Cronos Group Inc. 10-Q

Item 1. Financial Statements Table of Contents Condensed Consolidated Balance Sheets as of September 30 , 2025 (Unaudited) and December 31, 202 4 4 Condensed Consolidated Statements of Net Income ( Loss ) and Comprehensive Income (Loss) for the three and nine months ended September 30 , 2025 and 2024 (Unaudited) 5 Condensed Consolidated Statements of Changes in Equity for the three and nine months ended September 30 , 2025 and 2024 (Unaudited) 6 Condensed Consolidated Statements of Cash Flows for the nine months ended September 30 , 2025 and 2024 (Unaudited) 9 Notes to Condensed Consolidated Financial Statements (Unaudited) 10 3 Cronos Group Inc. Condensed Consolidated Balance Sheets (In thousands of U.S. dollars, except share amounts, unaudited) Table of Contents As of September 30, 2025 As of December 31, 2024 Assets Current assets Cash and cash equivalents $ 784,170 $ 858,805 Short-term investments 40,000 — Accounts receivable, net 27,091 15,462 Interest receivable 6,548 8,690 Other receivables 4,357 5,000 Current portion of loans receivable (net of allowance for credit losses of $ 1 ) 176 618 Inventory, net 48,167 33,149 Prepaids and other current assets 8,769 6,277 Held-for-sale assets 2,873 8,112 Total current assets 922,151 936,113 Other investments 11,443 2,813 Non-current portion of loans receivable (net of allowance for credit losses of $ 5,419 ) 22,409 15,526 Property, plant and equipment, net 145,536 133,189 Right-of-use assets 1,529 1,390 Goodwill 65,413 63,453 Intangible assets, net 9,829 11,257 Deferred tax assets 100 2,571 Total assets $ 1,178,410 $ 1,166,312 Liabilities Current liabilities Accounts payable $ 10,865 $ 16,973 Income taxes payable 1 9 Accrued liabilities 29,625 31,653 Current portion of lease obligation 576 1,025 Derivative liabilities — 40 Total current liabilities 41,067 49,700 Non-current portion due to non-controlling interests 698 1,073 Non-current portion of lease obligation 1,166 993 Deferred tax liabilities 3,430 3,564 Total liabilities 46,361 55,330 Shareholders’ equity Share capital and additional paid-in capital (no par value; authorized for issue as of September 30, 2025 and December 31, 2024: unlimited; shares outstanding as of September 30, 2025 and December 31, 2024: 382,893,267 and 382,530,780 , respectively) 666,147 669,879 Retained earnings 450,032 457,709 Accumulated other comprehensive loss ( 33,675 ) ( 63,525 ) Total equity attributable to shareholders of Cronos Group 1,082,504 1,064,063 Non-controlling interests 49,545 46,919 Total shareholders’ equity 1,132,049 1,110,982 Total liabilities and shareholders’ equity $ 1,178,410 $ 1,166,312 See notes to condensed consolidated interim financial statements. 4 Cronos Group Inc. Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) (In thousands of U.S. dollars, except share and per share amounts, unaudited) Table of Contents Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Net revenue, before excise taxes $ 48,828 $ 46,594 $ 134,978 $ 120,639 Excise taxes ( 12,489 ) ( 12,330 ) ( 32,922 ) ( 33,325 ) Net revenue 36,339 34,264 102,056 87,314 Cost of sales 17,501 30,341 54,894 72,216 Inventory write-down 506 312 592 707 Gross profit 18,332 3,611 46,570 14,391 Operating expenses Sales and marketing 5,301 5,528 15,213 15,190 Research and development 1,345 1,242 3,067 3,201 General and administrative 9,254 12,760 29,099 34,434 Restructuring costs 212 — 1,535 630 Share-based compensation 2,333 2,262 5,802 6,513 Depreciation and amortization 354 1,098 1,717 3,237 Impairment loss on long-lived assets 36 14,376 36 16,350 Total operating expenses 18,835 37,266 56,469 79,555 Operating loss ( 503 ) ( 33,655 ) ( 9,899 ) ( 65,164 ) Other income (expense) Interest income, net 11,742 12,460 30,404 40,156 Share of income from equity method investments — — — 2,365 Gain on revaluation of loan receivable — 11,804 — 11,804 Gain on revaluation of equity method investment — 32,469 — 32,469 Gain (loss) on revaluation of financial instruments 4,066 ( 293 ) 3,475 ( 6,550 ) Impairment loss on other investments — — — ( 25,650 ) Foreign currency gain (loss) 19,785 ( 7,432 ) ( 18,170 ) 12,370 Loss on held-for-sale assets ( 3,031 ) ( 10,422 ) ( 5,532 ) ( 10,422 ) Change in allowance for credit loss on non-operating loan ( 4,771 ) — ( 4,771 ) — Other, net ( 283 ) ( 315 ) ( 241 ) ( 737 ) Total other income 27,508 38,271 5,165 55,805 Income (loss) before income taxes 27,005 4,616 ( 4,734 ) ( 9,359 ) Income tax benefit ( 1,316 ) ( 2,708 ) ( 2,296 ) ( 5,440 ) 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 income (loss) attributable to Cronos Group $ 25,958 $ 8,349 $ ( 7,631 ) $ ( 2,649 ) 5 Cronos Group Inc. Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) (In thousands of U.S. dollars, except share and per share amounts, unaudited) Table of Contents Comprehensive income (loss) Net income (loss) $ 28,321 $ 7,324 $ ( 2,438 ) $ ( 3,919 ) Other comprehensive income (loss) Foreign exchange gain (loss) on translation ( 26,005 ) 12,408 31,141 ( 20,113 ) Comprehensive income (loss) 2,316 19,732 28,703 ( 24,032 ) Comprehensive income (loss) attributable to non-controlling interests 1,629 ( 269 ) 6,484 ( 344 ) Comprehensive income (loss) attributable to Cronos Group $ 687 $ 20,001 $ 22,219 $ ( 23,688 ) Net income (loss) per share Basic net income (loss) per share attributable to Cronos Group $ 0.07 $ 0.02 $ ( 0.02 ) $ ( 0.01 ) Diluted net income (loss) per share attributable to Cronos Group $ 0.07 $ 0.02 $ ( 0.02 ) $ ( 0.01 ) See notes to condensed consolidated interim financial statements. 6 Cronos Group Inc. Condensed Consolidated Statements of Changes in Equity For the nine months ended September 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 Activities relating to share-based compensation 4,217 1,392 ( 6 ) — — 1,386 Share repurchases ( 917,862 ) ( 1,859 ) — — — ( 1,859 ) Net income — — 25,958 — 2,363 28,321 Foreign exchange loss on translation — — — ( 25,271 ) ( 734 ) ( 26,005 ) Balance as of September 30, 2025 382,893,267 $ 666,147 $ 450,032 $ ( 33,675 ) $ 49,545 $ 1,132,049 7 Cronos Group Inc. Condensed Consolidated Statements of Changes in Equity For the nine months ended September 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, 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 Non-controlling interest resulting from business combination — — — — 53,542 53,542 Activities relating to share-based compensation 13,982 2,249 ( 4 ) — — 2,245 Net income (loss) — — 8,349 — ( 1,025 ) 7,324 Foreign exchange gain on translation — — — 11,652 756 12,408 Balance as of September 30, 2024 382,294,707 $ 667,926 $ 413,995 $ ( 361 ) $ 49,751 $ 1,131,311 See notes to condensed consolidated interim financial statements. 8 Cronos Group Inc. Condensed Consolidated Statements of Cash Flows (In thousands of U.S. dollars, except share amounts, unaudited) Table of Contents Nine months ended September 30, 2025 2024 Operating activities Net loss $ ( 2,438 ) $ ( 3,919 ) Adjustments to reconcile net loss to net cash provided by (used in) operating activities: Share-based compensation 5,802 6,513 Depreciation and amortization 10,574 6,811 Impairment loss on long-lived assets 36 16,350 Impairment loss on other investments — 25,650 (Gain) loss from investments ( 3,482 ) 4,103 Changes in expected credit losses on long-term financial assets 4,766 1,026 Revaluation of equity method investment — ( 32,469 ) Revaluation of loan receivable — ( 11,804 ) Loss on held-for-sale assets 5,532 10,422 Inventory step-up recorded to cost of sales 517 7,116 Foreign currency (gain) loss 18,170 ( 12,370 ) Other non-cash operating activities, net 2,367 ( 11 ) Changes in operating assets and liabilities: Accounts receivable, net ( 10,510 ) ( 5,402 ) Interest receivable 2,095 ( 1,018 ) Other receivables 941 1,658 Prepaids and other current assets ( 2,348 ) ( 1,217 ) Inventory, net ( 13,025 ) 7,162 Accounts payable ( 1,227 ) ( 9,102 ) Income taxes payable ( 9 ) ( 9 ) Accrued liabilities ( 3,730 ) 1,633 Net cash provided by operating activities 14,031 11,123 Investing activities Purchase of short-term investments ( 40,000 ) — Proceeds from short-term investments — 187,166 Purchase of other investments ( 5,107 ) — Cash acquired in business combinations — 5,993 Advances on loans receivable ( 13,307 ) ( 8,822 ) Proceeds from repayment on loans receivable 2,855 5,290 Purchase of property, plant and equipment, net of disposals ( 23,578 ) ( 8,868 ) Purchase of intangible assets, net of disposals ( 204 ) ( 578 ) Net cash provided by (used in) investing activities ( 79,341 ) 180,181 Financing activities Repurchases of common stock ( 5,471 ) — Dividend paid to non-controlling interest ( 3,858 ) — Withholding taxes paid on share-based awards ( 3,153 ) ( 918 ) Net cash used in financing activities ( 12,482 ) ( 918 ) Effect of foreign currency translation on cash and cash equivalents 3,157 2,357 Net change in cash and cash equivalents ( 74,635 ) 192,743 Cash and cash equivalents, beginning of period 858,805 669,291 Cash and cash equivalents, end of period $ 784,170 $ 862,034 Supplemental cash flow information Interest paid $ — $ — Interest received $ 32,148 $ 38,965 Income taxes paid $ 68 $ 621 See notes to condensed consolidated interim financial statements. 9 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 nine months ended September 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 September 30, 2025 2024 Cannabis flower $ 26,362 $ 26,328 Cannabis extracts 9,964 7,789 Other 13 147 Net revenue $ 36,339 $ 34,264 Nine months ended September 30, 2025 2024 Cannabis flower $ 74,731 $ 64,514 Cannabis extracts 26,932 22,580 Other 393 220 Net revenue $ 102,056 $ 87,314 10 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 September 30, 2025 2024 Canada $ 23,132 $ 24,067 Israel 11,353 7,259 Other countries 1,854 2,938 Net revenue $ 36,339 $ 34,264 Nine months ended September 30, 2025 2024 Canada $ 62,412 $ 62,781 Israel 29,958 20,565 Other countries 9,686 3,968 Net revenue $ 102,056 $ 87,314 (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 interest receivables on the consolidated balance sheets and interest income, net on the condensed consolidated statements of net income (loss) and comprehensive income (loss). Cash inflows and outflows related to the purchase and maturity of short-term investments are classified as investing activities in the Company’s consolidated statements of cash flows. As of September 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 $ 884,751 and $ 904,101 as of September 30, 2025 and December 31, 2024, respectively. An impairment analysis is performed at each reporting date using a calculation that 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 September 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 September 30, 2025, the Company assessed that there is a concentration of credit risk, as 30 % 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 September 30, 2025, the Company earned a total net revenue before excise taxes of $ 22,634 from two major customers, together accounting for 46 % of the Company’s total net revenue before excise taxes. During the three months ended September 30, 2024, the Company earned a total net revenue before excise taxes of $ 21,993 from two major customers, together accounting for 48 % of the Company’s total net revenue before excise taxes. During the nine months ended September 30, 2025, the Company earned a total net revenue before excise taxes of $ 58,490 from two major customers, together accounting for 43 % of the Company’s total net revenue before excise taxes. During the nine months ended September 30, 2024, the Company earned a total net revenue before excise taxes of $ 71,846 from three major customers, together accounting for 59 % of the Company’s total net revenue before excise taxes. (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 11 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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) had the right, but not the obligation, to purchase an aggregate total quantity of 80 % of Cronos GrowCo’s production. Following the commencement of sales from the Phase 2 Expansion Area during the third quarter of 2025, the Company and its controlled affiliates (other than Cronos GrowCo) 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. Following the date of the Cronos GrowCo Transaction 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. 12 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 nine months ended September 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 income (loss) and comprehensive income (loss). For both the three and nine months ended September 30, 2024, the Company recognized $ 7,116 of the inventory step-up into cost of sales on the condensed consolidated statements of net income (loss) and comprehensive income (loss). As of September 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 both the three and nine months ended September 30, 2024, net revenue attributable to Cronos GrowCo was $ 4,268 and loss before income taxes was $ 1,606 . Business combination-related costs of nil and $ 72 were incurred in relation to the Cronos GrowCo Transaction in the three and nine months ended September 30, 2025, respectively, and were reported in general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss). Business combination-related costs of $ 334 and $ 530 were incurred in relation to the Cronos GrowCo Transaction in the three and nine months ended September 30, 2024, respectively, and were reported in general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss). As 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. The following table presents unaudited supplemental pro forma results for the three and nine months ended September 30, 2024, as if the Cronos GrowCo Transaction had occurred as of January 1, 2023. The unaudited pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the business combination had taken place at such time. The unaudited pro forma results presented below include adjustments such as amortization of inventory step-up, amortization charges for acquired intangible assets, depreciation adjustments for property, plant and equipment 13 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents that has been revalued, adjustment of interest expense and interest income resulting from the effective settlement of pre-existing debt financing in connection with the Cronos GrowCo Transaction and adjustments for certain business combination-related charges. Three months ended September 30, Nine months ended September 30, 2024 2024 Net revenue $ 34,264 $ 94,788 Gross profit ( 3,540 ) 14,124 Operating expenses 37,266 82,715 Other income (expense) ( 6,002 ) 8,892 Net loss attributable to Cronos Group $ ( 29,447 ) $ ( 39,578 ) Material nonrecurring pro forma adjustments directly attributable to the Cronos GrowCo Transactions include the following: • Historical amortization of the acquired inventory step-up of $ 7,116 recognized in the historical three month period ended September 30, 2024 was removed from pro forma net income for the three months and nine months ended September 30, 2024. • Pre-business combination revenues for sales from Cronos GrowCo to the Company of $ 14,776 were adjusted out for the nine months ended September 30, 2024 as these amounts would have been eliminated in consolidation. Company pre-business combination cost of sales of $ 11,386 were adjusted out for the nine months ended September 30, 2024, as these amounts would have been eliminated in consolidation. • The gain on the revaluation of the equity method investment and loan receivable relating to the Cronos GrowCo Transaction of $ 32,469 and $ 11,804 , respectively, were adjusted out for the three months and nine months ended September 30, 2024, as this revaluation is assumed to have occurred on January 1, 2023. 3. Inventory, net Inventory, net is comprised of the following items: As of September 30, 2025 As of December 31, 2024 Raw materials $ 6,380 $ 5,400 Work-in-progress 28,403 14,350 Finished goods 13,224 13,248 Supplies and consumables 160 151 Total $ 48,167 $ 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 nine months ended September 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 income (loss) and comprehensive income (loss). For both the three and nine months ended September 30, 2024, the Company recognized $ 7,116 of the inventory step-up into cost of sales on the condensed consolidated statements of net income (loss) and comprehensive income (loss). As of September 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. 14 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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 September 30, 2024 Nine months ended September 30, 2024 Cronos GrowCo (i) $ — $ 2,365 $ — $ 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, options and warrants of three 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 September 30, 2025 and December 31, 2024, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 0.7 % and 5.8 %, respectively. The decrease in ownership percentage in the nine months ended September 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 September 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 income (loss) and comprehensive income (loss) for the nine months ended September 30, 2024. 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. 15 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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 September 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 gain (loss) on revaluation of financial instruments on the condensed consolidated statements of net income (loss) and comprehensive income (loss). High Tide Warrant 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 ($ 21,919 ) and an original issue discount of 16 % (the “High Tide Loan”). Additionally, the Company received a common share purchase warrant (the “High Tide Warrant”) with a five-year term, 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 High Tide Warrant is classified as a derivative that is not being held as a hedge and was initially recorded at a fair value of C$ 6,989 ($ 5,106 ) to other investments on the condensed consolidated balance sheet on the transaction date. The High Tide Warrant’s fair value is estimated at each reporting date using a Black-Scholes model. Key inputs include the share price and volatility of High Tide common shares, the risk-free rate and the remaining term of the High Tide Warrant. Changes in the fair value of the High Tide Warrant are recorded as income (loss) on revaluation of financial instruments on the condensed consolidated statements of net income (loss) and comprehensive income (loss). See Note 5 “ Loans Receivable, net ” for discussion of the loan receivable recognized as part of the agreement with High Tide. The following table summarizes the Company’s other investments activity: As of June 30, 2025 Warrant Acquired Unrealized gain Impairment charges Foreign exchange effect As of September 30, 2025 Vitura $ 2,251 $ — $ 216 $ — $ 14 $ 2,481 High Tide Warrant — 5,106 3,966 — ( 110 ) 8,962 $ 2,251 $ 5,106 $ 4,182 $ — $ ( 96 ) $ 11,443 As of December 31, 2024 Warrant Acquired Unrealized gain (loss) Impairment charges Foreign exchange effect As of September 30, 2025 Vitura $ 2,813 $ — $ ( 484 ) $ — $ 152 $ 2,481 High Tide Warrant — 5,106 3,966 — ( 110 ) 8,962 $ 2,813 $ 5,106 $ 3,482 $ — $ 42 $ 11,443 As of June 30, 2024 Unrealized loss Impairment charges Foreign exchange effect As of September 30, 2024 PharmaCann $ — $ — $ — $ — $ — Vitura 3,168 ( 371 ) — 103 2,900 $ 3,168 $ ( 371 ) $ — $ 103 $ 2,900 As of December 31, 2023 Unrealized loss Impairment charges Foreign exchange effect As of September 30, 2024 PharmaCann $ 25,650 $ — $ ( 25,650 ) $ — $ — Vitura 9,601 ( 6,468 ) — ( 233 ) 2,900 $ 35,251 $ ( 6,468 ) $ ( 25,650 ) $ ( 233 ) $ 2,900 16 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 September 30, 2025 As of December 31, 2024 Current portion of Mucci Promissory Note accrued interest $ 176 $ 618 Total current portion of loans receivable, net 176 618 High Tide Loan 8,846 — Mucci Promissory Note 11,237 13,464 Cannasoul Collaboration Loan 1,901 1,736 Add: Long-term portion of accrued interest 425 326 Total long-term portion of loans receivable, net 22,409 15,526 Total loans receivable, net $ 22,585 $ 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 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. Term Loan B will mature on August 22, 2035, which represents the 10-year anniversary of the commencement of sales from the Phase 2 Expansion Area on August 22, 2025. Principal will be repaid under Term Loan B on a quarterly basis following 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 $ 11,745 ) 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 the nine months ended September 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 nine months ended September 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 has established 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 ($ 2,505 ) by a non-recourse loan (the “Cannasoul Collaboration Loan”) to CLS over a period of two years from April 1, 2020 for the capital and operating expenditures of the Cannasoul Laboratory. The Cannasoul Collaboration Loan bears interest at 3.5 % annually. Cronos Israel will receive 70 % of the profits of the Cannasoul Laboratory until such time as it has recovered 150 % of the amounts advanced to CLS, after which time it will receive 50 % of the Cannasoul Laboratory profits. As a result, the Company is exposed to economic variability from CLS’s performance. The Company does not consolidate CLS as it does not have the power to direct the activities that most significantly impact the entity’s economic performance; thus, the Company is not considered the primary beneficiary of the entity. The 17 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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 September 30, 2025 and December 31, 2024, CLS has received ILS 8,297 (approximately $ 2,505 and $ 2,272 , respectively), from the Cannasoul Collaboration Loan. High Tide Loan On July 16, 2025, the Company, as lender, and High Tide Inc, as borrower, entered into the High Tide Loan. The High Tide 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 High Tide Loan is convertible only upon the agreement of the Company and High Tide. The High Tide Loan has a term of five years and may be repaid early with no penalty. Additionally, the Company received the High Tide Warrant, which is exercisable into up to 3,836,317 common shares of High Tide at an exercise price of C$ 3.91 per Warrant Share. See Note 4 “ Investments ” for discussion of the High Tide Warrant. The loan receivable was recorded at a fair value as of the transaction date of C$ 18,591 ($ 13,583 ) and will be amortized using the effective interest method over the estimated life of the loan. For both the three and nine months ended September 30, 2025, High Tide paid $ 183 in interest. As of September 30, 2025, the High Tide loan receivable included an unamortized discount of $ 7,962 and an expected credit loss of $ 4,742 as presented in the tables below. Credit Quality Indicators The Company is exposed to credit risk on loan receivables. Credit risk is the risk of loss arising from the failure of borrowers to meet the terms of the contract or otherwise fail to perform as agreed. Because each borrower has distinct risk characteristics, the Company evaluates each loan individually rather than as part of a broader portfolio. The Company routinely reviews its borrowers and assesses their financial health to estimate current expected credit losses. This assessment involves examining historical loss data—including benchmarking risk grades using Moody’s reports across different economic cycles—analyzing asset-specific risks, particularly those unique to the cannabis industry, and evaluating the current financial status and forecasted financial results of each borrower. Furthermore, the Company assigns credit risk ratings through an ordinal logit regression model, which compares borrowers’ credit quality to other rated companies by analyzing key financial metrics such as total assets, debt, revenue, earnings before interest and taxes, and net income. Expected credit loss allowances on the Company’s long-term financial assets for the three and nine months ended September 30, 2025 and 2024 were comprised of the following items: 18 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents As of June 30, 2025 Increase (decrease) (ii) Foreign exchange effect As of September 30, 2025 Mucci Promissory Note $ 74 $ 1 $ ( 1 ) $ 74 Cannasoul Collaboration Loan 589 5 10 604 High Tide Loan — 4,771 ( 29 ) 4,742 $ 663 $ 4,777 $ ( 20 ) $ 5,420 As of December 31, 2024 Increase (decrease) (ii) Foreign exchange effect As of September 30, 2025 Mucci Promissory Note $ 88 $ ( 18 ) $ 4 $ 74 Cannasoul Collaboration Loan 535 13 56 604 High Tide Loan — 4,771 ( 29 ) 4,742 $ 623 $ 4,766 $ 31 $ 5,420 As of June 30, 2024 Increase (decrease) (iii) Foreign exchange effect As of September 30, 2024 GrowCo Credit Facility (i) $ 11,838 $ ( 11,804 ) $ ( 34 ) $ — Mucci Promissory Note 90 1 1 92 Cannasoul Collaboration Loan 506 4 10 520 $ 12,434 $ ( 11,799 ) $ ( 23 ) $ 612 As of December 31, 2023 Increase (decrease) (iii) Foreign exchange effect As of September 30, 2024 GrowCo Credit Facility (i) $ 11,176 $ ( 10,794 ) $ ( 382 ) $ — Mucci Promissory Note 89 4 ( 1 ) 92 Cannasoul Collaboration Loan 524 12 ( 16 ) 520 $ 11,789 $ ( 10,778 ) $ ( 399 ) $ 612 (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 nine months ended September 30, 2025, $ 6 and $( 5 ), respectively, were recorded as changes to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses. During the three and nine months ended September 30, 2025, $ 4,771 was recorded as a change in allowance for credit loss on non-operating loan on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our allowance for expected credit loss on the High Tide Loan. (iii) During the three and nine months ended September 30, 2024, $ 5 and $ 1,026 were recorded as increases to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses. During both the three and nine months ended September 30, 2024, $ 11,804 was recorded as a gain on revaluation of loans receivable on the condensed consolidated statements of net income (loss) and comprehensive income (loss) from remeasuring our outstanding loans receivable with Cronos GrowCo as a result of the Cronos GrowCo Transaction. 19 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 September 30, 2025 As of December 31, 2024 Cost Land $ 7,091 $ 6,389 Building and leasehold improvements 234,824 192,059 Machinery and Equipment 45,729 36,741 Furniture and fixtures 2,662 2,687 Construction in progress 469 28,710 Less: accumulated depreciation ( 38,439 ) ( 29,798 ) Less: accumulated impairment charges ( 106,800 ) ( 103,599 ) Property, Plant and Equipment, net $ 145,536 $ 133,189 During the first quarter of 2024, the Company ceased operations at its Winnipeg, Manitoba facility (“Cronos Fermentation Facility”), performed an assessment under ASC 360 of the recoverability of the carrying value of the Cronos Fermentation Facility assets and determined the carrying value of the assets was not fully recoverable. The fair value was estimated using a combination of the market and income approaches. As a result of this analysis, an impairment loss on long-lived assets of $ 1,631 was recorded to the condensed consolidated statements of net income (loss) and comprehensive income (loss) in the nine months ended September 30, 2024. As of both September 30, 2025 and December 31, 2024, the Cronos Fermentation Facility assets were classified as held-for-sale on the condensed consolidated balance sheets. See Note 8 “ Restructuring ” for further information. For the three and nine months ended September 30, 2025, depreciation expense on property, plant and equipment was $ 2,971 and $ 8,582 , respectively. For the three and nine months ended September 30, 2024, depreciation expense on property, plant and equipment was $ 2,552 and $ 3,861 , 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 income (loss) and comprehensive income (loss). As of September 30, 2025 and December 31, 2024, the Company had $ 2,704 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 September 30, 2025 and December 31, 2024: As of September 30, 2025 Cost Accumulated Impairment Charges Net Peace Naturals $ 1,006 $ — $ 1,006 Cronos GrowCo 64,407 — 64,407 $ 65,413 $ — $ 65,413 As of December 31, 2024 Cost Accumulated Impairment Charges Net Peace Naturals $ 976 $ — $ 976 Cronos GrowCo 62,477 — 62,477 $ 63,453 $ — $ 63,453 20 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (b) Intangible assets, net In the third quarter of 2024, the Company determined that it was no longer utilizing and had no current plans to utilize the intellectual property associated with its exclusive licenses with Ginkgo Bioworks Holdings, Inc. (“Ginkgo”). As a result, the remaining net book value of $ 14,258 was impaired and recorded to impairment loss on long-lived assets on the condensed consolidated statements of income (loss) and comprehensive income (loss) in both the three and nine months ended September 30, 2024. Intangible assets, net are comprised of the following items as of September 30, 2025 and December 31, 2024: As of September 30, 2025 Cost Accumulated amortization Accumulated impairment charges Net Software $ 5,411 $ ( 4,135 ) $ ( 76 ) $ 1,200 Health Canada licenses 8,051 ( 1,579 ) ( 6,472 ) — Ginkgo exclusive licenses 26,947 ( 5,494 ) ( 21,453 ) — Israeli codes (i) 310 ( 95 ) — 215 Know-how (ii) 7,902 ( 988 ) — 6,914 Total definite-lived intangible assets 48,621 ( 12,291 ) ( 28,001 ) 8,329 Lord Jones ® brand 64,000 — ( 62,500 ) 1,500 Trademarks 142 — ( 142 ) — Total intangible assets $ 112,763 $ ( 12,291 ) $ ( 90,643 ) $ 9,829 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 income (loss) and comprehensive income (loss). As of September 30, 2025, the estimated future amortization of definite-lived intangible assets is as follows: As of September 30, 2025 Remainder of 2025 (3 months) $ 376 2026 1,487 2027 1,050 2028 878 2029 822 Thereafter 3,716 $ 8,329 21 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 was 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 the Cronos Fermentation Facility, list the Cronos Fermentation Facility assets for sale, and implement additional organization-wide cost reductions as the Company continues its Realignment initiatives. On November 26, 2023, the Company entered into an agreement for the sale and leaseback of the Peace Naturals Campus, which 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. 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. During the first quarter of 2024, the Company ceased operations at the Cronos Fermentation Facility, performed an assessment under ASC 360 Property, Plant and Equipment of the recoverability of the carrying value of the Cronos Fermentation Facility assets and determined the carrying value of the assets was not fully recoverable. The fair value was estimated using a combination of the market and income approaches. As a result of this analysis, an impairment loss on long-lived assets of $ 1,631 was recorded to the condensed consolidated statements of net loss and comprehensive loss in the nine months ended September 30, 2024. In addition, the Cronos Fermentation Facility assets were classified as held-for-sale in the first quarter of 2024 and continue to be classified as held-for-sale as of September 30, 2025. During the second quarter of 2025, the Company revised its listing price and reassessed the fair value of the Cronos Fermentation Facility assets, which resulted in the recognition of a loss on held-for-sale assets of $ 2,501 on the condensed consolidated statements of net income (loss) and comprehensive income (loss) in the nine months ended September 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 third quarter of 2025, the Company entered into an agreement to sell the Cronos Fermentation Facility assets for C$ 4,000 ($ 2,873 ), which resulted in the recognition of a loss on held-for-sale assets of $ 3,031 on the condensed consolidated statements of net income (loss) and comprehensive income (loss) in the three months ended September 30, 2025. During the three and nine months ended September 30, 2025, the Company incurred $ 212 and $ 1,535 , respectively, in restructuring costs in connection with the Realignment. During the three and nine months ended September 30, 2024, the Company incurred nil 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. 22 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 nine months ended September 30, 2025: Accrual as of June 30, 2025 Expenses Payments/Write-offs Accrual as of September 30, 2025 Employee Termination Benefits $ 104 $ — $ — $ 104 Other Restructuring Costs 108 212 ( 163 ) 157 Total $ 212 $ 212 $ ( 163 ) $ 261 Accrual as of December 31, 2024 Expenses Payments/Write-offs Accrual as of September 30, 2025 Employee Termination Benefits $ — $ 620 $ ( 516 ) $ 104 Other Restructuring Costs — 915 ( 758 ) 157 Total $ — $ 1,535 $ ( 1,274 ) $ 261 The following tables summarize the Company’s restructuring activity for the three and nine months ended September 30, 2024: Accrual as of June 30, 2024 Expenses Payments/Write-offs Accrual as of September 30, 2024 Employee Termination Benefits $ 24 $ — $ ( 24 ) $ — Other Restructuring Costs 547 — ( 547 ) — Total $ 571 $ — $ ( 571 ) $ — Accrual as of December 31, 2023 Expenses Payments/Write-offs Accrual as of September 30, 2024 Employee Termination Benefits $ 150 $ 62 $ ( 212 ) $ — Other Restructuring Costs — 568 ( 568 ) — Total $ 150 $ 630 $ ( 780 ) $ — 23 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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, RSUs and DSUs for the three and nine months ended September 30, 2025 and 2024: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Stock options $ 18 $ 34 $ 171 $ 101 RSUs 1,375 2,228 4,691 6,412 DSUs 940 — 940 — Total share-based compensation $ 2,333 $ 2,262 $ 5,802 $ 6,513 Share-based compensation for both the three and nine months ended September 30, 2025 included $ 940 of expense associated with the Company’s DSUs. For both three and nine months ended September 30, 2024, $ 449 of DSU-related expense was included in general and administrative expense in the Company’s condensed consolidated statement of net income (loss) and comprehensive income (loss). For the three and nine months ended September 30, 2024, $ 78 and $( 82 ) was included in gain (loss) on revaluation of financial instruments in the Company’s condensed consolidated statement of net income (loss) and comprehensive income (loss), primarily related to the revaluation of DSUs. (b) Stock options Vesting conditions for grants of options are determined by the Compensation Committee of the Board. The typical vesting for stock option grants made under the 2020 Omnibus Plan is annual vesting over three to five years with a maximum term of ten years . The typical vesting for stock option grants made under the 2018 Stock Option Plan is quarterly vesting over three to five years with a maximum term of seven years . The 2018 Stock Option Plan did not, and the 2020 Omnibus Plan does not, authorize grants of options with an exercise price below fair market value. The following is a summary of the changes in stock options for the nine months ended September 30, 2025 and 2024: Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of December 31, 2024 $ 5.63 717,264 3.65 Cancellation, forfeiture and expiry of options 14.70 ( 15,000 ) Balance as of September 30, 2025 $ 5.44 702,264 2.30 Exercisable as of September 30, 2025 $ 5.72 631,645 2.06 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 ( 1,385,937 ) Balance as of September 30, 2024 $ 5.63 717,264 3.90 Exercisable as of September 30, 2024 $ 6.39 535,469 3.42 (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. 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 table summarizes stock options outstanding: As of September 30, 2025 As of December 31, 2024 2020 Omnibus Plan 702,264 702,264 2018 Stock Option Plan — 15,000 Total stock options outstanding 702,264 717,264 (c) Restricted share units The following is a summary of the changes in RSUs for the nine months ended September 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) 3.57 2,641,485 Vested and issued 2.61 ( 4,850,878 ) Cancellation and forfeitures 2.32 ( 618,020 ) Balance as of September 30, 2025 $ 2.81 5,554,800 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 3.51 ( 1,364,864 ) Cancellation and forfeitures 2.99 ( 125,616 ) Balance as of September 30, 2024 $ 3.53 8,394,896 (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. (d) Deferred share units The following is a summary of the changes in DSUs for the nine months ended September 30, 2025 and 2024: Financial liability Number of DSUs Balance as of December 31, 2024 $ 1,129 560,261 Granting and vesting of DSUs 450 198,238 Loss on revaluation 519 — Balance as of September 30, 2025 $ 2,098 758,499 Financial liability Number of DSUs Balance as of December 31, 2023 $ 1,092 521,679 Granting and vesting of DSUs 450 193,965 DSU liabilities settled ( 359 ) ( 155,383 ) Loss on revaluation 59 — Balance as of September 30, 2024 $ 1,242 560,261 25 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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 months ended September 30, 2025, the Company repurchased 917,862 common shares for $ 1,859 . During the nine months ended September 30, 2025, the Company repurchased 2,792,813 common shares for $ 5,471 . 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. (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. At the parties’ request, the Court has stayed all deadlines in the action pending submission of the proposed settlement to the Court. The proposed settlement remains subject to preliminary and final approval by the court and certain other conditions not within the Company’s control. 26 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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 and (iii) was 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. 27 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (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. 28 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 income (loss) and comprehensive income (loss). Furthermore, the CODM regularly reviews total cash and short-term investments to aid in capital allocation decisions. The table below sets forth consolidated Adjusted EBITDA and significant expenses for our single segment: Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Adjusted EBITDA $ 5,677 $ ( 6,019 ) $ 9,654 $ ( 27,739 ) Significant expenses: Sales and marketing 5,301 5,528 15,213 15,190 Research and development 1,345 1,242 3,067 3,201 General and administrative 9,254 12,760 29,099 34,434 Share-based compensation 2,333 2,262 5,802 6,513 Depreciation and amortization 354 1,098 1,717 3,237 Total significant expenses 18,587 22,890 54,898 62,575 Restructuring costs 212 — 1,535 630 Impairment loss on long-lived assets 36 14,376 36 16,350 Total operating expense $ 18,835 $ 37,266 $ 56,469 $ 79,555 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 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 September 30, 2025 Net income $ 28,321 Interest income, net ( 11,742 ) Income tax benefit ( 1,316 ) Depreciation and amortization 3,532 EBITDA 18,795 Impairment loss on long-lived assets (i) 36 Gain on revaluation of financial instruments (iv) ( 4,066 ) Foreign currency gain ( 19,785 ) Transaction costs (vi) 547 Loss on held-for-sale assets (vii) 3,031 Other, net (viii) 283 Restructuring costs (ix) 212 Share-based compensation (x) 2,333 Restatement litigation costs (xi) ( 624 ) Israel Ministry of Economy and Industry dumping inquiry expense (xiii) 144 Change in allowance for credit loss on non-operating loan (xiv) 4,771 Adjusted EBITDA $ 5,677 Three months ended September 30, 2024 Net income $ 7,324 Interest income, net ( 12,460 ) Income tax benefit ( 2,708 ) Depreciation and amortization 3,567 EBITDA ( 4,277 ) Impairment loss on long-lived assets (i) 14,376 Revaluation gain on loan receivable (ii) ( 11,804 ) Gain on revaluation of equity method investment (iii) ( 32,469 ) Loss on revaluation of financial instruments (iv) 293 Foreign currency loss 7,432 Transaction costs (vi) 334 Loss on held-for-sale assets (vii) 10,422 Other, net (viii) 315 Share-based compensation (x) 2,262 Restatement litigation costs (xi) ( 19 ) Inventory step-up recorded to cost of sales (xii) 7,116 Adjusted EBITDA $ ( 6,019 ) 30 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents Nine months ended September 30, 2025 Net loss $ ( 2,438 ) Interest income, net ( 30,404 ) Income tax benefit ( 2,296 ) Depreciation and amortization 10,574 EBITDA ( 24,564 ) Impairment loss on long-lived assets (i) 36 Gain on revaluation of financial instruments (iv) ( 3,475 ) Foreign currency loss 18,170 Transaction costs (vi) 619 Loss on held-for-sale assets (vii) 5,532 Other, net (viii) 241 Restructuring costs (ix) 1,535 Share-based compensation (x) 5,802 Restatement litigation costs (xi) ( 186 ) Inventory step-up recorded to cost of sales (xii) 517 Israel Ministry of Economy and Industry dumping inquiry expense (xiii) 656 Change in allowance for credit loss on non-operating loan (xiv) 4,771 Adjusted EBITDA $ 9,654 Nine months ended September 30, 2024 Net loss $ ( 3,919 ) Interest income, net ( 40,156 ) Income tax benefit ( 5,440 ) Depreciation and amortization 6,811 EBITDA ( 42,704 ) Share of income from equity method investment ( 2,365 ) Impairment loss on long-lived assets (i) 16,350 Revaluation gain on loan receivable (ii) ( 11,804 ) Gain on revaluation of equity method investment (iii) ( 32,469 ) Loss on revaluation of financial instruments (iv) 6,550 Impairment loss on other investments (v) 25,650 Foreign currency gain ( 12,370 ) Transaction costs (vi) 530 Loss on held-for-sale assets (vii) 10,422 Other, net (viii) 737 Restructuring costs (ix) 630 Share-based compensation (x) 6,513 Restatement litigation costs (xi) ( 525 ) Inventory step-up recorded to cost of sales (xii) 7,116 Adjusted EBITDA $ ( 27,739 ) 31 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (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 .” The following tables present the Company’s revenue by major product category for our single segment: Three months ended September 30, 2025 2024 Cannabis flower $ 26,362 26,328 Cannabis extracts 9,964 7,789 Other 13 147 Net revenue $ 36,339 $ 34,264 Nine months ended September 30, 2025 2024 Cannabis flower $ 74,731 $ 64,514 Cannabis extracts 26,932 22,580 Other 393 220 Net revenue $ 102,056 $ 87,314 32 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 was as follows: Three months ended September 30, 2025 2024 Canada $ 23,132 $ 24,067 Israel 11,353 7,259 Other countries 1,854 2,938 Net revenue $ 36,339 $ 34,264 Nine months ended September 30, 2025 2024 Canada $ 62,412 $ 62,781 Israel 29,958 20,565 Other countries 9,686 3,968 Net revenue $ 102,056 $ 87,314 The table below sets forth total cash and cash equivalents and short-term investments for our single segment: As of September 30, 2025 As of December 31, 2024 Total cash and cash equivalents and short-term investments $ 824,170 $ 858,805 Property, plant and equipment, net were physically located in the following geographic regions: As of September 30, 2025 As of December 31, 2024 Canada $ 129,272 $ 117,329 Israel 16,264 15,860 Total $ 145,536 $ 133,189 Intangibles, net were physically located in the following geographic regions: As of September 30, 2025 As of December 31, 2024 Canada $ 9,482 $ 10,887 Israel 347 370 Total $ 9,829 $ 11,257 For additions to our property, plant and equipment, net and intangibles, net for the nine months ended September 30, 2025 and September 30, 2024, please see Note 6 “ Property, Plant and Equipment, net ” and the condensed consolidated statements of cash flows. 33 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 13. Income (Loss) per Share Basic and diluted income (loss) per share are calculated as follows (in thousands, except share and per share amounts): Three months ended September 30, Nine months ended September 30, 2025 2024 2025 2024 Basic income (loss) per share computation Net income (loss) attributable to the shareholders of Cronos Group $ 25,958 $ 8,349 $ ( 7,631 ) $ ( 2,649 ) Weighted-average number of common shares outstanding for computation for basic income (loss) per share 383,086,739 382,285,589 383,784,383 381,963,097 Basic income (loss) per share $ 0.07 $ 0.02 $ ( 0.02 ) $ ( 0.01 ) Diluted income (loss) per share computation Net income (loss) attributable to the shareholders of Cronos Group $ 25,958 $ 8,349 $ ( 7,631 ) $ ( 2,649 ) Weighted-average number of common shares outstanding used in the computation of basic income (loss) per share 383,086,739 382,285,589 383,784,383 381,963,097 Dilutive effect of RSUs 1,899,692 3,408,093 — — Dilutive effect of Top-up Rights – market price 6,282 290,725 — — Weighted-average number of common shares for computation of diluted income (loss) from continuing operations per share (i) 384,992,713 385,984,407 383,784,383 381,963,097 Diluted income (loss) per share $ 0.07 $ 0.02 $ ( 0.02 ) $ ( 0.01 ) (i) In computing diluted loss per share, incremental common shares are not considered in periods in which a net loss is reported as the inclusion of the common share equivalents would be anti-dilutive. For the three months ended September 30, 2025 and 2024, total securities of 18,062,067 and 15,065,666 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive. For the nine months ended September 30, 2025 and 2024, total securities of 19,353,160 and 20,926,402 , 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. 34 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: September 30, 2025 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 784,170 $ — $ — $ 784,170 Other investments (i)(ii) 2,481 8,962 — 11,443 Derivative liabilities — — — — 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 September 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. (ii) As of September 30, 2025, the fair value of the Company’s warrants in High Tide is estimated using a Black-Scholes model with key inputs including share price and volatility of High Tide common shares, the risk-free rate and the remaining term of the High Tide Warrant. 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 September 30, 2024 Nine months ended September 30, 2024 Cronos GrowCo – purchases $ — $ 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 September 30, Nine months ended September 30, 2025 2024 2025 2024 Related party – purchases of products and services $ 475 $ 410 $ 837 $ 1,346 The Company had outstanding accounts payable related to the agreement of $ 234 and $ 149 as of September 30, 2025 and December 31, 2024, respectively. 35 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (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 nine months ended September 30, 2025, the Company incurred $ 436 and $ 1,007 , respectively, of expense under this agreement. During both the three and nine months ended September 30, 2024, the Company incurred $ 220 of expense under this agreement. As of September 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. 36 Table of Contents