Cronos Group扭虧為盈 次季淨收入5300萬美元大增58%

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UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549

Form 10-Q
(Mark One)
☒ QUARTERLY REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES 
 EXCHANGE ACT OF 1934

For the quarterly period ended June 30, 2026
or
☐    TRANSITION REPORT PURSUANT TO SECTION 13 OR 15(d) OF THE SECURITIES EXCHANGE ACT OF 1934

For the transition period from to .
Commission File No. 001-38403
__________________________
CRONOS GROUP INC.
(Exact name of registrant as specified in its charter)
__________________________
British Columbia, Canada
N/A
(State or other jurisdiction of(I.R.S. Employer
incorporation or organization)Identification No.)

4491 Concession Rd 12

Stayner, Ontario
L0M 1S0

(Address of principal executive offices)(Zip Code)

416-504-0004
(Registrant’s telephone number, including area code)

N/A

(Former name, former address and former fiscal year, if changed since last report)

Securities registered pursuant to Section 12(b) of the Act:
Title of each classTrading Symbol(s)Name of each exchange on which registered
Common Shares, no par valueCRONThe Nasdaq Stock Market LLC

Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days.    Yes x No o

Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files).                Yes x No o

Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
Large accelerated fileroAccelerated filerx
Non-accelerated fileroSmaller reporting company☐
Emerging growth company☐

If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o

Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act).    Yes ☐ No x

As of August 3, 2026, there were 368,412,864 common shares of the registrant issued and outstanding.

1

Table of Contents

PART I

FINANCIAL INFORMATION
Item 1.Financial Statements.
3

Item 2.Management’s Discussion and Analysis of Financial Condition and Results of Operations.
30

Item 3.Quantitative and Qualitative Disclosures About Market Risk.
47

Item 4.Controls and Procedures.
48

PART II
OTHER INFORMATION
Item 1.Legal Proceedings.
49

Item 1A.Risk Factors.
49

Item 2.Unregistered Sales of Equity Securities and Use of Proceeds.
49

Item 3.Defaults Upon Senior Securities.
50

Item 4.Mine Safety Disclosures.
50

Item 5.Other Information.
50

Item 6.Exhibits.
50

Unless otherwise noted or the context indicates otherwise, references in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to the “Company,” “Cronos Group,” “we,” “us” and “our” refer to Cronos Group Inc., its direct and indirect wholly owned subsidiaries and, if applicable, its joint ventures and investments accounted for by the equity method; the term “cannabis” means the plant of any species or subspecies of genus Cannabis and any part of that plant, including all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers; the term “U.S. hemp” has the meaning given to the term “hemp” in the United States (“U.S.”) Agricultural Improvement Act of 2018 (the “2018 Farm Bill”), as amended by section 781 of Public Law 119-37 (effective November 12, 2026), including hemp-derived cannabidiol (“CBD”); and the term “U.S. Schedule I cannabis” means cannabis excluding U.S. hemp.
This Quarterly Report contains references to our trademarks and trade names and to trademarks and trade names belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trademarks or trade names to imply a relationship with, or endorsement or sponsorship of us or our business by, any other companies. In addition, this Quarterly Report includes website addresses. These website addresses are intended to provide inactive, textual references only. The information on or referred to on these websites is not part of or incorporated into this Quarterly Report.
All currency amounts in this Quarterly Report are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to “dollars” or “$” are to U.S. dollars; all references to “C$” are to Canadian dollars; and all references to “ILS” are to New Israeli Shekels.

(Exchange rates are shown as C$ per $)As of
June 30, 2026June 30, 2025December 31, 2025

Spot rate1.41961.36081.3698
Year-to-date average rate1.37831.4094N/A

(Exchange rates are shown as ILS per $)As of
June 30, 2026June 30, 2025December 31, 2025

Spot rate2.97673.36833.1863
Year-to-date average rate3.03733.5954N/A

All summaries of agreements described herein are qualified by the full text of such agreements (certain of which have been filed as exhibits with the U.S. Securities and Exchange Commission).

2

PART I
FINANCIAL INFORMATION
Table of Contents

Item 1. Financial Statements
Table of Contents

Condensed Consolidated Balance Sheets as of June 30, 2026 (Unaudited) and December 31, 2025
4

Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) for the three and six months ended June 30, 2026 and 2025 (Unaudited)
5

Condensed Consolidated Statements of Changes in Equity for the three and six months ended June 30, 2026 and 2025 (Unaudited)
6
Condensed Consolidated Statements of Cash Flows for the six months ended June 30, 2026 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 June 30, 2026As of December 31, 2025
Assets
Current assets
Cash and cash equivalents$467,019 $791,794 
Short-term investments330,000 40,000 
Accounts receivable, net36,719 34,099 
Interest receivable3,982 8,654 
Current income tax receivable14,661 12,431 
Other receivables1,679 2,014 

Inventory, net52,701 46,750 
Prepaids and other current assets5,269 8,344 

Total current assets912,030 944,086 
Non-current interest-bearing deposits30,000 — 
Other investments4,527 7,664 
Non-current portion of loans receivable, net17,379 20,847 
Property, plant and equipment, net141,539 145,865 
Right-of-use assets1,282 1,422 
Goodwill64,146 66,478 
Intangible assets, net8,050 8,890 
Deferred tax assets907 1,888 
Total assets$1,179,860 $1,197,140 
Liabilities
Current liabilities
Accounts payable$17,423 $11,640 
Income taxes payable3,548 — 
Accrued liabilities35,231 36,210 
Current portion of lease obligation162 337 

Total current liabilities56,364 48,187 
Non-current portion due to non-controlling interests— 733 
Non-current portion of lease obligation1,133 1,172 
Deferred tax liabilities4,918 4,089 
Total liabilities62,415 54,181 
Shareholders’ equity
Share capital and additional paid-in capital (no par value; authorized for issue as of June 30, 2026 and December 31, 2025: unlimited; shares outstanding as of June 30, 2026 and December 31, 2025: 370,726,047 and 381,592,969, respectively)
632,074 662,983 
Retained earnings492,319 447,756 
Accumulated other comprehensive loss(55,721)(16,842)
Total equity attributable to shareholders of Cronos Group1,068,672 1,093,897 
Non-controlling interests48,773 49,062 
Total shareholders’ equity1,117,445 1,142,959 
Total liabilities and shareholders’ equity$1,179,860 $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 June 30,Six months ended June 30,
2026202520262025
Net revenue, before excise taxes$70,597 $44,252 $129,562 $86,150 
Excise taxes(17,590)(10,797)(31,345)(20,433)
Net revenue53,007 33,455 98,217 65,717 
Cost of sales24,168 18,865 49,560 37,393 
Inventory write-down388 86 1,053 86 
Gross profit28,451 14,504 47,604 28,238 
Operating expenses
Sales and marketing6,785 5,347 12,400 9,912 
Research and development1,215 929 2,628 1,722 
General and administrative10,803 10,536 22,539 19,845 
Restructuring costs308 768 792 1,323 
Share-based compensation1,557 1,381 2,870 3,469 
Depreciation and amortization379 867 804 1,363 

Total operating expenses21,047 19,828 42,033 37,634 
Operating income (loss)7,404 (5,324)5,571 (9,396)
Other income (expense)

Interest income, net8,816 8,997 17,669 18,662 

Loss on revaluation of financial instruments(615)(640)(3,099)(591)

Foreign currency gain (loss)20,219 (39,538)33,918 (37,955)
Loss on held-for-sale assets— (2,501)— (2,501)
Change in allowance for credit loss on non-operating loan(108)— (214)— 
Other, net(2)(1)8 42 
Total other income (expense)28,310 (33,683)48,282 (22,343)
Income (loss) before income taxes35,714 (39,007)53,853 (31,739)
Income tax provision (benefit)51 (525)2,479 (980)

Net income (loss)35,663 (38,482)51,374 (30,759)
Net income attributable to non-controlling interest3,578 1,229 5,537 2,830 
Net income (loss) attributable to Cronos Group$32,085 $(39,711)$45,837 $(33,589)

Comprehensive income
Net income (loss)$35,663 $(38,482)$51,374 $(30,759)
Other comprehensive income (loss)
Foreign exchange gain (loss) on translation(23,062)60,228 (41,007)57,146 
Comprehensive income12,601 21,746 10,367 26,387 
Comprehensive income attributable to non-controlling interests2,319 3,412 3,409 4,855 
Comprehensive income attributable to Cronos Group$10,282 $18,334 $6,958 $21,532 
Net income (loss) per share

Basic net income (loss) per share attributable to Cronos Group$0.09 $(0.10)$0.12 $(0.09)

Diluted net income (loss) per share attributable to Cronos Group$0.09 $(0.10)$0.12 $(0.09)

See notes to condensed consolidated interim financial statements.
5

Cronos Group Inc.
Condensed Consolidated Statements of Changes in Equity
For the six months ended June 30, 2026 and 2025
(In thousands of U.S. dollars, except share amounts, unaudited)

Number of sharesShare capital and additional paid-in capitalRetained earningsAccumulated other comprehensive lossNon-controlling interestsTotal shareholders’ equity
Balance as of December 31, 2025381,592,969$662,983 $447,756 $(16,842)$49,062 $1,142,959 

Activities relating to share-based compensation1,031,438 787 (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, 2026376,258,707 $647,040 $460,540 $(33,918)$50,152 $1,123,814 
Activities relating to share-based compensation355,510 1,162 (306)— — 856 
Share repurchases(5,888,170)(16,128)— — — (16,128)
Dividend paid to non-controlling interest— — — — (3,698)(3,698)
Net income— — 32,085 — 3,578 35,663 
Foreign exchange loss on translation— — — (21,803)(1,259)(23,062)
Balance as of June 30, 2026370,726,047 $632,074 $492,319 $(55,721)$48,773 $1,117,445 

Number of sharesShare capital and additional paid-in capitalRetained earningsAccumulated other comprehensive income (loss)Non-controlling interestsTotal shareholders’ equity
Balance as of December 31, 2024382,530,780$669,879 $457,709 $(63,525)$46,919 $1,110,982 

Activities relating to share-based compensation2,875,615(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, 2025385,406,395 $669,036 $463,816 $(66,449)$48,362 $1,114,765 
Activities relating to share-based compensation275,4681,190 (25)— — 1,165 
Share repurchases(1,874,951)(3,612)— — — (3,612)
Dividend paid to non-controlling interest— — — — (3,858)(3,858)
Net income (loss)— — (39,711)— 1,229 (38,482)
Foreign exchange gain on translation— — — 58,045 2,183 60,228 
Balance as of June 30, 2025383,806,912 $666,614 $424,080 $(8,404)$47,916 $1,130,206 

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

Six months ended June 30,
20262025
Operating activities
Net income (loss)$51,374 $(30,759)
 Adjustments to reconcile net income (loss) to net cash used in operating activities:
Share-based compensation2,870 3,469 
Depreciation and amortization7,101 7,042 

Loss from investments3,099 700 
Changes in expected credit losses on long-term financial assets202 (11)

Loss on held-for-sale assets
— 2,501 
Inventory step-up recorded to cost of sales
— 517 
Foreign currency (gain) loss(33,918)37,955 
Other non-cash operating activities, net2,179 1,329 
Changes in operating assets and liabilities:
Accounts receivable, net(2,695)(9,794)
Interest receivable3,569 6,240 
Current income tax receivable(2,676)(3,047)
Other receivables375 (1,024)
Prepaids and other current assets2,954 1,386 
Inventory, net(5,766)(6,717)
Accounts payable3,116 (1,056)
Income taxes payable3,603 4 
Accrued liabilities(479)(8,013)
Net cash provided by operating activities34,908 722 
Investing activities
Purchase of short-term investments(330,000)(40,000)
Proceeds from short-term investments40,000 — 
Purchase of non-current interest-bearing deposits(30,000)— 

Proceeds from repayment on loans receivable3,480 2,855 
Purchase of property, plant and equipment(3,614)(19,095)
Purchase of intangible assets(139)(99)

Net cash used in investing activities(320,273)(56,339)
Financing activities
Repurchases of common stock(32,858)(3,612)
Dividend paid to non-controlling interest
(3,698)(3,858)
Withholding taxes paid on share-based awards(2,014)(3,146)
Other financing activities, net(577)— 
Net cash used in financing activities(39,147)(10,616)
Effect of foreign currency translation on cash and cash equivalents(263)1,844 
Net change in cash and cash equivalents(324,775)(64,389)
Cash and cash equivalents, beginning of period791,794 858,805 
Cash and cash equivalents, end of period$467,019 $794,416 
Supplemental cash flow information
Interest paid$215 $— 
Interest received$21,845 $24,451 
Income taxes paid$14 $59 

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 and six months ended June 30, 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 June 30,
20262025
Cannabis flower$39,214 $25,025 
Cannabis extracts13,774 8,360 
Other19 70 
Net revenue$53,007 $33,455 

Six months ended June 30,
20262025
Cannabis flower$72,948 $48,369 
Cannabis extracts25,231 16,968 
Other38 380 
Net revenue$98,217 $65,717 

8

Cronos Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S. dollars, except share amounts)Table of Contents

Net revenues attributed to a geographic region based on the location of the customer were as follows:

Three months ended June 30,
20262025
Canada$28,710 $19,150 
Israel15,018 9,376 
Other countries9,279 4,929 
Net revenue$53,007 $33,455 

Six months ended June 30,
20262025
Canada$54,061 $39,280 
Israel29,169 18,605 
Other countries14,987 7,832 
Net revenue$98,217 $65,717 

(e)Short-term investments and non-current interest-bearing deposits
Short-term investments and non-current interest-bearing deposits are classified as held-to-maturity and recorded at cost. Interest earned on short-term investments and non-current interest-bearing deposits 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 and non-current interest-bearing deposits are classified as investing activities in the Company’s condensed consolidated statements of cash flows. The Company’s short-term investments and non-current interest-bearing deposits were $330,000 and $30,000, respectively, as of June 30, 2026 and $40,000 and nil, respectively, as of December 31, 2025, and 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, non-current interest-bearing deposits and loans receivable. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $901,439 and $909,839 as of June 30, 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 (as defined below), 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 June 30, 2026 and December 31, 2025, the Company had $15 and $9, respectively, in expected credit losses that have been recognized on receivables from contracts with customers.
As of June 30, 2026, the Company assessed that there is a concentration of credit risk, as 36% of the Company’s accounts receivable were due from two customers 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.
9

Cronos Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S. dollars, except share amounts)Table of Contents

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 June 30, 2026, the Company earned a total net revenue before excise taxes of $30,804 from two major customers, together accounting for 44% of the Company’s total net revenue before excise taxes. During the three months ended June 30, 2025, the Company earned a total net revenue before excise taxes of $18,112 from two major customers, together accounting for 41% of the Company’s total net revenue before excise taxes. During the six months ended June 30, 2026, the Company earned a total net revenue before excise taxes of $55,401 from two major customers, together accounting for 43% of the Company’s total net revenue before excise taxes. During the six months ended June 30, 2025, the Company earned a total net revenue before excise taxes of $35,856 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.
(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 (“ASU 2025-11”). ASU 2025-11 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.
10

Cronos Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S. dollars, except share amounts)Table of Contents

2. Inventory, net
Inventory, net is comprised of the following items:

As of June 30, 2026December 31, 2025
Raw materials$12,208 $8,762 
Work-in-progress25,108 25,830 
Finished goods15,306 12,012 
Supplies and consumables79 146 
Total$52,701 $46,750 

As a result of the transaction by which we obtained majority control of Cronos Growing Company Inc.’s (“Cronos GrowCo”) board of directors (the “Cronos GrowCo Transaction”), the Company recorded a step-up to Cronos GrowCo’s existing inventory of $5,605 to bring the inventory balance acquired by the Company to its fair value. For the three and six months ended June 30, 2025, the Company recognized nil and $517, respectively, of this inventory step-up into cost of sales on the condensed consolidated statements of net income (loss) and comprehensive income (loss). No inventory step-up was recognized in cost of sales during 2026. As of both June 30, 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 June 30, 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).
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 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 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.
11

Cronos Group Inc.
Notes to Condensed Consolidated Financial Statements (Unaudited)

(In thousands of U.S. dollars, except share amounts)Table of Contents

The