Cronos Group Inc. 10-Q

Item 1. Financial Statements Table of Contents Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 202 5 4 Condensed Consolidated Statements of Net Income ( Loss ) and Comprehensive Income (Loss) for the three months ended March 31 , 2026 and 202 5 (Unaudited) 5 Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2026 and 202 5 (Unaudited) 6 Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 202 6 and 2025 (Unaudited) 7 Notes to Condensed Consolidated Financial Statements (Unaudited) 8 3 Cronos Group Inc. Condensed Consolidated Balance Sheets (In thousands of U.S. dollars, except share amounts, unaudited) Table of Contents As of March 31, 2026 As of December 31, 2025 Assets Current assets Cash and cash equivalents $ 821,856 $ 791,794 Short-term investments — 40,000 Accounts receivable, net 32,962 34,099 Interest receivable 5,734 8,654 Other receivables 13,546 14,445 Current portion of loans receivable, net 128 — Inventory, net 48,676 46,750 Prepaids and other current assets 4,974 8,344 Total current assets 927,876 944,086 Other investments 5,199 7,664 Non-current portion of loans receivable, net 20,803 20,847 Property, plant and equipment, net 142,102 145,865 Right-of-use assets 1,303 1,422 Goodwill 65,436 66,478 Intangible assets, net 8,549 8,890 Deferred tax assets 841 1,888 Total assets $ 1,172,109 $ 1,197,140 Liabilities Current liabilities Accounts payable $ 10,281 $ 11,640 Income taxes payable 1,369 — Accrued liabilities 30,601 36,210 Current portion of lease obligation 169 337 Total current liabilities 42,420 48,187 Non-current portion due to non-controlling interests 749 733 Non-current portion of lease obligation 1,142 1,172 Deferred tax liabilities 3,984 4,089 Total liabilities 48,295 54,181 Shareholders’ equity Share capital and additional paid-in capital (no par value; authorized for issue as of March 31, 2026 and December 31, 2025: unlimited; shares outstanding as of March 31, 2026 and December 31, 2025: 376,258,707 and 381,592,969 , respectively) 647,040 662,983 Retained earnings 460,540 447,756 Accumulated other comprehensive loss ( 33,918 ) ( 16,842 ) Total equity attributable to shareholders of Cronos Group 1,073,662 1,093,897 Non-controlling interests 50,152 49,062 Total shareholders’ equity 1,123,814 1,142,959 Total liabilities and shareholders’ equity $ 1,172,109 $ 1,197,140 See notes to condensed consolidated interim financial statements. 4 Cronos Group Inc. Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) (In thousands of U.S. dollars, except share and per share amounts, unaudited) Table of Contents Three months ended March 31, 2026 2025 Net revenue, before excise taxes $ 58,965 $ 41,898 Excise taxes ( 13,755 ) ( 9,636 ) Net revenue 45,210 32,262 Cost of sales 25,392 18,528 Inventory write-down 665 — Gross profit 19,153 13,734 Operating expenses Sales and marketing 5,615 4,565 Research and development 1,413 793 General and administrative 11,736 9,309 Restructuring costs 484 555 Share-based compensation 1,313 2,088 Depreciation and amortization 425 496 Total operating expenses 20,986 17,806 Operating loss ( 1,833 ) ( 4,072 ) Other income (expense) Interest income, net 8,853 9,665 Gain (loss) on revaluation of financial instruments ( 2,484 ) 49 Foreign currency gain 13,699 1,583 Change in allowance for credit loss on non-operating loan ( 106 ) — Other, net 10 43 Total other income 19,972 11,340 Income before income taxes 18,139 7,268 Income tax provision (benefit) 2,428 ( 455 ) Net income 15,711 7,723 Net income attributable to non-controlling interest 1,959 1,601 Net income attributable to Cronos Group $ 13,752 $ 6,122 Comprehensive income (loss) Net income $ 15,711 $ 7,723 Other comprehensive loss Foreign exchange loss on translation ( 17,945 ) ( 3,082 ) Comprehensive income (loss) ( 2,234 ) 4,641 Comprehensive income attributable to non-controlling interests 1,090 1,443 Comprehensive income (loss) attributable to Cronos Group $ ( 3,324 ) $ 3,198 Net income per share Basic net income per share attributable to Cronos Group $ 0.04 $ 0.02 Diluted net income per share attributable to Cronos Group $ 0.04 $ 0.02 See notes to condensed consolidated interim financial statements. 5 Cronos Group Inc. Condensed Consolidated Statements of Changes in Equity For the three months ended March 31, 2026 and 2025 (In thousands of U.S. dollars, except share amounts, unaudited) Number of shares Share capital and additional paid-in capital Retained earnings Accumulated other comprehensive income (loss) Non-controlling interests Total shareholders’ equity Balance as of December 31, 2025 381,592,969 $ 662,983 $ 447,756 $ ( 16,842 ) $ 49,062 $ 1,142,959 Activities relating to share-based compensation 1,031,438 787 ( 968 ) — — ( 181 ) Share repurchases ( 6,365,700 ) ( 16,730 ) — — — ( 16,730 ) Net income — — 13,752 — 1,959 15,711 Foreign exchange loss on translation — — — ( 17,076 ) ( 869 ) ( 17,945 ) Balance as of March 31, 2026 376,258,707 $ 647,040 $ 460,540 $ ( 33,918 ) $ 50,152 $ 1,123,814 Number of shares Share capital and additional paid-in capital Retained earnings Accumulated other comprehensive loss Non-controlling interests Total shareholders’ equity Balance as of December 31, 2024 382,530,780 $ 669,879 $ 457,709 $ ( 63,525 ) $ 46,919 $ 1,110,982 Activities relating to share-based compensation 2,875,615 ( 843 ) ( 15 ) — — ( 858 ) Net income — — 6,122 — 1,601 7,723 Foreign exchange loss on translation — — — ( 2,924 ) ( 158 ) ( 3,082 ) Balance as of March 31, 2025 385,406,395 $ 669,036 $ 463,816 $ ( 66,449 ) $ 48,362 $ 1,114,765 See notes to condensed consolidated interim financial statements. 6 Cronos Group Inc. Condensed Consolidated Statements of Cash Flows (In thousands of U.S. dollars, except share amounts, unaudited) Table of Contents Three months ended March 31, 2026 2025 Operating activities Net income $ 15,711 $ 7,723 Adjustments to reconcile net income to net cash used in operating activities: Share-based compensation 1,313 2,088 Depreciation and amortization 3,727 2,840 Loss from investments 2,484 68 Changes in expected credit losses on long-term financial assets 107 9 Inventory step-up recorded to cost of sales — 517 Foreign currency gain ( 13,699 ) ( 1,583 ) Other non-cash operating activities, net 979 779 Changes in operating assets and liabilities: Accounts receivable, net 879 ( 3,409 ) Interest receivable 2,360 3,453 Other receivables 724 ( 2,379 ) Prepaids and other current assets 3,310 ( 60 ) Inventory, net ( 2,039 ) ( 1,631 ) Accounts payable ( 1,206 ) ( 1,637 ) Income taxes payable 1,387 4 Accrued liabilities ( 5,139 ) ( 8,878 ) Net cash provided by (used in) operating activities 10,898 ( 2,096 ) Investing activities Purchase of short-term investments — ( 40,000 ) Proceeds from short-term investments 40,000 — Purchase of property, plant and equipment ( 1,875 ) ( 15,258 ) Purchase of intangible assets ( 96 ) ( 98 ) Net cash provided by (used in) investing activities 38,029 ( 55,356 ) Financing activities Repurchases of common stock ( 16,730 ) — Withholding taxes paid on share-based awards ( 1,538 ) ( 2,930 ) Net cash used in financing activities ( 18,268 ) ( 2,930 ) Effect of foreign currency translation on cash and cash equivalents ( 597 ) ( 604 ) Net change in cash and cash equivalents 30,062 ( 60,986 ) Cash and cash equivalents, beginning of period 791,794 858,805 Cash and cash equivalents, end of period $ 821,856 $ 797,819 Supplemental cash flow information Interest paid $ — $ — Interest received $ 9,370 $ 13,052 Income taxes paid $ 8 $ 50 See notes to condensed consolidated interim financial statements. 7 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 1. Background, Basis of Presentation, and Summary of Significant Accounting Policies (a) Background Cronos Group Inc. (“Cronos” or the “Company”) is incorporated in the province of British Columbia under the Business Corporations Act (British Columbia) with principal executive offices at 4491 Concession Rd 12, Stayner, Ontario, L0M 1S0. The Company’s common shares are currently listed on the Toronto Stock Exchange (“TSX”) and Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CRON.” Cronos is a global cannabis company focused on scaling leading consumer goods products through research and development and innovation. 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 ® , LIT ™ and Lord Jones ® . (b) Basis of presentation These condensed consolidated interim financial statements of Cronos are unaudited. They have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and with applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) relating to interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for any other reporting period. These condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”). Certain prior period amounts have been reclassified to conform to the current period presentation of our condensed consolidated interim financial statements. These reclassifications had no effect on the reported results of operations and ending shareholders’ equity. (c) Segment information Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”) manages the business, makes operating decisions and assesses the Company’s performance. The Company has determined that it has one operating segment and therefore one reportable segment, which is comprised of operations in Canada and Israel and is involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets . (d) Revenue recognition The following table presents the Company’s revenue by major product category: Three months ended March 31, 2026 2025 Cannabis flower $ 33,734 $ 23,344 Cannabis extracts 11,457 8,608 Other 19 310 Net revenue $ 45,210 $ 32,262 Net revenues attributed to a geographic region based on the location of the customer were as follows: Three months ended March 31, 2026 2025 Canada $ 25,351 $ 20,130 Israel 14,151 9,229 Other countries 5,708 2,903 Net revenue $ 45,210 $ 32,262 8 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (e) Short-term Investments Short-term investments are classified as held-to-maturity and recorded at cost. Interest earned on short-term investments is recorded in interest receivables on the consolidated balance sheets and interest income, net on the condensed consolidated statements of net income (loss) and comprehensive income (loss). Cash inflows and outflows related to the purchase and maturity of short-term investments are classified as investing activities in the Company’s condensed consolidated statements of cash flows. As of March 31, 2026 and December 31, 2025, the Company’s short-term investments of nil and $ 40,000 , respectively, were comprised of Guaranteed Investment Certificates held in Canada. (f) Concentration of risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities, primarily accounts receivable and other receivables, and its investing activities, including cash held with banks and financial institutions, short-term investments and loans receivable. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $ 895,029 and $ 909,839 as of March 31, 2026 and December 31, 2025, 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 and current conditions. Effective January 1, 2026, the Company elected the practical expedient under ASU 2025-05, which permits the assumption that current conditions as of the reporting date remain unchanged for the remaining life of the asset when developing the expected credit loss estimate for current accounts receivable and current contract assets arising from contracts with customers. Accounts receivable are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among 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 March 31, 2026 and December 31, 2025, the Company had $ 12 and $ 9 , respectively, in expected credit losses that have been recognized on receivables from contracts with customers. As of March 31, 2026, the Company assessed that there is a concentration of credit risk, as 21 % of the Company’s accounts receivable were due from one customer with an established credit history with the Company. As of December 31, 2025, 16 % of the Company’s accounts receivable were due from one customer with an established credit history with the Company. The Company sells products to a limited number of major customers. Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s net revenue before excise taxes. During the three months ended March 31, 2026, the Company earned a total net revenue before excise taxes of $ 24,597 from two major customers, together accounting for 42 % of the Company’s total net revenue before excise taxes. During the three months ended March 31, 2025, the Company earned a total net revenue before excise taxes of $ 17,751 from two major customers, together accounting for 42 % of the Company’s total net revenue before excise taxes. (g) Adoption of new accounting pronouncement 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. Entities may now elect a practical expedient that assumes that current conditions as of the balance sheet date will not change for the remaining life of the asset when evaluating the likelihood of repayment. The adoption of ASU 2025-05 did not have a material effect on the Company’s condensed consolidated financial statements. 9 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (h) 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 (“ASU 2025-01”). No guidance was changed with ASU 2025-01, but the issuance simply ensures that all public business entities have a clear and consistent timeline for implementing the enhanced expense disaggregation disclosures. 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. Inventory, net Inventory, net is comprised of the following items: As of March 31, 2026 December 31, 2025 Raw materials $ 9,170 $ 8,762 Work-in-progress 25,832 25,830 Finished goods 13,578 12,012 Supplies and consumables 96 146 Total $ 48,676 $ 46,750 As a result of the transaction by which we obtained majority control of the board of directors of Cronos GrowCo (the “Cronos GrowCo Transaction”), the Company recorded a step-up to Cronos GrowCo’s existing inventory of $ 5,605 to bring the inventory balance acquired by the Company to its fair value. For the three months ended March 31, 2026 and 2025, the Company recognized nil and $ 517 , respectively, of this inventory step-up into cost of sales on the condensed consolidated statements of net income (loss) and comprehensive income (loss). As of both March 31, 2026 and December 31, 2025, none of the inventory step-up was remaining in the Company’s inventory on the condensed consolidated balance sheets. 3. Investments Other investments Other investments consist of investments in common shares and warrants of companies in the cannabis industry. Vitura On February 12, 2025, Vitura Health Limited (“Vitura”) issued an additional 74,814,757 common shares diluting the Company’s ownership in Vitura from approximately 10 % to approximately 8.3 %. As of March 31, 2026, the Company’s ownership percentage in Vitura remained at approximately 8.3 % of its outstanding common shares. The investment is considered an equity security with a readily determinable fair value. Changes in the fair value of the investment are recorded as gain (loss) on revaluation of financial instruments on the condensed consolidated statements of net income (loss) and comprehensive income (loss). 10 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 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 ($ 21,558 ) and an original issue discount of 16 % (the “High Tide Loan”). Additionally, the Company received a common share purchase warrant (the “High Tide Warrant”) with a five-year term, which is exercisable into up to 3,836,317 common shares (the “Warrant Shares”) of High Tide at an exercise price of C$ 3.91 per Warrant Share. The High Tide Warrant is classified as a derivative that is not being held as a hedge and was initially recorded at a fair value of C$ 6,989 ($ 5,106 ) to other investments on the condensed consolidated balance sheet on the transaction date. The High Tide Warrant’s fair value is estimated at each reporting date using a Black-Scholes model. Key inputs include the share price and volatility of High Tide common shares, the risk-free rate and the remaining term of the High Tide Warrant. Changes in the fair value of the High Tide Warrant are recorded as income (loss) on revaluation of financial instruments on the condensed consolidated statements of net income (loss) and comprehensive income (loss). See Note 4 “ Loans Receivable, net ” for discussion of the loan receivable recognized as part of the agreement with High Tide. The following tables summarize the Company’s other investments activity: As of December 31, 2025 Unrealized loss Foreign exchange effect As of March 31, 2026 Vitura $ 2,253 $ ( 888 ) $ 82 $ 1,447 High Tide Warrant 5,411 ( 1,596 ) ( 63 ) 3,752 $ 7,664 $ ( 2,484 ) $ 19 $ 5,199 As of December 31, 2024 Unrealized loss Foreign exchange effect As of March 31, 2025 Vitura $ 2,813 $ ( 68 ) $ 10 $ 2,755 $ 2,813 $ ( 68 ) $ 10 $ 2,755 4. Loans Receivable, net Loans receivable, net consists of the following: As of March 31, 2026 As of December 31, 2025 Current portion of Mucci Promissory Note accrued interest $ 128 $ — Total current portion of loans receivable, net 128 — High Tide Loan 9,235 9,185 Mucci Promissory Note 9,081 9,226 Cannasoul Collaboration Loan 1,993 1,972 Add: Long-term portion of accrued interest 494 464 Total long-term portion of loans receivable, net 20,803 20,847 Total loans receivable, net $ 20,931 $ 20,847 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 $ 11,749 ) with the Cronos GrowCo joint venture partner (“Mucci”). The Mucci Promissory Note is secured by a general security agreement covering all the assets of Mucci. Prior to July 1, 2022, interest accrued on the Mucci Promissory Note was capitalized as part of the principal balance. On September 30, 2022, the Mucci Promissory Note was amended and restated to increase the interest rate from 3.95 % to the Canadian Prime Rate plus 1.25 %, change the interest payments from quarterly to annual, and defer Mucci’s initial cash interest payment from September 30, 2022 to July 1, 2023. On June 20, 2024, the Mucci Promissory Note was amended and restated. As a result, interest accrued on the Mucci Promissory Note between July 1, 2023 and July 1, 2024 was capitalized as part of the principal balance. As of July 1, 2024, interest accruing on the Mucci Promissory Note is required to be paid in cash beginning on July 1, 2025. For both the three months ended March 31, 2026 and 2025, there were no repayments of principal or interest on the Mucci Promissory Note. 11 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents Cannasoul Collaboration Loan The Company holds a variable interest in Cannasoul Lab Services Ltd. (“CLS”). CLS is a wholly owned subsidiary of Cannasoul Analytics Ltd., which has established a commercial cannabis analytical testing laboratory (the “Cannasoul Laboratory”) located on the premises of Cronos Israel (the “Cannasoul Collaboration”). Cronos Israel agreed to advance up to ILS 8,297 ($ 2,639 ) by a non-recourse loan (the “Cannasoul Collaboration Loan”) to CLS over a period of two years from April 1, 2020 for the capital and operating expenditures of the Cannasoul Laboratory. The Cannasoul Collaboration Loan bears interest at 3.5 % annually. Cronos Israel will receive 70 % of the profits of the Cannasoul Laboratory until such time as it has recovered 150 % of the amounts advanced to CLS, after which time it will receive 50 % of the Cannasoul Laboratory profits. As a result, the Company is exposed to economic variability from CLS’s performance. The Company does not consolidate CLS as it does not have the power to direct the activities that most significantly impact the entity’s economic performance; thus, the Company is not considered the primary beneficiary of the entity. The carrying amount of the Cannasoul Collaboration Loan is recorded under loans receivable and the full amount of the Cannasoul Collaboration Loan, ILS 8,297 , represents the Company’s maximum potential exposure to losses through the Cannasoul Collaboration. As of both March 31, 2026 and December 31, 2025, CLS has received ILS 8,297 (approximately $ 2,639 and $ 2,604 , respectively), from the Cannasoul Collaboration Loan. 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 3 “ 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 ($ 13,359 ) and will be amortized using the effective interest method over the estimated life of the loan. For the three months ended March 31, 2026, High Tide paid $ 212 in interest. As of March 31, 2026, the High Tide loan receivable included an unamortized discount of $ 7,373 and an expected credit loss of $ 4,951 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. 12 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents Expected credit loss allowances on the Company’s long-term financial assets for the three months ended March 31, 2026 and 2025 were comprised of the following items: As of December 31, 2025 Increase (i) Foreign exchange effect As of March 31, 2026 Mucci Promissory Note $ 59 $ 1 $ ( 1 ) $ 59 Cannasoul Collaboration Loan 631 5 9 645 High Tide Loan 4,924 106 ( 79 ) 4,951 $ 5,614 $ 112 $ ( 71 ) $ 5,655 As of December 31, 2024 Increase (ii) Foreign exchange effect As of March 31, 2025 Mucci Promissory Note 88 5 — 93 Cannasoul Collaboration Loan 535 4 ( 10 ) 529 $ 623 $ 9 $ ( 10 ) $ 622 (i) During the three months ended March 31, 2026, $ 6 was recorded as an increase to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses. During the three months ended March 31, 2026, $ 106 was recorded as a change in allowance for credit loss on non-operating loan on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our allowance for expected credit loss on the High Tide Loan. (ii) During the three months ended March 31, 2025, $ 9 was recorded as an increase to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses. 5. Property, Plant and Equipment, net Property, plant and equipment, net consisted of the following: As of March 31, 2026 As of December 31, 2025 Cost Land $ 7,183 $ 7,245 Building and leasehold improvements 235,368 236,811 Machinery and Equipment 48,635 47,514 Furniture and fixtures 2,717 2,694 Construction in progress 363 1,062 Total Cost 294,266 295,326 Less: accumulated depreciation ( 45,297 ) ( 42,639 ) Less: accumulated impairment charges ( 106,867 ) ( 106,822 ) Property, Plant and Equipment, net $ 142,102 $ 145,865 For the three months ended March 31, 2026, depreciation expense on property, plant and equipment was $ 3,097 . For the three months ended March 31, 2025, depreciation expense on property, plant and equipment was $ 2,144 . This depreciation expense was included in cost of sales as well as depreciation and amortization in operating expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss). As of March 31, 2026 and December 31, 2025, the Company had $ 465 and $ 760 , respectively, of unpaid purchases of property, plant and equipment accrued in accounts payable on the condensed consolidated balance sheets. 13 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 6. Goodwill and Intangible Assets, net (a) Goodwill Goodwill is comprised of the following items as of March 31, 2026 and December 31, 2025: As of March 31, 2026 Cost Accumulated Impairment Charges Net Peace Naturals $ 1,006 $ — $ 1,006 Cronos GrowCo 64,430 — 64,430 $ 65,436 $ — $ 65,436 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 (b) Intangible assets, net Intangible assets, net are comprised of the following items as of March 31, 2026 and December 31, 2025: As of March 31, 2026 Cost Accumulated amortization Accumulated impairment charges Net Software $ 5,599 $ ( 4,516 ) $ ( 74 ) $ 1,009 Health Canada licenses 8,054 ( 1,725 ) ( 6,329 ) — Israeli codes (i) 327 ( 108 ) — 219 Know-how (ii) 7,905 ( 1,384 ) — 6,521 Total definite-lived intangible assets 21,885 ( 7,733 ) ( 6,403 ) 7,749 Lord Jones ® brand 64,000 — ( 63,200 ) 800 Trademarks 142 — ( 142 ) — Total intangible assets $ 86,027 $ ( 7,733 ) $ ( 69,745 ) $ 8,549 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 (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. Amortization costs associated with the know-how intangible asset are recorded to cost of sales on the condensed consolidated statements of net income (loss) and comprehensive income (loss). 14 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents As of March 31, 2026, the estimated future amortization of definite-lived intangible assets is as follows: As of March 31, 2026 Remainder of 2026 (9 months) $ 1,163 2027 1,161 2028 886 2029 823 2030 808 Thereafter 2,908 $ 7,749 7. Restructuring In the first quarter of 2022, the Company initiated a strategic plan to realign the business around its brands, centralize functions and evaluate the Company’s supply chain (the “Realignment”). As part of the Realignment, on February 28, 2022, the Company’s Board of Directors (the “Board”) approved plans to leverage the Company’s strategic partnerships to improve supply chain efficiencies and reduce manufacturing overhead by exiting its production facility in Stayner, Ontario, Canada (the “Peace Naturals Campus”). On February 27, 2023, the Board approved revisions to the Realignment, under which the Company was maintaining select components of its operations at the Peace Naturals Campus, namely distribution warehousing, certain research and development activities and manufacturing of certain of the Company’s products. In the third quarter of 2023, the Board approved revisions to the Realignment to wind-down operations at the Company’s Winnipeg, Manitoba facility (the “Cronos Fermentation Facility”), list the Cronos Fermentation Facility assets for sale, and implement additional organization-wide cost reductions as the Company continues its Realignment initiatives. On November 26, 2023, the Company entered into an agreement for the sale and leaseback of the Peace Naturals Campus, which was subsequently terminated pursuant to its terms during the second quarter of 2024. The Company plans to continue and expand operations at the Peace Naturals Campus. In the first quarter of 2025, the Company continued its Realignment initiatives to transform its IT infrastructure and finance departments to drive long-term cost efficiencies, improve cross-functional collaboration, and support global scalability. These actions 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. During the three months ended March 31, 2026, the Company incurred $ 484 of restructuring costs in connection with the Realignment. During the three months ended March 31, 2025, the Company incurred $ 555 of restructuring costs in connection with the Realignment. Charges related thereto include employee-related costs such as severance and other termination benefits, as well as IT infrastructure and finance transformation costs associated with the Realignment. The following tables summarize the Company’s restructuring activity for the three months ended March 31, 2026 and three months ended March 31, 2025: Accrual as of December 31, 2025 Expenses Payments/Write-offs Accrual as of March 31, 2026 Employee Termination Benefits $ 104 $ — $ ( 104 ) $ — Other Restructuring Costs 211 484 ( 459 ) 236 Total $ 315 $ 484 $ ( 563 ) $ 236 Accrual as of December 31, 2024 Expenses Payments/Write-offs Accrual as of March 31, 2025 Employee Termination Benefits $ — $ 257 $ — $ 257 Other Restructuring Costs — 298 ( 115 ) 183 Total $ — $ 555 $ ( 115 ) $ 440 15 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 8. Share-based Compensation (a) Share-based award plans The Company has granted stock options, restricted share units (“RSUs”) and deferred share units (“DSUs”) to employees and non-employee directors under the 2020 Omnibus Equity Incentive Plan dated March 29, 2020 (the “2020 Omnibus Plan”) and the DSU Plan dated August 10, 2019 (the “DSU Plan”). The following table summarizes the total share-based compensation expense associated with the Company’s stock options, RSUs and DSUs for the three months ended March 31, 2026 and 2025: Three months ended March 31, 2026 2025 Stock options $ 18 $ 74 RSUs 1,338 2,014 DSUs ( 43 ) — Total share-based compensation $ 1,313 $ 2,088 Share-based compensation for the three months ended March 31, 2026 included a gain of $ 43 associated with the Company’s DSUs. For the three months ended March 31, 2025, a gain of $ 117 was included in revaluation of financial instruments in the Company’s condensed consolidated statements of net income (loss) and comprehensive income (loss), related to the revaluation of DSUs. (b) Stock options Vesting conditions for grants of options are determined by the Compensation Committee of the Board. The typical vesting for stock option grants made under the 2020 Omnibus Plan is annual vesting over three to five years with a maximum term of ten years . The 2020 Omnibus Plan does not authorize grants of options with an exercise price below fair market value. The following is a summary of the changes in stock options for the three months ended March 31, 2026 and 2025: Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of December 31, 2025 $ 5.68 588,317 2.48 Balance as of March 31, 2026 $ 5.68 588,317 2.24 Exercisable as of March 31, 2026 $ 5.92 541,237 2.09 Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of December 31, 2024 $ 5.63 717,264 3.65 Balance as of March 31, 2025 $ 5.63 717,264 3.40 Exercisable as of March 31, 2025 $ 6.20 573,253 3.04 (i) The weighted-average exercise price reflects the conversion of foreign currency-denominated stock options translated into C$ using the average foreign exchange rate as of the date of issuance. The following table summarizes stock options outstanding: As of March 31, 2026 As of December 31, 2025 2020 Omnibus Plan 588,317 588,317 Total stock options outstanding 588,317 588,317 16 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (c) Restricted share units The following is a summary of the changes in RSUs for the three months ended March 31, 2026 and 2025: Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of December 31, 2025 $ 2.85 5,385,106 Granted (i) 3.49 1,507,369 Vested and issued 2.66 ( 1,635,895 ) Balance as of March 31, 2026 $ 3.05 5,256,580 Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of December 31, 2024 $ 3.50 8,382,213 Granted (i) 2.73 1,775,668 Vested and issued 4.00 ( 4,459,280 ) Cancellation and forfeitures 3.47 ( 134,999 ) Balance as of March 31, 2025 $ 2.86 5,563,602 (i) RSUs granted in the period vest annually in equal installments over a three-year period from the grant date. All RSUs are subject to such holder’s continued employment through each vesting date. The vesting of such RSUs is not subject to the achievement of any performance criteria. (ii) The weighted-average grant date fair value reflects the conversion of foreign currency-denominated RSUs translated into C$ using the foreign exchange rate as of the date of issuance. (d) Deferred share units The following is a summary of the changes in DSUs for the three months ended March 31, 2026 and 2025: Financial liability Number of DSUs Balance as of December 31, 2025 $ 1,993 758,499 Gain on revaluation ( 43 ) — Foreign exchange effect ( 31 ) — Balance as of March 31, 2026 $ 1,919 758,499 Financial liability Number of DSUs Balance as of December 31, 2024 $ 1,129 560,261 Gain on revaluation ( 117 ) — Foreign exchange effect ( 3 ) — Balance as of March 31, 2025 $ 1,009 560,261 9. Share Repurchase Program On May 7, 2025, the Board authorized a share repurchase program of up to $ 50,000 . The repurchase program commenced on May 14, 2025 and is expected to terminate on May 13, 2026, unless earlier terminated. Repurchases under the program may be made from time to time, either through open market purchases at then-prevailing market prices through the facilities of the Nasdaq or other U.S. published markets, privately negotiated transactions or otherwise. Open market repurchases will not exceed 19,270,951 common shares, being 5 % of the outstanding common shares as of May 7, 2025. The timing and amount of repurchases are subject to market conditions, compliance with applicable laws and regulations and any other factors management of the Company may deem relevant. The program does not obligate Cronos to acquire any specific dollar amount or number of common shares and may be modified, suspended, or discontinued at any time. During the three months ended March 31, 2026, the Company repurchased 6,365,700 common shares for $ 16,730 , inclusive of commissions and excise taxes. All common shares repurchased under this program were retired and cancelled upon settlement. As a result, the repurchased common shares were removed from issued and outstanding share capital, reducing the number of common shares outstanding. The value of the retired common shares was charged against share capital and additional paid-in capital. The Company funded the repurchases using available cash resources. 17 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents Subsequent to March 31, 2026, the Board authorized a new share repurchase program intended to succeed the Company’s existing share repurchase program. See Note 15, “ Subsequent Events .” 10. Commitments and Contingencies (a) Commitments There have been no material changes in the information regarding commitments as disclosed in the Company’s Annual Report. (b) Contingencies The Company is subject to various legal proceedings in the ordinary course of its business and in connection with its marketing, distribution and sale of its products. Many of these legal proceedings are in the early stages of litigation and seek damages that are unspecified or not quantified. Although the outcome of these matters cannot be predicted with certainty, the Company does not believe these legal proceedings, individually or in the aggregate, will have a material adverse effect on its 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. 18 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents On June 3, 2020, an alleged shareholder filed a Statement of Claim, as amended on August 12, 2020, in the Ontario Superior Court of Justice in Toronto, Ontario, Canada, seeking, among other things, an order certifying the action as a class action on behalf of a putative class of shareholders and damages of an unspecified amount. The Amended Statement of Claim named (i) the Company, (ii) its Chief Executive Officer, (iii) former Chief Financial Officer, (iv) former Chief Financial Officer and Chief Commercial Officer, and (v) current and former members of the Board as defendants and alleged breaches of the Ontario Securities Act, oppression under the Ontario Business Corporations Act and common law misrepresentation. The Amended Statement of Claim generally alleged that certain of the Company’s prior public statements about revenue and internal controls were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of the Board 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. (ii) Regulatory reviews relating to restatements On October 24, 2022, the Company announced regulatory settlements as follows: SEC Settlement On October 24, 2022, the SEC issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8(a) of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21(c) of the Exchange Act, Making Findings, and Imposing a Cease-and-Desist Order (the “Settlement Order”) resolving the restatements of our 2019 and 2021 interim financial statements (the “Restatements”). The Company agreed to settle with the SEC, without admitting or denying the allegations described in the Settlement Order. The Settlement Order fully and finally disposed of the investigation of the Company by the SEC into the Restatements without the payment of any civil penalty or other amount. The Settlement Order required the Company to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Sections 10(b), 13(a), 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 13a-13, 13a-15(a), 13a-16 and 12b-20 thereunder. As a result of the Settlement Order, the Company (i) lost its status as a well-known seasoned issuer for a period of three years, (ii) is unable to rely on the private offering exemptions provided by Regulations A and D under the Securities Act for a period of five years and (iii) was unable to rely on the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 for a period of three years. OSC Settlement On October 24, 2022, the Ontario Capital Markets Tribunal approved a settlement agreement (the “Settlement Agreement”) between the Company and the staff of the Ontario Securities Commission (the “OSC”), resolving the Restatements. Pursuant to the terms of the Settlement Agreement, which fully and finally disposed the investigation of the Company by the OSC, Cronos agreed to pay a total of C$ 1.34 million to fully settle the matter, and acknowledged that it had failed to comply with the requirement under Section 77 of the Ontario Securities Act to file interim financial reports in the manner set out therein and had acted in a manner contrary to the public interest. 19 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (iii) Litigation and regulatory inquiries relating to marketing, distribution, import and sale of products On April 17, 2023, a group of plaintiffs led by the Green Leaf (Ale Yarok) political party filed a Statement of Claim and Request for Approval of a Class Action on behalf of a purported class of Israeli cannabis consumers in the District Court of Tel Aviv, Israel, against 26 cannabis-related parties, including three Cronos Israel entities. The Statement of Claim alleges that the defendants violated certain laws relating to the marketing of medical cannabis products, including marketing to unlicensed cannabis consumers. The lawsuit seeks a total of ILS 420 million. The Cronos Israel defendants moved to dismiss the action on August 13, 2023. The court granted the motion (and similar motions filed by other defendants) on May 16, 2024, dismissing the plaintiffs’ petition for class certification without prejudice and their individual claims with prejudice, and ordering the plaintiffs to pay ILS 10 thousand to each of the defendants for costs. On July 14, 2024, the plaintiffs appealed to the Supreme Court of Israel seeking to overturn both the dismissal of plaintiffs’ individual claims and the award of costs. The appeal is pending. On January 18, 2024, the Company was notified that the Trade Levies Commissioner of the Israel Ministry of Economy and Industry initiated a public investigation of alleged dumping of medical cannabis imports from Canada into Israel. On July 9, 2024, the Commissioner announced a preliminary determination proposing to impose an anti-dumping duty on Canadian licensed producers. Under the proposal, the Company would have been subject to a proposed duty of 369%. The Commissioner determined not to impose a provisional duty at that time pending the conclusion of the Ministry’s investigation. The Company responded to requests for information from the Ministry. On November 10, 2024, the Trade Levies Commissioner published final findings under which the Company would be subject to a proposed duty of 175%. The Commissioner’s findings were then evaluated by an ad hoc advisory committee. On December 12, 2024, the Minister of Economy announced a conflict of interest and recused himself from the evaluation of whether to impose a duty. On April 10, 2025, notwithstanding the previous recusal, the Minister of 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. 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. 20 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 11. 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 useful insight into underlying business trends and results and facilitates comparison of period-over-period results. In addition, certain significant expenses are regularly reviewed by the CODM and considered for business decisions and allocation of resources; these significant expenses include: sales and marketing, research and development, general and administrative, depreciation and amortization, and share-based compensation expense, which are presented within operating expenses on the Company’s condensed consolidated statements of net income (loss) and comprehensive income (loss). Furthermore, the CODM regularly reviews total cash and short-term investments to aid in capital allocation decisions. The table below sets forth consolidated Adjusted EBITDA and significant expenses for our single segment: Three months ended March 31, 2026 2025 Adjusted EBITDA $ 5,079 $ 2,289 Significant expenses: Sales and marketing 5,615 4,565 Research and development 1,413 793 General and administrative, excluding transaction costs 10,777 9,269 Share-based compensation 1,313 2,088 Depreciation and amortization 425 496 Total significant expenses 19,543 17,211 Restructuring costs 484 555 Transaction costs 959 40 Total operating expense $ 20,986 $ 17,806 21 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents The following tables set forth a reconciliation of net income as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated: Three months ended March 31, 2026 Net income $ 15,711 Interest income, net ( 8,853 ) Income tax provision 2,428 Depreciation and amortization 3,727 EBITDA 13,013 Loss on revaluation of financial instruments (i) 2,484 Foreign currency transaction gain ( 13,699 ) Transaction costs (ii) 959 Other, net (iii) ( 10 ) Restructuring costs (iv) 484 Share-based compensation (v) 1,313 Restatement litigation costs (vi) 411 Israel Ministry of Economy and Industry dumping inquiry expense (vii) 18 Change in allowance for credit loss on non-operating loan (viii) 106 Adjusted EBITDA $ 5,079 Three months ended March 31, 2025 Net income $ 7,723 Interest income, net ( 9,665 ) Income tax benefit ( 455 ) Depreciation and amortization 2,840 EBITDA 443 Gain on revaluation of financial instruments (i) ( 49 ) Foreign currency transaction gain ( 1,583 ) Transaction costs (ii) 40 Other, net (iii) ( 43 ) Restructuring costs (iv) 555 Share-based compensation (v) 2,088 Restatement litigation costs (vi) 47 Inventory step-up recorded to cost of sales (ix) 517 Israel Ministry of Economy and Industry dumping inquiry expense (vii) 274 Adjusted EBITDA $ 2,289 (i) For the three months ended March 31, 2026, the loss on revaluation of financial instruments was driven by a loss related to the Company’s High Tide Warrant and the Company’s equity securities in Vitura. For the three months ended March 31, 2025, the gain on revaluation of financial instruments related primarily to the revaluation of the Company’s DSU liability, partially offset by a loss on the Company’s equity securities in Vitura. (ii) For the three months ended March 31, 2026, transaction costs represented fees related to the pending acquisition of CanAdelaar B.V. For the three months ended March 31, 2025, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction. These costs are included in general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss). (iii) For the three months ended March 31, 2026, other, net related to rental income. For the three months ended March 31, 2025, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities. 22 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents (iv) For the three months ended March 31, 2026 and 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 7 “ Restructuring .” (v) For the three months ended March 31, 2026, share-based compensation related to the expenses of share-based compensation awarded to employees and DSUs issued to our Board of Directors, each under the Company’s share-based award plans, as described in Note 8 “ Share-based Compensation. ” For the three months ended March 31, 2025, share-based compensation related to the expenses of share-based compensation awarded to employees under the Company’s share-based award plans, as described in Note 8 “ Share-based Compensation. ” (vi) For the three months ended March 31, 2026 and 2025, restatement litigation costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement. (vii) For the three months ended March 31, 2026 and 2025, Israel Ministry of Economy and Industry dumping inquiry expense included expenditures relating to the regulatory inquiry about alleged dumping of medical cannabis products in Israel and related litigation and external relations expenses. (viii) For the three months ended March 31, 2026, change in allowance for credit loss on non-operating loan represents the allowance recognized on the High Tide loan receivable, as described in Note 4, “Loans Receivable, net.” (ix) For the three months ended March 31, 2025, inventory step-up recorded to cost of sales represents the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the condensed consolidated statements of net income (loss) and comprehensive income (loss). The following tables present the Company’s revenue by major product category for our single segment: Three months ended March 31, 2026 2025 Cannabis flower $ 33,734 $ 23,344 Cannabis extracts 11,457 8,608 Other 19 310 Net revenue $ 45,210 $ 32,262 Net revenue attributed to a geographic region based on the location of the customer was as follows: Three months ended March 31, 2026 2025 Canada $ 25,351 $ 20,130 Israel 14,151 9,229 Other countries 5,708 2,903 Net revenue $ 45,210 $ 32,262 The table below sets forth total cash and cash equivalents and short-term investments for our single segment: As of March 31, 2026 As of December 31, 2025 Total cash and cash equivalents and short-term investments $ 821,856 $ 831,794 Property, plant and equipment, net were physically located in the following geographic regions: As of March 31, 2026 As of December 31, 2025 Canada $ 125,776 $ 129,352 Israel 16,326 16,513 Total $ 142,102 $ 145,865 Intangibles, net were physically located in the following geographic regions: As of March 31, 2026 As of December 31, 2025 Canada $ 8,219 $ 8,551 Israel 330 339 Total $ 8,549 $ 8,890 For additions to our property, plant and equipment, net and intangibles, net for the three months ended March 31, 2026 and March 31, 2025, please see Note 5 “ Property, Plant and Equipment, net ” and the condensed consolidated statements of cash flows. 23 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 12. Income per Share Basic and diluted income (loss) per share are calculated as follows (in thousands, except share and per share amounts): Three months ended March 31, 2026 2025 Basic income per share computation Net income attributable to the shareholders of Cronos Group $ 13,752 $ 6,122 Weighted-average number of common shares outstanding for computation for basic income per share 379,374,109 382,958,797 Basic income per share $ 0.04 $ 0.02 Diluted income per share computation Net income attributable to the shareholders of Cronos Group $ 13,752 $ 6,122 Weighted-average number of common shares outstanding used in the computation of basic income per share 379,374,109 382,958,797 Dilutive effect of stock options 4,223 — Dilutive effect of RSUs 2,310,041 3,823,127 Dilutive effect of Top-up Rights – market price 110,915 181,761 Weighted-average number of common shares for computation of diluted income from continuing operations per share 381,799,288 386,963,685 Diluted income per share $ 0.04 $ 0.02 For the three months ended March 31, 2026 and 2025, total securities of 1,288,578 and 18,273,597 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive. 13. Fair Value Measurements The Company complies with ASC 820 Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values are determined by: • Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. • Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability. 24 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis: March 31, 2026 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 821,856 $ — $ — $ 821,856 Other investments (i)(ii) 1,447 3,752 — 5,199 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 (i) As of March 31, 2026 and December 31, 2025, 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 3 “ Investments ” for further information. (ii) As of March 31, 2026 and 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 3 “ Investments ” for further information. There were no transfers between fair value categories during the periods presented. 14. Related Party Transactions (a) Vendor Agreement In November 2022, the Company entered into an agreement with an external vendor whereby the vendor would provide certain manufacturing services to the Company. The vendor then subcontracted out a portion of those services to another company whose chief executive officer is an immediate family member of an executive of the Company. In November 2023, the Company negotiated a direct contract with the related-party vendor. In April 2026, subsequent to the period end, this vendor restructured its management team and, as a result, the vendor no longer meets the definition of a related party to the Company. Three months ended March 31, 2026 2025 Related party – purchases of products and services $ 557 $ 189 The Company had outstanding accounts payable related to the agreement of $ 248 and $ 208 as of March 31, 2026 and December 31, 2025, respectively. (b) Consulting Agreement In connection with the Cronos GrowCo Transaction, Cronos GrowCo entered into a consulting services agreement with a consulting firm managed by a member of the group of investors holding the remaining 50 % ownership of Cronos GrowCo, pursuant to which the consulting firm provides management services to Cronos GrowCo. During the three months ended March 31, 2026 and 2025, the Company incurred $ 437 and $ 209 of expense under this agreement. As of both March 31, 2026 and December 31, 2025, the Company had no outstanding payables related to this agreement. 25 Cronos Group Inc. Notes to Condensed Consolidated Financial Statements (Unaudited) (In thousands of U.S. dollars, except share amounts) Table of Contents 15. Subsequent Events Share Repurchase Authorization On May 8, 2026, the Board unanimously authorized a share repurchase program of up to $ 50,000 , which is intended to succeed the Company’s existing share repurchase program upon its scheduled expiration on May 13, 2026. The share repurchase program is expected to commence on May 14, 2026, and terminate on May 13, 2027, unless earlier terminated. Repurchases under the program may be made from time to time, either through open market purchases at then-prevailing market prices through the facilities of the Nasdaq Global Market or other U.S. published markets, privately negotiated transactions or otherwise. Open market repurchases will be limited to 5 % of the number of common shares outstanding as of the applicable measurement time, the maximum amount permitted by applicable Canadian securities laws. The timing and amount of repurchases are subject to market conditions, compliance with applicable laws and regulations and any other factors management of the Company may deem relevant. The program does not obligate Cronos to acquire any specific dollar amount or number of shares and may be modified, suspended, or discontinued at any time. The Company intends to fund repurchases using available cash resources. All shares repurchased under this program will be retired and cancelled upon settlement. As a result, the repurchased shares will be removed from issued and outstanding share capital, reducing the number of shares outstanding. The value of the retired shares will be charged against share capital and additional paid-in capital and, if necessary, to retained earnings, in accordance with ASC 505-30. Pending Acquisition On December 9, 2025, the Company entered into a definitive share sale and purchase agreement (the “SPA”) to acquire all of the issued and outstanding shares of CanAdelaar, one of ten licensed cannabis producers participating in the Dutch Controlled Cannabis Supply Chain Experiment. On May 8, 2026, the Company entered into an amendment to the SPA pursuant to which the parties agreed to extend the Long Stop Date (as defined in the SPA) for closing of the acquisition from June 9, 2026 to September 9, 2026. The extension provides additional time to satisfy certain closing conditions, including obtaining required regulatory clearances in the Netherlands, receipt of confirmations relating to CanAdelaar’s licenses and completion of the Bibob review (a background check conducted by Dutch authorities). No other material changes were made to the terms of the transaction. Table of Contents