What changed in this filing

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Item 2. Management’s Discussion and Analysis

2026-08-06 compared with 2026-05-11 · 259 added, 154 removed, 352 unchanged (54% of the section changed)

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

The following discussion and analysis should be read together with other information, including the Company’s condensed consolidated financial statements and the related notes to those statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (this “Quarterly Report”), consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”), Part I, Item 1A, Risk Factors, of the Annual Report and Part II, Item 1A, Risk Factors, of this Quarterly Report.

The following discussion and analysis should be read together with other information, including the Company’s condensed consolidated financial statements and the related notes to those statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended June 30, 2026 (this “Quarterly Report”), consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”), Part I, Item 1A, Risk Factors, of the Annual Report and Part II, Item 1A, Risk Factors, of this Quarterly Report.

Forward-Looking Statements

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Forward-Looking Statements include, but are not limited to, statements with respect to:

• the ongoing impact of the public investigation into Canadian licensed producers of alleged dumping of medical cannabis imports from Canada into Israel by the Trade Levies Commissioner of the Israel Ministry of Economy and Industry (the “Anti-Dumping Investigation”) and the proposed anti-dumping duty to which the Company’s imports would be subject;

• expectations related to the conflict involving the United States, Israel, Hamas, Hezbollah, Houthis, Iran, Iran’s proxies and other stakeholders in the region (the “Middle East Conflict”) and its impact on our operations in Israel, the supply of product in the market and the demand for product by medical patients in Israel, as well as any regional or global escalations and their impact to global commerce and stability;

• expectations related to markets outside of Canada and Israel, and our ability to successfully distribute the PEACE NATURALS ® brand in those markets;

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

hemp-derived cannabinoid product operations and any future plans to re-enter the U.S.

• the ongoing impact of investigations or proceedings by the Trade Levies Commissioner of the Israel Ministry of Economy and Industry or other Israeli governmental authorities concerning alleged dumping of medical cannabis imports from Canada into Israel (collectively, the “Anti-Dumping Matters”), including the timing and outcome thereof, any anti-dumping duty or other measure that may be imposed and the impact thereof on the Company’s ability to import and sell products in Israel;

• expectations related to the conflict involving the United States, Israel, Hamas, Hezbollah, Houthis, Iran, Iran’s proxies and other stakeholders in the region (the “Middle East Conflict”) and its impact on our employees, facilities, and operations in Israel, the supply of product in the market and the demand for product by medical patients in Israel, and our operating costs, as well as any regional or global escalations and their impact to global commerce and stability;

• expectations related to markets outside of Canada and Israel, and our ability to successfully maintain, expand and distribute the PEACE NATURALS ® brand in those markets;

• expectations related to any future plans to re-enter the U.S.

• the ongoing impact of our announced realignment (inclusive of any revisions thereto, the “Realignment”) and any progress, challenges and effects related thereto as well as changes in strategy, metrics, investments, reporting structure, costs, operating expenses, employee turnover and other changes with respect thereto;

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

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

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

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

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(“CanAdelaar”), including the timing and completion of the transaction, and the anticipated costs, benefits and integration matters associated therewith and the performance of the business from and following closing;

• expectations related to the impact of the renewed share repurchase program that was authorized on May 8, 2026, including the timing and amount of repurchases;

• expectations related to the renewed share repurchase program that was authorized on May 8, 2026, including the timing and amount of repurchases;

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

• expectations regarding revenues, expenses, gross margins and capital expenditures;

• expectations regarding revenues, expenses, gross margins, Adjusted EBITDA (as defined below), profitability, cash flows, foreign currency effects, interest income and capital expenditures;

• expectations regarding our future production and manufacturing strategy and operations, the costs and timing associated therewith and the receipt of applicable production and sale licenses;

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• our ability to successfully create, launch and scale brands and cannabis products;

• our liquidity, capital resources and future cash requirements, including the sufficiency of our cash and cash equivalents and short-term investments to fund our business operations, acquisitions, strategic investments, share repurchases and capital expenditures;

• expectations related to the differentiation of our products, including through the utilization of rare cannabinoids;

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The Forward-Looking Statements contained herein are based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including:

(i) our ability to effectively navigate developments related to the Anti-Dumping Investigation and the proposed anti-dumping duty to which the Company’s imports would be subject and its impact on our operations in Israel;

(ii) our ability to effectively navigate developments related to the Middle East Conflict and its impact on our employees and operations in Israel, the supply of product in the market and demand for product by medical patients in Israel;

(iii) our ability to efficiently and effectively distribute our PEACE NATURALS ® brand in markets outside of Canada and Israel;

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

hemp-derived cannabinoid product operations;

(i) our ability to effectively navigate developments related to the Anti-Dumping Matters, any anti-dumping duty or other measure that may be imposed and the impact thereof on our operations in Israel;

(ii) our ability to effectively navigate developments related to the Middle East Conflict and its impact on our employees, facilities and operations in Israel, the supply of product in the market and demand for product by medical patients in Israel, and our operating costs;

(iii) our ability to efficiently and effectively maintain and expand our distribution of our PEACE NATURALS ® brand in markets outside of Canada and Israel;

(iv) our ability to identify and execute legally permissible opportunities to re-enter the U.S.

(v) our ability to realize the expected cost-savings, efficiencies and other benefits of our Realignment and other announced cost-cutting measures and employee turnover related thereto;

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(xviii) anticipated and unanticipated costs;

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

(xix) our ability to generate cash flow from operations and the sufficiency of our cash and cash equivalents and short-term investments to fund our business operations, acquisitions, strategic investments, share repurchases and capital expenditures;

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

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A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the Forward-Looking Statements in this Quarterly Report and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf.

Such factors include, without limitation, negative impacts on our business and operations in Israel due to the Anti-Dumping Investigation, including that we may not be able to produce, import or sell our products in Israel as a result thereof;

negative impacts on our employees, business and operations in Israel due to the Middle East Conflict, including that we may not be able to produce, import or sell our products or protect our people or facilities in Israel during the Middle East Conflict, the supply of product in the market and the demand for product by medical patients in Israel, and inflationary pressures and related increases in input, production, transportation and other operating costs, as well as potential impacts on consumer purchasing power;

Such factors include, without limitation, negative impacts on our business and operations in Israel due to the Anti-Dumping Matters, including that we may not be able to produce, import or sell our products in Israel as a result thereof;

negative impacts on our employees, business, facilities and operations in Israel due to the Middle East Conflict, including that we may not be able to produce, import or sell our products or protect our people or facilities in Israel during the Middle East Conflict, the supply of product in the market and the demand for product by medical patients in Israel, and inflationary pressures and related increases in input, production, transportation and other operating costs, as well as potential impacts on consumer purchasing power;

that we may not be able to successfully maintain or expand distribution of our products in our markets outside of Canada or Israel or generate meaningful revenue in those markets;

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failure to realize expected growth opportunities;

the lack of cash flow necessary to execute our business plan (either within the expected timeframe or at

insufficient cash flow, liquidity or capital resources to execute our business plan

(either within the expected timeframe or at all), fund our operations, acquisitions, strategic investments, share repurchases or capital expenditures;

difficulty raising capital;

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

The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of March 31, 2026, March 31, 2025, and December 31, 2025.

The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of June 30, 2026, June 30, 2025, and December 31, 2025.

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

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

March 31, 2026 March 31, 2025 December 31, 2025

June 30, 2026 June 30, 2025 December 31, 2025

Spot rate 1.4196 1.3608 1.3698

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

March 31, 2026 March 31, 2025 December 31, 2025

June 30, 2026 June 30, 2025 December 31, 2025

Spot rate 2.9767 3.3683 3.1863

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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).

The extension provides additional time to satisfy certain closing conditions, including obtaining required regulatory clearance 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.

The Company expects the acquisition to close in the summer of 2026.

The Company expects the acquisition to close in the second half of 2026.

Conflict in Middle East

The Middle East Conflict, including the recent escalation involving the United States, Israel and Iran, has contributed to increased energy and shipping costs.

While the impact of these cost increases on the Company’s results for the three months ended March 31, 2026, was not material, the Company expects such cost pressures to have an adverse effect on gross margins in the second quarter of 2026.

The impact of these cost increases on the Company’s results for the three and six months ended June 30, 2026 was not material.

The Company is monitoring these impacts and pursuing mitigation efforts through supply chain optimization and cost reduction initiatives.

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The Company continues to monitor these developments and assess whether they may have any implications for its business.

Anti-Dumping Matters in Israel

In June 2026, the Trade Levies Commissioner of the Israel Ministry of Economy and Industry announced the opening of a new investigation into alleged dumping of medical cannabis imports from Canada.

This announcement followed the 2024 investigation by the Commissioner, which did not result in the imposition of an anti-dumping duty.

On July 28, 2026, the Commissioner terminated the investigation on procedural grounds.

The termination was not based on a substantive determination of the merits and did not preclude another complaint or a new investigation.

On July 30, 2026, a new complaint concerning imports of medical cannabis from Canada was filed on behalf of the Israeli domestic industry.

On August 2, 2026, the Commissioner notified the Government of Canada that the new complaint contained sufficient prima facie evidence of dumping, material injury to the domestic industry and a causal link between the alleged dumping and injury.

On August 5, 2026, the Commissioner notified the Company of the initiation of a new investigation.

The Company disputes the allegations underlying these matters and cannot predict the timing or outcome of the new investigation or any related proceeding, or whether any provisional or final anti-dumping duty or other import restriction will ultimately be imposed.

Consolidated Results of Operations

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

Three months ended March 31,

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

2026 2025 2026 2025

Net revenue, before excise taxes $ 70,597 $ 44,252 $ 129,562 $ 86,150

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Total operating expenses 21,047 19,828 42,033 37,634

Operating loss (1,833) (4,072)

19,972 11,340

Operating income (loss) 7,404 (5,324) 5,571 (9,396)

Other income (loss) 28,310 (33,683) 48,282 (22,343)

Income tax provision (benefit) 51 (525) 2,479 (980)

Net income 15,711 7,723

Net income (loss) 35,663 (38,482) 51,374 (30,759)

Net income attributable to non-controlling interest 3,578 1,229 5,537 2,830

Net income attributable to Cronos Group $ 13,752 $ 6,122

Net income (loss) attributable to Cronos Group $ 32,085 $ (39,711) $ 45,837 $ (33,589)

Summary of select financial results

Three months ended March 31, Change

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

2026 2025 $ % 2026 2025 $ %

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Cost of sales 24,168 18,865 5,303 28 % 49,560 37,393 12,167 33 %

Inventory write-down 665 — 665 N/A

Inventory write-down 388 86 302 351 % 1,053 86 967 1124 %

Gross profit 28,451 $ 14,504 13,947 96 % 47,604 28,238 19,366 69 %

Gross margin (i)

42 % 43 % N/A (1) pp

54 % 43 % N/A 11 pp 48 % 43 % N/A 5 pp

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

For the three months ended March 31, 2026, we reported consolidated net revenue of $45.2 million, representing an increase of $12.9 million from the three months ended March 31, 2025.

The increase was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, and higher cannabis extract and flower sales in the Canadian market.

For the three months ended June 30, 2026, we reported consolidated net revenue of $53.0 million, representing an increase of $19.6 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, we reported consolidated net revenue of $98.2 million, representing an increase of $32.5 million from the six months ended June 30, 2025.

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

In addition, net revenue for both comparative periods benefited from the strengthening of the New Israeli Shekel versus the U.S.

dollar in the current period.

Cost of sales

For the three months ended March 31, 2026, we reported consolidated cost of sales of $25.4 million, representing an increase of $6.9 million from the three months ended March 31, 2025.

The increase was primarily due to higher sales volumes in the period.

For the three months ended March 31, 2025, we recognized $0.5 million of inventory step-up from the Cronos GrowCo Transaction into cost of sales.

No such costs were recognized for the three months ended March 31, 2026.

For the three months ended June 30, 2026, we reported consolidated cost of sales of $24.2 million, representing an increase of $5.3 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, we reported consolidated cost of sales of $49.6 million, representing an increase of $12.2 million from the six months ended June 30, 2025.

For both the three and six month comparative periods, the increase was primarily due to higher sales volumes in the period.

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

No such costs were recognized for the three months ended June 30, 2025 or the three and six months ended June 30, 2026.

Inventory write-down

For the three months ended March 31, 2026, we reported inventory write-down of $0.7 million, representing an increase of $0.7 million from the three months ended March 31, 2025.

The current year write-downs relate to unusable inventory that was scrapped in the period.

There were no such write-downs for the three months ended March 31, 2025.

For the three months ended March 31, 2026, we reported gross profit of $19.2 million, representing an increase of $5.4 million from the three months ended March 31, 2025.

The increase was primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise taxes, and higher sales volumes.

For the three months ended March 31, 2025, gross profit was reduced by $0.5 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales.

No such costs were recognized for the three months ended March 31, 2026.

Operating expenses

Three months ended March 31, Change

For the three months ended June 30, 2026, we reported inventory write-downs of $0.4 million, representing an increase of $0.3 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, we reported inventory write-downs of $1.1 million, representing an increase of $1.0 million from the six months ended June 30, 2025.

Inventory write-downs for both the three and six months ended June 30, 2026 and 2025, relate to unusable inventory that was scrapped in the period.

For the three months ended June 30, 2026, we reported gross profit of $28.5 million, representing an increase of $13.9 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, we reported gross profit of $47.6 million, representing an increase of $19.4 million from the six months ended June 30, 2025.

For both the three and six month comparative periods, the increase was primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise taxes, and higher sales volumes.

Higher sales volumes led to higher net revenue and efficiencies as fixed overhead costs were spread over greater volumes.

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

No such costs were recognized for the three months ended June 30, 2025 or the three and six months ended June 30, 2026.

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

2026 2025 $ % 2026 2025 $ %

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Sales and marketing

For the three months ended March 31, 2026, sales and marketing expenses were $5.6 million, representing an increase of $1.1 million compared to the three months ended March 31, 2025.

The increase was primarily due to higher marketing expenses and salaries and benefits.

For the three months ended June 30, 2026, sales and marketing expenses were $6.8 million, representing an increase of $1.4 million compared to the three months ended June 30, 2025.

For the six months ended June 30, 2026, sales and marketing expenses were $12.4 million, representing an increase of $2.5 million from the six months ended June 30, 2025.

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

Research and development

For the three months ended March 31, 2026, research and development expenses were $1.4 million, representing an increase of $0.6 million compared to the three months ended March 31, 2025.

The increase was primarily due to higher product development costs and salaries and benefits.

For the three months ended June 30, 2026, research and development expenses were $1.2 million, representing an increase of $0.3 million compared to the three months ended June 30, 2025.

For the six months ended June 30, 2026, research and development expenses were $2.6 million, representing an increase of $0.9 million from the six months ended June 30, 2025.

For both the three and six month comparative periods, the increase was primarily due to increased testing, clinical study and other product development activity, as well as higher salaries and benefits.

General and administrative

For the three months ended March 31, 2026, general and administrative expenses were $11.7 million, representing an increase of $2.4 million from the three months ended March 31, 2025.

The increase was primarily due to higher salaries and benefits, transaction costs related to the pending CanAdelaar acquisition, and restatement litigation costs, partially offset by lower anti-dumping costs.

For the three months ended June 30, 2026, general and administrative expenses were $10.8 million, representing an increase of $0.3 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, general and administrative expenses were $22.5 million, representing an increase of $2.7 million from the six months ended June 30, 2025.

For the three month comparative period, the increase was primarily due to higher transaction costs related to the pending CanAdelaar acquisition and higher professional fees, partially offset by the recovery of previously assessed excise tax stamp penalties as well as lower anti-dumping and restatement litigation costs.

For the six month comparative period, the increase was primarily due to higher transaction costs related to the pending CanAdelaar acquisition, higher salaries and benefits, and higher professional fees, partially offset by the recovery of excise tax stamp penalties as well as lower anti-dumping costs and restatement litigation costs.

Restructuring costs

For the three months ended March 31, 2026, restructuring costs were $0.5 million, representing a decrease of $0.1 million from the three months ended March 31, 2025.

For the three months ended June 30, 2026, restructuring costs were $0.3 million, representing a decrease of $0.5 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, restructuring costs were $0.8 million, representing a decrease of $0.5 million from the six months ended June 30, 2025.

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

Share-based compensation

For the three months ended March 31, 2026, share-based compensation expense was $1.3 million, representing a decrease of $0.8 million from the three months ended March 31, 2025.

The decrease was primarily due to lower average amounts of share-based compensation awards outstanding.

For the three months ended June 30, 2026, share-based compensation expense was $1.6 million, representing an increase of $0.2 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, share-based compensation expense was $2.9 million, representing a decrease of $0.6 million from the six months ended June 30, 2025.

For the three month comparative period, the increase was primarily due to the inclusion of revaluation expense on our deferred share units in share-based compensation in the current period.

For the six month comparative period, the decrease was primarily due to lower average amounts of share-based compensation awards outstanding, partially offset by the inclusion of revaluation expense on our deferred share units in share-based compensation in the current period.

Depreciation and amortization

For the three months ended March 31, 2026, depreciation and amortization expenses were $0.4 million, representing a decrease of $0.1 million from the three months ended March 31, 2025.

The decrease was primarily due to lower amortization of intangible assets, partially offset by higher depreciation of property, plant and equipment.

Other income and income tax expense (benefit)

Three months ended March 31, Change

For the three months ended June 30, 2026, depreciation and amortization expenses were $0.4 million, representing a decrease of $0.5 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, depreciation and amortization expenses were $0.8 million, representing a decrease of $0.6 million from the six months ended June 30, 2025.

For both the three and six month comparative periods, the decrease was primarily due to lower amortization of intangible assets and depreciation of property, plant and equipment.

Other income and income tax provision (benefit)

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

2026 2025 $ % 2026 2025 $ %

Interest income, net $ 8,816 $ 8,997 $ (181) (2) % $ 17,669 $ 18,662 $ (993) (5) %

Gain (loss) on revaluation of financial instruments

(2,484) 49 (2,533) N/M

Foreign currency gain 13,699 1,583 12,116 765 %

Change in allowance for credit loss on non-operating loan (106) — (106) N/A

Loss on revaluation of financial instruments (615) (640) 25 4 % (3,099) (591) (2,508) (424) %

Foreign currency gain (loss) 20,219 (39,538) 59,757 N/M 33,918 (37,955) 71,873 N/M

Loss on held-for-sale assets — (2,501) 2,501 100 % — (2,501) 2,501 100 %

Change in allowance for credit loss on non-operating loan (108) — (108) N/A (214) — (214) N/A

Other, net (2) (1) (1) (100) % 8 42 (34) (81) %

Total other income 19,972 11,340 8,632 76 %

Income tax provision (benefit) 2,428 (455) 2,883 N/M

Net income 15,711 $ 7,723 7,988 103 %

Total other income (loss) 28,310 (33,683) 61,993 N/M 48,282 (22,343) 70,625 N/M

Income tax provision (benefit) 51 (525) 576 N/M 2,479 (980) 3,459 N/M

Net income (loss) 35,663 $ (38,482) 74,145 N/M 51,374 (30,759) 82,133 N/M

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

Interest income, net

For the three months ended March 31, 2026, interest income, net was $8.9 million, representing a decrease of $0.8 million from the three months ended March 31, 2025.

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

Gain (loss) on revaluation of financial instruments

For the three months ended March 31, 2026, the loss on revaluation of financial instruments was $2.5 million, representing a deterioration of $2.5 million from the three months ended March 31, 2025.

The change was primarily related to the change in fair value of our High Tide Warrant and our investment in Vitura Health Limited (“Vitura”).

For the three months ended June 30, 2026, interest income, net was $8.8 million, representing a decrease of $0.2 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, interest income, net was $17.7 million, representing a decrease of $1.0 million from the six months ended June 30, 2025.

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

Loss on revaluation of financial instruments

For the three months ended June 30, 2026, the loss on revaluation of financial instruments was $0.6 million, essentially flat from the three months ended June 30, 2025.

For the six months ended June 30, 2026, the loss on revaluation of financial instruments was $3.1 million, representing a deterioration of $2.5 million from the six months ended June 30, 2025.

For the six month comparative period, the increased loss was primarily related to the change in fair value of our High Tide Warrant and our investment in Vitura Health Limited (“Vitura”).

For further information, see Note 3 “ Investments ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Foreign currency gain

For the three months ended March 31, 2026, foreign currency gain was $13.7 million, representing an improvement of $12.1 million from the three months ended March 31, 2025.

Foreign currency gain (loss)

For the three months ended June 30, 2026, foreign currency gain was $20.2 million, representing an improvement of $59.8 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, foreign currency gain was $33.9 million, representing an improvement of $71.9 million from the six months ended June 30, 2025.

The change was primarily due to the strengthening of the U.S.

dollar compared to the Canadian dollar impacting the revaluation of certain foreign currency-denominated cash equivalents and short-term investments held in Canada, as well as the strengthening of the New Israeli Shekel compared to the Canadian dollar impacting the revaluation of certain foreign currency-denominated intercompany loans anticipated to be settled in the foreseeable future.

Loss on held-for-sale assets

For both the three and six months ended June 30, 2025, we recognized a loss on held-for-sale assets of $2.5 million, relating to a decrease in the fair value of the Cronos Fermentation Facility held-for-sale assets group (the “Cronos Fermentation Held-For-Sale Assets Group”).

There were no such losses on held-for-sale assets for the three and six months ended June 30, 2026.

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

Change in allowance for credit loss on non-operating loan

For the three months ended March 31, 2026, change in allowance for credit loss on non-operating loan was $0.1 million.

There was no such activity during the three months ended March 31, 2025.

For the three and six months ended June 30, 2026, change in allowance for credit loss on non-operating loan was $0.1 million and $0.2 million, respectively.

There was no such activity during the three and six months ended June 30, 2025.

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

For further information, see Note 4 “ Loans Receivable, net .”

For the three months ended March 31, 2026, other, net primarily related to non-operating rental income.

For the three months ended March 31, 2025, other, net primarily related to gains and losses on the disposal of assets.

For the three months ended June 30, 2026 and 2025, other, net was essentially nil.

For the six months ended June 30, 2026, other, net primarily related to non-operating rental income, partially offset by a loss on disposal of assets.

For the six months ended June 30, 2025, other, net primarily related to gains and losses on the disposal of assets.

Income tax provision (benefit)

For the three months ended March 31, 2026, income tax provision was $2.4 million, compared to a benefit of $0.5 million for the three months ended March 31, 2025.

The increased expense was primarily due to decreased net operating loss utilization compared to the three months ended March 31, 2025.

For the three months ended March 31, 2026, net income was $15.7 million, compared to net income of $7.7 million for the three months ended March 31, 2025.

The improvement in net income was primarily due to higher gross profit and other income, partially offset by higher operating expenses.

For the three months ended June 30, 2026, income tax provision was $0.1 million, compared to a benefit of $0.5 million for the three months ended June 30, 2025.

For the six months ended June 30, 2026, income tax provision was $2.5 million, compared to a benefit of $1.0 million for the six months ended June 30, 2025.

For both the three and six month comparative periods, the increased expense was primarily due to decreased net operating loss utilization in the current period.

Net income (loss)

For the three months ended June 30, 2026, net income was $35.7 million, compared to a net loss of $38.5 million for the three months ended June 30, 2025.

For the six months ended June 30, 2026, net income was $51.4 million, compared to a net loss of $30.8 million for the six months ended June 30, 2025.

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

Non-GAAP Measures

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GAAP to Adjusted EBITDA for the periods indicated:

Three months ended March 31, 2026

Three months ended June 30, 2026

Net income $ 35,663

13 unchanged sentences

Adjusted EBITDA $ 13,088

Three months ended March 31, 2025

Net income $ 7,723

Three months ended June 30, 2025

Net loss $ (38,482)

Interest income, net (8,997)

1 unchanged sentence

Depreciation and amortization 4,202

Gain on revaluation of financial instruments (i)

EBITDA (43,802)

Loss on revaluation of financial instruments (i)

Foreign currency transaction loss 39,538

Transaction costs (ii)

Other, net (iii)

Restructuring costs (iv)

Share-based compensation (v)

Restatement litigation costs (vi)

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

Loss on held-for-sale assets (ix)

Adjusted EBITDA $ 1,688

Six months ended June 30, 2026

Net income $ 51,374

Interest income, net (17,669)

Income tax provision 2,479

Depreciation and amortization 7,101

EBITDA 43,285

Loss on revaluation of financial instruments (i)

Foreign currency transaction gain (33,918)

5 unchanged sentences

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

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

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

Adjusted EBITDA $ 18,167

(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.

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.

Six months ended June 30, 2025

Net loss $ (30,759)

Interest income, net (18,662)

Income tax benefit (980)

Depreciation and amortization 7,042

EBITDA (43,359)

Loss on revaluation of financial instruments (i)

Foreign currency transaction loss 37,955

Transaction costs (ii)

Other, net (iii)

Restructuring costs (iv)

Share-based compensation (v)

Restatement litigation costs (vi)

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

Loss on held-for-sale assets (ix)

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

Adjusted EBITDA $ 3,977

(i) For the three and six months ended June 30, 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 and six months ended June 30, 2025, the loss on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura.

(ii) For the three and six months ended June 30, 2026, transaction costs represented fees related to the pending acquisition of CanAdelaar.

For the three and six months ended June 30, 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.

(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 income (loss) and comprehensive income (loss).

For the three months ended March 31, 2026, Adjusted EBITDA was $5.1 million, representing an improvement of $2.8 million from the three months ended March 31, 2025.

The improvement was primarily due to higher gross profit, partially offset by higher operating expenses due to higher sales and marketing, general and administrative, and research and development costs.

(iii) For the three months ended June 30, 2026, other, net related to a loss on disposal of fixed assets.

For the six months ended June 30, 2026, other, net related primarily to rental income.

For the three and six months ended June 30, 2025, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.

(iv) For the three and six months ended June 30, 2026, restructuring costs related to IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 7 “ Restructuring .” For the three and six months ended June 30, 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 7 “ Restructuring .”

(v) For the three and six months ended June 30, 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 and six months ended June 30, 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 and six months ended June 30, 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 and six months ended June 30, 2026 and 2025, Israel Ministry of Economy and Industry dumping inquiry expense included expenditures relating to regulatory investigations and proceedings about alleged dumping of medical cannabis imports from Canada into Israel and related litigation and external relations expenses.

(viii) For the three and six months ended June 30, 2026, change in allowance for credit loss on non-operating loan related to the allowance recognized on the High Tide loan receivable, as described in Note 4, “Loans Receivable, net.”

(ix) For the three and six months ended June 30, 2025, loss on held-for-sale assets related to a revaluation of the Cronos Fermentation Held-For-Sale Assets Group.

(x) For the six months ended June 30, 2025, inventory step-up recorded to cost of sales represents the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the condensed consolidated statements of net income (loss) and comprehensive income (loss).

For the three months ended June 30, 2026, Adjusted EBITDA was $13.1 million, representing an improvement of $11.4 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, Adjusted EBITDA was $18.2 million, representing an improvement of $14.2 million from the six months ended June 30, 2025.

For both comparative periods, the improvement was primarily due to higher gross profit, partially offset by higher operating expenses due to higher sales and marketing, general and administrative, and research and development costs.

Adjusted Gross Profit and Adjusted Gross Margin

5 unchanged sentences

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

(in thousands of USD) Three months ended March 31, Change

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

2026 2025 $ % 2026 2025 $ %

5 unchanged sentences

Gross margin (i)

42 % 43 % N/A (1) pp

54 % 43 % N/A 11 pp 48 % 43 % N/A 5 pp

Adjusted Gross Margin (ii)

42 % 44 % N/A (2) pp

54 % 43 % N/A 11 pp 48 % 44 % N/A 4 pp

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

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

For the three months ended March 31, 2026, Adjusted Gross Profit was $19.2 million, representing an increase of $4.9 million from the three months ended March 31, 2025.

The increase was primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise taxes, and higher sales volumes.

For the three months ended June 30, 2026, Adjusted Gross Profit was $28.5 million, representing an increase of $13.9 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, Adjusted Gross Profit was $47.6 million, representing an increase of $18.8 million from the six months ended June 30, 2025.

For both comparative periods, the increase was primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise taxes, and higher sales volumes.

Higher sales volumes led to higher net revenue and efficiencies as fixed overhead costs were spread over greater volumes.

Constant Currency

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

GAAP, we have presented constant currency adjusted financial measures for net revenue, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for the three months ended March 31, 2026, as well as cash and cash equivalents and short-term investment balances as of March 31, 2026 compared to December 31, 2025, which are considered non-GAAP financial measures.

GAAP, we have presented constant currency adjusted financial measures for net revenue, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for the three and six months ended June 30, 2026, as well as cash and cash equivalents, short-term investment and non-current interest-bearing deposit balances as of June 30, 2026 compared to December 31, 2025, which are considered non-GAAP financial measures.

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

1 unchanged sentence

dollars are converted into U.S.

dollars using the average exchange rates from the three month comparative period in 2025, rather than the actual average exchange rates in effect during the respective current period;

dollars using the average exchange rates from the three and six month comparative periods in 2025, rather than the actual average exchange rates in effect during the respective current period;

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

3 unchanged sentences

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

The table below sets forth certain measures of consolidated results from continuing operations on a constant currency basis for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 as well as cash and cash equivalents and short-term investments as of March 31, 2026 and December 31, 2025, both on an as-reported and constant currency basis (in thousands):

The table below sets forth certain measures of consolidated results from continuing operations on a constant currency basis for the three and six months ended June 30, 2026 compared to the three and six months ended June 30, 2025 as well as cash and cash equivalents, short-term investments and non-current interest-bearing deposits as of June 30, 2026 and December 31, 2025, both on an as-reported and constant currency basis (in thousands):

As Reported As Adjusted for Constant Currency

Three months ended March 31, As Reported Change Three months ended March 31, Constant Currency Change

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

2026 2025 $ % 2026 $ %

3 unchanged sentences

Operating expenses 21,047 19,828 1,219 6 % 20,574 746 4 %

Net income (loss) 35,663 (38,482) 74,145 N/M 35,185 73,667 N/M

Adjusted EBITDA $ 13,088 $ 1,688 $ 11,400 675 % $ 11,879 $ 10,191 604 %

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

2026 2025 $ % 2026 $ %

Net revenue $ 98,217 $ 65,717 $ 32,500 49 % $ 92,296 $ 26,579 40 %

Gross profit 47,604 28,238 19,366 69 % 44,491 16,253 58 %

Gross margin 48 % 43 % N/A 5 pp 48 % N/A 5 pp

Operating expenses 42,033 37,634 4,399 12 % 40,579 2,945 8 %

Net income (loss) 51,374 (30,759) 82,133 N/M 49,994 80,753 N/M

Adjusted EBITDA $ 18,167 $ 3,977 $ 14,190 357 % $ 16,032 $ 12,055 303 %

As of March 31, As of December 31, As Reported Change As of March 31, Constant Currency Change

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

2026 2025 $ % 2026 $ %

Cash and cash equivalents $ 467,019 $ 791,794 $ (324,775) (41) % $ 468,459 $ (323,335) (41) %

Short-term investments — 40,000 (40,000) N/A — (40,000) N/A

Total cash and cash equivalents and short-term investments $ 821,856 $ 831,794 $ (9,938) (1) % $ 822,316 $ (9,478) (1) %

Short-term investments 330,000 40,000 290,000 725 % 330,000 290,000 725 %

Non-current interest-bearing deposits 30,000 — 30,000 N/A 30,000 30,000 N/A

Total cash and cash equivalents, short-term investments and non-current interest-bearing deposits $ 827,019 $ 831,794 $ (4,775) (1) % $ 828,459 $ (3,335) — %

As Reported As Adjusted for Constant Currency

Three months ended March 31, As Reported Change Three months ended March 31, Constant Currency Change

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

2026 2025 $ % 2026 $ %

4 unchanged sentences

As Reported As Adjusted for Constant Currency

Three months ended March 31, As Reported Change Three months ended March 31, Constant Currency Change

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

2026 2025 $ % 2026 $ %

Cannabis flower $ 72,948 $ 48,369 $ 24,579 51 % $ 67,589 $ 19,220 40 %

Cannabis extracts 25,231 16,968 8,263 49 % 24,670 7,702 45 %

Other 38 380 (342) (90) % 37 (343) (90) %

Net revenue $ 98,217 $ 65,717 $ 32,500 49 % $ 92,296 $ 26,579 40 %

As Reported As Adjusted for Constant Currency

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

2026 2025 $ % 2026 $ %

Canada $ 28,710 $ 19,150 $ 9,560 50 % $ 28,488 $ 9,338 49 %

2 unchanged sentences

Net revenue $ 53,007 $ 33,455 $ 19,552 58 % $ 50,383 $ 16,928 51 %

For the three months ended March 31, 2026, net revenue on a constant currency basis was $41.9 million, representing a 30% increase from the three months ended March 31, 2025.

On a constant currency basis, net revenue increased for the three months ended March 31, 2026, primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, and higher cannabis extract and flower sales in the Canadian market.

For the three months ended March 31, 2026, gross profit on a constant currency basis was $17.6 million, representing a 28% increase from the three months ended March 31, 2025.

On a constant currency basis, gross profit increased for the three months ended March 31, 2026, primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise tax, higher sales volumes, and the impact of the inventory step-up from the Cronos GrowCo Transaction recognized in the three months ended March 31, 2025.

For the three months ended March 31, 2025, we recognized $0.5 million of inventory step-up from the Cronos GrowCo Transaction in cost of sales.

No such costs were recognized for the three months ended March 31, 2026.

As Reported As Adjusted for Constant Currency

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

2026 2025 $ % 2026 $ %

Canada $ 54,061 $ 39,280 $ 14,781 38 % $ 52,710 $ 13,430 34 %

Israel 29,169 18,605 10,564 57 % 24,654 6,049 33 %

Other countries 14,987 7,832 7,155 91 % 14,932 7,100 91 %

Net revenue $ 98,217 $ 65,717 $ 32,500 49 % $ 92,296 $ 26,579 40 %

For the three months ended June 30, 2026, net revenue on a constant currency basis was $50.4 million, representing a 51% increase from the three months ended June 30, 2025.

For the six months ended June 30, 2026, net revenue on a constant currency basis was $92.3 million, representing a 40% increase from the six months ended June 30, 2025.

On a constant currency basis, net revenue increased for the three and six months ended June 30, 2026, primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, and higher cannabis flower and extract sales in the Canadian market.

For the three months ended June 30, 2026, gross profit on a constant currency basis was $26.9 million, representing an 85% increase from the three months ended June 30, 2025.

For the six months ended June 30, 2026, gross profit on a constant currency basis was $44.5 million, representing a 58% increase from the six months ended June 30, 2025.

On a constant currency basis, gross profit increased for the three and six months ended June 30, 2026, primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise taxes, and higher sales volumes.

Higher sales volumes led to higher net revenue and efficiencies as fixed overhead costs were spread over greater volumes.

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

No such costs were recognized for the three months ended June 30, 2025 or the three and six months ended June 30, 2026.

Operating expenses

For the three months ended March 31, 2026, operating expenses on a constant currency basis were $20.0 million, representing a 12% increase from the three months ended March 31, 2025.

On a constant currency basis, operating expenses increased for the three months ended March 31, 2026, primarily due to higher salaries and benefits, transaction costs and product development costs, partially offset by lower share-based compensation expense.

For the three months ended March 31, 2026, net income on a constant currency basis was $14.8 million, representing an increase in net income of $7.1 million from the three months ended March 31, 2025.

On a constant currency basis, the improvement in net income for the three months ended March 31, 2026, was primarily due to higher gross profit and other income, partially offset by higher operating expenses.

For the three months ended June 30, 2026, operating expenses on a constant currency basis were $20.6 million, representing a 4% increase from the three months ended June 30, 2025.

For the six months ended June 30, 2026, operating expenses on a constant currency basis were $40.6 million, representing an 8% increase from the six months ended June 30, 2025.

On a constant currency basis, operating expenses increased for the three and six months ended June 30, 2026, primarily due to higher salaries and benefits, transaction costs and product development costs, partially offset by the recovery of excise tax stamp penalties, as well as lower anti-dumping costs and restatement litigation costs.

Net income (loss)

For the three months ended June 30, 2026, net income on a constant currency basis was $35.2 million, representing an increase in net income of $73.7 million from the three months ended June 30, 2025.

For the six months ended June 30, 2026, net income on a constant currency basis was $50.0 million, representing an increase in net income of $80.8 million from the six months ended June 30, 2025.

On a constant currency basis, the improvement in net income for the three and six months ended June 30, 2026, was primarily due to higher gross profit and other income, partially offset by higher operating expenses.

Adjusted EBITDA

For the three months ended March 31, 2026, Adjusted EBITDA on a constant currency basis was $4.2 million, representing a $1.9 million improvement from the three months ended March 31, 2025.

The improvement in Adjusted EBITDA for the three months ended March 31, 2026 on a constant currency basis was driven by higher gross profit, partially offset by higher operating expenses due to higher sales and marketing, general and administrative, and research and development costs.

Cash and cash equivalents & short-term investments

Cash and cash equivalents and short-term investments on a constant currency basis decreased 1% to $822.3 million as of March 31, 2026, from $831.8 million as of December 31, 2025.

The decrease in cash and cash equivalents and short-term investments on a constant currency basis is primarily due to repurchases of common stock, purchases of property, plant and equipment, and withholding taxes paid on share-based awards, partially offset by positive cash from operating activities.

For the three months ended June 30, 2026, Adjusted EBITDA on a constant currency basis was $11.9 million, representing a $10.2 million improvement from the three months ended June 30, 2025.

For the six months ended June 30, 2026, Adjusted EBITDA on a constant currency basis was $16.0 million, representing a $12.1 million improvement from the six months ended June 30, 2025.

The improvement in Adjusted EBITDA for the three and six months ended June 30, 2026 on a constant currency basis was driven by higher gross profit, partially offset by higher operating expenses due to higher sales and marketing, general and administrative, and research and development costs.

Cash and cash equivalents, short-term investments and non-current interest-bearing deposits

Cash and cash equivalents, short-term investments and non-current interest-bearing deposits, on a constant currency basis decreased $3.3 million to $828.5 million as of June 30, 2026, from $831.8 million as of December 31, 2025.

The decrease in cash and cash equivalents, short-term investments and non-current interest-bearing deposits on a constant currency basis is primarily due to repurchases of common stock, purchases of property, plant and equipment, and withholding taxes paid on share-based awards, partially offset by positive cash from operating activities.

Liquidity and Capital Resources

As of March 31, 2026, we had $822 million in cash and cash equivalents and no short-term investments.

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

As of June 30, 2026, we had $467.0 million in cash and cash equivalents and $330.0 million in short-term investments, compared with $791.8 million in cash and cash equivalents and $40.0 million in short-term investments as of December 31, 2025.

The increase in short-term investments primarily reflected the investment of available cash in guaranteed investment certificates and did not materially change our aggregate cash and cash equivalents and short-term investments position.

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

The following table summarizes the cash flows from operating, investing and financing activities:

(In thousands of U.S.

dollars) Three months ended March 31,

Net cash provided by (used in) operating activities $ 10,898 $ (2,096)

Net cash provided by (used in) investing activities

38,029 (55,356)

dollars) Six months ended June 30,

Net cash provided by operating activities $ 34,908 $ 722

Net cash used in investing activities (320,273) (56,339)

Net cash used in financing activities (39,147) (10,616)

1 unchanged sentence

Net change in cash $ (324,775) $ (64,389)

Comparison of cash flows between the three months ended March 31, 2026 and the three months ended March 31, 2025

Comparison of cash flows between the six months ended June 30, 2026 and the six months ended June 30, 2025

Operating activities

During the three months ended March 31, 2026, we generated $10.9 million of cash from operating activities as compared to $2.1 million of cash used in the three months ended March 31, 2025, representing an increase in cash generated of $13.0 million.

This change is primarily driven by decreases in accounts receivable, prepaids and other current assets, and other receivables, as well as a lower decrease in accrued liabilities compared to the three months ended March 31, 2025.

These were partially offset by a $1.8 million decrease in net income after adjusting for non-cash items during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, and a lower decrease to interest receivable.

During the six months ended June 30, 2026, we generated $34.9 million of cash from operating activities as compared to $0.7 million in the six months ended June 30, 2025, representing an increase in cash generated of $34.2 million.

This change is primarily driven by a $10.2 million increase in net income after adjusting for non-cash items, a lower decrease in accrued liabilities, lower increases in accounts receivable and current income tax receivable, increases in accounts payable and income taxes payable, and higher decreases in prepaids and other current assets compared to the six months ended June 30, 2025.

These were partially offset by a lower decrease to interest receivable compared to the six months ended June 30, 2025.

Investing activities

During the three months ended March 31, 2026, we generated $38.0 million of cash from investing activities, compared to $55.4 million of cash used in investing activities during the three months ended March 31, 2025, representing a change of $93.4 million.

This change was driven by the maturity of $40.0 million of short-term investments and lower capital expenditures during the three months ended March 31, 2026, compared to the purchase of $40.0 million of short-term investments during the three months ended March 31, 2025.

During the six months ended June 30, 2026, we used $320.3 million of cash from investing activities, compared to $56.3 million of cash used in investing activities during the six months ended June 30, 2025, representing a change of $263.9 million.

This change was primarily driven by higher net purchases of short-term investments and the purchase of a non-current interest-bearing deposit, partially offset by lower purchases of property, plant and equipment.

Financing activities

During the three months ended March 31, 2026, cash used in financing activities was $18.3 million, compared to $2.9 million of cash used in financing activities during the three months ended March 31, 2025, representing an increase in cash used of $15.3 million.

This change is primarily driven by $16.7 million of share repurchases, partially offset by a decrease in withholding taxes paid on share-based awards during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.

During the six months ended June 30, 2026, cash used in financing activities was $39.1 million, compared to $10.6 million of cash used in financing activities during the six months ended June 30, 2025, representing an increase in cash used of $28.5 million.

This change is primarily driven by higher share repurchases, partially offset by a decrease in withholding taxes paid on share-based awards compared to the six months ended June 30, 2025.

Share Repurchase Program

On May 7, 2025, the Company’s Board of Directors (the “Board”) authorized a share repurchase program of up to $50.0 million, but not to exceed 19,270,951 common shares, being 5% of the outstanding common shares as of May 7, 2025.

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

In the three months ended March 31, 2026, we repurchased 6,365,700 common shares at costs of approximately $16.7 million, inclusive of commissions and excise taxes.

As of March 31, 2026, the Company has repurchased a total of 10,785,181 common shares at costs of approximately $26.5 million, inclusive of commissions and excise taxes, under the repurchase program.

The repurchase program commenced on May 14, 2025 and expired on May 13, 2026.

On May 8, 2026, the Board authorized a share repurchase program of up to $50.0 million, but not to exceed 18,712,918 common shares, the maximum amount permitted by applicable Canadian securities laws.

The repurchase program commenced on May 14, 2026 and is expected to expire on May 13, 2027 unless earlier terminated.

For further information, see Note 9 “ Share Repurchase Program ” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

In the three months ended June 30, 2026, we repurchased 5,888,170 common shares at a cost of approximately $16.1 million, inclusive of commissions and excise taxes.

In the six months ended June 30, 2026, we repurchased 12,253,870 common shares at a cost of approximately $32.9 million, inclusive of commissions and excise taxes.

As of June 30, 2026, under the current repurchase plan, the Company has repurchased a total of 2,780,368 common shares at a cost of approximately $7.9 million, inclusive of commissions and excise taxes.

Commissions and excise taxes do not reduce the Company’s remaining repurchase authorization.

Accordingly, the Company has remaining authorization to repurchase up to $23.9 million of additional common shares, not to exceed the remaining 8,485,770 common shares authorized by the Board.

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.”

Accordingly, the Company has remaining authorization to repurchase up to $42.1 million of additional common shares, not to exceed the 15,932,550 common shares authorized by the Board.

Cash Requirements

6 unchanged sentences

Beginning in the third quarter of 2024, the GrowCo Credit Facility has been treated as an intercompany loan and eliminated upon consolidation.

For the three months ended March 31, 2026, Cronos GrowCo repaid an aggregate C$3.4 million ($2.5 million) and C$1.8 million ($1.3 million) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.

As of March 31, 2026, Cronos GrowCo had repaid an aggregate C$39.3 million ($28.6 million) and C$38.2 million ($27.8 million) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.

As of March 31, 2026, the closing balance of the GrowCo Credit Facility was C$127.7 million ($91.8 million).

For the three and six months ended June 30, 2026, Cronos GrowCo repaid an aggregate C$7.9 million ($5.6 million) and C$11.3 million ($8.1 million) in principal and C$1.8 million ($1.3 million) and C$3.7 million ($2.6 million) in interest, respectively, under the terms of the GrowCo Credit Facility.

As of June 30, 2026, Cronos GrowCo had repaid an aggregate C$47.2 million ($34.2 million) and C$40.0 million ($29.1 million) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.

As of June 30, 2026, the outstanding balance of the GrowCo Credit Facility was C$119.8 million ($84.4 million) and C$8.0 million ($5.6 million) remained undrawn.

Critical Accounting Policies and Estimates

2 unchanged sentences

Compared sentence by sentence after normalising whitespace, quotation marks, case and digits, so re-formatting and restated figures do not read as changed language. Wording changes appear as one removal and one addition. The current filing and the prior one are authoritative.

What changed 10-Q

Item 2. Management’s Discussion and Analysis