Cronos Group Inc. 10-K

ITEM 8. FINANCIAL STATEMENTS AND SUPPLEMENTARY DATA Table of Contents Reports of Independent Registered Public Accounting Firm ( Davidson & Company LLP , Vancouver, BC, Canada , Auditor Firm ID: 731 ) ( KPMG LLP , Vaughan, Ontario, Canada , Auditor Firm ID: 85 ) 68 Consolidated Balance Sheets 71 Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) 72 Consolidated Statements of Changes in Shareholders’ Equity 74 Consolidated Statements of Cash Flows 75 Notes to Consolidated Financial Statements 77 67 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Cronos Group Inc. Opinion on the Consolidated Financial Statements We have audited the accompanying consolidated balance sheets of Cronos Group Inc. (the “Company” as of December 31, 2025 and 2024, and the related consolidated statements of net income (loss) and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the years ended December 31, 2025, and 2024, and the related notes (collectively referred to as the “financial statements”). In our opinion, the financial statements present fairly, in all material respects, the financial position of the Company as of December 31, 2025, and 2024, and the results of its operations and its cash flows for the years ended December 31, 2025, and 2024, in conformity with accounting principles generally accepted in the United States of America. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (“PCAOB”), the Company’s internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control—Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 Framework) (“COSO”) and our report dated February 26, 2026 expressed an unqualified opinion on the effectiveness of the Company’s internal control over financial reporting. Basis for Opinion These financial statements are the responsibility of the entity’s management. Our responsibility is to express an opinion on these financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (“PCAOB”) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the financial statements. We believe that our audits provide a reasonable basis for our opinion. Critical Audit Matters Critical audit matters are matters arising from the current period audit of the financial statements that were communicated or required to be communicated to the audit committee and that: (1) relate to accounts or disclosures that are material to the financial statements and (2) involved our especially challenging, subjective, or complex judgments. We determined that there are no critical audit matters. We have served as the Company’s auditor since 2024. /s/ DAVIDSON & COMPANY LLP Chartered Professional Accountants Vancouver, Canada February 26, 2026 68 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Cronos Group Inc. Opinion on the Consolidated Financial Statements We have audited, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 14, the consolidated statements of net income (loss) and comprehensive income (loss), changes in shareholders’ equity, and cash flows for the year ended December 31, 2023, and the related notes (collectively, the consolidated financial statements). The 2023 consolidated financial statements before the effects of the adjustments described in Note 14 are not presented herein. In our opinion, the consolidated financial statements, before the effects of the adjustments to retrospectively apply the change in accounting described in Note 14, present fairly, in all material respects, the results of its operations and its cash flows for the year ended December 31, 2023, in conformity with U.S. generally accepted accounting principles. We were not engaged to audit, review, or apply any procedures to the adjustments to retrospectively apply the change in accounting described in Note 14 and, accordingly, we do not express an opinion or any other form of assurance about whether such adjustments are appropriate and have been properly applied. Those adjustments were audited by other auditors. Basis for Opinion These consolidated financial statements are the responsibility of the Company’s management. Our responsibility is to express an opinion on these consolidated financial statements based on our audits. We are a public accounting firm registered with the Public Company Accounting Oversight Board (United States) (PCAOB) and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audits in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the consolidated financial statements are free of material misstatement, whether due to error or fraud. Our audits included performing procedures to assess the risks of material misstatement of the consolidated financial statements, whether due to error or fraud, and performing procedures that respond to those risks. Such procedures included examining, on a test basis, evidence regarding the amounts and disclosures in the consolidated financial statements. Our audits also included evaluating the accounting principles used and significant estimates made by management, as well as evaluating the overall presentation of the consolidated financial statements. We believe that our audits provide a reasonable basis for our opinion. /s/ KPMG LLP Chartered Professional Accountants, Licensed Public Accountants We served as the Company’s auditor from 2018 to 2024. Vaughan, Canada February 29, 2024 69 Table of Contents Report of Independent Registered Public Accounting Firm To the Shareholders and Board of Directors Cronos Group Inc. Opinion on Internal Control Over Financial Reporting We have audited Cronos Group Inc.’s (the “Company”) internal control over financial reporting as of December 31, 2025, based on criteria established in Internal Control — Integrated Framework issued by the Committee of Sponsoring Organizations of the Treadway Commission (2013 framework) (the COSO criteria). In our opinion, the Company maintained, in all material respects, effective internal control over financial reporting as of December 31, 2025, based on the COSO criteria. We also have audited, in accordance with the standards of the Public Company Accounting Oversight Board (United States) (PCAOB), the Company’s consolidated balance sheets as of December 31, 2025 and 2024, and the related consolidated statements net income (loss), comprehensive income (loss), changes in shareholders’ equity, and cash flows for the years ended December 31, 2025 and 2024, and the related notes and our report dated February 26, 2026 expressed an unqualified opinion thereon. Basis for Opinion The Company’s management is responsible for maintaining effective internal control over financial reporting and for its assessment of the effectiveness of internal control over financial reporting included in the accompanying Management’s Report on Internal Control over Financial Reporting. Our responsibility is to express an opinion on the Company’s internal control over financial reporting based on our audit. We are a public accounting firm registered with the PCAOB and are required to be independent with respect to the Company in accordance with the U.S. federal securities laws and the applicable rules and regulations of the Securities and Exchange Commission and the PCAOB. We conducted our audit in accordance with the standards of the PCAOB. Those standards require that we plan and perform the audit to obtain reasonable assurance about whether effective internal control over financial reporting was maintained in all material respects. Our audit included obtaining an understanding of internal control over financial reporting, assessing the risk that a material weakness exists, testing and evaluating the design and operating effectiveness of internal control based on the assessed risk, and performing such other procedures as we considered necessary in the circumstances. We believe that our audit provides a reasonable basis for our opinion. Definition of Limitations of Internal Control Over Financial Reporting A company’s internal control over financial reporting is a process designed to provide reasonable assurance regarding the reliability of financial reporting and the preparation of financial statements for external purposes in accordance with generally accepted accounting principles. A company’s internal control over financial reporting includes those policies and procedures that (1) pertain to the maintenance of records that, in reasonable detail, accurately and fairly reflect the transactions and dispositions of the assets of the company; (2) provide reasonable assurance that transactions are recorded as necessary to permit preparation of financial statements in accordance with generally accepted accounting principles, and that receipts and expenditures of the company are being made only in accordance with authorizations of management and directors of the company; and (3) provide reasonable assurance regarding prevention or timely detection of unauthorized acquisition, use, or disposition of the company’s assets that could have a material effect on the financial statements. Because of its inherent limitations, internal control over financial reporting may not prevent or detect misstatements. Also, projections of any evaluation of effectiveness to future periods are subject to the risk that controls may become inadequate because of changes in conditions, or that the degree of compliance with the policies or procedures may deteriorate. We have served as the Company’s auditor since 2024. /s/ DAVIDSON & COMPANY LLP Chartered Professional Accountants Vancouver, Canada February 26, 2026 70 CRONOS GROUP INC. CONSOLIDATED FINANCIAL STATEMENTS FOR THE YEARS ENDED DECEMBER 31, 2025 AND 2024 Cronos Group Inc. Consolidated Balance Sheets As of December 31, 2025 and 2024 (In thousands of U.S. dollars) Table of Contents As of December 31, 2025 2024 Assets Current assets Cash and cash equivalents $ 791,794 $ 858,805 Short-term investments 40,000 — Accounts receivable, net 34,099 15,462 Interest receivable 8,654 8,690 Other receivables 14,445 5,000 Current portion of loans receivable, net — 618 Inventory, net 46,750 33,149 Prepaids and other current assets 8,344 6,277 Held-for-sale assets — 8,112 Total current assets 944,086 936,113 Other investments 7,664 2,813 Non-current portion of loans receivable, net 20,847 15,526 Property, plant and equipment, net 145,865 133,189 Right-of-use assets 1,422 1,390 Goodwill 66,478 63,453 Intangible assets, net 8,890 11,257 Deferred tax assets 1,888 2,571 Total assets $ 1,197,140 $ 1,166,312 Liabilities Current liabilities Accounts payable $ 11,640 $ 16,973 Income taxes payable — 9 Accrued liabilities 36,210 31,653 Current portion of lease obligation 337 1,025 Derivative liabilities — 40 Total current liabilities 48,187 49,700 Non-current portion due to non-controlling interests 733 1,073 Non-current portion of lease obligation 1,172 993 Deferred tax liabilities 4,089 3,564 Total liabilities 54,181 55,330 Shareholders’ equity Share capital and additional paid-in capital (no par value; authorized for issue as of December 31, 2025 and 2024: unlimited; shares outstanding as of December 31, 2025 and 2024: 381,592,969 and 382,530,780 , respectively) 662,983 669,879 Retained earnings 447,756 457,709 Accumulated other comprehensive loss ( 16,842 ) ( 63,525 ) Total equity attributable to shareholders of Cronos Group 1,093,897 1,064,063 Non-controlling interests 49,062 46,919 Total shareholders’ equity 1,142,959 1,110,982 Total liabilities and shareholders’ equity $ 1,197,140 $ 1,166,312 See notes to consolidated financial statements. 71 Cronos Group Inc. Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except share and per share amounts) Table of Contents Year ended December 31, 2025 2024 2023 Net revenue, before excise taxes $ 193,363 $ 161,821 $ 120,270 Excise taxes ( 46,776 ) ( 44,206 ) ( 33,029 ) Net revenue 146,587 117,615 87,241 Cost of sales 83,174 91,710 74,527 Inventory write-down 654 707 805 Gross profit 62,759 25,198 11,909 Operating expenses Sales and marketing 21,764 21,603 22,701 Research and development 4,449 4,229 5,843 General and administrative 41,999 46,514 49,475 Restructuring costs 2,037 630 1,524 Share-based compensation 7,050 8,700 8,756 Depreciation and amortization 2,119 3,701 5,044 Impairment loss on goodwill and indefinite-lived intangible assets 700 — — Impairment loss on long-lived assets 36 16,350 3,366 Total operating expenses 80,154 101,727 96,709 Operating loss ( 17,395 ) ( 76,529 ) ( 84,800 ) Other income (expense) Interest income, net 39,963 52,019 51,235 Share of income from equity method investments — 2,365 1,583 Gain on revaluation of loan receivable — 11,804 — Gain on revaluation of equity method investment — 32,469 — Loss on revaluation of financial instruments ( 452 ) ( 6,248 ) ( 12,042 ) Impairment loss on other investments — ( 25,650 ) ( 23,350 ) Foreign currency transaction gain (loss) ( 28,588 ) 57,859 ( 7,324 ) Loss on held-for-sale assets ( 5,532 ) ( 11,202 ) — Change in allowance for credit loss on non-operating loan ( 4,875 ) — — Other, net ( 241 ) ( 301 ) 1,029 Total other income 275 113,115 11,131 Income (loss) before income taxes ( 17,120 ) 36,586 ( 73,669 ) Income tax benefit ( 14,191 ) ( 3,436 ) ( 3,230 ) Income (loss) from continuing operations ( 2,929 ) 40,022 ( 70,439 ) Loss from discontinued operations — — ( 4,114 ) Net income (loss) ( 2,929 ) 40,022 ( 74,553 ) Net income (loss) attributable to non-controlling interest 6,518 ( 1,058 ) ( 590 ) Net income (loss) attributable to Cronos Group $ ( 9,447 ) $ 41,080 $ ( 73,963 ) 72 Cronos Group Inc. Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except share and per share amounts) Table of Contents Year ended December 31, 2025 2024 2023 Comprehensive income (loss) Net income (loss) $ ( 2,929 ) $ 40,022 $ ( 74,553 ) Other comprehensive income (loss) Foreign exchange gain (loss) on translation 48,721 ( 86,321 ) 21,539 Comprehensive income (loss) 45,792 ( 46,299 ) ( 53,014 ) Comprehensive income (loss) attributable to non-controlling interest 8,556 ( 3,176 ) ( 526 ) Comprehensive income (loss) attributable to Cronos Group $ 37,236 $ ( 43,123 ) $ ( 52,488 ) Net income (loss) per share Basic - continuing operations $ ( 0.02 ) $ 0.11 $ ( 0.18 ) Basic - discontinued operations $ — $ — $ ( 0.01 ) Basic net income (loss) per share attributable to Cronos Group $ ( 0.02 ) $ 0.11 $ ( 0.19 ) Diluted - continuing operations $ ( 0.02 ) $ 0.11 $ ( 0.18 ) Diluted - discontinued operations $ — $ — $ ( 0.01 ) Diluted net income (loss) per share attributable to Cronos Group $ ( 0.02 ) $ 0.11 $ ( 0.19 ) See notes to consolidated financial statements. 73 Cronos Group Inc. Consolidated Statements of Changes in Shareholders’ Equity For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except number of share amounts) Table of Contents 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 January 1, 2023 380,575,403 $ 654,000 $ 490,682 $ ( 797 ) $ ( 2,921 ) $ 1,140,964 Activities relating to share-based compensation 723,450 8,174 — — — 8,174 Net loss — — ( 73,963 ) — ( 590 ) ( 74,553 ) Foreign exchange gain on translation — — — 21,475 64 21,539 Balance as of December 31, 2023 381,298,853 662,174 416,719 20,678 ( 3,447 ) 1,096,124 Non-controlling interest resulting from business combination — — — — 53,542 53,542 Activities relating to share-based compensation 1,231,927 7,705 ( 90 ) — — 7,615 Net income (loss) — — 41,080 — ( 1,058 ) 40,022 Foreign exchange loss on translation — — — ( 84,203 ) ( 2,118 ) ( 86,321 ) 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 3,481,670 2,845 ( 506 ) — — 2,339 Share repurchases ( 4,419,481 ) ( 9,741 ) — — — ( 9,741 ) Dividend paid to non-controlling interest — — — — ( 6,413 ) ( 6,413 ) Net income (loss) — — ( 9,447 ) — 6,518 ( 2,929 ) Foreign exchange gain on translation — — — 46,683 2,038 48,721 Balance as of December 31, 2025 381,592,969 $ 662,983 $ 447,756 $ ( 16,842 ) $ 49,062 $ 1,142,959 See notes to consolidated financial statements. 74 Cronos Group Inc. Consolidated Statements of Cash Flows For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars) Table of Contents Year ended December 31, 2025 2024 2023 Operating activities Net income (loss) $ ( 2,929 ) $ 40,022 $ ( 74,553 ) Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Share-based compensation 7,050 8,700 8,769 Depreciation and amortization 14,231 9,336 8,110 Impairment loss on goodwill and indefinite-lived intangible assets 700 — — Impairment loss on long-lived assets 36 16,350 3,571 Impairment loss on other investments — 25,650 23,350 Loss from investments 446 3,841 10,513 Changes in expected credit losses on long-term financial assets 4,859 1,032 ( 1,528 ) Revaluation of equity method investment — ( 32,469 ) — Revaluation of loan receivable — ( 11,804 ) — Loss on held-for-sale assets 5,532 11,202 — Inventory step-up recorded to cost of sales 517 5,284 — Foreign currency (gain) loss 28,588 ( 57,859 ) 7,324 Other non-cash operating activities, net 1,250 ( 131 ) ( 1,923 ) Changes in operating assets and liabilities: Accounts receivable, net ( 16,741 ) ( 917 ) 9,206 Interest receivable ( 11 ) ( 3,656 ) ( 14,344 ) Other receivables ( 9,001 ) 2,059 ( 1,449 ) Prepaids and other current assets ( 1,802 ) ( 512 ) 1,437 Inventory, net ( 10,395 ) 7,417 7,399 Accounts payable 1,108 ( 7,449 ) ( 773 ) Income taxes payable ( 10 ) ( 93 ) ( 33,104 ) Accrued liabilities 2,438 2,840 5,160 Net cash provided by (used in) operating activities 25,866 18,843 ( 42,835 ) Investing activities Purchase of short-term investments ( 40,000 ) — ( 608,247 ) Proceeds from short-term investments — 185,817 532,838 Purchase of other investments ( 5,107 ) — — Proceeds from sale of held for sale assets 2,847 — — Cash acquired in business combination — 5,993 — Advances on loans receivable ( 13,307 ) ( 8,759 ) — Proceeds from repayment on loans receivable 5,064 5,252 16,831 Dividends received from equity method investment — — 1,297 Dividend proceeds — — 345 Purchase of property, plant and equipment ( 25,717 ) ( 12,411 ) ( 2,505 ) Purchase of intangible assets, net of disposals ( 339 ) ( 743 ) ( 918 ) Other investing activities — — 860 Net cash provided by (used in) investing activities ( 76,559 ) 175,149 ( 59,499 ) 75 Cronos Group Inc. Consolidated Statements of Cash Flows (continued) For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars) Table of Contents Year ended December 31, 2025 2024 2023 Financing activities Repurchases of common stock ( 9,741 ) — — Dividend paid to non-controlling interest ( 6,413 ) — — Withholding taxes paid on share-based awards ( 3,751 ) ( 1,231 ) ( 1,030 ) Net cash used in financing activities ( 19,905 ) ( 1,231 ) ( 1,030 ) Effect of foreign currency translation on cash and cash equivalents 3,587 ( 3,247 ) 8,011 Net change in cash and cash equivalents ( 67,011 ) 189,514 ( 95,353 ) Cash and cash equivalents, beginning of period 858,805 669,291 764,644 Cash and cash equivalents, end of period $ 791,794 $ 858,805 $ 669,291 Supplementary cash flow information (i) : Interest paid $ — $ — $ — Interest received 39,130 48,399 36,501 Income taxes paid $ 104 $ 647 $ 33,013 (i) See Note 3 and Note 9 for supplementary cash flow information related to the Company’s operating leases. See notes to consolidated financial statements. 76 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for 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 and 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 currently 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 The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain prior year amounts have been reclassified to conform to the current year presentation of our consolidated financial statements, which includes discontinued operations. These reclassifications had no effect on reported results of operations and ending shareholders’ equity. (c) Basis of consolidation The accompanying consolidated financial statements include the accounts of the Company, and all entities in which the Company has a controlling voting interest or is the primary beneficiary of a variable interest as of and for the reporting periods. The Company assesses control under the variable interest entity (“VIE”) model to determine whether the Company is the primary beneficiary of that entity’s operations. If an entity is not deemed to be a VIE, the Company consolidates the entity if the Company has a controlling voting interest. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. Investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but does not have control, are accounted for under the equity method of accounting. The Company consolidates the financial results of the following entities, which the Company controls but does not wholly own: Subsidiaries Jurisdiction of incorporation Incorporation date Ownership interest (iii) Cronos Growing Company Inc. (i) Canada June 14, 2018 50 % Cronos Israel G.S. Cultivation Ltd. (ii) Israel February 4, 2018 70 % Cronos Israel G.S. Manufacturing Ltd. (ii) Israel September 4, 2018 90 % Cronos Israel G.S. Store Ltd. (ii) Israel June 28, 2018 90 % Cronos Israel G.S. Pharmacy Ltd. (ii) Israel February 15, 2018 90 % (i) Cronos Growing Company Inc. is referred to as “Cronos GrowCo.” (ii) These Israeli entities are collectively referred to as “Cronos Israel.” (iii) “Ownership interest” is defined as the proportionate share of net income to which the Company is entitled; equity interest may differ from ownership interest as described herein. In the consolidated statements of net income (loss) and comprehensive (income) loss, net income (loss) and comprehensive income (loss) are attributed to the equity holders of the Company and to the non-controlling interests. Non-controlling interests in the equity of Cronos Israel and Cronos GrowCo are presented separately in the shareholders’ equity section of the consolidated balance sheets and consolidated statements of shareholders’ equity. All intercompany transactions and balances are eliminated upon consolidation. (d) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include, among other things, allocation of consideration to acquired assets and liabilities in a business combination, expected credit losses on long-term financial assets, gain on revaluation of loans receivable, gain on revaluation of equity method investment, impairment losses on goodwill and indefinite-lived intangible assets, impairment losses on long-lived 77 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents assets, inventory write-downs, share-based payments, valuation allowance on deferred income tax assets and uncertain tax liabilities. Actual results could differ from those estimates. (e) Cash and cash equivalents and short-term investments Cash and cash equivalents are comprised of cash and highly liquid short-term investments that are readily convertible into known amounts of cash, generally with original maturities of three months or less. Cash and cash equivalents include amounts held in dollars, C$, and ILS and security deposits. Short-term investments consist of debt securities that (i) generally have original maturities of greater than three months and (ii) the Company has the ability to convert into cash within one year. Short-term investments are classified as held-to-maturity and recorded at cost. Interest earned on short-term investments is recorded in other receivables on the consolidated balance sheets and interest income, net on the consolidated statements of net income (loss) and comprehensive income (loss). Cash inflows and outflows related to the purchase and maturity of short-term investments are classified as investing activities in the Company’s consolidated statements of cash flows. (f) Business combination Effective July 1, 2024, the Company obtained majority control of the board of directors of Cronos GrowCo, a cannabis cultivation company. The business combination was accounted for using the acquisition method of accounting in accordance with Accounting Standards Codification (“ASC”) 805 Accounting for Business Combinations (the “Cronos GrowCo Transaction”). Prior to this date, the Company’s investment in Cronos GrowCo was accounted for as an investment under the equity method and loans receivable from Cronos GrowCo. The excess of the fair value of our existing equity method investment over the net assets acquired was recorded as goodwill. The results of operations of Cronos GrowCo have been included in the Company’s consolidated financial statements from the acquisition date. Transaction costs associated with the acquisition were $ 70 and $ 701 in the years ended December 31, 2025 and 2024, respectively, and were expensed as incurred. (g) Inventory Inventory is comprised of raw materials, finished goods and work-in-progress. Cannabis inventories are accounted for at various stages of cultivation, production, and packaging. The costs of growing cannabis, including but not limited to labor, utilities, nutrition and irrigation, are capitalized into inventory until the time of harvest. Inventory is stated at the lower of cost and net realizable value. Cost is determined using standard cost, which approximates actual cost. Standard costs are reviewed periodically and adjusted to reflect current costs. Costs include, but are not limited to, direct labor, overhead, contract manufacturer fees, consumables, packaging, and the depreciation of manufacturing equipment and production facilities. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. We record an inventory valuation adjustment for excess, slow moving, and obsolete inventory that is equal to the excess of the cost of the inventory over the estimated net realizable value. We also experience inventory write-downs due to reduced market prices. The inventory valuation adjustment to net realizable value establishes a new cost basis of the inventory that cannot be subsequently reversed. Inventory valuation adjustments recorded during an interim period may be reversed, in whole or in part, in subsequent interim periods of the same fiscal year if the net realizable value recovers prior to the inventory being sold. (h) Investments Variable interest entities A variable interest entity is an entity having either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or equity investors at risk that lack the ability to control the entity’s activities. Variable interests are investments or other interests that will absorb portions of a VIE’s expected losses or receive portions of the VIE’s expected residual returns. The Company evaluates whether it is the primary beneficiary of each VIE it identifies on a periodic basis and considers the impact of any reconsideration events. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE and holds a variable interest that could potentially be significant to the VIE. To make this determination, the Company considers both quantitative and qualitative factors regarding the nature, size and form of its involvement with the VIE. The Company consolidates a VIE when it is determined that it is the primary beneficiary of the VIE. 78 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Equity method investments The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling financial interest using the equity method. Under the equity method, the Company records its proportionate share of income or loss in share of income (loss) from equity method investments within the consolidated statements of net income (loss) and comprehensive income (loss). Cash payments to equity method investees such as additional investments or expenses incurred on behalf of investees, as well as income earned and payments from equity method investees such as dividends and distributions are recorded as adjustments to investment balances. If the current fair value of an investment falls below its carrying amount, this may indicate that an impairment loss should be recorded. Any impairment losses recognized in one period cannot be reversed in subsequent periods. Other investments Other investments include common stock, options and warrants in third-party entities in which the Company’s influence is deemed non-significant. The Company holds other investments with and without readily determinable fair values. Other investments with readily determinable fair values are recorded using the fair value method of accounting as of period-end on the consolidated balance sheets. Other investments without readily determinable fair values are recorded using the cost method of accounting on the consolidated balance sheets. Other investments without readily determinable fair values are assessed for observable price changes and other than temporary impairment on a periodic basis. Changes in the reported value of other investments are reported in the consolidated statements of net income (loss) and comprehensive income (loss). (i) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Rate Building and leasehold improvements 15 to 20 years Machinery and equipment 7 to 10 years Furniture and fixtures 5 years When assets are disposed of, the cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Maintenance and repairs are charged to expense as incurred. Significant expenditures, which increase productivity or extend the useful life of the asset, are capitalized. Available for use is defined as the point at which the related property, plant and equipment is operational, including the possession of any requisite licenses. Depreciation commences at the point the assets are available for use. (j) Definite-lived intangible assets Intangible assets are recorded at cost less any accumulated amortization and accumulated impairment losses. Intangible assets acquired through a business combination are measured at fair value at the acquisition date. The fair value of the know-how intangible asset that was acquired in the Cronos GrowCo Transaction was estimated using the income approach. Under the income approach, significant inputs used in the relief-from-royalty method include projected revenues, royalty rate, income tax rate and discount rate. The Company capitalizes certain costs incurred in connection with its enterprise software, which include external direct costs of materials and services consumed in developing or obtaining internal-use software and payroll and payroll-related costs for employees who are directly associated with and who devote time to the development of the software for the function intended. All other costs are expensed as incurred. 79 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Intangible assets with definite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Israeli codes (i) Straight-line Useful life of corresponding facilities Know-how (ii) Straight-line 10 years (i) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli codes”) were transferred by non-controlling interests to Cronos Israel in exchange for equity interests in the Cronos Israel entities specified above. (ii) Know-how was acquired as part of the Cronos GrowCo Transaction. See Note 2 “ Business Combination ” for further information. Amortization begins when assets become available for use. The estimated useful life, amortization method, and rate are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Definite-lived intangible assets are subject to amortization and reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value has been reduced to less than its carrying amount. (k) Accrued liabilities Accrued liabilities consist of the following: As of December 31, 2025 2024 Accrued payroll and related expenses $ 9,463 $ 10,324 Accrued professional fees 713 1,537 Accrued taxes 16,102 11,831 Deferred share units liability 1,993 1,128 Other accrued expenses 7,939 6,833 Total accrued liabilities $ 36,210 $ 31,653 Accrued payroll and related expenses include salaries and wages, bonuses, and other related payroll expenses associated with the Company’s employees. Accrued professional fees include fees for legal expenses, litigation, consulting, marketing, and other related expenses. Accrued taxes include sales, excise and other taxes owed. Deferred share units liability includes the fair value of deferred share units outstanding to directors. Other accrued expenses include other general expenses. (l) Leases The Company enters into leases in the normal course of business, primarily for the land-use rights, office and research premises, and equipment used in the production of its products. At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company performs an analysis over the classification of the lease agreement as either an operating lease or finance lease. A right-of-use asset and the related lease obligation associated with the lease are recorded at the inception of the lease. The right-of-use asset’s recorded amount is based on the present value of future lease payments over the lease term at the commencement date plus any initial direct costs incurred. If the rate implicit in the lease is not readily determinable for the Company’s operating leases, an incremental borrowing rate is generally used based on information available at the lease commencement date to determine the present value of future lease payments. Subsequent changes to these lease payments due to rate updates are recorded as lease expense in the period incurred. Leases with a term of 12 months or less are not recorded on the balance sheet as a lease. The right-of-use asset is subject to impairment testing whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. 80 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The Company’s lease agreements generally exclude non-lease components. As a result, non-lease components are accounted for separately for all classes of assets and expensed as incurred. In addition, the Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. For finance leases, from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, the right-of-use asset is amortized on a straight-line basis and the interest expense is recognized on the lease liability using the effective interest method. For operating leases, lease expense is recognized on a straight-line basis over the term of the lease and presented as a single charge in the consolidated statements of net income (loss) and comprehensive income (loss). (m) Capital stock Capital stock is presented at the fair value at the time of issuance of the shares issued. Costs related to the issuance of shares are reported in equity, net of tax, as a deduction from the issuance proceeds. (n) Revenue recognition Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company’s contracts with customers for the sale of dried flower, cannabis oil, cannabinoid-derived products and “hemp” (as defined in the U.S. Agricultural Improvement Act of 2018 “U.S. hemp”) derived products consist of a single performance obligation. The Company has concluded that revenue from the sale of these products should be recognized at the point in time when control is transferred to the customer, depending on the specific contractual terms. The Company has determined that the most definitive demonstration that control has transferred to a customer is physical shipment or delivery, depending on the contractual shipping terms, except for consignment transactions. Consignment transactions are arrangements where the Company transfers product to a customer or third-party location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon the customer’s usage. Revenue is recognized at the transaction price, which is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. Net revenue before excise taxes from sale of goods, as presented in the consolidated statements of net income (loss) and comprehensive income (loss), represents revenue from the sale of goods less expected price discounts, allowances for customer returns and other forms of variable consideration. If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated using either the expected value or most likely amount method, based on the Company’s historical information, at contract inception. The Company’s payment terms vary by customer and product type. The Company treats shipping and handling activities as a fulfillment cost, classified as cost of sales. Accordingly, the Company accrues all fulfillment costs related to the shipping and handling of consumer goods at the time of shipment. The following table presents the Company’s revenue by major product category for continuing operations: Year ended December 31, 2025 2024 2023 Cannabis flower $ 108,476 $ 87,912 $ 62,070 Cannabis extracts 37,700 29,168 24,569 Other 411 535 602 Net revenue $ 146,587 $ 117,615 $ 87,241 81 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Net revenue attributed to a geographic region based on the location of the customer was as follows: Year ended December 31, 2025 2024 2023 Canada $ 90,330 $ 82,437 $ 64,702 Israel 41,796 28,368 21,134 Other countries 14,461 6,810 1,405 Net revenue $ 146,587 $ 117,615 $ 87,241 (o) Research and development The Company has a research and development center in Canada that performs scientific research on the interaction of cannabinoids as well as strain development, growing conditions and extraction technology. In 2023, fermentation and production related research was performed to further strategic initiatives around rare cannabinoids. In addition, until December 2025, the Company had the Ginkgo Collaboration Agreement to research, produce, and commercialize cultured cannabinoids. Technological feasibility was considered to be established once productivity targets or commercialization were achieved, at which point the exclusive license was recognized at cost less impairment charges. As of the acquisition date of each exclusive license, cost less impairment charges was equal to the fair value. See Note 8 “ Goodwill and Intangible Assets, net” for more information on the Ginkgo Collaboration Arrangement. Research and development costs associated with these collective efforts are expensed as incurred as part of operating expenses in the Company’s consolidated statements of net income (loss) and comprehensive income (loss). (p) Advertising costs Advertising costs include costs to sell the Company’s products and are expensed as incurred through sales and marketing expenses in the consolidated statements of net income (loss) and comprehensive income (loss). Advertising costs were $ 2,270 , $ 887 and $ 1,382 for the years ended December 31, 2025, 2024, and 2023, respectively. (q) Share-based compensation Share-based awards consists of equity-settled share-based awards such as stock options and restricted share units (“RSUs”) that are issued to eligible employees, non-executive directors, and non-employees, as well as cash-settled deferred share units (“DSUs”) that are issued to non-executive directors under the DSU Plan dated August 10, 2019 (the “DSU Plan”) and are recorded in accrued liabilities. Equity instruments granted are initially measured at fair value on the grant date. The fair value of stock options is determined using the Black-Scholes option pricing model. The fair value of RSUs and DSUs are determined using the market price of the Company’s common shares. Compensation expense related to options and RSUs is recognized on a straight-line basis in the consolidated statements of net income (loss) and comprehensive income (loss) over the vesting period for employees, and over the contractual term for non-employees. The fair value of the payout of cash-settled DSUs is determined at each reporting date based on the fair value of the Company’s common shares at the reporting date and is recorded within accrued liabilities. The related costs for all equity-settled share-based awards are reflected in additional paid-in capital until the awards are settled or exercised. Upon settlement or exercise, shares are issued and the amount previously reflected in additional paid-in capital is, along with any proceeds paid upon settlement or exercise, credited to a combination of share capital and additional paid-in capital. Forfeitures of share-based compensation awards are accounted for as reductions to share-based compensation and additional paid-in capital as they occur. (r) Impairment of long-lived assets The Company reviews its long-lived assets, such as property, plant and equipment and definite-lived intangible assets, for impairment in accordance with ASC 360, Property, Plant, and Equipment . In accordance with ASC 360, long-lived assets are reviewed for events or changes in circumstances that indicate that their carrying amount may not be recoverable. The Company periodically reviews for indicators and, if indicators are present, tests the carrying amount of long-lived assets, assessing their recoverable value based on estimated undiscounted cash flows over their remaining estimated useful lives. The Company groups assets at the lowest level for which cash flows are separately identifiable, referred to as an asset group. If the carrying amount of an asset (or asset group) exceeds its estimated undiscounted future cash flows, an impairment charge is measured as the amount by which the carrying amount of the asset (or asset group) exceeds the fair value of the asset (or asset group, as applicable), based on discounted cash flows. 82 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents (s) Assets held-for-sale and discontinued operations In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations , a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meet the criteria in paragraph ASC 205-20-45-10. In the period in which the component meets held-for-sale or discontinued operations criteria, the major current assets, other assets, current liabilities, and other liabilities are reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), are reported as components of net income (loss) separate from the net income (loss) of continuing operations. The Company periodically evaluates its long-lived assets that it plans to dispose of through sale for held-for-sale classification. To be classified as held-for-sale, management must have committed to a plan to sell, the asset (or asset group) must be available for immediate sale in its present condition, an active program to locate a buyer must have been initiated, the sale must be probable to close within one year, the asset (or asset group) must be marketed at a reasonable sales price, and it must be unlikely that significant changes to the plan will be made. Once an asset (or asset group) meets all of the above criteria, it is reclassified as assets held-for-sale on the consolidated balance sheet, and the asset(s) cease depreciation and are written down to their fair value, less costs to sell, if applicable. The Company completed a review of its global supply chain in 2023 and determined that it would wind down its Winnipeg, Manitoba facility (“Cronos Fermentation Facility”) and list it for sale. This review involved significant complexities and judgments in making the accounting treatment determination. There are subjective and complex judgments in the determination of whether the Cronos Fermentation Facility met the criteria to be classified as held for sale as of December 31, 2024, including: (1) whether the Cronos Fermentation Facility was available for sale in its present condition subject only to terms that are usual and customary for sales of such businesses, (2) whether the sale of the Cronos Fermentation Facility was probable and that the transfer of assets would be a completed sale within one year from period end, and (3) whether the Cronos Fermentation Facility was being actively marketed at a reasonable price. The Cronos Fermentation Facility assets were subsequently sold in November 2025. See Note 7 “ Property, Plant and Equipment, net ” for discussion regarding our evaluation of the Cronos Fermentation Facility for held-for-sale classification as of December 31, 2024 and the subsequent sale of the Cronos Fermentation Facility in 2025. (t) Impairment of goodwill and indefinite-lived intangible assets Goodwill and indefinite-lived intangible assets are not amortized. Goodwill and indefinite-lived intangible assets are reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying amount in accordance with the provisions of ASC 350, Intangibles—Goodwill and Other . The Company performs an impairment test annually in the fourth quarter by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. (u) Income taxes The Company uses the liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when such assets and liabilities are recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the year that includes the enactment date. The Company determines deferred tax assets including net operating losses and liabilities, based on temporary differences between the book and tax bases of assets and liabilities. A valuation allowance is established to reduce some or all net deferred tax assets to amounts that are more likely than not to be realized. The Company considers all available evidence, both positive and negative, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies, in assessing the need for a valuation allowance. A valuation allowance against some or all of the net deferred tax assets does not in any way impact the Company’s ability to use future tax deductions such as the Company’s net operating loss carryforwards; rather, the valuation allowance indicates, according to the provisions of ASC 740, Income Taxes , it is more likely than not that the deferred tax assets will not be realized. The valuation allowance that was established will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that the net deferred tax assets will be realized. The Company’s income tax expense for future periods will be reduced to the extent of corresponding decreases in our valuation allowance. There is uncertainty regarding any future realization of the benefit by the Company of all or part of our net deferred tax assets. 83 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Judgment is required to determine the recognition and measurement attributes prescribed in the accounting guidance for uncertainty in income taxes. The Company uses a two-step approach for evaluating uncertain tax positions. Step one, recognition, requires us to determine whether the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. If a tax position is not considered “more likely than not” to be sustained, no benefits of the position are recognized. If we determine that a position is “more likely than not” to be sustained, then we proceed to step two, measurement, which is based on the largest amount of benefit which is more likely than not to be realized on effective settlement. This process involves estimating our actual current tax exposure, including assessing the risks associated with income tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and financial reporting purposes. If actual results differ from our estimates, our net operating loss and credit carryforwards, to the extent not covered by a valuation allowance, could be materially impacted in the period which such determination is made. The Company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon examination by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Any interest and penalties related to unrecognized tax liabilities are presented within income tax expense in the consolidated statements of net income (loss) and comprehensive income (loss). Accrued interest and penalties are included in accounts payable and other liabilities in the consolidated balance sheets. (v) Foreign currency The Company’s functional currency is the Canadian dollar (“C$”) and its reporting currency is the U.S. dollar. Functional currencies for the entities in these consolidated financial statements are their respective local currencies, including C$, U.S. dollar and Israeli New Shekel (“ILS”). All assets and liabilities of operations with a functional currency other than the Canadian dollar are translated into Canadian dollars at the period-end currency exchange rates and subsequently translated into U.S. dollars at period-end currency exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income (loss), net of tax. Revenues and expenses of operations, as well as all cash flows, with a functional currency other than the Canadian dollar are translated into Canadian dollars at the average exchange rates for the period and subsequently translated into U.S. dollars at the average exchange rates for the period. Transaction gains and losses resulting from changes in foreign currency exchange rates are recorded in either general and administrative expenses or foreign currency transaction gain (loss) in the consolidated statements of net income (loss) and comprehensive income (loss). (w) Segments Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”) manages the business, makes operating decisions and assesses the Company’s performance. Prior to the second quarter of 2023, the Company reported results for two reportable segments, the U.S. and Rest of World. In the second quarter of 2023, as a result of the Company’s exit of its then-existing U.S. operations, the Company determined that it has one operating segment and therefore one reportable segment. All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Annual Report. These reclassifications had no effect on our consolidated financial statements in any period presented. (x) Earnings (loss) per share The Company presents basic and diluted earnings (loss) per share data for its common shares. Basic earnings (loss) per share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potentially dilutive common shares. (y) Fair value measurements The carrying amount of the Company’s cash and cash equivalents, accounts receivable, other receivables, loans receivable, accounts payable and other liabilities approximate fair value, given their short-term nature. Cronos uses a fair value hierarchy, which gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities, noted as Level 1 measurements, and the lowest priority to unobservable inputs, noted as Level 3 measurements. The following are the three levels of inputs used to measure fair value: • Level 1 – valuation based on quoted prices (unadjusted) in active markets for identical assets and liabilities. • Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. 84 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents • Level 3 – valuation techniques using the inputs for the asset or liability that are not based on observable market data. The Company’s policy for determining when transfers between levels of the fair value hierarchy occur is based on the date of the event or changes in circumstances that caused the transfer. (z) Adoption of new accounting pronouncements In the fourth quarter of 2025, the Company adopted ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”) on a prospective basis. ASU 2023-09 enhances income tax disclosures by requiring disclosures such as a more detailed and standardized income tax rate reconciliation, disclosure of income taxes paid by jurisdiction and additional qualitative explanations supporting significant or unusual items and tax events. (aa) New accounting pronouncements not yet adopted 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. 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. In July 2025, the Financial Accounting Standards Board issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. This ASU effectively simplifies the expected credit loss analysis on accounts receivable and contract assets. All entities may elect a practical expedient that assumes that current conditions as of the balance sheet date do not change for the remaining life of the asset. The Company does not expect this ASU to have a material effect on its consolidated financial statements. In December 2025, the Financial Accounting Standards Board issued ASU 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements. The ASU clarifies and reorganizes existing interim reporting guidance to improve its operability and consistency, primarily by emphasizing that interim disclosures should focus on significant changes since the most recent annual reporting period. The amendments do not change the recognition or measurement of amounts reported in the financial statements. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The adoption of ASU 2025-11 is not expected to have a material impact on the Company’s consolidated financial statements. 2. Business Combination Cronos GrowCo was formed under the Canada Business Corporations Act on June 14, 2018, with the objective of cultivating and commercializing cannabis and cannabis products. Cronos GrowCo is licensed to sell certain cannabis products to other license holders in the wholesale channel, as well as to provincial cannabis control authorities. It is also licensed to export dried flower to Israel. As described in Note 1 “ Background, Basis of Presentation, and Summary of Significant Accounting Policies, ” 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. 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 the Company entered into a new supply agreement (the “Cronos GrowCo Supply Agreement”) with Cronos GrowCo. Pursuant to the Cronos GrowCo Supply Agreement, 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 85 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 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 has been valued with reference to the fair value of our existing equity method investment of $ 53,542 , as well as the effective settlement of various preexisting relationships between the Company and Cronos GrowCo. These preexisting relationships are now classified as intercompany transactions and eliminated upon consolidation. For the year ended December 31, 2024, we recorded a gain of $ 32,469 on the consolidated statements of net income (loss) and comprehensive income (loss) from remeasuring our equity method investment in Cronos GrowCo. We also recorded $ 11,804 to gain on revaluation of loan receivable on the consolidated statements of net income (loss) and comprehensive income (loss) for the year ended December 31, 2024, from remeasuring our outstanding loans receivable with Cronos GrowCo. Additionally, the consideration also included the effective settlement of various preexisting trade receivables and payables and other related accounts that are now classified as intercompany transactions and eliminated upon consolidation. The effective settlement of the preexisting trade receivables, payables, and related accounts did not result in the recognition of any gain or loss on settlement. As of the date of the Cronos GrowCo Transaction, the fair value of the non-controlling interest in Cronos GrowCo was $ 53,542 . The Company used the income approach to estimate both the fair value of the Company’s equity method investment in Cronos GrowCo and the fair value of the non-controlling interest in Cronos GrowCo. Under the income approach, significant assumptions used in the discounted cash flow method that required the use of judgment were the discount rate, growth rates and cash flow projections. The Company used the income approach to estimate the fair value of the Company’s loan receivable with Cronos GrowCo. Under the income approach, significant assumptions used that required the use of judgment were the credit spread and interest rate volatility. 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 includes a step-up to fair value of $ 5,605 . For the years ended December 31, 2025 and 2024, the Company recognized $ 517 and $ 5,284 , respectively, of this inventory step-up into cost of sales on the consolidated statements of income (loss) and comprehensive income (loss). As of December 31, 2025, none of the inventory step-up was remaining in the Company’s inventory on the 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 86 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 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 The Company’s results of operations for the year ended December 31, 2024, included six months of the operating results of Cronos GrowCo, which was comprised of revenue of $ 6,374 and loss before income taxes of $ 802 . Business combination-related costs of $ 70 and $ 701 were incurred in relation to the Cronos GrowCo Transaction for the years ended December 31, 2025 and 2024, respectively, and were reported in general and administrative expenses on the 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, bolster 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 year ended December 31, 2024 and 2023, respectively, as if the Cronos GrowCo Transaction had occurred as of January 1, 2023. The unaudited pro forma information is presented for informational purposes only and is not indicative of the results of operations that would have been achieved if the business combination had taken place at such time. The unaudited pro forma results presented below include adjustments such as amortization of inventory step-up, amortization charges for acquired intangible assets, depreciation adjustments for property, plant and equipment that has been revalued, adjustment of interest expense and interest income resulting from the effective settlement of pre-existing debt financing in connection with the Cronos GrowCo Transaction and adjustments for certain business combination-related charges. Year ended December 31, 2024 2023 Net revenue $ 125,089 $ 106,700 Gross profit 35,906 18,500 Operating expenses 103,031 101,995 Other income 66,202 49,441 Net income (loss) attributable to Cronos Group 13,582 ( 44,256 ) Material nonrecurring pro forma adjustments directly attributable to the Cronos GrowCo Transactions include the following: • Acquired inventory fair value step-up of $ 5,605 is assumed to be recorded at January 1, 2023. As such, historical amortization of the acquired inventory step-up of $ 5,284 recognized in the historical six-month period ended December 31, 2024 was removed from pro forma net income for the year ended December 31, 2024. The entire inventory fair value step-up of $ 5,605 was recognized as an incremental product cost in the year ended December 31, 2023. • Pre-business combination revenues for sales from Cronos GrowCo to the Company of $ 21,145 were adjusted out for the year ended December 31, 2023, and $ 14,776 of pre-business combination revenues were adjusted out for the year ended December 31, 2024, as these amounts would have been eliminated in consolidation. Company pre-business combination cost of sales of $ 17,988 were adjusted out for the year ended December 31, 2023, and $ 11,386 of pre-business combination cost of sales were adjusted out for the year ended December 31, 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 year ended December 31, 2024 and added into the year ended December 31, 2023 as this revaluation is assumed to have occurred on January 1, 2023. 3. Discontinued Operations In the second quarter of 2023, the Company exited its then-existing U.S. hemp-derived cannabinoid product operations. Accordingly, the net income (loss) for the year ended December 31, 2023 is reported separately as income (loss) from discontinued operations on the consolidated statements of net income (loss) and comprehensive income (loss). There was no activity in discontinued operations for the years ended December 31, 2025 or December 31, 2024. 87 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The following table presents the major components comprising loss from discontinued operations in the consolidated statements of operations for the year ended December 31, 2023: Year ended December 31, 2023 Net revenue $ 1,029 Cost of sales 2,164 Inventory write-down (i) 839 Gross profit ( 1,974 ) Operating expenses Sales and marketing 578 Research and development 32 General and administrative 668 Restructuring costs 523 Share-based compensation 13 Depreciation and amortization 13 Impairment loss on long-lived assets (ii) 205 Total operating expenses 2,032 Interest income 10 Other, net (iii) ( 118 ) Total other loss ( 108 ) Loss before income taxes ( 4,114 ) Income tax expense (benefit) — Net loss from discontinued operations ( 4,114 ) (i) For the year ended December 31, 2023, Inventory write-down relates to the disposal of obsolete inventory as a result of the exit of the U.S. operations. (ii) During the year ended December 31, 2023, as a result of the exit of the U.S. operations, the Company recognized an impairment charge of $ 205 related to the right-of-use lease assets associated with the Company’s former U.S. manufacturing facility in Los Angeles, California. (iii) For the year ended December 31, 2023, other, net related to loss on disposal of assets that were part of the U.S. operations. The following table presents the Company’s discontinued operations revenue by major product category: Year ended December 31, 2023 Cannabis extracts 1,029 Net revenue $ 1,029 The following table summarizes the Company’s discontinued operations restructuring activity for the year ended December 31, 2023: Accrual as of December 31, 2022 Expenses Payments/Write-offs Accrual as of December 31, 2023 Employee Termination Benefits $ — $ 431 $ ( 431 ) $ — Other Restructuring Costs — 92 ( 92 ) — Total $ — $ 523 $ ( 523 ) $ — As of December 31, 2023, there were no remaining assets or liabilities attributable to the Company’s discontinued operations. 88 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents For the year ended December 31, 2023, purchases of property, plant and equipment related to discontinued operations were $ 67 . The following table presents information related to leases associated with the Company’s U.S. discontinued operations. As of December 31, 2025 and December 31, 2024, the Company had no right-of-use assets or lease obligations associated with its U.S. discontinued operations. For the year ended December 31, 2023, the aggregate depreciation expense on right-of-use assets associated with the Company’s U.S. discontinued operations was $ 198 , and was included in loss from discontinued operations on the consolidated statements of net income (loss) and comprehensive income (loss). 2023 Lease cost Operating lease cost $ 213 Short-term lease cost — Total lease cost $ 213 Supplemental cash flow and other information Operating cash flows - cash paid for operating lease obligations $ 525 Non-cash activity - right-of-use assets obtained in exchange for lease obligations — Weighted-average remaining lease term (years) – operating leases 0.0 Weighted-average discount rate – operating leases — % 4. Inventory, net Inventory, net is comprised of the following items: As of December 31, 2025 2024 Raw materials $ 8,762 $ 5,400 Work-in-progress 25,830 14,350 Finished goods 12,012 13,248 Supplies and consumables 146 151 Total $ 46,750 $ 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 year ended December 31, 2025, the Company recognized $ 517 of this inventory step-up into cost of sales on the consolidated statements of net income (loss) and comprehensive income (loss). For the year ended December 31, 2024, the Company recognized $ 5,284 of this inventory step-up into cost of sales on the consolidated statements of income (loss) and comprehensive income (loss). As of December 31, 2025, none of the inventory step-up was remaining in the Company’s inventory on the consolidated balance sheet. See Note 2 “ Business Combination ” for more information. 5. Investments (a) Variable interest entities and investments in equity method investments, net Cronos GrowCo As a result of the Cronos GrowCo Transaction, the existing equity method investment in Cronos GrowCo was remeasured at its fair value on July 1, 2024. For the year ended December 31, 2024, we recorded a gain of $ 32,469 on the consolidated statements of net income (loss) and comprehensive income (loss) from remeasuring our equity method investment in Cronos GrowCo. See Note 2 “ Business Combination ” for further information regarding the Cronos GrowCo Transaction. 89 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The following is a summary of the Company’s share of net income from equity investments accounted for under the equity method of accounting: Year ended December 31, 2025 2024 2023 Cronos GrowCo (i) — 2,365 1,583 $ — $ 2,365 $ 1,583 (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. The following is a summary of financial information for the Company’s equity method investments: Year ended December 31, 2025 2024 2023 Revenue $ — $ 22,191 $ 40,604 Gross profit — 10,529 21,565 Net income — 3,514 3,051 As of December 31, 2025 and 2024, the Company did not hold any equity method investments. (b) Other investments Other investments consist of investments in common shares and options of two companies in the cannabis industry. PharmaCann Option On June 14, 2021, the Company purchased an option (the “PharmaCann Option”) to acquire 473,787 shares of Class A Common Stock of PharmaCann, Inc. (“PharmaCann”), a vertically integrated cannabis company in the United States, at an exercise price of $ 0.0001 per share, representing approximately 10.5 % of PharmaCann’s issued and outstanding capital stock on a fully diluted basis as of the date of the PharmaCann Option, for an aggregate purchase price of approximately $ 110,392 . The option exercise will be based upon various factors, including the status of U.S. federal cannabis legalization, as well as regulatory approvals, including in the states where PharmaCann operates that may be required upon exercise. The Company has deemed its influence in PharmaCann to be non-significant. 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. The PharmaCann Option is reported as Other investments on the consolidated balance sheet for the periods ended December 31, 2025 and 2024. As of December 31, 2025 and 2024, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 1.1 % and 5.8 %, respectively. Under the terms of the Company’s investment in PharmaCann, the Company’s rights to nominate an observer or a director to the PharmaCann board of directors could be lost if the Company’s ownership drops below 6 % on a fully diluted basis and it sells or transfers all or any portion of the option (subject to certain exceptions). The decrease in the Company’s ownership percentage since acquisition does not materially affect the Company’s rights under the PharmaCann Option. During the fourth quarter of 2023, the Company identified adverse forecast changes in the financial performance of PharmaCann as an indicator of impairment related to the PharmaCann Option and conducted an analysis comparing the PharmaCann Option’s carrying amount to its estimated fair value. The fair value was estimated using a combination of the income approach and the market approach. Under the income approach, significant inputs used in the discounted cash flow method include discount rate, growth rates, cash flow projections, and the expectation of federal rescheduling and individual state legalization of cannabis in the U.S. Under the market valuation approach, the key assumptions are the selected multiples and the discount for lack of marketability. As a result of this analysis, the Company recorded a non-cash impairment charge of $ 23,350 in the fourth quarter of 2023 as the difference between the carrying amount of the PharmaCann Option and its estimated fair value, in the consolidated statements of net income (loss) and comprehensive income (loss) for the year ended December 31, 2023. During the first and second quarters of 2024, the Company identified adverse forecast changes in the financial performance of PharmaCann as indicators of impairment related to the PharmaCann Option and conducted analyses comparing the PharmaCann Option’s carrying amount to its estimated fair value. The 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 90 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents difference between the carrying amount of the PharmaCann Option and its estimated fair value, in the consolidated statements of net income (loss) and comprehensive income (loss) for the year ended December 31, 2024. As a result of the impairment charge recorded in the second quarter of 2024, the net book value of the PharmaCann Option was reduced to zero. 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 (as defined in the Option Purchase Agreement) of the whole PharmaCann Option) transfers less than all of the PharmaCann Option to any third party that is not a Permitted Transferee, certain governance and information rights terminate immediately, unless waived by the PharmaCann board of directors in its sole and absolute discretion. Additionally, in the event of an initial underwritten public offering of PharmaCann’s common stock pursuant to an effective registration statement, to the extent that holders of PharmaCann common stock are subject to any lock-up period imposed by the underwriter in connection therewith, the Company will, if applicable, execute a customary lock-up agreement on the same material terms and conditions as the other holders of common stock are subject to or as otherwise agreed between PharmaCann and the Company, subject to certain conditions with respect to the duration of the lock-up period. Vitura The Company’s investment in Vitura 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 consolidated statements of net income (loss) and comprehensive income (loss). The Company recorded losses on the revaluation of its investment in Vitura of $ 740 and $ 6,206 for the years ended December 31, 2025 and 2024, respectively. Those amounts are included in the loss on revaluation of financial instruments on the statements of net income (loss) and comprehensive income (loss). The Company’s investment in Vitura was $ 2,253 and $ 2,813 as of December 31, 2025 and 2024, respectively, and is included in other investments on the consolidated balance sheets. On February 12, 2025, Vitura issued 74,814,757 shares. This issuance diluted the Company’s ownership to approximately 8.4 %. As of December 31, 2025, the Company’s ownership percentage in Vitura remained at approximately 8.3 % of its outstanding common shares. 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 ($ 21,901 ) 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 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 consolidated statements of net income (loss) and comprehensive income (loss). See Note 6 “ Loans Receivable, net ” for discussion of the loan receivable recognized as part of the agreement with High Tide. 91 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The following table summarizes the Company’s other investments activity: As of December 31, 2024 Warrants acquired Unrealized gain (loss) Foreign exchange effect As of December 31, 2025 Vitura $ 2,813 $ — $ ( 740 ) $ 180 $ 2,253 High Tide Warrant — 5,106 294 11 5,411 $ 2,813 $ 5,106 $ ( 446 ) $ 191 $ 7,664 As of December 31, 2023 Unrealized loss Impairment charges Foreign exchange effect As of December 31, 2024 PharmaCann $ 25,650 $ — $ ( 25,650 ) $ — $ — Vitura 9,601 ( 6,206 ) — ( 582 ) 2,813 $ 35,251 $ ( 6,206 ) $ ( 25,650 ) $ ( 582 ) $ 2,813 6. Loans Receivable, net Loans receivable, net consists of the following: As of December 31, 2025 2024 Current portion of Mucci Promissory Note accrued interest $ — $ 618 Total current portion of loans receivable — 618 High Tide Loan 9,185 — Mucci Promissory Note 9,226 13,464 Cannasoul Collaboration Loan 1,972 1,736 Add: Long-term portion of accrued interest 464 326 Total long-term portion of loans receivable 20,847 15,526 Total loans receivable, net $ 20,847 $ 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 . In June 2024, the GrowCo Credit Facility was amended to increase the aggregate principal amount available by C$ 70,000 to C$ 175,000 by providing a second secured non-revolving credit facility (“Term Loan B”). The funds from Term Loan B were used to expand Cronos GrowCo’s purpose-built cannabis facility and Term Loan B will mature 10 years after the commencement of sales from the Phase 2 Expansion Area. Principal is repaid under Term Loan B on a quarterly basis after the commencement of sales from the Phase 2 Expansion Area. Interest on Term Loan B is payable on a quarterly basis until maturity beginning after the first borrowing under Term Loan B. Prior to July 1, 2024, only C$ 12,000 of the C$ 70,000 increased principal availability could be drawn, which Cronos GrowCo drew in full on June 20, 2024. As of June 30, 2024 and December 31, 2023, Cronos GrowCo had drawn C$ 116,000 and C$ 104,000 ($ 84,833 and $ 78,532 , respectively), respectively from the GrowCo Credit Facility. For the six months ended June 30, 2024, Cronos GrowCo repaid C$ 3,333 ($ 2,447 ) in principal and C$ 3,862 ($ 2,835 ) in interest related to the GrowCo Credit Facility. As of June 30, 2024, Cronos GrowCo had repaid an aggregate C$ 14,833 ($ 10,848 ) and C$ 24,384 ($ 17,832 ) in principal and interest, respectively, under the terms of the GrowCo Credit Facility. As a result of the Cronos GrowCo Transaction on July 1, 2024, the existing loans receivable under the GrowCo Credit Facility were remeasured at their fair value and effectively settled. We recorded a gain of $ 11,804 to revaluation gain on loans receivable on the consolidated statements of net income (loss) and comprehensive income (loss) for the year ended December 31, 2024, from remeasuring our outstanding loans receivable with Cronos GrowCo. See Note 2 “ Business Combination ” for further information regarding the Cronos GrowCo Transaction. 92 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 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 $ 11,936 ) 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. Following July 1, 2024, interest accruing on the Mucci Promissory Note is required to be paid in cash beginning on July 1, 2025. For the year ended December 31, 2025, Mucci made principal repayments of C$ 6,911 ($ 5,064 ) and interest payments of C$ 1,839 ($ 1,316 ) on the Mucci Promissory Note. For the year ended December 31, 2024, there were no repayments of principal or interest on the Mucci Promissory Note. For the year ended December 31, 2023, Mucci repaid C$ 563 ($ 425 ) in principal and C$ 1,187 ($ 897 ) in interest related to 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., incorporated with the purpose of establishing a commercial cannabis analytical testing laboratory located on the premises of Cronos Israel (the “Cannasoul Collaboration”). Cronos Israel agreed to advance up to ILS 8,297 ($ 2,604 ) 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 laboratory. The loan bears interest at 3.5 % annually. Cronos Israel will receive 70 % of the profits of the laboratory until such time as it has recovered 150 % of the amounts advanced to CLS, after which time it will receive 50 % of the laboratory profits. As a result, the Company is exposed to economic variability from CLS’s performance. The Company does not consolidate CLS as it does not have the power to direct the activities that most significantly impact the entity’s economic performance; thus, the Company is not considered the primary beneficiary of the entity. The carrying amount of the non-recourse 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. High Tide Loan On July 16, 2025, the Company, as lender, and High Tide, 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 5 “ 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 ($ 13,572 ) and will be amortized using the effective interest method over the estimated life of the loan. For the year ended December 31, 2025, High Tide paid C$ 556 ($ 398 ) in interest. As of December 31, 2025, the High Tide loan receivable included an unamortized discount of C$ 10,675 ($ 7,793 ) and an expected credit loss of C$ 6,744 ($ 4,924 ) 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. 93 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Expected credit loss allowances on the Company’s long-term financial assets were comprised of the following items: As of December 31, 2024 Increase (decrease) (i) Foreign exchange effect As of December 31, 2025 Mucci Promissory Note $ 88 $ ( 33 ) $ 4 $ 59 Cannasoul Collaboration Loan 535 17 79 631 High Tide Loan $ — $ 4,875 $ 49 $ 4,924 $ 623 $ 4,859 $ 132 $ 5,614 As of December 31, 2023 Increase (decrease) (i) Foreign exchange effect As of December 31, 2024 GrowCo Credit Facility (ii) $ 11,176 $ ( 10,794 ) $ ( 382 ) $ — Mucci Promissory Note 89 6 ( 7 ) 88 Cannasoul Collaboration Loan 524 16 ( 5 ) 535 $ 11,789 $ ( 10,772 ) $ ( 394 ) $ 623 (i) During the year ended December 31, 2025 and 2024, $( 16 ) and $ 1,032 , respectively, were recorded as changes to general and administrative expenses on the consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses. During the year ended December 31, 2025, $ 4,875 was recorded as a change in allowance for credit loss on non-operating loan on the 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. During the year ended December 31, 2024, $ 11,804 was recorded as a gain on revaluation of loans receivable on the 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. (ii) 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. 7. Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following: As of December 31, 2025 2024 Cost Land $ 7,245 $ 6,389 Building and leasehold improvements 236,811 192,059 Machinery and equipment 47,514 36,741 Furniture and fixtures 2,694 2,687 Construction in progress 1,062 28,710 Less: accumulated depreciation ( 42,639 ) ( 29,798 ) Less: accumulated impairment charges ( 106,822 ) ( 103,599 ) Property, Plant and Equipment, net $ 145,865 $ 133,189 For the years ended December 31, 2025, 2024 and 2023, depreciation expense on property, plant and equipment was $ 11,590 , $ 5,506 and $ 3,913 , respectively, and was included in cost of sales as well as depreciation and amortization in operating expenses on the consolidated statements of net income (loss) and comprehensive income (loss). As of December 31, 2025 and December 31, 2024, the Company had $ 760 and $ 8,828 , respectively, of unpaid purchases of property, plant and equipment accrued in accounts payable on the consolidated balance sheets. 94 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The following table presents details of the property, plant and equipment acquired on July 1, 2024, as a result of the Cronos GrowCo Transaction 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 See Note 2 “ Business Combination ” for more information regarding the Cronos GrowCo Transaction. Impairment of Long-lived Assets During the first quarter of 2024, the Company ceased operations at the Cronos Fermentation Facility and performed an assessment under ASC 360 of the recoverability of the carrying value of the assets of Thanos Holdings Ltd., known as Cronos Fermentation (“Cronos Fermentation”), 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 consolidated statements of net income (loss) and comprehensive income (loss) for the year ended December 31, 2024. Held-for-sale Assessments During the year ended December 31, 2025, the Company completed the sale of certain assets previously classified as held for sale in accordance with ASC 360, Property, Plant and Equipment. These assets primarily include buildings and machinery and equipment related to production at the Cronos Fermentation Facility. As of December 31, 2025, the Company had no assets classified as held-for-sale on the consolidated balance sheet. As of December 31, 2024, the Company had $ 8,112 of assets related to production at the Cronos Fermentation Facility classified as held-for-sale on the consolidated balance sheet. See Note 18 “ Restructuring ” for more information. 8. Goodwill and Intangible Assets, net (a) Goodwill Goodwill is comprised of the following items: As of December 31, 2025 Cost Accumulated impairment charges Net Peace Naturals $ 1,022 $ — $ 1,022 Cronos GrowCo 65,456 — 65,456 $ 66,478 $ — $ 66,478 As of December 31, 2024 Cost Accumulated impairment charges Net Peace Naturals $ 976 $ — $ 976 Cronos GrowCo $ 62,477 $ — $ 62,477 $ 63,453 $ — $ 63,453 (b) Intangible assets, net In the fourth quarter of 2025, the Company determined that its Lord Jones ® indefinite-lived intangible asset exhibited signs of impairment due to lower than anticipated sales figures and conducted an analysis comparing the Lord Jones ® brand’s carrying amount to its estimated fair value. The fair value was estimated using the income approach, with key inputs being estimated cash flows and the discount rate. As a result of this analysis, the Company recorded an impairment loss on goodwill and long-lived assets of $ 700 in its consolidated statements of net income (loss) and comprehensive income (loss) for the year ended December 31, 2025. 95 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents In the fourth quarter of 2023, the Company determined that it had no current plans to utilize the intellectual property associated with one of its exclusive licenses with Ginkgo and, therefore, recognized $ 3,366 in impairment charges on the consolidated statements of net income (loss) and comprehensive income (loss) for the year ended December 31, 2023. 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 other exclusive licenses with 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 consolidated statements of income (loss) and comprehensive income (loss) in the year ended December 31, 2024. During the fourth quarter of 2025, the Company disposed of its existing Ginkgo exclusive licenses through a sale to Ginkgo for nominal consideration. Intangible assets, net are comprised of the following items: As of December 31, 2025 Cost Accumulated amortization Accumulated impairment charges Net Software $ 5,511 $ ( 4,391 ) $ ( 76 ) $ 1,044 Health Canada licenses 8,182 ( 1,710 ) ( 6,472 ) — Israeli codes (i) 323 ( 103 ) — 220 Know-how (ii) 8,030 ( 1,204 ) — 6,826 Total definite-lived intangible assets 22,046 ( 7,408 ) ( 6,548 ) 8,090 Lord Jones ® brand 64,000 — ( 63,200 ) 800 Trademarks 142 — ( 142 ) — Total intangible assets $ 86,188 $ ( 7,408 ) $ ( 69,890 ) $ 8,890 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 more 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). The estimated future amortization of definite-lived intangible assets is as follows: As of December 31, 2025 2026 $ 1,514 2027 1,094 2028 888 2029 825 Thereafter 3,769 $ 8,090 96 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Impairment of Intangible Assets Accumulated impairment charges on intangible assets, net consist of: As of December 31, 2024 Impairment charges Disposals Foreign exchange effect As of December 31, 2025 Software $ ( 72 ) $ — $ — $ ( 4 ) $ ( 76 ) Health Canada licenses ( 6,137 ) — — ( 335 ) ( 6,472 ) Ginkgo exclusive licenses (i) ( 20,810 ) — 21,654 ( 844 ) — Lord Jones ® brand ( 62,500 ) ( 700 ) — — ( 63,200 ) Trademarks ( 142 ) — — — ( 142 ) $ ( 89,661 ) $ ( 700 ) $ 21,654 $ ( 1,183 ) $ ( 69,890 ) As of December 31, 2023 Impairment charges Disposals Foreign exchange effect As of December 31, 2024 Software $ ( 78 ) $ — $ — $ 6 $ ( 72 ) Health Canada licenses ( 6,650 ) — — 513 ( 6,137 ) Ginkgo exclusive licenses ( 7,968 ) ( 14,258 ) — 1,416 ( 20,810 ) Lord Jones ® brand ( 62,500 ) — — — ( 62,500 ) Trademarks ( 142 ) — — — ( 142 ) $ ( 77,338 ) $ ( 14,258 ) $ — $ 1,935 $ ( 89,661 ) As of December 31, 2022 Impairment charges Disposals Foreign exchange effect As of December 31, 2023 Software $ ( 76 ) $ — $ — $ ( 2 ) $ ( 78 ) Health Canada licenses ( 6,498 ) — — ( 152 ) ( 6,650 ) Ginkgo exclusive licenses ( 4,434 ) ( 3,366 ) — ( 168 ) ( 7,968 ) Lord Jones ® brand ( 62,500 ) — — — ( 62,500 ) Trademarks ( 142 ) — — — ( 142 ) $ ( 73,650 ) $ ( 3,366 ) $ — $ ( 322 ) $ ( 77,338 ) (i) During the fourth quarter of 2025, the Company disposed of its existing Ginkgo exclusive licenses through a sale to Ginkgo for nominal consideration. 97 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 9. Leases The Company has entered into leases primarily for the land-use rights, office and research premises and equipment used in the production of cannabis and other related products. The Company’s leases have terms that range from 19 months to six years , excluding land use rights, which generally extend to 15 years. These leases often include options to extend the term of the lease for up to 10 years. When it is reasonably certain that the option will be exercised, the impact of the option is included in the lease term for purposes of determining total future lease payments. Operating leases greater than one year are included in right-of-use assets and operating lease liabilities. Finance leases are included in property, plant and equipment on the Company’s consolidated balance sheet. The Company’s finance leases were not material for any of the periods presented. As of December 31, 2025 2024 2023 Lease cost Operating lease cost $ 703 $ 613 $ 685 Short-term lease cost — — — Total lease cost $ 703 $ 613 $ 685 Supplemental cash flow and other information Operating cash flows - cash paid for operating lease obligations $ 1,207 $ 1,137 $ 1,124 Non-cash activity - right-of-use assets obtained in exchange for lease obligations 371 566 — Weighted-average remaining lease term (years) – operating leases 4.5 3.6 3.6 Weighted-average discount rate – operating leases 8.19 % 7.71 % 7.62 % For the years ended December 31, 2025, 2024 and 2023, the aggregate depreciation expense on right-of-use assets was $ 569 , $ 486 and $ 455 , respectively, and was included in general and administrative expenses on the consolidated statements of net income (loss) and comprehensive income (loss). The following is a summary of the Company’s future minimum lease payments under operating leases for its premises due in future fiscal years: As of December 31, 2025 2026 $ 500 2027 376 2028 376 2029 200 2030 147 Thereafter 256 Total lease payments 1,855 Less: imputed interest ( 346 ) Present value of lease liabilities $ 1,509 In addition to the minimum lease payments, the Company is required to pay realty taxes and other occupancy costs in accordance with the terms of the lease agreements. 98 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 10. Share-based Compensation (a) Share-based award plans The Company has granted stock options, RSUs and DSUs to employees and non-employee directors under the Stock Option Plan dated May 26, 2015 (the “2015 Stock Option Plan”), the 2018 Stock Option Plan dated June 28, 2018 (the “2018 Stock Option Plan” and, together with the 2015 Stock Option Plan, the “Prior Option Plans”), the Employment Inducement Award Plan #1 (the “Employment Inducement Award Plan”), the 2020 Omnibus Equity Incentive Plan dated March 29, 2020 (the “2020 Omnibus Plan”) and the DSU Plan. The Company can no longer make grants under the Prior Option Plans or the Employment Inducement Award Plan. The following table summarizes the total share-based compensation associated with the Company’s stock options and RSUs: Year ended December 31, 2025 2024 2023 Stock options $ 189 $ 134 $ 1,175 RSUs 6,055 8,566 7,581 DSUs 806 — — Total share-based compensation $ 7,050 $ 8,700 $ 8,756 Share-based compensation for the year ended December 31, 2025 included $ 806 of expense associated with the Company’s DSUs. For the years ended December 31, 2024 and 2023, $ 449 and $ 447 , respectively, of DSU-related expense was included in general and administrative expense in the Company’s consolidated statement of net income (loss) and comprehensive income (loss). For the years ended December 31, 2024 and 2023, $ 40 and $ 54 , respectively, was included in gain (loss) on revaluation of financial instruments in the Company’s consolidated statement of net income (loss) and comprehensive income (loss), primarily related to the revaluation of DSUs. (b) Stock options On June 28, 2018, the shareholders of the Company approved the 2018 Stock Option Plan, which replaced the 2015 Stock Option Plan. The 2018 Stock Option Plan terminated the Company’s ability to grant equity under the 2015 Stock Option Plan. As of June 25, 2020, the date on which the 2020 Omnibus Plan was approved by the shareholders of the Company, no further awards will be granted under the 2018 Stock Option Plan; however, shares may be purchased via option exercise by the holders of any outstanding options previously issued under the 2018 Stock Option Plan. On March 29, 2020, the Board of Directors of the Company (the “Board”) adopted the 2020 Omnibus Plan, which was approved by the shareholders of the Company at the annual and special meeting of shareholders held on June 25, 2020. The 2020 Omnibus Plan provides for grants of stock options, share appreciation rights, restricted shares, RSUs and other share-based or cash-based awards, which are subject to terms as determined by the Compensation Committee of the Board (the “Compensation Committee”), and awards may be granted to eligible employees, non-employee directors and consultants. The 2020 Omnibus Plan terminated the Company’s ability to grant equity awards under the 2018 Stock Option Plan and RSUs under the Employment Inducement Award Plan. Options represent the right to purchase Company common shares on the date of exercise at a stated exercise price. The exercise price of an option generally must be at least equal to the fair market value of the Company common shares on the date of grant. Vesting conditions for grants of options are determined by the Compensation Committee. The typical vesting for stock option grants is quarterly vesting over three to five years . The maximum term of options granted under the 2020 Omnibus Plan is seven years . Participants under the 2020 Omnibus Plan are eligible to be granted options to purchase shares at an exercise price established upon approval of the grant by the Compensation Committee. When options are granted, the exercise price is, with respect to a particular date, the closing price as reported by the TSX or the Nasdaq and, if the shares are not traded on the TSX or the Nasdaq, any other stock exchange on which the Company’s common shares are traded (as selected by the Compensation Committee in good faith taking into account applicable legal and tax requirements) on the immediately preceding trading day (the “Fair Market Value”). The 2020 Omnibus Plan does not authorize grants of options with an exercise price below the Fair Market Value. 99 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The following is a summary of the changes in options: 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 Issuance of options — — Cancellation, forfeiture and expiry of options 5.42 ( 128,947 ) Balance as of December 31, 2025 $ 5.68 588,317 2.48 Exercisable as of December 31, 2025 $ 5.98 529,467 2.29 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 Issuance of options — — Cancellation, forfeiture and expiry of options 19.05 ( 1,385,937 ) Balance as of December 31, 2024 $ 5.63 717,264 3.65 Exercisable as of December 31, 2024 $ 6.29 554,361 3.23 (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. For the year ended December 31, 2023, the fair value per option at grant date was C$2.07. There were no options granted in 2025 or 2024. The fair value of the options issued during 2023 was determined using the Black-Scholes option pricing model, using the following inputs: 2023 Share price at grant date (per share) C$ 2.96 Exercise price (per option) C$ 2.96 Risk-free interest rate (i) 3.22 % Expected life of options (in years) (i) 7 Expected annualized volatility (i) 73 % Expected dividend yield — Weighted average Black-Scholes value at grant date (per option) C$ 2.07 Forfeiture rate — (i) The expected life of the awards represents the period of time options are expected to be outstanding and is estimated considering vesting terms and employees’ and non-employees’ historical exercise and, where relevant, post-vesting employment termination behavior. Volatility was estimated by using the historical volatility of the Company’s share price, adjusted for the Company’s expectation of volatility going forward. The risk-free interest rate was based on the Bank of Canada government bonds with a remaining term equal to the expected life of the options at the grant date. The following table summarizes stock options outstanding: Options outstanding as of December 31, 2025 2024 2023 2020 Omnibus Plan 588,317 702,264 702,264 2018 Stock Option Plan — 15,000 1,400,937 Total stock options outstanding 588,317 717,264 2,103,201 (c) Restricted share units RSUs are granted under the 2020 Omnibus Plan. RSUs represent an equivalent amount of Company common shares on the date of issuance at fair value. Fair value is determined using the closing price of the trading day immediately preceding the date of grant. RSUs issued under the 2020 Omnibus Plan typically vest over a three-year period following the grant date and have no performance requirements. 100 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The following is a summary of the changes in RSUs: Weighted average grant date fair value (C$) (ii) Number of RSUs Balance as of December 31, 2024 $ 3.50 8,382,213 Granted (i) 2.89 3,039,665 Vested and issued 3.88 ( 5,360,354 ) Cancellation and forfeitures 2.97 ( 676,418 ) Balance as of December 31, 2025 $ 2.85 5,385,106 Weighted average grant date fair value (C$) (ii) Number of RSUs Balance as of December 31, 2023 $ 3.77 7,381,541 Granted (i) 2.92 2,987,147 Vested and issued 3.49 ( 1,726,230 ) Cancellation and forfeitures 3.18 ( 260,245 ) Balance as of December 31, 2024 $ 3.50 8,382,213 (i) RSUs granted in the period either vest annually in equal installments over a three-year period from 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 On August 10, 2019, the Company established the DSU Plan pursuant to which its non-executive directors receive DSUs for Board services. The DSU Plan is designed to promote a greater alignment of long-term interests between non-executive directors and shareholders. The number of DSUs granted under the DSU Plan (including fractional DSUs) is determined by dividing the amount of remuneration payable by the closing price as reported by the TSX for awards made prior to 2022 and as reported by Nasdaq for awards made in 2022 and subsequent years on the trading day immediately preceding the date of grant. DSUs are payable at the time a non-executive director ceases to hold the office of director for any reason and are settled by a lump-sum cash payment, in accordance with the terms of the DSU Plan, based on the fair value of the DSUs at such time. The fair value of the cash payout is determined by multiplying the number of DSUs vested at the payout date by the closing price as reported by the TSX for awards made prior to 2022 and as reported by Nasdaq for awards made in 2022 and subsequent years on the trading day immediately preceding the payout date. The fair value of the cash payout is determined at each reporting date based on the fair value of the Company’s common shares at the reporting date and is recorded within accrued liabilities. The following is a summary of the changes in DSUs: 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 414 — Balance as of December 31, 2025 $ 1,993 758,499 Financial liability Number of DSUs Balance as of December 31, 2023 $ 1,092 521,679 Granting and vesting of DSUs 450 193,965 Liabilities settled ( 359 ) ( 155,383 ) Gain on revaluation ( 54 ) — Balance as of December 31, 2024 $ 1,129 560,261 101 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 11. 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 year ended December 31, 2025, the Company repurchased 4,419,481 common shares for $ 9,741 . All common shares repurchased under the 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. 12. Commitments and Contingencies (a) Commitments CanAdelaar acquisition On December 9, 2025, the Company announced a definitive share sale and purchase agreement (the “Purchase Agreement”) to acquire all of the outstanding shares of CanAdelaar B.V. (“CanAdelaar”), one of ten licensed cannabis producers in the Dutch Controlled Cannabis Supply Chain Experiment. Under the terms of the Purchase Agreement, all of the issued and outstanding share capital of CanAdelaar will be acquired for up-front consideration of € 57.5 million, or approximately US$ 67.5 million, subject to certain customary adjustments, with additional contingent consideration payable in cash based on 0.5 x of CanAdelaar’s normalized EBITDA in 2026 and 2027. As of December 31, 2025, the transaction has not closed and is subject to certain closing conditions, including obtaining required regulatory clearances in the Netherlands, receipt of confirmations relating to CanAdelaar’s licenses and Bibob review (a background check conducted by Dutch authorities), the accuracy of representations and warranties, and the absence of certain regulatory orders. Upon consummation of the transaction, CanAdelaar will become a wholly owned subsidiary of the Company and will be included in the Company’s consolidated financial results. R&D commitments On September 4, 2018, the Company announced an R&D partnership with Ginkgo to develop scalable and consistent production of a variety of certain common and lesser-known cannabinoids. As part of this partnership, Cronos agreed to issue up to 14,674,903 common shares of the Company (aggregate value of approximately $ 100,000 as of July 17, 2018 assuming all milestones are met, collectively the “Ginkgo Equity Milestones”) in tranches and $ 22,000 in cash subject to Ginkgo’s achievement of certain milestones and to fund certain R&D expenses, including foundry access fees. During the years ended December 31, 2022 and December 31, 2021, 4,157,888 shares and 2,934,980 shares, respectively, of the Company’s common stock were issued in conjunction with this partnership. No shares were issued for the year ended December 31, 2025, December 31, 2024 or December 31, 2023. In 2025, the Company terminated its R&D partnership with Ginkgo. Other commitments On February 18, 2019, the Company entered into an agreement with a wholly owned subsidiary of Altria (which agreement was subsequently amended and restated to substitute Altria Pinnacle as a party thereto), to receive strategic advisory and project management services from Altria Pinnacle (the “Services Agreement”). Pursuant to the Services Agreement, the Company will pay Altria Pinnacle a monthly fee equal to the product of 105 % and the sum of: (i) all costs directly associated with the services incurred during the monthly period, and (ii) a reasonable and appropriate allocation of indirect costs incurred during the monthly period. The Company will also pay all third-party direct charges incurred during the monthly period in connection with the services, including any reasonable and documented costs, fees and expenses associated with obtaining any consent, license or permit. The Services Agreement will remain in effect until terminated by either party. See Note 17 “ Related Party Transactions .” 102 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents (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 consolidated financial condition but could be material to its results of operations for any particular reporting period depending, in part, on its results for that period. (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 of Directors’ review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel. The consolidated amended complaint 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, which the defendants moved to dismiss. On May 30, 2025, the parties jointly informed the court that they had reached an agreement-in-principle to settle the action and the court then stayed all deadlines in the action. On December 2, 2025, the plaintiffs moved for preliminary approval of the proposed settlement. The proposed settlement includes a payment of $ 10 million to be distributed, after fees and expenses, to members of the settlement class and a release by class members of their claims, including in the New York and Ontario actions, based on shares acquired on the Nasdaq or any other public U.S. market for trading stocks during the class period. The release would apply to claims relating to shares acquired on the Nasdaq or any other public U.S. market during the class period but would not resolve claims of persons who acquired shares on the TSX. The proposed settlement remains subject to preliminary and final approval by the court and certain other conditions not within the Company’s control. One of the shareholder plaintiffs in the Ontario action has informed the court that he intends to oppose approval of the settlement. On June 3, 2020, an alleged shareholder filed a Statement of Claim, as amended on August 12, 2020, in the Ontario Superior Court of Justice in Toronto, Ontario, Canada, seeking, among other things, an order certifying the action as a class action on behalf of a putative class of shareholders and damages of an unspecified amount. The Amended Statement of Claim named (i) the Company, (ii) its Chief Executive Officer, (iii) former Chief Financial Officer, (iv) former Chief Financial Officer and Chief Commercial Officer, and (v) current and former members of the Board as defendants and alleged breaches of the Ontario Securities Act, oppression under the Ontario Business Corporations Act and common law misrepresentation. The Amended Statement of Claim generally alleged that certain of the Company’s prior public statements about revenue and internal controls were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of the Board of Directors was conducting a review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel, and the Company’s subsequent restatement. The Amended Statement of Claim 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 the 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. 103 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents (ii) Regulatory Settlements 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. (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 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 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 or the Knesset and cannot predict whether a duty will ultimately be imposed on its products. 104 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 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. On December 18, 2025, the court dismissed the administrative petition. The deadline for petitioners to appeal was February 16, 2026. We expect litigation and regulatory proceedings relating to the marketing, distribution, import and sale of our products to increase. 13. Income Taxes For financial reporting purposes, income (loss) from continuing operations before income taxes includes the following components: Year ended December 31, 2025 2024 2023 Domestic income (loss) before income taxes $ ( 28,585 ) $ 58,806 $ ( 53,521 ) Foreign income (loss) before income taxes 11,465 ( 22,220 ) ( 20,148 ) Total income (loss) before income taxes $ ( 17,120 ) $ 36,586 $ ( 73,669 ) The income (loss) before income taxes above excludes losses from discontinued operations of nil , nil and $ 4,114 for the years ended December 31, 2025, 2024 and 2023, respectively. Income tax expense (benefit) consists of the following components: Year Ended December 31, 2025 2024 2023 Current Federal $ ( 8,762 ) $ ( 1,849 ) $ ( 1,941 ) Provincial ( 6,606 ) ( 1,352 ) ( 1,489 ) Foreign 51 31 55 Total current income tax (recovery) expense ( 15,317 ) ( 3,170 ) ( 3,375 ) Deferred Federal 1,617 ( 111 ) 42 Provincial 1,239 ( 72 ) 33 Foreign ( 1,730 ) ( 83 ) 70 Total deferred income tax (recovery) expense 1,126 ( 266 ) 145 Total income tax (recovery) expense $ ( 14,191 ) $ ( 3,436 ) $ ( 3,230 ) As of December 31, 2025 and 2024, the Company’s current income taxes payable were nil and $ 9 , respectively, related to current income tax expense. Included in other receivables as of December 31, 2025 and 2024 is $ 12,431 and $ 3,110 , respectively, related to current income tax benefits. 105 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents For the year ended December 31, 2025, income tax differs from that computed using the Canadian federal statutory income tax rate of 15.0%, which is the Company’s jurisdiction of domicile. Reconciliation of the expected income tax to the effective tax rate in continuing operations is as follows: Year ended December 31, 2025 Amount % Canadian federal statutory rate $ ( 2,568 ) 15.0 % Provincial tax, net of federal benefits (i) ( 5,486 ) 32.0 % Foreign tax effects United States Changes in valuation allowance ( 3,679 ) 21.5 % Effect of change in tax laws or rates ( 221 ) 1.3 % Non-deductible share-based compensation 3,739 ( 21.8 ) % Other 91 ( 0.5 ) % Israel Statutory tax rate differences between Israel and Canada 860 ( 5.0 ) % Changes in valuation allowance ( 4,087 ) 23.9 % Other 21 ( 0.1 ) % Non-taxable or non-deductible items Non-taxable portion of capital gains 1,185 ( 6.9 ) % Non-deductible transaction costs 127 ( 0.7 ) % Other 65 ( 0.4 ) % Changes in valuation allowances ( 4,261 ) 24.7 % Effect of cross-border tax laws 73 ( 0.4 ) % Other ( 50 ) 0.3 % Income tax expense (benefit), net $ ( 14,191 ) 82.9 % (i) Ontario provincial taxes comprises the majority (greater than 50 percent) of the tax effect in this category. 106 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents For the years ended December 31, 2024 and December 31, 2023, income tax differs from that computed using the combined Canadian federal and provincial statutory income tax rate of 26.5%. Reconciliation of the expected income tax to the effective tax rate in continuing operations is as follows: 2024 2023 Net income (loss) before income taxes $ 36,586 $ ( 73,669 ) Effective income tax rate 26.5 % 26.5 % Expected income tax expense (benefit) 9,695 ( 19,522 ) Non-taxable income (loss) ( 11,138 ) 1,077 Non-deductible share-based compensation 143 525 Non-deductible expenses 741 459 Non-deductible transaction costs ( 14 ) 351 Effect of provincial tax rate difference ( 66 ) ( 9 ) Effect of tax rates outside of Canada 755 816 Effect of change in tax rates 11,533 4,601 Fair value gain (loss) on financial liabilities ( 15 ) 23 Changes in valuation allowance ( 19,367 ) 7,930 Capital gain on financial liabilities — 106 Additional taxable income 3,746 — Other 551 413 Income tax expense (benefit), net $ ( 3,436 ) $ ( 3,230 ) The valuation allowance recorded against the loss on discontinued operations is not reflected in the effective tax rate reconciliation presented above for continuing operations. The following table summarizes the significant components of the Company’s deferred tax assets and liabilities: As of December 31, 2025 2024 Deferred tax assets: Tax loss carryforwards $ 92,836 $ 96,349 Interest expense carryforwards 3,477 2,814 Finance lease obligation 127 306 Plant and equipment 34,224 32,130 Investment 24,602 28,778 Intangible assets 25,708 36,428 Inventory — 419 Reserve 348 1,282 R&D investment tax credits 1,156 1,104 Share-based compensation 2,686 — Other 1,358 3,245 Total deferred tax assets 186,522 202,855 Less valuation allowance ( 184,634 ) ( 200,284 ) Net deferred tax assets $ 1,888 $ 2,571 Deferred tax liabilities: Plant and equipment ( 2,280 ) ( 1,635 ) Intangible assets ( 1,809 ) ( 1,929 ) Total deferred tax liabilities $ ( 4,089 ) $ ( 3,564 ) The realization of deferred tax assets is dependent on the Company generating sufficient taxable income in the years that the temporary differences become deductible. A valuation allowance has been provided for the deferred tax assets that the Company determined did not meet the more-likely-than-not recognition threshold under U.S. GAAP. 107 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents As of December 31, 2025 and 2024, the Company’s valuation allowance was $ 184,634 and $ 200,284 , respectively. The valuation allowance decreased by $ 15,650 during the year ended December 31, 2025, and decreased by $ 15,957 during the year ended December 31, 2024. The decrease in the valuation allowance during the year ended December 31, 2025 was primarily due to the recognition of a portion of deferred tax assets for which a valuation allowance was recorded in the prior year. The decrease in the valuation allowance during the year ended December 31, 2024, was primarily due to the recognition of a portion of deferred tax assets for which a valuation allowance was recorded in the prior year. As of December 31, 2025, the Company had net operating losses in Canada, the U.S., and Israel available to offset future years’ taxable income of approximately $ 182,261 , $ 162,932 , $ 4,769 , respectively. As of December 31, 2024, the Company had net operating losses in Canada, the U.S., and Israel available to offset future years’ taxable income of approximately $ 197,515 , $ 151,279 , and $ 17,049 , respectively. The net operating losses in Canada will begin to expire, for purposes of carryforward, in fiscal year 2037. The net operating losses in the U.S. can be carried forward indefinitely for federal purposes. The net operating losses in Israel can be carried forward indefinitely. Utilization of the net operating loss carryforwards may be subject to limitations under the tax laws applicable in each tax jurisdiction due to ownership changes that could occur in the future. These ownership changes could limit the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and tax expense. Due to the existence of the valuation allowance, limitations created by ownership changes, if any, will not impact the Company’s effective tax rate. As of December 31, 2025, the Company has various scientific research and experimental development investment tax credit carryforwards of $ 4,363 related to Canadian operations, which, if not utilized, will begin to expire in 2040. Investment tax credits are recognized when realization of the tax credits is more likely than not. The Company files federal income tax returns in Canada, Israel and the U.S. The Company has open tax years with the taxation jurisdictions. These open years contain certain matters that could be subject to differing interpretations of applicable tax laws and regulations and tax treaties, as they relate to the amount, timing, or inclusion of revenue and expense. As of December 31, 2025, Cronos Group Inc., is under examination with the Canadian Revenue Agency for tax years 2022 and 2023. Jurisdiction Open Years Canada 2021 - 2025 United States 2022 - 2025 Israel 2022 - 2025 Income taxes paid (net of refunds received) were as follows: Year ended December 31, 2025 Canada federal $ ( 3,604 ) Canada provincial ( 2,763 ) Foreign United States 53 Israel 51 Total income taxes paid (received) $ ( 6,263 ) Accounting guidance clarifies the accounting for uncertain tax positions and prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. Additionally, the authoritative guidance addresses the derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. Only tax positions that meet the more-likely-than-not recognition threshold may be recognized. There were no identified unrecognized tax benefits as of December 31, 2025 or December 31, 2024. As of December 31, 2025 and 2024, deferred income taxes have not been provided for any undistributed earnings from operations outside of Canada. The foreign subsidiaries have accumulated losses and as such the amount of undistributed earnings upon which income taxes have not been provided is immaterial to these consolidated financial statements. 108 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 14. 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 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 tables below set forth consolidated Adjusted EBITDA and significant expenses for our single segment (after adoption of ASU 2023-07): Year ended December 31, 2025 2024 2023 Adjusted EBITDA $ 10,110 $ ( 34,942 ) $ ( 63,746 ) Significant expenses: Sales and marketing 21,764 21,603 22,701 Research and development 4,449 4,229 5,843 General and administrative 41,999 46,514 49,475 Share-based compensation 7,050 8,700 8,756 Depreciation and amortization 2,119 3,701 5,044 Total significant expenses 77,381 84,747 91,819 Restructuring costs 2,037 630 1,524 Impairment loss on goodwill and indefinite-lived intangible assets 700 — — Impairment loss on long-lived assets 36 16,350 3,366 Total operating expense $ 80,154 $ 101,727 $ 96,709 109 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The following tables set forth a reconciliation of net income (loss) as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated (after adoption of ASU 2023-07): (in thousands of U.S. dollars) For the year ended December 31, 2025 Continuing Operations Discontinued Operations Total Net loss $ ( 2,929 ) $ — $ ( 2,929 ) Interest income, net ( 39,963 ) — ( 39,963 ) Income tax benefit ( 14,191 ) — ( 14,191 ) Depreciation and amortization 14,231 — 14,231 EBITDA ( 42,852 ) — ( 42,852 ) Impairment loss on goodwill and indefinite-lived intangible assets (i) 700 — 700 Impairment loss on long-lived assets (ii) 36 — 36 Loss on revaluation of financial instruments (v) 452 — 452 Foreign currency transaction loss 28,588 — 28,588 Transaction costs (vii) 1,965 — 1,965 Loss on held-for-sale assets (viii) 5,532 — 5,532 Other, net (ix) 241 — 241 Restructuring costs (x) 2,037 — 2,037 Share-based compensation (xi) 7,050 — 7,050 Restatement litigation costs (xii) 275 — 275 Inventory step-up recorded to cost of sales (xiii) 517 — 517 Israel Ministry of Economy and Industry dumping inquiry (xiv) 694 — 694 Change in allowance for credit loss on non-operating loan (xv) 4,875 — 4,875 Adjusted EBITDA $ 10,110 $ — $ 10,110 110 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents (in thousands of U.S. dollars) For the year ended December 31, 2024 Continuing Operations Discontinued Operations Total Net income $ 40,022 $ — $ 40,022 Interest income, net ( 52,019 ) — ( 52,019 ) Income tax benefit ( 3,436 ) — ( 3,436 ) Depreciation and amortization 9,336 — 9,336 EBITDA ( 6,097 ) — ( 6,097 ) Share of income from equity method investments ( 2,365 ) — ( 2,365 ) Impairment loss on long-lived assets (ii) 16,350 — 16,350 Revaluation gain on loan receivable (iii) ( 11,804 ) — ( 11,804 ) Gain on revaluation of equity method investment (iv) ( 32,469 ) — ( 32,469 ) Loss on revaluation of financial instruments (v) 6,248 — 6,248 Impairment loss on other investments (vi) 25,650 — 25,650 Foreign currency transaction gain ( 57,859 ) — ( 57,859 ) Transaction costs (vii) 701 — 701 Loss on held-for-sale assets (viii) 11,202 — 11,202 Other, net (ix) 301 — 301 Restructuring costs (x) 630 — 630 Share-based compensation (xi) 8,700 — 8,700 Restatement litigation costs (xii) ( 1 ) — ( 1 ) Inventory step-up recorded to cost of sales (xiii) 5,284 — 5,284 Israel Ministry of Economy and Industry dumping inquiry (xiv) 587 — 587 Adjusted EBITDA $ ( 34,942 ) $ — $ ( 34,942 ) (in thousands of U.S. dollars) For the year ended December 31, 2023 Continuing Operations Discontinued Operations Total Net loss $ ( 70,439 ) $ ( 4,114 ) $ ( 74,553 ) Interest income, net ( 51,235 ) ( 10 ) ( 51,245 ) Income tax benefit ( 3,230 ) — ( 3,230 ) Depreciation and amortization 7,866 244 8,110 EBITDA ( 117,038 ) ( 3,880 ) ( 120,918 ) Share of income from equity method investments ( 1,583 ) — ( 1,583 ) Impairment loss on long-lived assets (ii) 3,366 205 3,571 Loss on revaluation of financial instruments (v) 12,042 — 12,042 Impairment loss on other investments (vi) 23,350 — 23,350 Foreign currency transaction loss 7,324 — 7,324 Other, net (ix) ( 1,029 ) 118 ( 911 ) Restructuring costs (x) 1,524 523 2,047 Share-based compensation (xi) 8,756 13 8,769 Restatement litigation costs (xii) 919 — 919 Inventory write-down (xvi) 805 839 1,644 Adjusted EBITDA $ ( 61,564 ) $ ( 2,182 ) $ ( 63,746 ) (i) For the year ended December 31, 2025, impairment loss on goodwill and indefinite-lived intangible assets related to our Lord Jones ® brand intangible asset, which was assessed for impairment in the fourth quarter of 2025. There were no such impairment losses in the years ended December 31, 2024 and 2023. See Note 8 “ Goodwill and Intangible Assets, net .” 111 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents (ii) For the year ended December 31, 2025, impairment loss on long-lived assets related to equipment no longer in use. For the year ended December 31, 2024, impairment loss on long-lived assets included $ 14,258 related to the write-down of our Ginkgo Exclusive Licenses and $ 1,631 related to the winding down of operations at the Cronos Fermentation Facility. For the year ended December 31, 2023, impairment loss on long-lived assets related to certain leased properties associated with the Company’s former U.S. operations and impairment of the Ginkgo Collaboration Agreement’s CBCVA exclusive license. See Note 7 “ Property, Plant and Equipment, net ” and Note 8 “ Goodwill and Intangible Assets, net. ” (iii) For the year ended December 31, 2024, a revaluation gain on loan receivable was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024. (iv) For the year ended December 31, 2024, a gain on revaluation of equity method investment was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024. (v) For the year ended December 31, 2025, the loss on revaluation of financial instruments was driven by the Company’s equity securities in Vitura, partially offset by a gain related to the High Tide Warrant. For the years ended December 31, 2024 and 2023, loss on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura. See Note 5 “ Investments. ” (vi) For the years ended December 31, 2024 and 2023, impairment loss on other investments represented the fair value change on the PharmaCann Option. See Note 5 “ Investments. ” (vii) For the years ended December 31, 2025 and 2024, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction and the pending acquisition of CanAdelaar. These costs are included in general and administrative expenses on the consolidated statements of net income (loss) and comprehensive income (loss). (viii) For the years ended December 31, 2025 and 2024, a loss on held-for-sale assets related to a revaluation of the Cronos Fermentation Facility held-for-sale asset group. (ix) For the year ended December 31, 2025, other, net related to (gain) loss on disposal of assets and dividend income. For the years ended 2024 and 2023, other, net primarily related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities. (x) For the year ended December 31, 2025, restructuring costs from continuing operations related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 18 “ Restructuring. ” For the year ended December 31, 2024, restructuring costs from continuing operations related to shutdown costs at the Cronos Fermentation Facility, as well as employee-related severance costs associated with the Realignment, as described in Note 18 “ Restructuring. ” For the year ended December 31, 2023 restructuring costs related to the employee-related severance costs and other restructuring costs associated with the Realignment. (xi) For the year ended December 31, 2025, share-based compensation related to the expenses of share-based compensation awarded to employees and our DSUs issued to certain members of our Board of Directors, each under the Company’s share-based award plans, as described in Note 10 “ Share-based Compensation. ” For the years ended December 31, 2024 and 2023, share-based compensation related to the vesting expenses of share-based compensation awarded to employees under our share-based award plans, as described in Note 10 “ Share-based Compensation. ” (xii) For the years ended December 31, 2025, 2024 and 2023, restatement litigation costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement. (xiii) For the years ended December 31, 2025 and 2024, inventory step-up recorded to cost of sales represented the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the consolidated statements of income (loss) and comprehensive income (loss). (xiv) For the year ended December 31, 2024, 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. (xv) For the year ended December 31, 2025, change in allowance for credit loss on non-operating loan represents the allowance recognized on the High Tide loan receivable and adjustments thereto, as described in Note 6, “ Loans Receivable, net. ” (xvi) For the year ended December 31, 2023, inventory write-downs from discontinued operations related to product destruction and obsolescence associated with the exit of our U.S. operations as described in Note 3 “ Discontinued Operations ” and inventory write-downs from continuing operations related to product destruction and obsolescence associated with the winding down of operations at the Cronos Fermentation Facility, as described in Note 18 “ Restructuring. ” The following table presents the Company’s revenue by major product category for our single segment (after adoption of ASU 2023-07): Year ended December 31, 2025 2024 2023 Cannabis flower $ 108,476 $ 87,912 $ 62,070 Cannabis extracts 37,700 29,168 24,569 Other 411 535 602 Net revenue $ 146,587 $ 117,615 $ 87,241 112 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Net revenue attributed to a geographic region based on the location of the customer was as follows (after adoption of ASU 2023-07): Year ended December 31, 2025 2024 2023 Canada $ 90,330 $ 82,437 $ 64,702 Israel 41,796 28,368 21,134 Other countries 14,461 6,810 1,405 Net revenue $ 146,587 $ 117,615 $ 87,241 The table below sets forth total cash and cash equivalents and short-term investments for our single segment: As of December 31, 2025 2024 Total cash and cash equivalents and short-term investments $ 831,794 $ 858,805 Property, plant and equipment, net were physically located in the following geographic regions: As of December 31, 2025 2024 Canada $ 129,352 $ 117,329 Israel 16,513 15,860 Total $ 145,865 $ 133,189 Intangibles, net were physically located in the following geographic regions: As of December 31, 2025 2024 Canada $ 8,551 $ 10,887 Israel 339 370 Total $ 8,890 $ 11,257 For additions to our property, plant and equipment, net and intangibles, net in the years ended December 31, 2025, 2024 and 2023, please see the consolidated statements of cash flows. 113 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 15. Income (Loss) per Share Basic and diluted earnings (loss) per share from continued and discontinued operations are calculated as follows: Year ended December 31, 2025 2024 2023 Basic income (loss) per share computation Net income (loss) from continuing operations attributable to the shareholders of Cronos Group $ ( 9,447 ) $ 41,080 $ ( 69,849 ) Weighted-average number of common shares outstanding for computation for basic income (loss) per share 383,468,522 382,058,056 380,964,739 Basic income (loss) from continuing operations per share $ ( 0.02 ) $ 0.11 $ ( 0.18 ) Loss from discontinued operations attributable to the shareholders of Cronos Group $ — $ — $ ( 4,114 ) Weighted-average number of common shares outstanding for computation of basic loss from discontinued operations per share 383,468,522 382,058,056 380,964,739 Basic loss from discontinued operations per share $ — $ — $ ( 0.01 ) Diluted income (loss) per share computation Net income (loss) from continuing operations attributable to the shareholders of Cronos Group $ ( 9,447 ) $ 41,080 $ ( 69,849 ) Weighted-average number of common shares outstanding used in the computation of basic income (loss) per share 383,468,522 382,058,056 380,964,739 Dilutive effect of RSUs — 3,243,564 — Dilutive effect of Altria Warrant — 255,382 — Weighted-average number of common shares for computation of diluted income (loss) from continuing operations per share (i) 383,468,522 385,557,002 380,964,739 Diluted income (loss) from continuing operations per share $ ( 0.02 ) $ 0.11 $ ( 0.18 ) Loss from discontinued operations attributable to the shareholders of Cronos Group $ — $ — $ ( 4,114 ) Weighted-average number of common shares for computation of diluted loss from discontinued operations per share 383,468,522 382,058,056 380,964,739 Diluted loss from discontinued operations per share $ — $ — $ ( 0.01 ) (i) In computing diluted earnings 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. Total securities of 18,980,970 , 17,070,836 and 25,426,119 were not included in the computation of diluted shares outstanding for the years ended December 31, 2025, 2024 and 2023, respectively, because the effect would be anti-dilutive. 114 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 16. Financial Instruments (a) Fair value measurement 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. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: As of December 31, 2025 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 791,794 $ — $ — $ 791,794 Other investments (i)(ii) 2,253 5,411 — 7,664 Derivative liabilities — — — — As of 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 December 31, 2025 and December 31, 2024, the Company’s influence on Vitura is deemed non-significant and the investment is considered an equity security with a readily determinable fair value. See Note 5 “Investments” for additional information. (ii) As of December 31, 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 5 “ Investments ” for further information. There were no transfers between fair value categories during the periods presented. (b) Financial risks The Company’s activities expose it to a variety of financial risks, including credit risk, liquidity risk, market risk, interest rate risk, and foreign currency rate risk. Credit 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, loans receivable, and advances to joint ventures. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $ 909,839 and $ 904,101 as of December 31, 2025 and December 31, 2024, respectively. (i) Accounts receivable The Company had accounts receivable of $ 34,099 and $ 15,462 as of December 31, 2025 and December 31, 2024, respectively. An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on the days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Accounts receivable are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, amongst others, the failure of a debtor to engage in a repayment plan, and a failure to make contractual payments for a period of greater than 120 days past due. As of December 31, 2025 and 2024, the Company had $ 9 and $ 7 , respectively, in expected credit losses on receivables from contracts with customers. 115 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents The Company considers a major customer to be one with an accounts receivable balance of at least 10% of the consolidated total. As of December 31, 2025, the Company has assessed that there is a concentration risk of customers because 16 % of accounts receivable was due from one customer. As of December 31, 2024, the Company has assessed that there is a concentration risk of customers because 27 % of accounts receivable was due from one customer. The Company sells products through a limited number of major customers. Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s revenues. During the year ended December 31, 2025, the Company earned a total net revenue before excise taxes of $ 82,581 from two major customers, together accounting for 43 % of the Company’s total net revenue before excise taxes. During the year ended December 31, 2024, the Company earned a total net revenue before excise taxes of $ 78,627 from two major customers, together accounting for 49 % of the Company’s total net revenue before excise taxes. During the year ended December 31, 2023, the Company earned a total net revenue before excise taxes of $ 79,503 from three major customers, accounting for 66 % of the Company’s total net revenues before excise taxes. (ii) Cash and cash equivalents, short-term investments, and other receivables The Company held cash and cash equivalents of $ 791,794 and $ 858,805 as of December 31, 2025 and December 31, 2024, respectively. The short-term investments and related interest receivable of $ 41,785 and nil as of December 31, 2025 and December 31, 2024, respectively, represent short-term investments with a maturity of less than a year and accrued interest. The cash and cash equivalents and short-term investments, including guaranteed investment certificates and bankers’ acceptances, are held with central banks and financial institutions that are highly rated. In addition to interest receivable, other receivables include sales taxes receivable from the government. As such, the Company has assessed an insignificant loss allowance on these financial instruments. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due and arises principally from the Company’s accounts payable. The Company had trade accounts payable of $ 7,642 and $ 4,563 as of December 31, 2025 and December 31, 2024, respectively, included in accounts payable on the consolidated balance sheet. The Company’s policy is to review liquidity resources and ensure that sufficient funds are available to meet financial obligations as they become due. Further, the Company’s management is responsible for ensuring funds exist and are readily accessible to support business opportunities as they arise. The Company considers a major vendor to be one with a trade accounts payable balance of at least 10% of the consolidated total. As of December 31, 2025, the Company has assessed that there is not a concentration risk of vendors because no vendor accounted for 10% or more of the Company’s trade accounts payable balance. As of December 31, 2024, the Company has assessed that there is a concentration risk of vendors because 10 % of accounts payable was due to one vendor. Market risk Market risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in market prices. The value of financial instruments can be affected by changes in interest rates, market and economic conditions, and equity and commodity prices. The Company is exposed to market risk in divesting its investments, such that unfavorable market conditions could result in dispositions of investments at less than their carrying amounts. Further, the revaluation of securities classified as fair value through net income could result in significant write-downs of the Company’s investments, which would have an adverse impact on the Company’s results of operations, unless these would flow through other comprehensive income. The Company manages risk by having a portfolio of securities from multiple issuers, such that the Company was not materially exposed to any one issuer. Interest rate risk Interest rate risk is the risk that the value or yield of fixed-income investments may decline if interest rates change. Fluctuations in interest rates may impact the level of income and expense recorded on the cash equivalents and short-term investments, and the market value of all interest-earning assets, other than those that possess a short term to maturity. A 10% change in the interest rate in effect on December 31, 2025 would not have a material effect on the fair value of our cash equivalents and short-term investments as the majority of the portfolio had a maturity date of three months or less. A 10% change in the interest rate in effect for 2025 would have an effect of $ 3,800 on interest income, net earned on our cash equivalents and short-term investments. A 10% change in the interest rate in effect on December 31, 2024, would have an effect of $ 5,200 on interest income, net earned on our cash and cash equivalents and short-term investments. During the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company had net interest income of $ 39,963 , $ 52,019 and $ 51,235 , respectively. 116 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents Foreign currency risk Currency rate risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in foreign exchange rates. The Company is exposed to this risk on investments in equity investments denominated in A$ and C$, and other assets and liabilities denominated in A$ and C$. The Company is further exposed to this risk through subsidiaries operating in Israel and the U.S. as the Company’s functional currency is in Canadian dollars. The Company does not currently use foreign exchange contracts to hedge its exposure to currency rate risk. As such, the Company’s financial position and financial results may be adversely affected by the unfavorable fluctuations in currency exchange rates. As of December 31, 2025 and December 31, 2024, the Company had foreign currency gain (loss) on translation of $ 48,721 and $( 86,321 ), respectively. A 10% change in the exchange rates for the foreign currencies would affect the carrying amounts of net assets by approximately $ 40,524 and $ 40,125 as of December 31, 2025 and December 31, 2024, respectively. 17. Related Party Transactions (a) Altria On March 8, 2019, in connection with the Altria Investment, Altria, through certain of its wholly owned subsidiaries, purchased a 45 % equity interest in the Company. As of December 31, 2025, Altria beneficially held an approximately 41.0 % ownership interest in the Company (calculated on a non-diluted basis). There were no amounts payable related to the consulting services with Altria Pinnacle as of December 31, 2025 and 2024. (b) Cronos GrowCo The Company holds both ownership of 50 % of Cronos GrowCo’s common shares and senior secured debt in Cronos GrowCo and these were historically accounted for as related party transactions. Effective July 1, 2024, the Company obtained majority control of the board of directors of Cronos GrowCo, which is now accounted for as an intercompany relationship and all intercompany activity is eliminated upon consolidation. For more information on the Cronos GrowCo Transaction, see Note 2 “Business Combination.” The Company made the following purchases of cannabis products from Cronos GrowCo: Year ended December 31, 2024 (i) 2023 Cronos GrowCo – purchases $ 16,952 $ 21,335 (i) 2024 activity presented above represents purchases from Cronos GrowCo for the first six months of the year. 117 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents During the third quarter of 2023, the Company, as supplier, entered into a cannabis germplasm supply agreement with Cronos GrowCo as buyer. During 2023, the Company received proceeds of $ 1,114 in relation to this agreement. Also, during 2023, the Company sold certain held for sale assets with carrying value of $ 332 and certain other previously expensed assets with a zero net book value to Cronos GrowCo for total proceeds of $ 761 and recognized a $ 436 gain in other, net in the consolidated statements of net income (loss) and comprehensive income (loss). Additionally, on August 23, 2019, the Company, as lender, and Cronos GrowCo, as borrower, entered into the Cronos GrowCo Credit Facility. See Note 6 “Loans Receivable, net” for further information regarding the Cronos GrowCo Credit Facility . (c) 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 vendor whose chief executive officer is an immediate family member of an executive of the Company. The Company purchased $ 0 , $ 0 and $ 2,310 of products and services under this subcontracted agreement for the years ended December 31, 2025, December 31, 2024 and December 31, 2023, respectively. The Company had no outstanding accounts payable related to the subcontracted agreement as of December 31, 2025 and December 31, 2024. In November 2023, the Company negotiated a direct contract with the related-party vendor. During the years ended 2025, 2024 and 2023, the Company purchased $ 1,462 , $ 1,746 and $ 42 , respectively, of products and services directly from the related-party vendor and had $ 208 and $ 149 in outstanding accounts payable to the vendor as of December 31, 2025 and 2024, respectively. (d) 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 years ended 2025 and 2024, the Company incurred $ 1,437 and $ 434 , respectively, of expense under this agreement and had no outstanding accounts payables to the vendor as of either December 31, 2025 or 2024. (e) 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 shareholder. The dividend distribution was funded from excess operating cash flows and is presented in the financing section of the statement of cash flows. On December 31, 2025, Cronos GrowCo made a dividend payment, of which $ 2,555 was paid to its non-controlling shareholder. The dividend distributions were funded from excess operating cash flows and are presented in the financing section of the consolidated statement of cash flows. 18. 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 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 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 included 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. 118 Cronos Group Inc. Notes to Consolidated Financial Statements For the years ended December 31, 2025, 2024, and 2023 (In thousands of U.S. dollars, except for share amounts) Table of Contents 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 consolidated statements of net income (loss) and comprehensive income (loss) in the year ended December 31, 2024. In addition, the Cronos Fermentation assets were classified as held-for-sale in the first quarter of 2024 at a fair value less costs to sell of $ 19,398 . During the third quarter of 2024, the Company adjusted its sales strategy for the Cronos Fermentation assets to market the assets to a broader buyer pool, which resulted in the recognition of a loss on held-for-sale assets of $ 10,422 on the consolidated statements of net income (loss) and comprehensive income (loss) in year ended December 31, 2024. During the fourth quarter of 2024, the Company recorded an additional loss on these held-for-sale assets of $ 345 . 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 consolidated statements of net income (loss) and comprehensive income (loss) in the second quarter of 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 consolidated statements of net income (loss) and comprehensive income (loss) in the third quarter of 2025. The agreement to sell the Cronos Fermentation Facility assets was consummated during the fourth quarter of 2025. The Company had no held-for-sale assets as of December 31, 2025. During the years ended December 31, 2025, December 31, 2024 and December 31, 2023, the Company incurred $ 2,037 , $ 630 , and $ 1,524 , respectively, of restructuring costs in its continuing operations in connection with the Realignment. Charges related thereto include employee-related costs such as severance and other termination benefits, as well as IT infrastructure and finance transformation costs associated with the Realignment. During the year ended December 31, 2023, as a result of the decision to wind down operations at Cronos Fermentation, the Company recognized an inventory write-down of $ 805 related to certain obsolete raw materials. Restructuring costs and inventory write-downs incurred in the Company’s discontinued operations during the year ended December 31, 2023 is presented in Note 3 “ Discontinued Operations. ” The following table summarizes the Company’s restructuring activity for the years ended December 31, 2025, 2024 and 2023: As of December 31, 2024 Expenses Payments/Write-offs As of December 31, 2025 Employee Termination Benefits $ — $ 637 $ ( 533 ) $ 104 Other Restructuring Costs — 1,400 ( 1,189 ) 211 Total $ — $ 2,037 $ ( 1,722 ) $ 315 As of December 31, 2023 Expenses Payments/Write-offs As of December 31, 2024 Employee Termination Benefits $ 150 $ 62 $ ( 212 ) $ — Other Restructuring Costs — 568 ( 568 ) — Total $ 150 $ 630 $ ( 780 ) $ — As of December 31, 2022 Expenses Payments/Write-offs As of December 31, 2023 Employee Termination Benefits $ 403 $ 1,371 $ ( 1,624 ) $ 150 Other Restructuring Costs 21 153 ( 174 ) — Total $ 424 $ 1,524 $ ( 1,798 ) $ 150 119 ITEM 9. CHANGES IN AND DISAGREEMENTS WITH ACCOUNTANTS ON ACCOUNTING AND FINANCIAL DISCLOSURE. None.