest income, net $ 11,742 $ 12,460 $ (718) (6) % $ 30,404 $ 40,156 $ (9,752) (24) %

Share of income from equity method investments — 917 (917) N/A — 2,365 (2,365) N/A

Loss on revaluation of financial instruments

(640) (3,615) 2,975 82 % (591) (6,257) 5,666 91 %

Impairment loss on other investments — (12,916) 12,916 N/A — (25,650) 25,650 N/A

Share of income from equity method investments — — — N/A — 2,365 (2,365) (100) %

Gain on revaluation of loan receivable — 11,804 (11,804) (100) % — 11,804 (11,804) (100) %

Gain on revaluation of equity method investment — 32,469 (32,469) (100) % — 32,469 (32,469) (100) %

Gain (loss) on revaluation of financial instruments

4,066 (293) 4,359 N/M 3,475 (6,550) 10,025 N/M

Impairment loss on other investments — — — N/A — (25,650) 25,650 100 %

Foreign currency gain (loss) 19,785 (7,432) 27,217 N/M (18,170) 12,370 (30,540) N/M

Loss on held-for-sale assets (2,501) — (2,501) N/A (2,501) — (2,501) N/A

Other, net (1) 248 (249) N/M 42 (422) 464 N/M

Total other income (expense) (33,683) 4,628 (38,311) N/M (22,343) 17,534 (39,877) N/M

Loss on held-for-sale assets (3,031) (10,422) 7,391 71 % (5,532) (10,422) 4,890 47 %

Change in allowance for credit loss on non-operating loan (4,771) — (4,771) N/A (4,771) — (4,771) N/A

Other, net (283) (315) 32 10 % (241) (737) 496 67 %

Total other income 27,508 38,271 (10,763) (28) % 5,165 55,805 (50,640) (91) %

Income tax benefit (1,316) (2,708) 1,392 51 % (2,296) (5,440) 3,144 58 %

Net loss (38,482) (8,759) (29,723) (339) % (30,759) (11,243) (19,516) (174) %

Net income (loss) 28,321 7,324 20,997 287 % (2,438) (3,919) 1,481 38 %

(i) “N/M” is defined as not meaningful.

Interest income, net

For the three months ended June 30, 2025, interest income, net was $9.0 million, representing a decrease of $4.5 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, interest income, net was $18.7 million, representing a decrease of $9.0 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the decrease in net interest income was primarily due to lower interest rates in the current period and the absence of income recognized on the Cronos GrowCo loan receivable, which is eliminated in consolidation, effective from and after July 1, 2024.

For the three months ended September 30, 2025, interest income, net was $11.7 million, representing a decrease of $0.7 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, interest income, net was $30.4 million, representing a decrease of $9.8 million from the nine months ended September 30, 2024.

For the three month comparative period, the decrease in net interest income was primarily due to lower interest rates in the current period, partially offset by interest on our High Tide Loan.

For the nine month comparative period, the decrease in net interest income was primarily due to lower interest rates in the current period and the absence of income recognized on the Cronos GrowCo loan receivable, which is eliminated in consolidation, effective from and after July 1, 2024.

Share of income from equity method investments

For the three months ended June 30, 2025, we had no income from equity method investments, compared to $0.9 million for the three months ended June 30, 2024.

For the six months ended June 30, 2025, we had no income from equity method investments, compared to $2.4 million for the six months ended June 30, 2024.

For both the three months ended September 30, 2025 and 2024, we had no income from equity method investments.

For the nine months ended September 30, 2025, we had no income from equity method investments, compared to $2.4 million for the nine months ended September 30, 2024.

As a result of the Cronos GrowCo Transaction on July 1, 2024, we now consolidate Cronos GrowCo and no longer account for our investment in Cronos GrowCo as an equity method investment.

For further information, see Note 4 “ Investments ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Loss on revaluation of financial instruments

For the three months ended June 30, 2025, the loss on revaluation of financial instruments was $0.6 million, representing an improvement of $3.0 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, the loss on revaluation of financial instruments was $0.6 million, representing an improvement of $5.7 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the change was primarily related to the change in fair value of our investment in Vitura.

Gain on revaluation of loans receivable

For both the three and nine months ended September 30, 2024, we recognized $11.8 million of gain on revaluation of loans receivable related to the remeasurement of the existing loans receivable under the credit facility with Cronos GrowCo as a result of the Cronos

GrowCo Transaction.

No such gain was recognized for either the three or nine months ended September 30, 2025.

For further information, see Note 5 “ Loans Receivable, net ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Gain on revaluation of equity method investment

For both the three and nine months ended September 30, 2024, we recognized $32.5 million of gain on revaluation of equity method investment related to the remeasurement of the existing investment in Cronos GrowCo as a result of the Cronos GrowCo Transaction.

No such gain was recognized for either the three or nine months ended September 30, 2025.

For further information, see Note 4 “ Investments ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Gain (loss) on revaluation of financial instruments

For the three months ended September 30, 2025, the gain on revaluation of financial instruments was $4.1 million, representing an improvement of $4.4 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, the gain on revaluation of financial instruments was $3.5 million, representing an improvement of $10.0 million from the nine months ended September 30, 2024.

For both the three and nine month comparative periods, the change was primarily related to the change in fair value of our High Tide Warrant and our investment in Vitura Health Limited (“Vitura”).

For further information, see Note 4 “ Investments ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Impairment loss on other investments

For the three and six months ended June 30, 2024, we recognized $12.9 million and $25.7 million, respectively, of impairment loss on other investments, driven by impairment charges recorded on our PharmaCann Option for the difference between its estimated fair value and its carrying amount.

There was no such impairment loss on other investments for the three and six months ended June 30, 2025.

For the nine months ended September 30, 2024, we recognized $25.7 million of impairment loss on other investments, driven by impairment charges recorded on our PharmaCann Option for the difference between its estimated fair value and its carrying amount.

There was no such impairment loss on other investments for the three and nine months ended September 30, 2025 or the three months ended September 30, 2024.

For further information, see Note 4 “ Investments ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Foreign currency gain (loss)

For the three months ended June 30, 2025, foreign currency loss was $39.5 million, representing a deterioration of $46.1 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, foreign currency loss was $38.0 million, representing a deterioration of $57.8 million from the six months ended June 30, 2024.

For both the three and six month comparative periods, the change was primarily due to the weakening of the U.S.

For the three months ended September 30, 2025, foreign currency gain was $19.8 million, representing an improvement of $27.2 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, foreign currency loss was $18.2 million, representing a deterioration of $30.5 million from the nine months ended September 30, 2024.

For the three month comparative period, the change was primarily due to the strengthening of the U.S.

dollar compared to the Canadian dollar impacting the revaluation of certain foreign currency-denominated cash equivalents and short-term investments held in Canada.

For the nine month comparative period, the change was primarily due to the weakening of the U.S.

dollar compared to the Canadian dollar impacting the revaluation of certain foreign currency-denominated cash equivalents and short-term investments held in Canada.

Loss on held-for-sale assets

For both the three and six months ended June 30, 2025, we recognized a loss on held-for-sale assets of $2.5 million, relating to a decrease in the fair value of the Cronos Fermentation assets.

There were no such losses on held-for-sale assets for the three and six months ended June 30, 2024.

For three and nine months ended September 30, 2025, we recognized a loss on held-for-sale assets of $3.0 million and $5.5 million, respectively.

For both the three and nine months ended September 30, 2024, we recognized a loss on held-for-sale assets of $10.4 million.

The losses in both 2025 and 2024 relate to decreases in the fair value of the Cronos Fermentation Facility assets.

For further information, see Note 8 “ Restructuring ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Change in allowance for credit loss on non-operating loan

For both the three and nine months ended September 30, 2025, change in allowance for credit loss on non-operating loan was $4.8 million.

The expense relates to the change in the allowance for credit loss on the High Tide Loan.

For further information, see Note 5 “ Loans Receivable, net.

Other, net primarily includes gains and losses on the disposal of assets.

Income tax benefit

For the three months ended June 30, 2025, income tax benefit was $0.5 million, compared to a benefit of $2.2 million for the three months ended June 30, 2024.

For the six months ended June 30, 2025, income tax benefit was $1.0 million, compared to a benefit of $2.7 million for the six months ended June 30, 2024.

For both the three and six month comparative periods, the decrease in benefit was mainly driven by deferred tax expense that was recorded in connection with the utilization of the loss carryforward balances.

For the three months ended June 30, 2025, net loss was $38.5 million, compared to a net loss of $8.8 million for the three months ended June 30, 2024.

For the six months ended June 30, 2025, net loss was $30.8 million, compared to a net loss of $11.2 million for the six months ended June 30, 2024.

For both the three and six month comparative periods, the higher net loss was primarily due to an unrealized foreign exchange loss on our U.S.

dollar-denominated cash and cash equivalents and short-term investments held in Canada, driven by the Canadian dollar strengthening against the U.S.

dollar, partially offset by higher gross profit and lower operating expenses.

For the three months ended September 30, 2025, income tax benefit was $1.3 million, compared to a benefit of $2.7 million for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, income tax benefit was $2.3 million, compared to a benefit of $5.4 million for the nine months ended September 30, 2024.

For the three month comparative period, the lower benefit was primarily due to recoveries related to our inventory step-up amortization in the prior year period that did not recur in the current period.

For the nine month comparative period, the decrease in benefit was mainly driven by deferred tax expense that was recorded in connection with the utilization of the loss carryforward balances.

Net income (loss)

For the three months ended September 30, 2025, net income was $28.3 million, compared to net income of $7.3 million for the three months ended September 30, 2024.

For the nine months ended September 30, 2025, net loss was $2.4 million, compared to a net loss of $3.9 million for the nine months ended September 30, 2024.

For both the three and nine month comparative periods, the improvement in net income was primarily due to lower operating expenses and higher gross profit, partially offset by lower other income.

Non-GAAP Measures

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foreign currency (gain) loss;

change in allowance for credit loss on non-operating loan;

restructuring costs;

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purchase accounting adjustment-related inventory step-up adjustments recorded through cost of sales;

and financial statement review costs related to the restatements of our 2019 and 2021 interim financial statements (the “Restatements”), including legal costs of defending shareholder class action complaints brought against us as a result of the 2019 restatement.

and legal costs of defending shareholder class action complaints brought against us as a result of the 2019 restatement.

Results are reported as total consolidated results, reflecting our reporting structure of one reportable segment.

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Management uses Adjusted EBITDA for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets.

The following tables set forth a reconciliation of Net loss as determined in accordance with U.S.

Beginning in the third quarter of 2025, the Company modified the composition of Adjusted EBITDA to exclude the impact of the provision for expected credit losses recognized under ASC 326 solely with respect to the High Tide Loan (for further information, see Part I, Note 5 – Loans Receivable, net in this Quarterly Report on Form 10-Q for the period ended September 30, 2025).

Management determined that excluding this non-cash provision provides investors with additional insight into period-over-period operating performance by isolating credit-risk movements unrelated to the Company’s core operations.

Management believes that this change provides additional information regarding the Company’s ongoing operational results and enhances comparability with peers that do not routinely extend credit to third parties.

This change does not affect the Company’s GAAP financial statements.

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 June 30, 2025

Three months ended September 30, 2025

Net income $ 28,321

Interest income, net (11,742)

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EBITDA 18,795

Loss on revaluation of financial instruments (ii)

Foreign currency loss

Transaction costs (iv)

Loss on held-for-sale assets (v)

Other, net (vi)

Restructuring costs (vii)

Share-based compensation (viii)

Financial statement review costs (ix)

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

Impairment loss on long-lived assets (i)

Gain on revaluation of financial instruments (iv)

Foreign currency gain (19,785)

Transaction costs (vi)

Loss on held-for-sale assets (vii)

Other, net (viii)

Restructuring costs (ix)

Share-based compensation (x)

Restatement litigation costs (xi)

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

Change in allowance for credit loss on non-operating loan (xiv)

Adjusted EBITDA $ 5,677

Three months ended June 30, 2024

Net loss $ (8,759)

Three months ended September 30, 2024

Net income $ 7,324

Interest income, net (12,460)

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EBITDA (4,277)

Share of income from equity method investments (917)

Loss on revaluation of financial instruments (ii)

Impairment loss on other investments (iii)

Foreign currency gain

Transaction costs (iv)

Other, net (vi)

Restructuring costs (vii)

Share-based compensation (viii)

Financial statement review costs (ix)

Impairment loss on long-lived assets (i)

Revaluation gain on loan receivable (ii)

Gain on revaluation of equity method investment (iii)

Loss on revaluation of financial instruments (iv)

Foreign currency loss 7,432

Transaction costs (vi)

Loss on held-for-sale assets (vii)

Other, net (viii)

Share-based compensation (x)

Restatement litigation costs (xi)

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

Adjusted EBITDA $ (6,019)

Six months ended June 30, 2025

Nine months ended September 30, 2025

Net loss $ (2,438)

Interest income, net (30,404)

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EBITDA (24,564)

Loss on revaluation of financial instruments (ii)

Impairment loss on long-lived assets (i)

Gain on revaluation of financial instruments (iv)

Foreign currency loss 18,170

Transaction costs (iv)

Loss on held-for-sale assets (v)

Other, net (vi)

Restructuring costs (vii)

Share-based compensation (viii)

Financial statement review costs (ix)

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

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

Transaction costs (vi)

Loss on held-for-sale assets (vii)

Other, net (viii)

Restructuring costs (ix)

Share-based compensation (x)

Restatement litigation costs (xi)

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

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

Change in allowance for credit loss on non-operating loan (xiv)

Adjusted EBITDA $ 9,654

Six months ended June 30, 2024

Nine months ended September 30, 2024

Net loss $ (3,919)

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EBITDA (42,704)

Share of income from equity method investments (2,365)

Share of income from equity method investment (2,365)

Impairment loss on long-lived assets (i)

Loss on revaluation of financial instruments (ii)

Impairment loss on other investments (iii)

Revaluation gain on loan receivable (ii)

Gain on revaluation of equity method investment (iii)

Loss on revaluation of financial instruments (iv)

Impairment loss on other investments (v)

Foreign currency gain (12,370)

Transaction costs (iv)

Other, net (vi)

Restructuring costs (vii)

Share-based compensation (viii)

Financial statement review costs (ix)

Transaction costs (vi)

Loss on held-for-sale assets (vii)

Other, net (viii)

Restructuring costs (ix)

Share-based compensation (x)

Restatement litigation costs (xi)

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

Adjusted EBITDA $ (27,739)

(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.

(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.

For the three months ended June 30, 2025 Adjusted EBITDA was $1.7 million, representing an improvement of $12.7 million from three months ended June 30, 2024.

For the six months ended June 30, 2025, Adjusted EBITDA was $4.0 million, representing an improvement of $25.7 million from the six months ended June 30, 2024.

The improvement year-over-year was primarily driven by higher revenue, lower cost of sales due to the consolidation of Cronos GrowCo, as well as by lower operating expenses due to a decline in general and administrative costs.

(i) For the three and nine months ended September 30, 2025, impairment loss on long-lived assets related to equipment no longer in use.

For the three and nine months ended September 30, 2024, impairment loss on long-lived assets included $14,258 related to the write-down of our Ginkgo exclusive licenses.

For the nine months ended September 30, 2024, impairment loss on long-lived assets included $1,631 related to the winding down of operations at the Cronos Fermentation Facility.

(ii) For the three and nine months ended September 30, 2024, a revaluation gain on loan receivable was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024.

(iii) For the three and nine months ended September 30, 2024, the gain on revaluation of equity method investment was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024.

(iv) For the three months ended September 30, 2025, the gain on revaluation of financial instruments was driven by a gain related to the Company’s High Tide Warrant and the Company’s equity securities in Vitura.

For the nine months ended September 30, 2025, the gain on revaluation of financial instruments related to the Company’s High Tide Warrant, partially offset by a loss related to the Company’s equity securities in Vitura.

For the three and nine months ended 2024, the loss on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura.

(v) For the nine months ended September 30, 2024, impairment loss on other investments represents the fair value change on the PharmaCann Option.

(vi) For the three and nine months ended September 30, 2025 and 2024, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction and discrete strategic initiatives.

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

(vii) For the three and nine months ended September 30, 2025 and 2024, loss on held-for-sale assets related to a revaluation of the Cronos Fermentation Facility held-for-sale asset group.

(viii) For the three and nine months ended September 30, 2025, other, net related to (gain) loss on disposal of assets and dividend income.

For the three and nine months ended September 30, 2024, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.

(ix) For the three and nine months ended September 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 nine months ended September 30, 2024, restructuring costs related to employee-related severance costs and other restructuring costs associated with the Realignment, as described in Note 8 “ Restructuring .”

(x) For the three and nine months ended September 30, 2025 and 2024, share-based compensation related to the expenses of share-based compensation awarded to employees and, for the three and nine months ended September 30, 2025, our DSUs issued to our Board of Directors, each under the Company’s share-based award plans, as described in Note 9 “ Share-based Compensation.

(xi) For the three and nine months ended September 30, 2025 and 2024, restatement litigation costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement.

(xii) For the nine months ended September 30, 2025 and the three and nine months ended September 30, 2024, 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).

(xiii) For the three and nine months ended September 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.

(xiv) For the three and nine months ended September 30, 2025, change in allowance for credit loss on non-operating loan represents the allowance recognized on the High Tide loan receivable, as described in Note 5, “ Loans Receivable, net .”

For the three months ended September 30, 2025, Adjusted EBITDA was $5.7 million, representing an improvement of $11.7 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, Adjusted EBITDA was $9.7 million, representing an improvement of $37.4 million from the nine months ended September 30, 2024.

For both the three and nine month comparative periods, the improvement was primarily due to higher gross profit and lower operating expenses due to a decline in general and administrative costs.

Adjusted Gross Profit and Adjusted Gross Margin

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GAAP, to Adjusted Gross Profit and Adjusted Gross Margin, respectively, for the periods indicated:

(in thousands of USD) Three months ended June 30, Change Six months ended June 30, Change

(in thousands of USD) Three months ended September 30, Change Nine months ended September 30, Change

2025 2024 $ % 2025 2024 $ %

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(ii) Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net revenue.

For the three months ended June 30, 2025 Adjusted Gross Profit was $14.5 million, representing an increase of $8.2 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, Adjusted Gross Profit was $28.8 million, representing an increase of $18.0 million from the six months ended June 30, 2024.

The increase was primarily due to the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, and production efficiencies.

For the three months ended September 30, 2025, Adjusted Gross Profit was $18.3 million, representing an increase of $7.6 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, Adjusted Gross Profit was $47.1 million, representing an increase of $25.6 million from the nine months ended September 30, 2024.

For the three month comparative period, the increase was primarily due to higher average sales prices driven primarily by a mix shift to Israel, higher sales volumes, production efficiencies and favorable inventory dynamics during the third quarter of 2025.

For the nine month comparative period, the increase was primarily due to the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, production efficiencies and favorable inventory dynamics during the nine months ended September 30, 2025.

Constant Currency

To supplement the consolidated financial statements presented in accordance with U.S.

GAAP, we have presented constant currency adjusted financial measures for net revenue, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for the three and six months ended June 30, 2025, as well as cash and cash equivalents and short-term investment balances as of June 30, 2025 compared to December 31, 2024, which are considered non-GAAP financial measures.

GAAP, we have presented constant currency adjusted financial measures for net revenue, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for the three and nine months ended September 30, 2025, as well as cash and cash equivalents and short-term investment balances as of September 30, 2025 compared to December 31, 2024, which are considered non-GAAP financial measures.

We present constant currency information to provide a framework for assessing how our underlying operations performed excluding the effect of foreign currency rate fluctuations.

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dollars are converted into U.S.

dollars using the average exchange rates from the three and six month comparative periods in 2024 rather than the actual average exchange rates in effect during the respective current period;

dollars using the average exchange rates from the three and nine month comparative periods in 2024 rather than the actual average exchange rates in effect during the respective current period;

constant currency current and prior comparative balance sheet information is translated at the prior year-end spot rate rather than the current period spot rate.

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See further discussion on foreign currency risk as noted in Item 3 “Quantitative and Qualitative Disclosures About Market Risk.”

The table below sets forth certain measures of consolidated results from continuing operations on a constant currency basis for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 as well as cash and cash equivalents and short-term investments as of June 30, 2025 and December 31, 2024, both on an as-reported and constant currency basis (in thousands):

The table below sets forth certain measures of consolidated results from continuing operations on a constant currency basis for the three and nine months ended September 30, 2025 compared to the three and nine months ended September 30, 2024 as well as cash and cash equivalents and short-term investments as of September 30, 2025 and December 31, 2024, both on an as-reported and constant currency basis (in thousands):

As Reported As Adjusted for Constant Currency

Three months ended June 30, As Reported Change Three months ended June 30, Constant Currency Change

Three months ended September 30, As Reported Change Three months ended September 30, Constant Currency Change

2025 2024 $ % 2025 $ %

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Operating expenses 18,835 37,266 (18,431) (49) % 18,743 (18,523) (50) %

Net income (loss)

28,321 7,324 20,997 287 % 28,957 21,633 295 %

Adjusted EBITDA $ 5,677 $ (6,019) $ 11,696 N/M $ 4,733 $ 10,752 N/M

Six months ended June 30, As Reported Change Six months ended June 30, Constant Currency Change

Nine months ended September 30, As Reported Change Nine months ended September 30, Constant Currency Change

2025 2024 $ % 2025 $ %

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Adjusted EBITDA $ 9,654 $ (27,739) $ 37,393 N/M $ 8,653 $ 36,392 N/M

As of June 30, As of December 31, As Reported Change As of June 30, Constant Currency Change

As of September 30, As of December 31, As Reported Change As of September 30, Constant Currency Change

2025 2024 $ % 2025 $ %

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As Reported As Adjusted for Constant Currency

Three months ended June 30, As Reported Change Three months ended June 30, Constant Currency Change

Three months ended September 30, As Reported Change Three months ended September 30, Constant Currency Change

2025 2024 $ % 2025 $ %

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As Reported As Adjusted for Constant Currency

Six months ended June 30, As Reported Change Six months ended June 30, Constant Currency Change

Nine months ended September 30, As Reported Change Nine months ended September 30, Constant Currency Change

2025 2024 $ % 2025 $ %

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As Reported As Adjusted for Constant Currency

Three months ended June 30, As Reported Change Three months ended June 30, Constant Currency Change

Three months ended September 30, As Reported Change Three months ended September 30, Constant Currency Change

2025 2024 $ % 2025 $ %

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As Reported As Adjusted for Constant Currency

Six months ended June 30, As Reported Change Six months ended June 30, Constant Currency Change

Nine months ended September 30, As Reported Change Nine months ended September 30, Constant Currency Change

2025 2024 $ % 2025 $ %

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Net revenue $ 102,056 $ 87,314 $ 14,742 17 % $ 102,478 $ 15,164 17 %

For the three months ended June 30, 2025, net revenue on a constant currency basis was $33.3 million, representing a 20% increase from the three months ended June 30, 2024.

For the six months ended June 30, 2025, net revenue on a constant currency basis was $67.0 million, representing a 26% increase from the six months ended June 30, 2024.

On a constant currency basis, net revenue increased for the three and six months ended June 30, 2025, primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the consolidation of Cronos GrowCo, and higher cannabis extract sales in the Canadian market.

On a constant currency basis, the consolidation of Cronos GrowCo as a result of the Cronos GrowCo Transaction contributed $2.2 million and $5.3 million, respectively, of cannabis flower sales in the three and six months ended June 30, 2025.

No such sales were recognized for the three and six months ended June 30, 2024.

For the three months ended June 30, 2025, gross profit on a constant currency basis was $14.4 million, representing a 129% increase from the three months ended June 30, 2024.

For the six months ended June 30, 2025, gross profit on a constant currency basis was $28.6 million, representing a 166% increase from the six months ended June 30, 2024.

On a constant currency basis, gross profit increased for the three and six months ended June 30, 2025, primarily due to the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, and production efficiencies.

On a constant currency basis, for the six months ended June 30, 2025, we recognized $0.6 million of inventory step-up from the Cronos GrowCo Transaction in cost of sales.

No such costs were recognized for the three months ended June 30, 2025, or the three and six months ended June 30, 2024.

For the three months ended September 30, 2025, net revenue on a constant currency basis was $35.5 million, representing a 4% increase from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, net revenue on a constant currency basis was $102.5 million, representing a 17% increase from the nine months ended September 30, 2024.

On a constant currency basis, net revenue increased for the three months ended September 30, 2025, primarily due to higher cannabis flower sales in Israel, which carry no excise taxes, and higher cannabis extract sales in the Canadian market, partially offset by a decrease in cannabis flower sales in the Canadian market.

On a constant currency basis, net revenue increased for the nine months ended September 30, 2025, primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the inclusion of a full nine months of Cronos GrowCo sales in the current period and higher cannabis extract sales in the Canadian market, partially offset by lower cannabis flower sales in the Canadian market.

On a constant currency basis, the consolidation of Cronos GrowCo as a result of the Cronos GrowCo Transaction contributed $7.2 million and $4.3 million of cannabis flower sales in the nine months ended September 30, 2025 and 2024, respectively.

For the three months ended September 30, 2025, gross profit on a constant currency basis was $17.9 million, representing a 395% increase from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, gross profit on a constant currency basis was $46.5 million, representing a 223% increase from the nine months ended September 30, 2024.

On a constant currency basis, gross profit increased for the three and nine months ended September 30, 2025, primarily due to lower amounts of inventory step-up from the Cronos GrowCo Transaction recognized into cost of sales.

For the three month comparative periods, the increase was also driven by higher average sales prices driven primarily by a mix shift to Israel, higher sales volumes, production efficiencies and favorable inventory dynamics during the third quarter of 2025.

For the nine month comparative period, the increase was also driven by the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volume, production efficiencies and favorable inventory dynamics during the nine months ended September 30, 2025.

On a constant currency basis, for the nine months ended September 30, 2025, we recognized $0.6 million of inventory step-up from the Cronos GrowCo Transaction in cost of sales.

No such costs were recognized for the three months ended September 30, 2025.

On a constant currency basis, for both the three and nine months ended September 30, 2024, we recognized $7.2 million of inventory step-up from the Cronos GrowCo Transaction in cost of sales.

Operating expenses

For the three months ended June 30, 2025, operating expenses on a constant currency basis were $19.8 million, representing a 9% decrease from the three months ended June 30, 2024.

For the six months ended June 30, 2025, operating expenses on a constant currency basis were $38.3 million, representing a 9% decrease from the six months ended June 30, 2024.

On a constant currency basis, operating expenses decreased for the three and six months ended June 30, 2025, primarily due to lower salaries and benefits, higher expected credit loss allowance on loans receivable recorded in the prior period, and lower share-based compensation expense, partially offset by higher sales and marketing expenses and restructuring costs and the consolidation of Cronos GrowCo.

On a constant currency basis, for the three and six months ended June 30, 2025, the consolidation of Cronos GrowCo increased operating expenses by $1.0 million and $1.9 million, respectively.

No such costs were recorded in the three or six months ended June 30, 2024.

Operating expenses on a constant currency basis also declined for the six months ended June 30, 2025 due to lower impairment loss on long-lived assets.

For the three months ended June 30, 2025, net loss on a constant currency basis was $39.8 million, representing a higher net loss of $31.0 million from the three months ended June 30, 2024.

For the six months ended June 30, 2025, net loss on a constant currency basis was $32.5 million, representing a higher net loss of $21.2 million from six months ended June 30, 2024.

On a constant currency basis, the increased net loss was primarily due to an unrealized foreign exchange loss on our U.S.

dollar-denominated cash and cash equivalents and short-term investments held in Canada, driven by the Canadian dollar strengthening against the U.S.

dollar, partially offset by higher gross profit and lower operating expenses.

For the three months ended September 30, 2025, operating expenses on a constant currency basis were $18.7 million, representing a 50% decrease from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, operating expenses on a constant currency basis were $57.1 million, representing a 28% decrease from the nine months ended September 30, 2024.

On a constant currency basis, operating expenses decreased for the three months ended September 30, 2025, primarily due to lower impairment loss on long-lived assets, lower amortization of intangible assets and lower salaries and benefits, partially offset by higher restructuring costs.

On a constant currency basis, operating expenses decreased for the nine months ended September 30, 2025, primarily due to lower impairment loss on long-lived assets, lower amortization of intangible assets and lower salaries and benefits, partially offset by higher restructuring costs.

Net income (loss)

For the three months ended September 30, 2025, net income on a constant currency basis was $29.0 million, representing a higher net income of $21.6 million from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, net loss on a constant currency basis was $3.5 million, representing a lower net loss of $0.4 million from nine months ended September 30, 2024.

On a constant currency basis, the improvement in net income for both the three and nine months ended September 30, 2025, was primarily due to lower operating expenses and higher gross profit, partially offset by lower other income.

Adjusted EBITDA

For the three months ended June 30, 2025, Adjusted EBITDA on a constant currency basis was $1.6 million, representing a $12.6 million improvement from the three months ended June 30, 2024.

For the six months ended June 30, 2025, Adjusted EBITDA on a constant currency basis was $3.9 million, representing a $25.6 million improvement from the six months ended June 30, 2024.

The improvement in Adjusted EBITDA for the three and six months ended June 30, 2025 on a constant currency basis was driven by higher gross profit, as well as by lower operating expenses due to a decline in general and administrative costs.

For the three months ended September 30, 2025, Adjusted EBITDA on a constant currency basis was $4.7 million, representing an $10.8 million improvement from the three months ended September 30, 2024.

For the nine months ended September 30, 2025, Adjusted EBITDA on a constant currency basis was $8.7 million, representing a $36.4 million improvement from the nine months ended September 30, 2024.

The improvement in Adjusted EBITDA for both the three and nine months ended September 30, 2025 on a constant currency basis was driven by higher gross profit and lower operating expenses due to a decline in general and administrative costs.

Cash and cash equivalents & short-term investments

Cash and cash equivalents and short-term investments on a constant currency basis decreased 3% to $832.6 million as of June 30, 2025, from $858.8 million as of December 31, 2024.

The decrease in cash and cash equivalents and short-term investments on a constant currency basis is primarily due to purchases of property, plant and equipment, repurchases of common stock, dividend payments to non-controlling interests and withholding taxes paid on share-based awards in the six months ended June 30, 2025.

Cash and cash equivalents and short-term investments on a constant currency basis decreased 4% to $821.6 million as of September 30, 2025, from $858.8 million as of December 31, 2024.

The decrease in cash and cash equivalents and short-term investments on a constant currency basis is primarily due to purchases of property, plant and equipment, advances on loans receivable, repurchases of common stock, purchases of other investments, dividend payments to non-controlling interests and withholding taxes paid on share-based awards, partially offset by positive cash from operating activities and proceeds from the repayment of loans receivable.

Liquidity and Capital Resources

As of June 30, 2025, we had $794 million in cash and cash equivalents and $40 million in short-term investments.

As of September 30, 2025, we had $784 million in cash and cash equivalents and $40 million in short-term investments.

We believe that the existing cash and cash equivalents and short-term investments will be sufficient to fund the business operations and capital expenditures over the next twelve months.

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(In thousands of U.S.

dollars) Six months ended June 30,

Net cash provided by (used in) operating activities $ 722 $ (460)

dollars) Nine months ended September 30,

Net cash provided by operating activities

$ 14,031 $ 11,123

Net cash provided by (used in) investing activities (79,341) 180,181

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Net change in cash $ (74,635) $ 192,743

Comparison of cash flows between the six months ended June 30, 2025 and the six months ended June 30, 2024

Comparison of cash flows between the nine months ended September 30, 2025 and the nine months ended September 30, 2024

Operating activities

During the six months ended June 30, 2025, we generated $0.7 million of cash from operating activities as compared to cash used of $0.5 million in the six months ended June 30, 2024, representing a decrease in cash used of $1.2 million.

This change is primarily driven by a $13.1 million increase in net income after adjusting for non-cash items during the six months ended June 30, 2025 compared to the six months ended June 30, 2024 and lower interest receivable, partially offset by increases in accounts receivable and inventory and decreases in accrued liabilities.

During the nine months ended September 30, 2025, we generated $14.0 million of cash from operating activities as compared to $11.1 million in the nine months ended September 30, 2024, representing an increase in cash provided of $2.9 million.

This change is primarily driven by a $24.4 million increase in net income after adjusting for non-cash items during the nine months ended September 30, 2025, compared to the nine months ended September 30, 2024, higher accounts payable and lower interest receivable, partially offset by increases in inventory and accounts receivable and decreases in accrued liabilities.

Investing activities

During the six months ended June 30, 2025, we used $56.3 million of cash in investing activities, compared to $181.0 million of cash provided by investing activities during the six months ended June 30, 2024, representing a change of $237.3 million.

This change was driven by the purchase of $40.0 million of short-term investments and higher capital expenditures during the six months ended June 30, 2025, compared to the maturity of certain short-term investments, which were reinvested as cash equivalents upon maturity during the six months ended June 30, 2024.

During the nine months ended September 30, 2025, we used $79.3 million of cash in investing activities, compared to $180.2 million of cash provided by investing activities during the nine months ended September 30, 2024, representing a change of $259.5 million.

This change was driven by the purchase of $40.0 million of short-term investments and higher capital expenditures, advances on loans receivable and purchases of other investments during the nine months ended September 30, 2025, compared to the maturity of certain short-term investments, which were reinvested as cash equivalents upon maturity during the nine months ended September 30, 2024.

Financing activities

During the six months ended June 30, 2025, cash used in financing activities was $10.6 million, compared to $0.9 million of cash used in financing activities during the six months ended June 30, 2024, representing an increase of $9.7 million.

This change is primarily driven by dividends paid to non-controlling interests, repurchases of common stock and an increase in withholding taxes paid on share-based awards during the six months ended June 30, 2025 compared to six months ended June 30, 2024.

During the nine months ended September 30, 2025, cash used in financing activities was $12.5 million, compared to $0.9 million of cash used in financing activities during the nine months ended September 30, 2024, representing an increase of $11.6 million.

This change is primarily driven by repurchases of common stock, dividends paid to non-controlling interests, and an increase in withholding taxes paid on share-based awards during the nine months ended September 30, 2025 compared to nine months ended September 30, 2024.

Share Repurchase Program

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

In both the three and six months ended June 30, 2025, we repurchased 1,874,951 common shares at a cost of approximately $3.6 million.

As of June 30, 2025, the Company has remaining authorization to repurchase up to $46.4 million of additional common shares, not to exceed the remaining 17,396,000 common shares authorized by the Board.

In the three and nine months ended September 30, 2025, we repurchased 917,862 and 2,792,813 common shares, respectively, at costs of approximately $1.9 million and $5.5 million, respectively.

As of September 30, 2025, the Company has remaining authorization to repurchase up to $44.5 million of additional common shares, not to exceed the remaining 16,478,138 common shares authorized by the Board.

Cash Requirements

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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 2. Management’s Discussion and Analysis