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What changed in Cronos Group Inc.'s 10-K — 2024 vs 2025

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Paragraph-level year-over-year comparison of Cronos Group Inc.'s 2024 and 2025 10-K annual filings, covering the Business, Risk Factors, Legal Proceedings, Cybersecurity, MD&A and Market Risk sections. Every new, removed and edited paragraph is highlighted side-by-side so you can see exactly what management changed in the 2025 report.

+574 added−599 removedSource: 10-K (2026-02-26) vs 10-K (2025-02-27)

Top changes in Cronos Group Inc.'s 2025 10-K

574 paragraphs added · 599 removed · 428 edited across 8 sections

Item 1. Business

Business — how the company describes what it does

71 edited+17 added−45 removed64 unchanged
Biggest changePre-Emptive Rights and Top-Up Rights Pursuant to the terms of the Investor Rights Agreement and provided the Altria Group continues to beneficially own at least 20% of Cronos’ issued and outstanding common shares, Altria has a right to purchase, directly or indirectly by another member of the Altria Group, upon the occurrence of certain issuances of common shares by Cronos (including issuances of common shares to Ginkgo under the Ginkgo Collaboration Agreement (each, a “Ginkgo Issuance”)) (each, a “Triggering Event”) and subject to obtaining the necessary approvals, up to such number of common shares issuable in connection with the Triggering Event which will, when added to Cronos’ common shares beneficially owned by the Altria Group immediately prior to the Triggering Event, result in the Altria Group beneficially owning the same percentage of Cronos’ issued and outstanding common shares that the Altria Group beneficially owned immediately prior to the Triggering Event (in each case, calculated on a non-diluted basis).
Biggest changeExclusivity Covenant Pursuant to the terms of the Investor Rights Agreement, until the earlier of: • the six-month anniversary of the date on which the Altria Group beneficially owns less than 10% of Cronos’ issued and outstanding common shares; and • the six-month anniversary of the termination of the Investor Rights Agreement, Altria has agreed to make Cronos its exclusive partner for pursuing cannabis opportunities throughout the world (subject to certain limited exceptions). 9 Table of Contents Pre-emptive Rights and Top-Up Rights Pursuant to the terms of the Investor Rights Agreement and provided the Altria Group continues to beneficially own at least 20% of Cronos’ issued and outstanding common shares, Altria has a right to purchase, directly or indirectly by another member of the Altria Group, upon the occurrence of certain issuances of common shares by Cronos (each, a “Triggering Event”) and subject to obtaining the necessary approvals, up to such number of common shares issuable in connection with the Triggering Event which will, when added to Cronos’ common shares beneficially owned by the Altria Group immediately prior to the Triggering Event, result in the Altria Group beneficially owning the same percentage of Cronos’ issued and outstanding common shares that the Altria Group beneficially owned immediately prior to the Triggering Event (in each case, calculated on a non-diluted basis).
Export permits issued by Health Canada are specific to each shipment and may only be obtained for medical or scientific purposes. To apply for a permit to export cannabis, a license holder must submit significant information to Health Canada including information about the substance to be exported (including description, intended use, quantity) and the importer.
Export permits issued by Health Canada are specific to each shipment and may only be obtained for medical or scientific purposes. To apply for a permit to export cannabis, a license holder must submit significant information to Health Canada including information about the substance to be exported (including description, intended use and quantity) and the importer.
Cronos also provides access without charge to all of its SEC filings, including copies of this Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as well as Section 16 reports on Forms 3, 4 or 5, as soon as reasonably practicable after filing or furnishing, on its website located at https://thecronosgroup.com.
Cronos also provides access without charge to all of its SEC filings, including copies of this Annual Report, Quarterly Reports on Form 10-Q, Current Reports on Form 8-K and amendments to those reports filed or furnished pursuant to Section 13(a) or 15(d) of the Exchange Act, as well as Section 16 reports on Forms 3, 4 or 5, as soon as reasonably practicable after filing or furnishing, on its website located at https://ir.thecronosgroup.com.
Cronos agreed that, among other things, it will not (and will use commercially reasonable efforts to cause its affiliates not to), without the prior written consent of Altria: • consolidate or merge into or with another person or enter into any similar business combination; • acquire any shares or similar equity interests, instruments convertible into or exchangeable for shares or similar equity interests, assets, business or operations with an aggregate value of more than C$100,000,000, in a single transaction or a series of related transactions; • sell, transfer, cause to be transferred, exclusively license, lease, pledge or otherwise dispose of any of the Company’s or its significant subsidiaries’ assets, business or operations in the aggregate with a value of more than C$60,000,000; • except as required by applicable law, make any changes to Cronos’ policy with respect to the declaration and payment of any dividends on its common shares; • subject to certain exceptions, enter into any contract or other agreement, arrangement, or understanding with respect to, or consummate, any transaction or series of related transactions between Cronos or any of its subsidiaries, on the one hand, and any related parties, on the other hand, involving consideration or any other transfer of value required to be disclosed pursuant to Item 404 of Regulation S-K promulgated pursuant to the Securities Act; or 10 Table of Contents • engage in the production, cultivation, advertisement, marketing, promotion, sale or distribution of cannabis or any Related Products and Services (as defined in the Investor Rights Agreement) in any jurisdiction, including the U.S., where such activity is prohibited by applicable law as of the date of the Investor Rights Agreement (subject to certain limitations).
Cronos agreed that, among other things, it will not (and will use commercially reasonable efforts to cause its affiliates not to), without the prior written consent of Altria: • consolidate or merge into or with another person or enter into any similar business combination; • acquire any shares or similar equity interests, instruments convertible into or exchangeable for shares or similar equity interests, assets, business or operations with an aggregate value of more than C$100,000,000, in a single transaction or a series of related transactions; • sell, transfer, cause to be transferred, exclusively license, lease, pledge or otherwise dispose of any of the Company’s or its significant subsidiaries’ assets, business or operations in the aggregate with a value of more than C$60,000,000; • except as required by applicable law, make any changes to Cronos’ policy with respect to the declaration and payment of any dividends on its common shares; • subject to certain exceptions, enter into any contract or other agreement, arrangement, or understanding with respect to, or consummate, any transaction or series of related transactions between Cronos or any of its subsidiaries, on the one hand, and any related parties, on the other hand, involving consideration or any other transfer of value required to be disclosed pursuant to Item 404 of Regulation S-K promulgated pursuant to the Securities Act; or • engage in the production, cultivation, advertisement, marketing, promotion, sale or distribution of cannabis or any Related Products and Services (as defined in the Investor Rights Agreement) in any jurisdiction, including the U.S., where such activity is prohibited by applicable law as of the date of the Investor Rights Agreement (subject to certain limitations).
These regulations and licensing regimes vary by jurisdiction and the Company, its joint venture partners, strategic investments and strategic partners spend significant time, effort and money to comply with the applicable requirements. The Company seeks to comply with export laws in connection with distributing Cronos products in other jurisdictions by obtaining export permits from Health Canada.
These regulations and licensing regimes vary by jurisdiction and the Company, its joint venture partners, strategic investments and strategic partners spend significant time, effort and money to comply with the applicable requirements. The Company seeks to comply with export laws in connection with distributing products in other jurisdictions by obtaining export permits from Health Canada.
The proposed amendments are intended to reduce regulatory and administrative burden for regulated parties and support diversity and competition in the legal cannabis market, while continuing to meet the public health and public safety objectives of the Cannabis Act.
The amendments are intended to reduce regulatory and administrative burden for regulated parties and support diversity and competition in the legal cannabis market, while continuing to meet the public health and safety objectives of the Cannabis Act.
With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach ® , PEACE NATURALS ® and Lord Jones ® .
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 ® .
The Company believes its strong capitalization resulting from the Altria Investment, along with the Spinach ® and Lord Jones ® brand recognition and differentiation in the Canadian adult-use market and Cronos GrowCo’s efficient and expanding operations functioning as a source of supply, will enable Cronos to develop better quality consumer products, grow its Canadian business and strengthen its market position in Canada.
The Company believes its strong capitalization resulting from the Altria Investment, along with the Spinach ® and Lord Jones ® brand recognition and differentiation in the Canadian market and Cronos GrowCo’s efficient and expanding operations functioning as a source of supply, will enable Cronos to develop better quality consumer products, grow its Canadian business and strengthen its market position in Canada.
In addition, trademark protections have been sought in many jurisdictions, including Canada, the U.S., Israel, European Union (the “EU”), Australia and China. Cronos’ ability to obtain registered trademark protection for cannabis-related goods and services, in particular for cannabis itself, may be limited in certain countries outside of Canada.
In addition, trademark protections have been sought in many jurisdictions, including Canada, the U.S., Israel, the UK, Switzerland, the European Union (the “EU”), Australia and China. Cronos’ ability to obtain registered trademark protection for cannabis-related goods and services, in particular for cannabis itself, may be limited in certain countries outside of Canada.
Provincial distributors may also take different positions on the sale and distribution of products with various cannabinoids (including tetrahydrocannabivarin and cannabinol).
Provincial distributors also take different positions on the sale and distribution of products with various cannabinoids (including tetrahydrocannabivarin and cannabinol).
Therefore, the cultivation, manufacture, distribution and possession of U.S. Schedule I cannabis violates federal law in the U.S. unless a U.S. federal agency, such as the DEA, grants a registration for a specific activity, such as research, with U.S. Schedule I cannabis. Cronos does not engage in any activities related to U.S. Schedule I cannabis in the U.S.
Accordingly, the cultivation, manufacture, distribution and possession of U.S. Schedule I cannabis violates federal law in the U.S. unless a U.S. federal agency, such as the DEA, grants a registration for a specific activity, such as research, with U.S. Schedule I cannabis. Cronos does not engage in any activities related to U.S. Schedule I cannabis in the U.S.
The public may obtain any document filed with or furnish to the SEC from the SEC’s Electronic Document Gathering, Analysis, and Retrieval system, which can be accessed at www.sec.gov , or via the System for Electronic Data Analysis and Retrieval, which can be accessed at www.sedarplus.com , as well as from commercial document retrieval services.
The public may obtain any document filed with or furnished to the SEC from the SEC’s Electronic Document Gathering, Analysis, and Retrieval system, which can be accessed at www.sec.gov , or via the System for Electronic Data Analysis and Retrieval, which can be accessed at www.sedarplus.com , as well as from commercial document retrieval services.
“Top-Up Securities” means any Cronos common shares issued: • on the exercise, conversion or exchange of Cronos convertible securities issued prior to the date of the Investor Rights Agreement or on the exercise, conversion or exchange of Cronos convertible securities issued after the date of the Investor Rights Agreement in compliance with the terms of the Investor Rights Agreement, in each case, excluding any of Cronos convertible securities owned by any member of the Altria Group; • pursuant to any share incentive plan of the Company; • on the exercise of any right granted by Cronos pro rata to all shareholders to purchase additional common shares and/or other securities of the Company (other than a right issued in a rights offering in which Altria had the right to participate); • in connection with bona fide bank debt, equipment financing or non-equity interim financing transactions with Cronos’ lenders, in each case, with an equity component; or • in connection with bona fide acquisitions (including acquisitions of assets or rights under a license or otherwise), mergers or similar business combination transactions or joint ventures undertaken and completed by Cronos, in each case, other than (A) common shares issued pursuant to Altria’s pre-emptive right and (B) common shares issued pursuant to the Ginkgo Collaboration Agreement.
“Top-Up Securities” means any Cronos common shares issued: • on the exercise, conversion or exchange of Cronos convertible securities issued prior to the date of the Investor Rights Agreement or on the exercise, conversion or exchange of Cronos convertible securities issued after the date of the Investor Rights Agreement in compliance with the terms of the Investor Rights Agreement, in each case, excluding any of Cronos convertible securities owned by any member of the Altria Group; • pursuant to any share incentive plan of the Company; • on the exercise of any right granted by Cronos pro rata to all shareholders to purchase additional common shares and/or other securities of the Company (other than a right issued in a rights offering in which Altria had the right to participate); • in connection with bona fide bank debt, equipment financing or non-equity interim financing transactions with Cronos’ lenders, in each case, with an equity component; or • in connection with bona fide acquisitions (including acquisitions of assets or rights under a license or otherwise), mergers or similar business combination transactions or joint ventures undertaken and completed by Cronos, in each case, other than (A) common shares issued pursuant to Altria’s pre-emptive right and (B) common shares issued pursuant to the collaboration and license agreement (the “Ginkgo Collaboration Agreement”) between Cronos and Ginkgo Bioworks Holdings, Inc.
In September 2023, Cronos established a strategic partnership with Cansativa, a leading German cannabis company, to distribute PEACE NATURALS ® branded products along with other white-labeled cannabis products in the German medical market. • United Kingdom.
In September 2023, Cronos established a strategic partnership with Cansativa, a leading German cannabis company, to distribute PEACE NATURALS ® and LIT™ branded products along with other white-labeled cannabis products in the German medical market. • United Kingdom.
The Cannabis Act and Cannabis Regulations include, among other things, strict specifications for the plain packaging and labeling and analytical testing of all cannabis products as well as stringent physical and personnel security requirements for all federally licensed cultivation, processing and sales sites. Health Canada allows license holders to export cannabis products with appropriate export permits.
The Cannabis Act and Cannabis Regulations include, among other things, strict 11 Table of Contents specifications for the plain packaging and labeling and analytical testing of all cannabis products as well as stringent physical and personnel security requirements for all federally licensed cultivation, processing and sales sites. Health Canada allows license holders to export cannabis products with appropriate export permits.
The services under the Commercial Arrangements are provided on customary terms and for a services fee payable by Cronos that is equal to Altria’s reasonably allocated costs plus 5%. Protection of Intangible Assets The ownership and protection of Cronos’ intellectual property rights is a significant aspect of its future success.
The services under the Commercial Arrangements are provided on customary terms and for a services fee payable by Cronos that is equal to Altria’s reasonably allocated costs plus 5%. 10 Table of Contents Protection of Intangible Assets The ownership and protection of Cronos’ intellectual property rights is a significant aspect of its future success.
The Company verifies the customers’ liquidity prior to the authorization of material transactions for the purpose of mitigating credit risk. Government Contracts In Canada, Cronos sells cannabis products to cannabis control authorities in all provinces of Canada and the Yukon territory, except for Saskatchewan (where cannabis products are sold directly to private-sector retailers).
The Company verifies the customers’ liquidity prior to the authorization of material transactions for the purpose of mitigating credit risk. 7 Table of Contents Government Contracts In Canada, Cronos sells cannabis products to cannabis control authorities in all provinces of Canada and the Yukon territory, except for Saskatchewan (where cannabis products are sold directly to private-sector retailers).
Licenses and Regulatory Framework in Other Jurisdictions Cronos and its joint venture partners, strategic investments and strategic partners are subject to comprehensive and evolving regulations in each jurisdiction in which they operate. All aspects of the production, manufacture and distribution of cannabis products 14 Table of Contents are regulated and subject to licensing regimes.
Licenses and Regulatory Framework in Other Jurisdictions Cronos and its joint venture partners, strategic investments and strategic partners are subject to comprehensive and evolving regulations in each jurisdiction in which they operate. All aspects of the production, manufacture and distribution of cannabis products are regulated and subject to licensing regimes.
Cronos believes it is positioned to enter certain markets in Europe in a meaningful way while continuing to operate and penetrate the markets in which it currently participates, such as in Israel, Germany and the UK, due to the strong capitalization resulting from the Altria Investment, extensive experience and expertise in the highly regulated cannabis industry in Canada, which can be leveraged when entering new markets or growing existing operations, and strong partnerships with local distributors.
Cronos believes it is positioned to enter certain markets in Europe in a meaningful way while continuing to operate and penetrate the markets in which it currently participates due to the strong capitalization resulting from the Altria Investment, extensive experience and expertise in the highly regulated cannabis industry in Canada, which can be leveraged when entering new markets or growing existing operations, and strong partnerships with local distributors.
At least one Altria Nominee must be independent as long as Atria has the right to designate at least three Altria Nominees and the Altria Group’s beneficial ownership of Cronos’ issued and outstanding common shares does not exceed 50%.
At least one Altria Nominee must be independent for so long as Altria has the right to designate at least three Altria Nominees and the Altria Group’s beneficial ownership of Cronos’ issued and outstanding common shares does not exceed 50%.
The price per common share to be paid by Altria pursuant to the exercise of these pre-emptive rights will be, subject to certain limited exceptions, the same price per common share at which the common shares are sold in the relevant Triggering Event; provided that if the consideration paid in connection with any such issuance is non-cash, the price per common share that would have been received had such common shares been issued for cash consideration will be determined by an independent committee (acting reasonably and in good faith); provided further that the price per common share to be paid by Altria pursuant to the exercise of its pre-emptive rights in connection with a Ginkgo Issuance will be C$16.25 per common share.
The price per common share to be paid by Altria pursuant to the exercise of these pre-emptive rights will be, subject to certain limited exceptions, the same price per common share at which the common shares are sold in the relevant Triggering Event; provided that if the consideration paid in connection with any such issuance is non-cash, the price per common share that would have been received had such common shares been issued for cash consideration will be determined by an independent committee (acting reasonably and in good faith).
Employees are enabled to succeed through the Company’s communicated behaviors, development training opportunities, performance management program and pay for performance philosophy, and using their voice in its employee engagement survey. 12 Table of Contents Inclusion, Belonging and Ethical Business Practices .
Employees are enabled to succeed through the Company’s communicated behaviors, development training opportunities, performance management program and pay for performance philosophy, and using their voice in its employee engagement survey. Inclusion, Belonging and Ethical Business Practices .
Cronos currently sells dried flower, pre-rolls, vaporizers edibles, and tinctures through its core adult-use brands, Spinach ® and Lord Jones ® , to cannabis control authorities in all provinces of Canada and the Yukon territory, except Saskatchewan, where the Company sells to private-sector retailers, subject to the relevant provincial or territorial product or other restrictions and requirements.
Cronos currently sells dried flower, pre-rolls, vaporizers, concentrates and edibles through its brands, Spinach ® and Lord Jones ® , to cannabis control authorities in all provinces of Canada and the Yukon territory, except Saskatchewan, where the Company sells to private-sector retailers, subject to the relevant provincial or territorial restrictions and requirements.
The Company believes these factors will enable a greater market penetration, provide a greater variety of quality consumer products facilitate entry into new markets and strengthen its existing market position in Europe, the UK, Australia and Israel.
The Company believes these factors will enable greater market penetration, provide a greater variety of quality consumer products, facilitate entry into new markets and strengthen its existing market position in overseas markets.
In 2024, there were two major customers, Ontario Cannabis Retail Corporation and Alberta Gaming, Liquor and Cannabis Commission, which accounted for approximately 32% and 17%, respectively, of the Company’s consolidated net revenues, before excises taxes, for the year ended December 31, 2024.
In 2025, there were two major customers, Ontario Cannabis Retail Corporation and Alberta Gaming, Liquor and Cannabis Commission, which accounted for approximately 27% and 16%, respectively, of the Company’s consolidated net revenues, before excises taxes, for the year ended December 31, 2025.
Altria Strategic Investment Altria Investment and Investor Rights Agreement As of December 31, 2024, Altria beneficially owned 40.9% of Cronos’ common shares and had the right to acquire additional common shares under its pre-emptive and top-up rights as discussed under “ Pre-Emptive Rights and Top-Up Rights ” below.
Altria Strategic Investment Altria Investment and Investor Rights Agreement As of December 31, 2025, Altria beneficially owned 41.0% of Cronos’ common shares and had the right to acquire additional common shares under its pre-emptive and top-up rights as discussed under “ Pre-emptive Rights and Top-Up Rights ” below.
In Israel, the Company operates under the Good Agricultural Practices (“IMC-GAP”), Good Manufacturing 4 Table of Contents Practices (“IMC-GMP”) and Good Distribution Practices (“IMC-GDP”) certifications required for the cultivation, production, distribution and marketing of medical cannabis products in Israel.
In Israel, Cronos operates under the Good Agricultural Practices (“IMC-GAP”), Good Manufacturing Practices (“IMC-GMP”) and Good Distribution Practices (“IMC-GDP”) certifications required for the cultivation, production, distribution and marketing of medical cannabis products in Israel.
Brand Portfolio Cronos is committed to building a portfolio of iconic brands that responsibly elevate the consumer experience. In Canada, Cronos sells a variety of cannabis products through wholesale channels under both our core adult-use brands, Spinach ® and Lord Jones ® , and under its core medical brand, PEACE NATURALS ® .
Brand Portfolio Cronos is committed to building a portfolio of iconic brands that responsibly elevate the consumer experience. In Canada, Cronos sells a variety of cannabis products through wholesale channels including under our Spinach ® , PEACE NATURALS ® and Lord Jones ® brands .
Licenses to cultivate, produce, possess and use cannabis for medical or research purposes in Israel are granted by the Israel Medical Cannabis Agency (the “Yakar”) within the Israeli Ministry of Health (the “Israeli MOH”).
Licenses to cultivate, produce, distribute, transport, conduct laboratory testing, dispense, possess and use cannabis for medical or research purposes in Israel are granted by the Israel Medical Cannabis Agency (the “Yakar”) within the Israeli Ministry of Health (the “Israeli MOH”).
Each of Cronos and the Greenhouse Partners owns a 50% equity interest in Cronos GrowCo. On July 1, 2024, the Company obtained majority control of the board of directors of Cronos GrowCo, which qualified as a business combination under ASC 805. Strategic Investment in PharmaCann, Inc.
Each of Cronos and the Greenhouse Partners owns a 50% equity interest in Cronos GrowCo. On July 1, 2024, the Company obtained majority control of the board of directors of Cronos GrowCo, which qualified as a business combination under ASC 805. No U.S.
It is possible that certain information on Cronos’ website or these social media sites could be deemed to be material information. Investors, the media and others interested in the Company should review the business and financial information posted on the Company’s website or these social media sites.
Twitter) ( https://x.com/cronosgroup ); and • LinkedIn ( https://www.linkedin.com/company/cronosgroupcron/ ). It is possible that certain information on Cronos’ website or these social media sites could be deemed to be material information. Investors, the media and others interested in the Company should review the business and financial information posted on the Company’s website or these social media sites.
In the second quarter of 2024, the Company entered into an amended and restated supply agreement with Cronos GrowCo (the “Cronos GrowCo Supply Agreement”), pursuant to which the Company has the right, but not the obligation, to purchase up to 80% of Cronos GrowCo’s total production prior to the commencement of sales from the Phase 2 expansion area of the Cronos GrowCo Facility.
In the second quarter of 2024, the Company entered into an amended and restated supply agreement with Cronos GrowCo (the “Cronos GrowCo Supply Agreement”), pursuant to which the Company has the right, but not the obligation, to purchase up to 70% of Cronos GrowCo’s total production from the Cronos GrowCo Facility.
The Company maintains a whistleblower policy and anonymous hotline for the confidential reporting of any suspected policy violations and provides training and education to its global workforce with respect to the Code of Business Conduct and Ethics and related policies.
Cronos is committed to fair hiring, development, and promotion of employees. The Company maintains a whistleblower policy and an anonymous hotline for the confidential reporting of any suspected policy violations and provides training and education to its global workforce with respect to the Code of Business Conduct and Ethics and related policies.
The SQDC has also placed significant restrictions on the types of edibles that may be sold through its channels, prohibiting edibles that are sweet, confectionary, dessert, chocolate or any other product SQDC considers attractive to persons under 21 years of age. Similarly, the Prince Edward Island Cannabis Management Corporation does not allow cannabis vaporizers to be sold through its channels.
The SQDC has also placed significant restrictions on the types of edibles that may be sold through its channels, prohibiting edibles that are sweet, confectionary, dessert, chocolate or any other product SQDC considers attractive to persons under 21 years of age.
In addition to competition from illegal market participants, Cronos faces competition from licensed cannabis competitors that fail to comply with the regulations governing the cannabis industry when developing and selling cannabis products.
In addition to competition from illegal market participants, Cronos faces competition from licensed cannabis competitors that fail to comply with the regulations governing the cannabis industry when developing and selling cannabis products. Competitive Conditions Outside of Canada Cronos faces competition when entering new markets.
As of December 31, 2024 Cronos had 459 full-time employees. Of the full-time employees, 356 were in Canada, 45 were in the U.S., and 58 were in Israel. No employees are represented by a labor union or covered by a collective bargaining agreement. Compensation and Benefits .
As of December 31, 2025, Cronos had 610 full-time employees. Of the full-time employees, 507 were in Canada, 36 were in the U.S., and 67 were in Israel. No employees are represented by a labor union or covered by a collective bargaining agreement. Compensation and Benefits .
The proposed amendments are supported by conclusions and recommendations from the independent expert panel’s final report that was published in March 2024 (as described above) with proposed targeted amendments in five areas: (1) licensing, (2) personnel and physical security measures, (3) production requirements, (4) packaging and labelling, and (5) record-keeping and reporting.
The amendments were supported by conclusions and recommendations from the independent expert panel’s final report published in March 2024 (described above), and were focused on five areas: (1) licensing, (2) personnel and physical security measures, (3) production requirements, (4) packaging and labeling, and (5) record-keeping and reporting.
Open Market Purchases The Altria Group is permitted to acquire Cronos common shares in the open market at any time and in any amount. 11 Table of Contents Registration Rights The Investor Rights Agreement provides Altria with the right, subject to certain limitations and to the extent permitted by applicable law, to require Cronos to use reasonable commercial efforts to file a prospectus under applicable securities laws and/or a registration statement, qualifying Cronos common shares held by Altria for distribution in Canada and/or the U.S.
Registration Rights The Investor Rights Agreement provides Altria with the right, subject to certain limitations and to the extent permitted by applicable law, to require Cronos to use reasonable commercial efforts to file a prospectus under applicable securities laws and/or a registration statement, qualifying Cronos common shares held by Altria for distribution in Canada and/or the U.S.
For example, recommendation 27 suggests reforms to the excise tax regime which would apply progressively larger duties on cannabis products with higher quantities or concentrations of THC or other intoxicating cannabinoids.
For example, recommendation 27 suggests reforms to the excise tax regime which would apply progressively larger duties on cannabis products with higher quantities or concentrations of THC or other intoxicating cannabinoids. On March 12, 2025, previously proposed amendments to the Cannabis Regulations came into effect.
Under the “Enabling Reform” (the “Reform”), patients with certain medical indications can obtain medical cannabis through prescriptions issued by physicians certified in their area of expertise who have undergone dedicated training within the public healthcare system.
Under the “Enabling Reform” (the “Reform”), which came into effect on April 1, 2024, patients with certain medical indications can obtain medical cannabis through prescriptions issued by physicians certified in their area of expertise who have undergone dedicated training within the public 12 Table of Contents healthcare system.
It also proposed further examination into excluding all cannabinoids besides THC from the Ordinance. Export From Israel In December 2020, the Israeli MOH initiated a pilot program in which certain medical cannabis companies were permitted to export their products, and the Yakar issued guidelines relating to the export of medical cannabis products.
Export From Israel In December 2020, the Israeli MOH initiated a pilot program in which certain medical cannabis companies were permitted to export their products, and the Yakar issued guidelines relating to the export of medical cannabis products.
A key change in the updated procedure was the removal of the words “for medical use and research” from its then title and guidelines. This change potentially expands the markets for Israeli cannabis products beyond medical markets.
A key change in the updated procedure was the removal of the words “for medical use and research” from its then title and guidelines.
Cronos Marketing Code In 2021, Cronos released its Marketing Code, which is designed to responsibly move the emerging cannabis industry forward. Cronos believes that those below the legal age of consumption should not be targeted in an adult-use cannabis market. Cronos recognizes there is a clear need for standards.
Cronos believes that those below the legal age of consumption should not be targeted in an adult-use cannabis market. Cronos recognizes there is a clear need for standards.
Board Representation The Investor Rights Agreement provides that, for so long as Altria and certain of its affiliates (the “Altria Group”) continue to beneficially own at least 40% of Cronos’ issued and outstanding common shares and the size of Cronos’ board of directors (the “Board”) is seven directors, Cronos agrees to nominate for election as directors to the Board four individuals designated by Altria (the “Altria Nominees”).
Investor Rights Agreement In connection with the Altria Investment, Cronos entered into the Investor Rights Agreement, dated as of March 8, 2019, by and between Cronos and Altria (the “Investor Rights Agreement”) pursuant to which Altria received certain governance rights that are summarized below. 8 Table of Contents Board Representation The Investor Rights Agreement provides that, for so long as Altria and certain of its affiliates (the “Altria Group”) continue to beneficially own at least 40% of Cronos’ issued and outstanding common shares and the size of Cronos’ board of directors (the “Board”) is seven directors, Cronos agrees to nominate for election as directors to the Board four individuals designated by Altria (the “Altria Nominees”).
These products are sold to the various cannabis control authorities under supply agreements that are subject to terms that allow for renegotiation of sale prices and termination at the election of the applicable cannabis control authority.
These products are sold to the various cannabis control authorities under supply agreements that are subject to terms that allow for renegotiation of sale prices and termination at the election of the applicable cannabis control authority. For the year ended December 31, 2025, the Company made approximately $122.4 million in sales to cannabis control authorities in Canada.
Health Canada defines “intoxicating cannabinoids” as cannabinoids that bind to and activate the type 1 cannabinoid receptor (“CB1 receptor”). This guidance recommends that license holders apply the regulatory controls currently applicable to THC to all other cannabinoids that Health Canada defines as “intoxicating cannabinoids” in order to minimize the risks of accidental consumption, overconsumption and adverse effects.
This guidance recommends that license holders apply the regulatory controls currently applicable to THC to all other cannabinoids that Health Canada defines as “intoxicating cannabinoids” in order to minimize the risks of accidental consumption, overconsumption and adverse effects. Provincial cannabis regulators have adopted Health Canada’s recommendation in various approaches.
Brand Positioning Mainstream adult-use Medical Premium adult-use Product Offering Dried flower, pre-rolls, vaporizers, edibles, tinctures Dried flower, pre-rolls, tinctures Pre-rolls, vaporizers, edibles Geographic Availability Canada Canada, Israel, Germany, & the UK Canada 6 Table of Contents Adult-Use Brands Spinach ® is a mainstream adult-use cannabis brand focused on friends, fun and legendary cannabis.
Cronos also sells cannabis flower in several international medical markets under our PEACE NATURALS ® , LIT™ and Lord Jones ® brands. 5 Table of Contents Brand Positioning Mainstream Mainstream Value Premium Product Offering Dried flower, pre-rolls, vaporizers, edibles Dried flower, pre-rolls, tinctures Dried flower Dried flower, pre-rolls, vaporizers, edibles Geographic Availability Canada Canada, Israel, Germany, Australia, Switzerland & the UK Germany, Israel & the UK Canada & Israel Spinach ® is a mainstream adult-use cannabis brand focused on friends, fun and legendary cannabis.
Cronos Israel holds the IMC-GAP, IMC-GMP and IMC-GDP certifications required for the cultivation, production, distribution and marketing of medical cannabis products in Israel. Cronos Israel distributes PEACE NATURALS ® branded cannabis products to the Israeli medical market through pharmacies. See “ — Licenses and Regulatory Framework in Israel.” • Germany.
Cronos GrowCo supplies products to Canada, Israel and select international markets. • Cronos Israel . Cronos Israel holds the IMC-GAP, IMC-GMP and IMC-GDP certifications required for the cultivation, production, distribution and marketing of medical cannabis products in Israel. Cronos Israel distributes PEACE NATURALS ® and LIT™ branded cannabis products to the Israeli medical market.
Subject to applicable regulatory approvals, strategic international business opportunities pursued by Cronos could include: • production, distribution, sales and marketing in jurisdictions that have passed legislation to legalize the production, distribution and possession of cannabis products at all relevant levels of government; and • the export of cannabis products to markets that permit the import of such products.
Subject to applicable regulatory approvals, strategic international business opportunities pursued by Cronos could include: • production, distribution, sales and marketing in jurisdictions that have passed legislation to legalize the production, distribution and possession of cannabis products at all relevant levels of government; and • the export of cannabis products to markets that permit the import of such products. 4 Table of Contents Cronos seeks to conduct business only in jurisdictions where Cronos has determined it is legal to do so and where such operations remain compliant with its TSX and Nasdaq listing obligations.
In February 2024, Cronos expanded into the UK by shipping its first batch of PEACE NATURALS ® medical cannabis flower to this emerging market, through a partnership with a third-party distributor of prescribed cannabis products. • Australia. Cronos distributes cannabis products in Australia through a distribution relationship with Vitura (formerly known as Cronos Australia Limited).
In February 2024, Cronos expanded into the UK by shipping its first batch of PEACE NATURALS ® medical cannabis flower to this emerging market, through a partnership with a third-party distributor of prescribed cannabis products. In 2025, LIT™ branded products also became available in the UK market. • Other International Markets.
Cronos Israel distributes PEACE NATURALS ® branded cannabis products to the Israeli medical market. See “ —Licenses and Regulatory Framework in Israel ” for more information on the Company’s licenses in Israel. • Third-party Supply and Manufacturing Agreements.
In February 2026, Cronos launched the Lord Jones ® brand in the Israeli medical market. See “ —Licenses and Regulatory Framework in Israel ” for more information on the Company’s licenses in Israel. • Third-party Supply and Manufacturing Agreements.
As the Company’s supply chain grows, Cronos continues to expand its portfolio of cannabis products for the existing markets in Canada. • Medical Market. Cronos sells cannabis products under the PEACE NATURALS®, Spinach® and Lord Jones® brands to medical cannabis users in Canada through various third-party distributors. Markets and Distribution Outside of Canada • Israel.
Cronos sells cannabis products under the PEACE NATURALS ® , Spinach ® and Lord Jones ® brands to medical cannabis users in Canada through various third-party distributors. 6 Table of Contents Markets and Distribution Outside of Canada • Israel. Cronos Israel distributes PEACE NATURALS ® and LIT™ branded cannabis products to the Israeli medical market through pharmacies.
Cronos continues to seek new international distribution channels in jurisdictions that have legalized the production, distribution and possession of cannabis products at all relevant levels of government. 7 Table of Contents Global Supply Chain Cronos is focused on establishing an efficient global supply chain by seeking to develop industry-leading methodologies and best practices at the cultivation and processing facilities of Cronos GrowCo (the “Cronos GrowCo Facility”) and the Peace Naturals Campus and leveraging this expertise to create beneficial production partnerships.
Global Supply Chain Cronos is focused on establishing an efficient global supply chain by seeking to develop industry-leading methodologies and best practices at the cultivation and processing facilities of Cronos GrowCo (the “Cronos GrowCo Facility”), the Peace Naturals Campus and the Cronos Israel facility at Kibbutz Gan Shmuel and leveraging this expertise to create beneficial production partnerships.
Additionally, the Company held approximately 9.5% of the issued capital of Vitura, which is accounted for as equity securities with a readily determinable fair value, and approximately 13.7% of the issued capital of NatuEra S.à.r.l. (“Natuera”), which is accounted for as equity securities without a readily determinable fair value, as of December 31, 2024.
Additionally, the Company held approximately 8.3% of the issued capital of Vitura following the issuance by Vitura of an additional 74,814,757 shares on February 12, 2025, which is accounted for as equity securities with a readily determinable fair value, and approximately 13.7% of the issued capital of NatuEra S.à.r.l.
By leveraging operational, manufacturing and regulatory expertise, quality standards and procedures and intellectual property, the Company is well-positioned to effectively access these markets.
Cronos anticipates that it will continue entering new markets and expanding in its current geographic markets. By leveraging operational, manufacturing and regulatory expertise, quality standards and procedures and intellectual property, the Company is well-positioned to effectively expand in its existing markets and access new markets.
For example, the Nova Scotia Liquor Corporation (“the NSLC”), the exclusive distributor of cannabis in the province of Nova Scotia and the sole retail and online vendor in Nova Scotia, does not permit the sale of cannabis products that do not meet Health Canada’s recommendation for total intoxicating cannabinoid content. 13 Table of Contents Provincial and Territorial Developments While the Cannabis Act provides for the regulation by the Canadian federal government of, among other things, the commercial production of cannabis and the sale of medical cannabis, the various provinces and territories of Canada regulate certain aspects of adult-use cannabis, including the distribution, sale, minimum age requirements and places where cannabis can be consumed.
Provincial and Territorial Developments While the Cannabis Act provides for the regulation by the Canadian federal government of, among other things, the commercial production of cannabis and the sale of medical cannabis, the various provinces and territories of Canada regulate certain aspects of adult-use cannabis, including the distribution, sale, minimum age requirements and places where cannabis can be consumed.
From time to time, Cronos may use its website, as well as the following social media sites, as an additional means of disclosing public information to investors, the media and others interested in the Company. • Facebook ( https://www.facebook.com/The-Cronos-Group-419168411987225 ); • X (f.k.a. Twitter) ( https://x.com/cronosgroup ); and • LinkedIn ( https://www.linkedin.com/company/cronosgroupcron/ ).
Within the time period required by the SEC, the Company will post on its website any amendment to the Code of Business Conduct and Ethics and any waiver applicable to any executive officer, director or senior financial officer. 13 Table of Contents From time to time, Cronos may use its website, as well as the following social media sites, as an additional means of disclosing public information to investors, the media and others interested in the Company; • Facebook ( https://www.facebook.com/The-Cronos-Group-419168411987225 ); • X (f.k.a.
Schedule I Cannabis-Related Activities Although several states in the U.S. have authorized the cultivation, distribution or possession of U.S. Schedule I cannabis and U.S. Schedule I cannabis containing products to various degrees and subject to various requirements or conditions, U.S. Schedule I cannabis continues to be a Schedule I controlled substance under the U.S. Controlled Substances Act (the “CSA”).
Schedule I Cannabis-Related Activities Although several states in the U.S. have authorized the cultivation, distribution or possession of U.S. Schedule I cannabis and U.S. Schedule I cannabis containing products to various degrees and subject to various requirements or conditions and although President Trump signed an executive order on December 18, 2025 (the “Executive Order”) directing the U.S.
The Company plans to continue and expand operations at the Peace Naturals Campus. • Cronos GrowCo. The Cronos GrowCo Facility is licensed for cannabis production and the manufacturing of certain cannabis products.
Activities at the Peace Naturals Campus include production, processing, finishing, packaging and shipping, as well as R&D, including cannabinoid product formulation, product development, tissue culture and micro propagation. The Company plans to continue and expand operations at the Peace Naturals Campus. • Cronos GrowCo. The Cronos GrowCo Facility is licensed for cannabis production and the manufacturing of certain cannabis products.
Israel In Israel, the Company operates under the IMC-GAP, IMC-GMP and IMC-GDP certifications required for the cultivation, production, distribution and marketing of medical cannabis products in Israel. Operations Outside of Canada and Israel Cronos anticipates that it will continue entering new markets and expanding in the geographic markets outside of Canada and Israel in which the Company currently participates.
Israel In Israel, the Company operates under the IMC-GAP, IMC-GMP and IMC-GDP certifications required for the cultivation, production, distribution and marketing of medical cannabis products in Israel. Operations Outside of Canada and Israel Cronos distributes PEACE NATURALS ® and LIT™ branded products and white-labeled cannabis products to select international markets.
The updated Procedure 110 establishes that export approvals are primarily contingent on the submission of a valid import permit or official confirmation from the competent authority in the destination country. Additionally, Procedure 110 exempts cannabis products intended solely for export from meeting Israeli domestic quality standards, except for compliance with mandatory security requirements specified under IMC-GSP guidelines.
The updated Procedure 110 establishes that export approvals are primarily contingent on the submission of a valid import permit or official confirmation from the competent authority in the destination country.
Organizational Realignments Beginning in the second quarter of 2023, following the exit of its U.S. operations, Cronos began reporting through one consolidated segment, which includes operations in both Canada and Israel. In Canada, Cronos operates one wholly owned license holder under the Cannabis Act (Canada) (the “Cannabis Act”), Peace Naturals Project Inc.
Business Segment Cronos reports through one consolidated segment, which includes operations in both Canada and Israel. In Canada, Cronos operates one wholly owned license holder under the Cannabis Act (Canada) (the “Cannabis Act”), Peace Naturals Project Inc. (“Peace Naturals”), which has production facilities in Stayner, Ontario (the “Peace Naturals Campus”).
As the demand for cannabis increases as a result of the legalization of adult-use cannabis in Canada under the Cannabis Act, Cronos believes that new competitors will continue to enter the market. The principal factors on which Cronos competes with other Canadian license holders are product quality, cost of production, innovation, intellectual property, brand recognition and price.
The principal factors on which Cronos competes with other Canadian license holders are product quality, cost of production, innovation, intellectual property, brand recognition and price.
On February 12, 2023, in response to the District Court’s order, the Director General of the Yakar published a decision regarding the Constructive Licenses, clarifying the Yakar’s authority to grant Constructive Licenses for the import/export of medical cannabis.
While arguments were previously made by local manufacturers against the issuance of these Constructive Licenses due to the less stringent requirements needed to obtain one, on February 12, 2023, the Director General of the Yakar published a decision regarding the Constructive Licenses, clarifying the Yakar’s authority to grant Constructive Licenses for the import/export of medical cannabis.
Constructive Licenses In June 2022, 11 cannabis manufacturers (including a subsidiary of the Company) (the “Petitioners”) filed an administrative petition to the District Court in Jerusalem regarding the Yakar’s decision to issue constructive licenses (i.e., licenses for dealing with medical cannabis, without direct contact with the product, such as brokering medical cannabis transactions) (the “Constructive Licenses”).
Constructive Licenses The Yakar is also able to issue constructive licenses (i.e., licenses for dealing with medical cannabis, without direct contact with the product, such as brokering medical cannabis transactions) (the “Constructive Licenses”).
Medical Brand PEACE NATURALS ® is a global medical brand committed to producing high-quality cannabis products. It is focused on building and shaping the global medical market. The Company currently distributes products under the PEACE NATURALS ® brand for the Canadian market and the Israeli, German, and UK medical markets.
The Company currently distributes products under the PEACE NATURALS ® brand for the Canadian market and several international medical markets. LIT™ is a value‑driven medical cannabis brand designed to make high‑quality relief more accessible, without compromising quality or care.
(“Peace Naturals”), which has production facilities near Stayner, Ontario (the “Peace Naturals Campus”). In addition, Cronos maintains a 50% equity interest in Cronos GrowCo, and as a result of the Cronos GrowCo Transaction, Cronos now consolidates the results of operations of Cronos GrowCo in its consolidated financial statements.
Cronos also consolidates the results of operations of Cronos GrowCo in its consolidated financial statements and maintains a 50% equity interest in Cronos GrowCo. Cronos GrowCo’s production facilities are licensed under the Cannabis Act and represent the Company’s principal source of cannabis.
The Spinach ® brand portfolio includes cannabinoid products in a wide range of formats including dried flower, pre-rolls, vaporizers, edibles and tinctures. Lord Jones ® is a premium adult-use cannabis brand that goes above and beyond to unlock differentiated ways to experience cannabis. The Lord Jones ® brand portfolio includes cannabis products in the pre-roll, vaporizer and edible categories.
The Spinach ® brand portfolio includes cannabinoid products in a wide range of formats including dried flower, pre-rolls, vaporizers and edibles. PEACE NATURALS ® is a mainstream global medical brand committed to producing high-quality cannabis products. The brand is focused on building and shaping the global medical market.
The consultation closed in July 2024 and Health Canada is reviewing the comments received through the public consultation. The proposed amendments are not yet effective. In December 2023, Health Canada released guidance on cannabis products deliberately made with intoxicating cannabinoids other than delta-9-tetrayhydrocannabinol.
In December 2023, Health Canada released guidance on cannabis products deliberately made with intoxicating cannabinoids other than delta-9-tetrahydrocannabinol. Health Canada defines “intoxicating cannabinoids” as cannabinoids that bind to and activate the type 1 cannabinoid receptor (“CB1 receptor”).
Additionally, Cronos GrowCo has sold products in the wholesale channel into the markets listed above as well as Portugal.
Cronos distributes PEACE NATURALS ® medical cannabis flower in Australia, Switzerland, and Malta through third-party distributor relationships. Additionally, Cronos GrowCo sells products in the wholesale channel into the markets listed above as well as Canada and select other international markets.
For further detail on the discontinuation of the U.S. operations, see Note 3 “ Discontinued Operations” to the consolidated financial statements under Item 8 of this Annual Report. Competitive Conditions Competitive Conditions in Canada The Company faces competition in all aspects of its business in the Canadian adult-use and medical markets.
Competitive Conditions Competitive Conditions in Canada The Company faces competition in all aspects of its business in the Canadian adult-use and medical markets. As the demand for cannabis increases as a result of the legalization of adult-use cannabis in Canada under the Cannabis Act, Cronos believes that new competitors will continue to enter the market.
Removed
Cronos GrowCo Transaction On June 20, 2024 the Company announced an additional investment in Cronos Growing Company Inc. (“Cronos GrowCo”), a cannabis cultivation company previously accounted for by the Company as an equity method investee, to fund the expansion of its cultivation operations (the “Cronos GrowCo Phase 2 Expansion”).
Added
(“Natuera”), which is accounted for as equity securities without a readily determinable fair value, as of December 31, 2025. The Company has an investment in High Tide through the High Tide Loan and the High Tide Warrant. The High Tide Loan had an initial principal amount of C$30,000, subject to a 16% original issue discount.
Removed
On July 1, 2024, Cronos obtained majority control of the board of directors of Cronos GrowCo, which qualified as a business combination under ASC 805 Accounting for Business Combination (the “Cronos GrowCo Transaction”) and began consolidating Cronos GrowCo’s results of operations in its financial statements.
Added
The High Tide Loan bears interest at a rate of 4% per annum, payable in cash quarterly, has a term of five years, and may be repaid by High Tide prior to maturity without penalty.
Removed
Prior to July 1, 2024, the Company’s investment in Cronos GrowCo consisted of an investment accounted for under the equity method and loans receivable from Cronos GrowCo. Cronos GrowCo was formed in 2018, with the objective of cultivating and commercializing cannabis and cannabis products.
Added
The High Tide Loan is convertible into common shares of High Tide at a conversion price of C$4.20 per share, subject to mutual agreement of the Company and High Tide.
Removed
Cronos GrowCo is licensed to sell certain cannabis products to other license holders in the wholesale channel, as well as to provincial cannabis control authorities. It is also licensed to export dried flower to Israel. The Cronos GrowCo Phase 2 Expansion aims to bolster Cronos’ supply capabilities and support future growth opportunities.
Added
The High Tide Warrant 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, subject to customary adjustments. The Company’s ownership interest in each joint venture is summarized in the table below.
Removed
The Cronos GrowCo Transaction and resulting facility expansion efforts are intended to enable Cronos to increase supply of Cronos’ portfolio of genetics, as well as expand Cronos’ international footprint with distribution to growing markets in Australia, Germany and the UK. The expansion efforts at Cronos GrowCo’s facility are underway.

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Item 1A. Risk Factors

Risk Factors — what could go wrong, per management

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Biggest changeRisk Factor Summary • We and certain of our joint ventures have limited operating histories and our growth strategy may not be successful. • We may not be able to achieve or maintain profitability and may continue to incur losses in the future. • We may not be able to successfully manage our growth. • Our products are new; there is limited long-term data with respect to the effects and the safety of our products, which is subject to conflicting medical data; and our products have been and may be in the future subject to recalls. • The production and distribution of our products is subject to disruption, the risks of an agricultural business and the risk third-party suppliers and distributors may not perform their obligations to us. • We may be unable to obtain adequate supplies of raw materials in a timely manner and at commercially reasonable prices. • Intellectual property is key to our growth strategy, and we may be unable to obtain or enforce our intellectual property rights. • Our entry into new markets is subject to risks normally associated with the conduct of business in foreign countries. • We are subject to extensive regulation and licensing and may not successfully comply with all applicable laws and regulations. 15 Table of Contents • Our businesses face highly competitive conditions, including from the illegal cannabis market and licensed cannabis competitors that fail to comply with applicable regulations. • Altria has significant influence over us. • The price of our common shares has been and may continue to be highly volatile. • We have had two restatements and seven material weaknesses in our internal control over financial reporting over the last six years. • The adult-use cannabis market in Canada has in the past been and may in the future become oversupplied. • Our business may be negatively impacted by the Middle East Conflict or the imposition of an anti-dumping duty on our imports into Israel. • Any rescheduling of U.S.
Biggest changeRisk Factor Summary • We and certain of our joint ventures have limited operating histories and our growth strategy may not be successful. • We may not be able to achieve or maintain profitability and may continue to incur losses in the future. • We may not be able to successfully manage our growth. • Our acquisition strategy may not be successful, and we have in the past, and may in the future, write down goodwill and intangible assets recognized upon acquisitions. • We may not be able to complete, or realize the expected benefits of, our planned acquisition of CanAdelaar. • Our products are new; there is limited long-term data with respect to the effects and the safety of our products, which is subject to conflicting medical data, and our products have been and may be in the future subject to recalls. • The production and distribution of our products is subject to disruption as a result of risks inherent to agricultural operations and our reliance on third-party suppliers and distributors. • We may be unable to obtain adequate supplies of raw materials in a timely manner and at commercially reasonable prices. • Intellectual property is key to our growth strategy, and we may be unable to obtain or enforce our intellectual property rights. • Our entry into new markets exposes us to market-specific regulatory, operational, and commercial risks, including unfamiliar regulatory regimes, changes in applicable laws, import and export restrictions, supply chain disruptions, currency fluctuations, and reliance on local partners and distributors. • We are subject to extensive regulation and licensing and may not successfully comply with all applicable laws and regulations. • Our business faces highly competitive conditions, including from the illegal cannabis market and licensed cannabis competitors that fail to comply with applicable regulations. • Altria has significant influence over us. • The price of our common shares has been and may continue to be highly volatile. • We have had multiple restatements and material weaknesses in our internal control over financial reporting in the past. • The adult-use cannabis market in Canada has in the past been and may in the future become oversupplied. • Our business may be negatively impacted by the Middle East Conflict or the imposition of an anti-dumping duty or other restrictions on our imports into Israel. • Any rescheduling of U.S.
If any of the following risks, or any other risks and uncertainties that we have not yet identified or that we currently consider not to be material, actually occur or become material risks, our business, prospects, financial condition, results of operations and cash flows and consequently the price of our securities could be materially and adversely affected.
If any of the following risks, or any other risks and uncertainties that we have not yet identified or that we currently consider not to be material, actually occur or become material, our business, prospects, financial condition, results of operations and cash flows and consequently the price of our securities could be materially and adversely affected.
Joint venture investments may involve risks not otherwise present for investments made solely by us, including: (i) we may not control the joint ventures, either by virtue of our economic or legal ownership share, or our ability to influence day-to-day operational decision-making; (ii) our joint venture partners may not agree to distributions that we believe are appropriate; (iii) where we do not have substantial decision-making authority, we may experience impasses or disputes with our joint venture partners on certain decisions, which could require us to expend additional resources to resolve such impasses or disputes, including litigation or arbitration; (iv) our joint venture partners may become insolvent or bankrupt, fail to fund their share of required capital contributions or fail to fulfill their obligations as a joint venture partner; (v) the arrangements governing our joint ventures may contain certain conditions or milestone events that may never be satisfied or achieved; (vi) our joint venture partners may have business or economic interests that are inconsistent with ours and may take actions contrary to our interests; (vii) we may suffer losses as a result of actions taken by our joint venture partners with respect to our joint venture investments; (viii) it may be difficult for us to exit a joint venture if an impasse arises or if we desire to sell our interest for any reason; (ix) our joint venture partners may exercise termination rights under the relevant agreements and (x) conflicts of interest may arise between our joint ventures and Company personnel who are directors of our joint ventures because of the fact that such directors are employed by us.
Joint venture investments involve risks not otherwise present for investments made solely by us, including: (i) we may not control the joint ventures, either by virtue of our economic or legal ownership share, or our ability to influence day-to-day operational decision-making; (ii) our joint venture partners may not agree to distributions that we believe are appropriate; (iii) where we do not have substantial decision-making authority, we may experience impasses or disputes with our joint venture partners on certain decisions, which could require us to expend additional resources to resolve such impasses or disputes, including litigation or arbitration; (iv) our joint venture partners may become insolvent or bankrupt, fail to fund their share of required capital contributions or otherwise fail to fulfill their obligations as a joint venture partner; (v) the arrangements governing our joint ventures may contain certain conditions or milestone events that may never be satisfied or achieved; (vi) our joint venture partners may have business or economic interests that are inconsistent with ours and may take actions contrary to our interests; (vii) we may suffer losses as a result of actions taken by our joint venture partners with respect to our joint venture investments; (viii) it may be difficult for us to exit a joint venture if an impasse arises or if we desire to sell our interest for any reason; (ix) our joint venture partners may exercise termination rights under the relevant agreements and (x) conflicts of interest may arise between our joint ventures and Company personnel who are directors of our joint ventures because of the fact that such directors are employed by us.
The industries and markets in which we operate are relatively new, and these industries and markets may not continue to exist or grow as anticipated or we may ultimately be unable to succeed in these industries and markets.
The industries and markets in which we operate are relatively new and may not continue to exist or grow as anticipated, and we may ultimately be unable to succeed in these industries and markets.
Our dependence upon consumer perceptions means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit, could have a material adverse effect on the demand for products, and our business, results of operations, financial condition and cash flows.
Our dependence upon consumer perceptions means that adverse scientific research reports, findings, regulatory proceedings, litigation, media attention or other publicity, whether or not accurate or with merit, could have a material adverse effect on the demand for our products, and our business, results of operations, financial condition and cash flows.
Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to our overall ability to advance our business strategy and realize on our growth prospects, thereby having a material adverse impact on our business, financial condition and results of operations.
Reputation loss may result in decreased investor confidence, increased challenges in developing and maintaining community relations and an impediment to our overall ability to advance our business strategy and realize our growth prospects, thereby having a material adverse impact on our business, financial condition and results of operations.
Many countries are parties to these conventions, which govern international trade and domestic control of these substances, including cannabis. They may interpret and implement their obligations in a way that creates legal obstacles to our obtaining manufacturing and/or marketing approval for our products in those countries.
Many countries are parties to these conventions, which govern international trade and domestic control of these substances, including cannabis. They may interpret and implement their obligations in a way that creates legal obstacles to our obtaining manufacturing or marketing approval for our products in those countries.
These countries may not be willing or able to amend or otherwise modify their laws and regulations to permit our products to be manufactured and/or marketed, and achieving such amendments to the laws and regulations may take a prolonged period of time.
These countries may not be willing or able to amend or otherwise modify their laws and regulations to permit our products to be manufactured or marketed, and achieving such amendments to the laws and regulations may take a prolonged period of time.
These investments and joint ventures are subject to the risks normally associated with any conduct of business in foreign and/or emerging countries including political risks; civil disturbance risks; changes in laws, regulations or policies of particular countries, including those relating to royalties, duties, imports, exports and currency; the cancellation or renegotiation of contracts; the imposition of royalties, net profits payments, tax increases or other claims by government entities, including retroactive claims; a disregard for due process and the rule of law by local courts; the risk of expropriation and nationalization; delays in obtaining or the inability to obtain necessary governmental permits or the reimbursement of refundable tax from fiscal authorities.
These investments and joint ventures are subject to the risks normally associated with any conduct of business in foreign or emerging countries, including political risks; civil disturbance risks; changes in laws, regulations or policies of particular countries, including those relating to royalties, duties, imports, exports and currency; the cancellation or renegotiation of contracts; the imposition of royalties, net profits payments, tax increases or other claims by government entities, including retroactive claims; a disregard for due process and the rule of law by local courts; the risk of expropriation and nationalization; delays in obtaining or the inability to obtain necessary governmental permits or the reimbursement of refundable tax from fiscal authorities.
Although we do not engage in any activities related to marijuana as defined by the CSA in the U.S., violations of any U.S. federal laws and regulations, including the CSA and the CSIEA, whether intentional or inadvertent, could result in civil, criminal and/or administrative enforcement actions, which could result in fines, penalties, and other sanctions, including but not limited to, cessation of business activities.
Although we do not engage in any activities related to marijuana as defined by the CSA in the U.S., violations of any U.S. federal laws and regulations, including the CSA and the CSIEA, whether intentional or inadvertent, could result in civil, criminal and administrative enforcement actions, which could result in fines, penalties, and other sanctions, including but not limited to, cessation of business activities.
The perpetuation of the illegal market for cannabis may have a material adverse effect on our business, results of operations, financial condition as well as the perception of cannabis use. Regulatory non-compliance by licensed cannabis competitors may have an adverse effect on our business, results of operations and financial condition.
The perpetuation of the illegal market for cannabis may have a material adverse effect on our business, results of operations and financial condition as well as the perception of cannabis use. Regulatory non-compliance by licensed cannabis competitors may have an adverse effect on our business, results of operations and financial condition.
Our operations are subject to various laws, regulations and guidelines by governmental authorities (including, in Canada, Health Canada and other federal, provincial and local regulatory agencies relating to the cultivation, manufacture, processing, marketing, labeling, packaging, management, transportation, distribution, import, export, storage, sale, pricing and disposal of cannabis, and also including laws, regulations and guidelines relating to health and safety, insurance coverage, the conduct of operations and the protection of the environment (including relating to emissions and discharges to water, air and land, and the handling and disposal of hazardous and non-hazardous materials and wastes).
Our operations are subject to various laws, regulations and guidelines by governmental authorities (including, in Canada, Health Canada and other federal, provincial and local regulatory agencies relating to the cultivation, manufacture, processing, marketing, labeling, packaging, management, transportation, distribution, import, export, storage, sale, pricing and disposal of cannabis, and also including laws, regulations and guidelines relating to health and safety, insurance coverage, banking, the conduct of operations and the protection of the environment (including relating to emissions and discharges to water, air and land, and the handling and disposal of hazardous and non-hazardous materials and wastes)).
Clinical trials face many risks, including, among others: • lack of effectiveness of any formulation or delivery system during clinical trials; • discovery of serious or unexpected toxicities or side effects experienced by trial participants or other safety issues; • slower than expected subject recruitment and enrollment rates in clinical trials; • delays or inability in manufacturing or in obtaining sufficient quantities of materials for use in clinical trials due to regulatory and manufacturing constraints; • delays in obtaining regulatory authorization to commence a trial, including licenses required for obtaining and using or isolated cannabinoids for research, either before or after a trial is commenced; • unfavorable results from ongoing pre-clinical studies and clinical trials; • trial participants or investigators failing to comply with study protocols; • trial participants failing to return for post-treatment follow-up at the expected rate; • sites participating in an ongoing clinical study withdraw, requiring us to engage new sites; and • third-party clinical investigators declining to participate in our clinical studies, not performing the clinical studies on the anticipated schedule, or acting in ways inconsistent with the established investigator agreement, clinical study protocol or good clinical practices.
Clinical trials face many risks, including, among others: • lack of effectiveness of any formulation or delivery system during clinical trials; • discovery of serious or unexpected toxicities or side effects experienced by trial participants or other safety issues; • slower than expected subject recruitment and enrollment rates in clinical trials; • delays or inability in manufacturing or in obtaining sufficient quantities of materials for use in clinical trials due to regulatory and manufacturing constraints; • delays in obtaining regulatory authorization to commence a trial, including licenses required for obtaining and using isolated cannabinoids for research, either before or after a trial is commenced; • unfavorable results from ongoing pre-clinical studies and clinical trials; • trial participants or investigators failing to comply with study protocols; • trial participants failing to return for post-treatment follow-up at the expected rate; • sites participating in an ongoing clinical study withdrawing, requiring us to engage new sites; and • third-party clinical investigators declining to participate in our clinical studies, not performing the clinical studies on the anticipated schedule, or acting in ways inconsistent with the established investigator agreement, clinical study protocol or good clinical practices.
Furthermore, provincial and territorial purchasers may also decide to ban, limit or implement new guidance on the types of cannabis products permitted for sale in each of their jurisdictions (including in response to Health Canada’s guidance on intoxicating cannabinoids) which may result in some or all of our products being viewed as non-compliant with law or non-binding policy guidance.
Furthermore, provincial and territorial purchasers may decide to ban, limit or implement new guidance on the types of cannabis products permitted for sale in each of their jurisdictions (including in response to Health Canada’s guidance on intoxicating cannabinoids) which may result in some or all of our products being viewed as non-compliant with law or non-binding policy guidance.
Previously unknown adverse reactions resulting from human consumption of cannabis or U.S. hemp products alone or in combination with other medications or substances could occur as described above under “ — There is limited long-term data with respect to the efficacy and side effects of cannabis, and cannabinoids and future clinical research studies on the effects of cannabis, and cannabinoids may lead to conclusions that dispute or conflict with our understanding and belief regarding their benefits, viability, safety, efficacy, dosing and social acceptance. ” We have been, and may in the future be, subject to product liability claims that include, among others, our products caused injury or illness, incorrect labeling, inadequate instructions for use or inadequate warnings concerning possible side effects or interactions with other substances.
Previously unknown adverse reactions resulting from human consumption of cannabis or U.S. hemp products alone or in combination with other medications or substances could occur as described above under “ — There is limited long-term data with respect to the efficacy and side effects of cannabis, and cannabinoids and future clinical research studies on the effects of cannabis, and cannabinoids may lead to conclusions that dispute or conflict with our understanding and belief regarding their benefits, viability, safety, efficacy, dosing and social acceptance. ” We have been, and may in the future be, subject to product liability claims that include our products caused injury or illness, incorrect labeling, inadequate instructions for use or inadequate warnings concerning possible side effects or interactions with other substances.
As these illegal market participants do not comply with the regulations governing the cannabis industry, their operations may also have significantly lower costs and they may be able to sell products with significantly higher cannabinoid potencies or which include ingredients that are prohibited by law.
As these illegal market participants do not comply with the regulations governing the cannabis industry, their operations may have significantly lower costs and they may be able to sell products with significantly higher cannabinoid potencies or which include ingredients that are prohibited by law.
Although our business has not been, to the date of this Annual Report, materially impacted by the ongoing military conflict in Ukraine, it is impossible to predict the extent to which our operations, or those of our suppliers and vendors, will be impacted in the long term, or the ways in which the conflict may impact our business.
Although our business has not been, as of the date of this Annual Report, materially impacted by the ongoing military conflict in Ukraine, it is impossible to predict the extent to which our operations, or those of our suppliers and vendors, will be impacted in the long term, or the ways in which the conflict may impact our business.
Risks Relating to Competition The markets in which we operate are increasingly competitive, and we may compete for market share with other companies, both domestically and internationally, that may have longer operating histories and more financial resources, manufacturing and marketing experience than us.
Risks Relating to Competition The markets in which we operate are increasingly competitive, and we may compete for market share with other companies, both domestically and internationally, that may have longer operating histories and more financial resources, manufacturing, distribution, and marketing experience than us.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common shares could decrease, which might cause our trading price and trading volume of our common shares to decline. General Risk Factors We are dependent on our senior management.
If one or more of these analysts cease coverage of us or fail to publish reports on us regularly, demand for our common shares could decrease, which could cause our trading price and trading volume of our common shares to decline. General Risk Factors We are dependent on our senior management.
The market price for our common shares has been volatile and subject to wide fluctuations and may continue to be volatile and subject to wide fluctuations in response to many factors, including: • actual or anticipated fluctuations in our results of operations; • changes in estimates of our future results of operations by us or securities research analysts; • changes in the economic performance or market valuations of other companies that investors deem comparable to us; • additions or departures of our executive officers and other key personnel; • our restating financial results twice in the last six years; • sales of additional common shares or the perception in the market that such sales might occur; • significant acquisitions or business combinations, strategic partnerships, investments, joint ventures or capital commitments by or involving us or our competitors; • increases in speculative trading activity by investors targeting publicly traded cannabis companies, which can further contribute to the volatility of the market price for our common shares if aggregate short exposure exceeds the number of our common shares available for purchase; • news reports relating to trends, concerns or competitive developments, regulatory changes or enforcement actions and other related issues in our industry or target markets; • the prospect of actual or perceived future changes to the legal and regulatory regimes that govern our products and our industries; • investors’ general perception of us and the public’s reaction to our press releases, our other public announcements and our filings with the SEC and Canadian securities regulators; • our failure to timely file our public filings with the SEC and Canadian securities regulators; • our failure to comply with the Nasdaq and TSX rules and potential trading halts or delisting notices; • reports by industry analysts, investor perceptions, and market rumors or speculation; and • negative announcements by our customers, competitors or suppliers regarding their own performance.
The market price for our common shares has been volatile and subject to wide fluctuations and may continue to be volatile and subject to wide fluctuations in response to many factors, including: • actual or anticipated fluctuations in our results of operations; • changes in estimates of our future results of operations by us or securities research analysts; • changes in the economic performance or market valuations of other companies that investors deem comparable to us; • additions or departures of our executive officers and other key personnel; • restating our financial results; • sales of additional common shares or the perception in the market that such sales might occur; • significant acquisitions or business combinations, strategic partnerships, investments, joint ventures or capital commitments by or involving us or our competitors; • increases in speculative trading activity by investors targeting publicly traded cannabis companies, which can further contribute to the volatility of the market price for our common shares if aggregate short exposure exceeds the number of our common shares available for purchase; • news reports relating to trends, concerns or competitive developments, regulatory changes or enforcement actions and other related issues in our industry or target markets; • the prospect of actual or perceived future changes to the legal and regulatory regimes that govern our products and our industries; • investors’ general perception of us and the public’s reaction to our press releases, our other public announcements and our filings with the SEC and Canadian securities regulators; • our failure to timely file our public filings with the SEC and Canadian securities regulators; • our failure to comply with the Nasdaq and TSX rules and potential trading halts or delisting notices; • reports by industry analysts, investor perceptions, and market rumors or speculation; and • negative announcements by our customers, competitors or suppliers regarding their own performance.
Moreover, any perception, whether or not valid, that we have failed to act responsibly with respect to such matters, failed (or may fail) to achieve our goals or to effectively respond to new or additional legal or regulatory requirements, could adversely affect our business, reputation and exposure to legal risks.
Any perception, whether or not valid, that we have failed to act responsibly with respect to such matters, failed (or may fail) to achieve our goals or to effectively respond to new or additional legal or regulatory requirements, could adversely affect our business, reputation and exposure to legal risks.
We and such other cannabis producers have in the past produced and may in the future produce more cannabis than is needed to satisfy aggregate demand of the Canadian medical and adult-use markets, and we have in the past, and may in the future, be unable to export that over-supply into other markets.
Cannabis producers have in the past produced and may in the future produce more cannabis than is needed to satisfy aggregate demand of the Canadian medical and adult-use markets, and we have in the past, and may in the future, be unable to export that over-supply into other markets.
Our U.S. strategy in part depends on the success of the PharmaCann Investment and there is no guarantee that we will exercise the PharmaCann Option in the near term, or at all, and, even if exercised, that the PharmaCann Investment will achieve the expected benefits of the transaction.
Our U.S. strategy in part depends on the success of the PharmaCann Investment and there is no guarantee that we will exercise the PharmaCann Option in the near term, or at all, and, even if exercised, that the PharmaCann Investment will achieve the expected benefits of the PharmaCann Investment.
If regulatory authorities are delayed in, or fail to, effectively restrict the marketing, sale or distribution of such non-compliant cannabis products by our competitors, there may be a material adverse effect on our business, results of operations and financial condition, as well as the perception of cannabis use. 40 Table of Contents We have been and may in the future be required to write down inventory due to downward pressure on market prices, which could have a material adverse effect on our results of operations or financial position.
If regulatory authorities are delayed in, or fail to, effectively restrict the marketing, sale or distribution of such non-compliant cannabis products by our competitors, there may be a material adverse effect on our business, results of operations and financial condition, as well as the perception of cannabis use. 37 Table of Contents We have been and may in the future be required to write down inventory due to downward pressure on market prices, which could have a material adverse effect on our results of operations or financial position.
In addition to competition from illegal market participants, we may also face competition from licensed cannabis competitors that fail to comply with the regulations governing the cannabis industry when developing, marketing and selling cannabis products.
In addition to competition from illegal market participants, we also face competition from licensed cannabis competitors that fail to comply with the regulations governing the cannabis industry when developing, marketing and selling cannabis products.
See “ Risk Factors—General Risks—Our business faces evolving and diverse expectations, requirements and demands from regulators, investors and other stakeholders, including with respect to environmental, social, governance and sustainability matters, which could expose us to numerous risks. ” There can be no assurance that continuing fluctuations in price and volume will not occur.
See “ Risk Factors—General Risks—Our business faces evolving and diverging expectations, requirements and demands from regulators, investors and other stakeholders, including with respect to environmental, social, governance and sustainability matters, which could expose us to numerous risks. ” There can be no assurance that continuing fluctuations in price and volume will not occur.
Increased competition from larger, better-financed competitors with geographic advantages could materially and adversely affect our business, financial condition and results of operations. Given the rapid changes affecting global, national and regional economies generally, we may not be able to create and maintain a competitive advantage in the marketplace.
Increased competition from larger, better-financed competitors, including those with geographic advantages, could materially and adversely affect our business, financial condition and results of operations. Given the rapid changes affecting global, national and regional economies generally, we may not be able to create and maintain a competitive advantage in the marketplace.
Such events could also negatively impact consumer sentiment, reduce demand for consumer products like ours and cause general economic slowdown. Our business faces evolving and diverse expectations, requirements and demands from regulators, investors and other stakeholders, including with respect to environmental, social, governance and sustainability matters, which could expose us to numerous risks.
Such events could also negatively impact consumer sentiment, reduce demand for consumer products like ours and cause general economic slowdown. Our business faces evolving and diverging expectations, requirements and demands from regulators, investors and other stakeholders, including with respect to environmental, social, governance and sustainability matters, which could expose us to numerous risks.
See “Risk Factors—General Risks—Our business faces evolving and diverse expectations, requirements and demands from regulators, investors and other stakeholders, including with respect to environmental, social, governance and sustainability matters, which could expose us to numerous risks.” Our financial performance is subject to risks of foreign exchange rate fluctuation, which could result in foreign exchange losses.
See “Risk Factors—General Risks—Our business faces evolving and diverging expectations, requirements and demands from regulators, investors and other stakeholders, including with respect to environmental, social, governance and sustainability matters, which could expose us to numerous risks.” Our financial performance is subject to risks of foreign exchange rate fluctuation, which could result in foreign exchange losses.
There can be no assurance that our current and future strategic alliances or expansions of scope of existing relationships will have a beneficial impact on our business, financial condition and results of operations. We currently have, and may in the future enter into additional, strategic alliances with third parties that we believe will complement or augment our existing business.
There can be no assurance that our current and future strategic alliances or expansions of existing relationships will have a beneficial impact on our business, financial condition and results of operations. We currently have, and may in the future enter into, strategic alliances with third parties that we believe will complement or augment our existing business.
While we endeavor to comply with all relevant laws, regulations and guidelines, any failure to comply with the regulatory requirements applicable to our operations could subject us to negative consequences, including, but not limited to, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, asset seizures, revocation or imposition of additional conditions on licenses to operate our business, the denial of regulatory applications, the suspension or expulsion from a particular market or jurisdiction of our key personnel, or the imposition of additional or more stringent inspection, testing and reporting requirements, any of which could materially adversely affect our business, financial condition and results of operations.
While we endeavor to comply with all relevant laws, regulations and guidelines, any failure to comply with the regulatory requirements applicable to our operations could subject us to negative consequences, including, but not limited to, civil and criminal penalties, damages, fines, the curtailment or restructuring of our operations, asset seizures, revocation or imposition of additional conditions on licenses to operate our business, the denial of regulatory applications, the suspension or expulsion from a particular market or jurisdiction of our key personnel, the imposition of additional or more stringent inspection, testing and reporting requirements or negative publicity, any of which could materially 33 Table of Contents adversely affect our business, financial condition and results of operations.
Future strategic alliances could result in the incurrence of debt, costs and contingent liabilities, and there can be no assurance that future strategic alliances will achieve, or that our existing strategic alliances will achieve, the expected benefits to our business or that we will be able to consummate future strategic alliances on satisfactory terms, or at all.
Future strategic alliances could result in the incurrence of debt, costs and liabilities, and there can be no assurance that strategic alliances will achieve the expected benefits to our business or that we will be able to consummate future strategic alliances on satisfactory terms or at all.
In addition, these initiatives could present unforeseen obstacles, lead to operating inefficiencies and negatively disrupt our corporate culture, which could lead to further employee attrition, any of which would have a material adverse effect on our business, financial condition and results of operations.
In addition, these initiatives could present unforeseen obstacles, lead to operating inefficiencies, negatively disrupt our corporate culture and lead to further employee attrition, which could have a material adverse effect on our business, financial condition and results of operations.
In December 2020, the Commission on Narcotic Drugs voted to remove cannabis from Schedule IV (“the most dangerous substances, already listed in Schedule I, which are particularly harmful and of extremely limited medical or therapeutic value”).
In December 2020, the United Nations Commission on Narcotic Drugs voted to remove cannabis from Schedule IV (“the most dangerous substances, already listed in Schedule I, which are particularly harmful and of extremely limited medical or therapeutic value”).
See Part II, Note 12(b) “ Contingencies ” to the consolidated financial statements under Item 8 of this Annual Report for a discussion on our legal proceedings. 27 Table of Contents There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities.
See Part II, Note 12(b) “ Contingencies ” to the consolidated financial statements under Item 8 of this Annual Report for a discussion of our legal proceedings. There can be no assurances that we will be able to obtain or maintain product liability insurance on acceptable terms or with adequate coverage against potential liabilities.
There can be no assurance that any pending or future regulatory or agency proceedings, investigations, inspections and audits will not result in substantial costs or a diversion of management’s attention and resources, negatively impact our future growth plans and opportunities or have a material adverse impact on our business, financial condition and results of operations. 36 Table of Contents As it relates to U.S.
There can be no assurance that any pending or future regulatory or agency proceedings, investigations, inspections and audits will not result in substantial costs or a diversion of management’s attention and resources, negatively impact our future growth plans and opportunities or have a material adverse impact on our business, financial condition and results of operations. As it relates to U.S.
Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis in general, or our products specifically, or associating the consumption or use of cannabis with illness or other negative effects or events, could have such a material adverse effect.
Further, adverse publicity reports or other media attention regarding the safety, efficacy and quality of cannabis in general, or our products specifically, or associating the consumption or use of cannabis with illness or other negative effects or events, could have such material adverse effects.
Our ability to obtain registered trademark protection for cannabis and cannabis-related goods and services (including U.S. hemp and U.S. hemp-related goods and services) may be limited in certain countries outside of Canada, including the U.S., where a trademark applicant/registrant would need to demonstrate continued use or intent to use a trademark in U.S. commerce to obtain and/or maintain rights to register such trademark, where registered federal trademark protection is currently unavailable for trademarks covering the sale of U.S.
Our ability to obtain registered trademark protection for cannabis and cannabis-related goods and services (including U.S. hemp and U.S. hemp-related goods and services) may be limited in certain countries outside of Canada, including the U.S., where a trademark applicant or registrant needs to demonstrate continued use or intent to use a trademark in U.S. commerce to obtain or maintain rights to register such trademark, where registered federal trademark protection is currently unavailable for trademarks covering the sale of U.S.
Any of the foregoing risks could have a material adverse effect on our business, financial condition and results of operations, and the magnitude of these material adverse effects could be greater to the extent we decide to rely on such 16 Table of Contents joint ventures for certain goods or services, such as the receipt of raw materials from Cronos GrowCo, or decide to outsource certain operating activities to such joint ventures.
Any of the foregoing risks could have a material adverse effect on our business, financial condition and results of operations, and the magnitude of these material adverse effects could be greater to the extent we decide to rely on such joint ventures for certain goods or services, such as the receipt of raw materials from Cronos GrowCo, or decide to outsource certain operating activities to such joint ventures.
Compliance with these laws, regulations or policies, including any that may be adopted in the future has resulted in, and are likely to continue to result in, among other things, increased general, compliance and administrative expenses, increased costs of operating our businesses, and reduced demand for our products, any or all of which could adversely affect our results of operations.
Compliance with these laws, regulations or policies, including any that may be adopted in the future has resulted in, and are likely to continue to result in, among other things, increased general, compliance and administrative expenses, increased costs of operating our businesses, increased legal and reputational risks and reduced demand for our products, any or all of which could adversely affect our results of operations.
Lawsuits against us could cause us to incur substantial costs and could divert the time and attention of our management and other resources. 43 Table of Contents Securities markets have in the past experienced, and may continue to experience, significant price and volume fluctuations that have, in some cases, been unrelated to the operating performance, underlying asset values or prospects of public companies.
Lawsuits against us could cause us to incur substantial costs and divert the time and attention of our management and other resources. Securities markets have in the past experienced, and may continue to experience, significant price and volume fluctuations that have, in some cases, been unrelated to the operating performance, underlying asset values or prospects of public companies.
If many of our employees are called for active duty, our operations in Israel and our business may not be able to function at profitable levels, or at all, and our business in, results of operations from, Israel would be adversely affected.
If many of our employees are called for active duty, our operations in Israel and our business may not be able to function at profitable levels, or at all, and our business in, and results of operations from, Israel could be adversely affected.
Until such time as we are able to deploy the cash available to us, we anticipate holding the net proceeds as cash balances in our bank accounts, investing in, among other things, certificates of deposit and other instruments issued by banks or obligations of or guaranteed by the Government of Canada or any province thereof, or investing in U.S.
Until such time as we are able to deploy the cash available to us, we anticipate holding the net proceeds as cash balances in our bank accounts, investing in, among other things, certificates of deposit and other instruments issued by banks or obligations of or guaranteed by the Government of 38 Table of Contents Canada or any province thereof, or investing in U.S.
Any of the foregoing could cause our products or treatments not to be commercially viable, which could have a material adverse effect on our business, financial condition and results of operations. 25 Table of Contents The controversy surrounding vaporizers and vaporizer products may materially and adversely affect the market for vaporizer products and expose us to litigation and additional regulation.
Any of the foregoing could cause our products or treatments not to be commercially viable, which could have a material adverse effect on our business, financial condition and results of operations. The controversy surrounding vaporizers and vaporizer products may materially and adversely affect the market for vaporizer products and expose us to litigation and additional regulation.
To the extent such permits, and approvals are required and not obtained, we may be prevented from operating and/or expanding our business, which could have a material adverse effect on our business, financial condition and results of operations. 37 Table of Contents Changes in the laws, regulations and guidelines governing cannabis may adversely impact our business.
To the extent such permits, and approvals are required and not obtained, we may be prevented from operating or expanding our business, which could have a material adverse effect on our business, financial condition and results of operations. Changes in the laws, regulations and guidelines governing cannabis may adversely impact our business.
In the event of non-renewal or termination of the Cronos GrowCo Supply Agreement, we would be required to source cannabis biomass from third parties or negotiate a new supply agreement with Cronos GrowCo, and we may not be able to do so on a timely basis at commercially reasonable prices or in the quantities we require.
In the event of non-renewal or termination of the Cronos GrowCo Supply Agreement, we would be required to source cannabis biomass from third parties or negotiate a new supply agreement with Cronos GrowCo, and we may not be able to do so on a timely basis at commercially reasonable prices or in the quantities, strains, grades and qualities we require.
Furthermore, any product recall affecting the cannabis industry more broadly could lead consumers to lose confidence in the safety and security of the products sold by participants in these industries generally, which could have a material adverse effect on our business, financial condition and results of operations.
Furthermore, any product recall affecting the cannabis industry more broadly could lead 25 Table of Contents consumers to lose confidence in the safety and security of the products sold by participants in these industries generally, which could have a material adverse effect on our business, financial condition and results of operations.
Moreover, our customers, shareholders, employees and other stakeholders have diverse expectations, demands and perspectives, including on these topics, which are continuing to evolve and, in some cases, diverge.
Moreover, our customers, shareholders, employees and other stakeholders have differing expectations, demands and perspectives, including on these topics, which are continuing to evolve and, in some cases, diverge.
We are therefore subject to many of the risks common to early-stage enterprises, including limitations with respect to personnel, financial, and other resources and lack of revenues. We may not be able to achieve or maintain profitability and may continue to incur losses in the future.
We are therefore subject to many of the risks common to early-stage enterprises, including limitations with respect to personnel, financial, and other resources and lack of revenues. 14 Table of Contents We may not be able to achieve or maintain profitability and may continue to incur losses in the future.
The 1971 UN Convention on Psychotropic Substances classifies tetrahydrocannabinols, which includes delta-9 THC, as a Schedule I psychotropic substance (substances presenting a high risk of abuse, posing a particularly serious threat to public health which are of very little or no therapeutic value).
The 1971 United Nations Convention on Psychotropic Substances classifies tetrahydrocannabinols, which includes delta-9 THC, as a Schedule I psychotropic substance (substances presenting a high risk of abuse, posing a particularly serious threat to public health which are of very little or no therapeutic value).
The extent and duration of the military conflict, sanctions and resulting market disruptions are impossible to predict, but may be substantial. In addition, the effects of the ongoing conflict could heighten any of our known risks described above. ITEM 1B. UNRESOLVED STAFF COMMENTS. None.
The extent and duration of the military conflict, sanctions and resulting market disruptions are impossible to predict, but may be substantial. In addition, the effects of the ongoing conflict could heighten any of our known risks described above. ITEM 1B. UNRESOLVED STAFF COMMENTS. None. 43 Table of Contents
Further, there can be no assurance that the Anti-Dumping Investigation will not result in the imposition of an anti-dumping duty on us or limit our imports into Israel, the impact of which could have a material adverse effect on our business in Israel.
Further, there can be no assurance that the Anti-Dumping Investigation will not result in the imposition of an anti-dumping duty on us or limit our imports into Israel, or that other trade restrictions will not limit our imports into Israel, the impact of which could have a material adverse effect on our business in Israel.
The dissemination of negative or inaccurate posts, comments or other user-generated content about us on social media (including those published by third-parties) could damage our brand, image and reputation or how the cannabis industry is perceived generally, which could have a detrimental impact on the market for our products and thus on our business, financial condition and results of operations.
The dissemination of negative or inaccurate posts, comments or other user-generated content about the cannabis industry, our business, or our products on social media (including those published by third parties) could damage our brand, image, and reputation or how the cannabis industry is perceived generally, which could have a material adverse impact on the market for our products and thus on our business, financial condition and results of operations.
If a final decision is made to impose an anti-dumping duty to which the Company’s imports would be subject, our ability to continue to import raw materials and cannabis products into Israel from Cronos GrowCo, the performance of our business in Israel, and our results of operations, financial condition, business and prospects could be materially and negatively impacted. 24 Table of Contents Risks Relating to Our Products There is limited long-term data with respect to the efficacy and side effects of cannabis and cannabinoids, and future clinical research studies on the effects of cannabis, and cannabinoids may lead to conclusions that dispute or conflict with our understanding and belief regarding their benefits, viability, safety, efficacy, dosing and social acceptance.
If a final decision is made to impose an anti-dumping duty, or any other import restrictions, to which the Company’s imports would be subject, our ability to continue to import raw materials and cannabis products into Israel from Cronos GrowCo, the performance of our business in Israel, and our results of operations, financial condition, business and prospects could be materially and adversely impacted. 22 Table of Contents Risks Relating to Our Products There is limited long-term data with respect to the efficacy and side effects of cannabis and cannabinoids, and future clinical research studies on the effects of cannabis and cannabinoids may lead to conclusions that dispute or conflict with our understanding and belief regarding their benefits, viability, safety, efficacy, dosing and social acceptance.
The final report of an independent expert panel on a review of the Cannabis Act was published in March 2024 and the amendment, removal or addition of provisions in or to the Cannabis Act based on the recommendations resulting from this report could adversely affect our business.
The final report of an 34 Table of Contents independent expert panel on a review of the Cannabis Act was published in March 2024 and the amendment, removal or addition of provisions in or to the Cannabis Act based on the recommendations resulting from this report could adversely affect our business.
Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including, among other things, product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labelling disclosure. Some of our products have been subject to recalls in the past.
Manufacturers and distributors of products are sometimes subject to the recall or return of their products for a variety of reasons, including, product defects, such as contamination, unintended harmful side effects or interactions with other substances, packaging safety and inadequate or inaccurate labeling disclosure. Some of our products have been subject to recalls in the past.
This calculation may be affected by several factors, including general economic conditions, regulatory developments, changes in category growth rates as a result of changing adult consumer preferences, success of planned new product introductions, and competitive activity. Certain events can also trigger an immediate review of goodwill and intangible assets.
This calculation may be affected by several factors, including general economic conditions, regulatory developments, changes in category growth rates as a result of changing adult consumer preferences, success of planned new product introductions, and competitive activity. Certain events can also trigger an immediate impairment review.
Approximately 250 substances, including cannabis, are listed in the Schedules annexed to the UN Single Convention on Narcotic Drugs (New York, 1961), the Convention on Psychotropic Substances (Vienna, 1971) and the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (introducing control on precursors) (Vienna, 1988).
Approximately 250 substances, including cannabis, are listed in the Schedules annexed to the United Nations Single Convention on Narcotic Drugs (New York, 1961), the Convention on Psychotropic Substances (Vienna, 1971) and the Convention against Illicit Traffic in Narcotic Drugs and Psychotropic Substances (introducing control on precursors) (Vienna, 1988).
Expansion into foreign jurisdictions subjects us to legal, regulatory, reputational and political risks that may be different from and additional to those that we face in jurisdictions in 34 Table of Contents which we currently operate, and we may be at a disadvantage relative to competitors who are more familiar with local markets and local laws and regulations.
Expansion into foreign jurisdictions subjects us to legal, regulatory, reputational and political risks that may be different from and additional to those that we face in jurisdictions in which we currently operate, and we may be at a disadvantage relative to competitors who are more familiar with local markets and local laws and regulations.
We have in the past, and in the future may have disruptions in our supply chain. We rely on third-party distributors and manufacturers to distribute and manufacture certain of our products, and those distributors and manufacturers may not perform their obligations.
We have in the past, and in the future may have disruptions in our supply chain. 28 Table of Contents We rely on third-party distributors and manufacturers to distribute and manufacture certain of our products, and those distributors and manufacturers may not perform their obligations.
Accordingly, shareholders may not agree with the manner in which management chooses to allocate and spend the net proceeds. Our failure to apply the funds effectively could have a material adverse effect on our business, financial condition and results of operations. We have cash on hand, including short-term investments, of approximately $859 million as of December 31, 2024.
Accordingly, shareholders may not agree with the manner in which management chooses to allocate and spend the net proceeds. Our failure to apply the funds effectively could have a material adverse effect on our business, financial condition and results of operations. We have cash on hand, including short-term investments, of approximately $831.8 million as of December 31, 2025.
We have entered into supply arrangements with all provinces in Canada (where the relevant provincial body is the sole wholesale distributor of cannabis products in the province, except for Manitoba where we have also entered into a distribution agreement with a MBLL authorized cannabis distributor) and the Yukon territory and with private retailers in Saskatchewan.
We have entered into supply arrangements with all provinces in Canada (where the relevant provincial body is the sole wholesale distributor of cannabis products in the province, except for Manitoba where we have also entered into a distribution agreement with a Manitoba Liquor & Lotteries Corporation authorized cannabis distributor) and the Yukon territory and with private retailers in Saskatchewan.
If our disclosures related to these and other topics are incomplete or 46 Table of Contents inaccurate, or if we fail to achieve our initiatives or goals on a timely basis, or at all, our reputation, business, financial performance and growth, as well as our reputation and customer and other stakeholder relationships, could be adversely affected.
If our disclosures related to these and other topics are incomplete or inaccurate, or if we fail to achieve our initiatives or goals on a timely basis, or at all, our reputation, business, financial performance and growth, as well as our reputation and customer and other stakeholder relationships, could be adversely affected.
Commercial success frequently depends on being the first company to the market, and many of our competitors are also making considerable investments in similar new and improved cannabis germplasm products.
Commercial success frequently depends on being the first company to the market, and many of our competitors are also 30 Table of Contents making considerable investments in similar new and improved cannabis germplasm products.
The 1961 UN Single Convention on Narcotic Drugs, as amended in 1972 classifies cannabis as a Schedule I (“substances with addictive properties, presenting a serious risk of abuse”) narcotic drug.
The 1961 United Nations Single Convention on Narcotic Drugs, as amended in 1972, classifies cannabis as a Schedule I (“substances with addictive properties, presenting a serious risk of abuse”) narcotic drug.
Any change in the rates or application of excise duty to cannabis products sold by us in Canada, and any restrictive interpretations by the CRA or the courts of the provisions of the Excise Act, 2001 (which may be different than those contained in the Cannabis Act) may affect our profitability and ability to compete in the market.
Any change in the rates or application of the excise duty, and any restrictive interpretations by the CRA or the courts of the provisions of the Excise Act, 2001 (which may be different than those contained in the Cannabis Act) may affect our profitability and ability to compete in the market.
Such claims, whether or not meritorious, may result in the expenditure of significant financial and managerial resources, legal fees, injunctions, temporary restraining orders, other equitable relief, and require the payment of damages, any or all of which may have an adverse impact on our business, financial condition and results of operations.
Such claims, whether or not meritorious, may result in supply chain disruptions, as well as the expenditure of significant financial and managerial resources, legal fees, injunctions, temporary restraining orders, other equitable relief, and require the payment of damages, any or all of which may have an adverse impact on our business, financial condition and results of operations.
Furthermore, governments in the U.S., Canada, the United Kingdom and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia.
Furthermore, governments in the U.S., Canada, the UK and European Union have each imposed export controls on certain products and financial and economic sanctions on certain industry sectors and parties in Russia.
We may not achieve profitability in the future and, even if we do become profitable, we might not be able to sustain that profitability. We may not be able to successfully manage our growth.
We may not achieve profitability in the future and, even if we do become profitable, we might not be able to sustain that profitability. We may not be able to successfully manage changes in our business or sustain our growth.
We may require additional capital in the future or be required to issue common shares pursuant to certain of our agreements, which may dilute holders of our securities. We may be required to issue additional common shares pursuant to the Ginkgo Collaboration Agreement.
We may require additional capital or issue additional securities in the future or be required to issue common shares pursuant to certain of our agreements, which may dilute holders of our securities.
Similarly, the excise duty has in the past, and will likely continue to, have an effect on our profitability and ability to compete in the market. Our business may be impacted as a result of conditions in the global economy and financial markets, including changes in inflation, interest rates, trade policy and overall economic conditions.
Similarly, the excise duty has in the past, and will likely continue to, have an effect on our profitability and ability to compete in the market. Our business may be impacted by conditions in the global economy and financial markets, including changes in inflation, interest rates, trade policy and overall economic conditions.
Cronos GrowCo’s production facilities are our principal source of raw materials. Therefore, our performance in Israel is reliant on our ability to acquire sufficient raw materials on a timely and cost-effective basis from Cronos GrowCo and to continue to import such raw materials and cannabis products to Israel from Cronos GrowCo’s production facilities.
Therefore, our performance in Israel is reliant on our ability to acquire sufficient raw materials on a timely and cost-effective basis from Cronos GrowCo and to continue to import such raw materials and cannabis products to Israel from Cronos GrowCo’s production facilities.
As a manufacturer and distributor of products designed to be ingested by humans, we face an inherent risk of exposure to product liability claims, regulatory action and litigation if our products are alleged to have caused significant loss or injury.
As a manufacturer and distributor of products designed to be ingested by humans, we face exposure to product liability claims, regulatory action and litigation if our products are alleged to have caused loss or injury.
If a significant number of new licenses are granted by Health Canada in the near term, we may experience increased competition for market share and may experience downward price pressure on our products as new entrants increase production.
If a significant number of new licenses are granted by Health Canada, we may experience increased competition for market share and may experience downward price pressure on our products as new entrants increase production.
There is no assurance that any of our existing personnel who presently or may in the future require a security clearance will be able to obtain or renew such clearances or that new personnel who require a security clearance will be able to obtain one.
There is no assurance that any of our existing personnel who presently or may in the future require a security clearance will be able to obtain or renew such clearances or that new personnel who require a security clearance or analogous clearance from another jurisdiction will be able to obtain one.
We may not be successful in developing effective and safe new products, bringing such products to market in time to be effectively commercialized, or obtaining any required regulatory approvals, and, in the event we are successful, it is possible that there may be little or no demand for the products we develop (including products containing cannabinoids other than THC and CBD with which consumers may not be familiar or have significant reservations), which, together with any capital expenditures made in the course of such product development and regulatory approval processes, may have a material adverse effect on our business, financial condition and results of operations. 28 Table of Contents The Canadian excise duty framework may adversely affect our profitability.
We may not be successful in developing effective and safe new products, bringing such products to market in time to be effectively commercialized, or obtaining any required regulatory approvals, and, in the event we are successful, it is possible that there may be little or no demand for the products we develop (including products containing cannabinoids other than THC and CBD with which consumers may not be familiar or have significant reservations), which, together with any capital expenditures made in the course of such product development and regulatory approval processes, may have a material adverse effect on our business, financial condition and results of operations.
We have been and may in the future be required to write down intangible assets, including goodwill, due to impairment, which could have a material adverse effect on our results of operations or financial position. The Company has been and may in the future be required to write down intangible assets, including goodwill, due to impairment, which would reduce earnings.
We have been, and may in the future be, required to write down intangible assets, including goodwill, due to impairment, which could have a material adverse effect on our results of operations or financial position.
For a discussion of previous write downs of indefinite-lived intangible assets and goodwill, see Note 8 “ Goodwill and Intangible Assets, net ” to the consolidated financial statements in Item 8 of this Annual Report. Risks Relating to Operations in Israel Conditions in Israel could materially and adversely affect our business, financial condition, and results of operations.
For a discussion of previous write downs of goodwill and other intangible assets, see Note 8 “ Goodwill and Intangible Assets, net ” to the consolidated financial statements in Item 8 of this Annual Report. 21 Table of Contents Risks Relating to Operations in Israel Conditions in Israel could materially and adversely affect our business, financial condition, and results of operations.
Our ability to execute on our initiatives and goals, including on environmental, social, governance and sustainability matters, is subject to numerous risks and uncertainties, many of which are outside of our control, including, among other factors, evolving standards for measuring progress, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Our ability to execute on our initiatives and goals, including on environmental, social, governance and sustainability matters, is subject to numerous risks and uncertainties, many of which are outside of our control, including, among other factors, changes in the regulatory or legal environment, changes in industry practices, evolving standards for measuring progress, internal controls and processes that continue to evolve, and assumptions that are subject to change in the future.
Indefinite-lived intangible assets are reviewed annually or more frequently when events or changes in circumstances indicate that the fair value of the indefinite-lived intangible assets have been reduced to less than their carrying amount. We periodically calculate the fair value of our reporting units and intangible assets to test for impairment.
Goodwill and other intangible assets are reviewed annually or more frequently when events or changes in circumstances indicate that their fair value has been reduced to less than their carrying amount. We periodically calculate the fair value of our reporting units and intangible assets to test for impairment.

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Item 1C. Cybersecurity

Cybersecurity — threats and controls disclosure

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Biggest changeOur cybersecurity processes include: • Basic security awareness online training for personnel with company email, at least annually; • Phishing tests for personnel with company email on a periodic basis; • Reviews of certain third-party vendors’ information security programs (as discussed below); • Consultation with external advisors regarding opportunities and enhancements to strengthen our practices and policies, on an ad hoc basis; • Electronic monitoring of the majority of our technology environments to identify cybersecurity events, including the use of a security information and event management system; 47 Table of Contents • Periodic assessments of existing technology hardware configurations, patches, security and lifecycle; • Periodic assessments, in consultation with software providers, of existing software versions, configurations, patches and updates; and • Periodic assessments of data management and handling, including data use and access reviews.
Biggest changeOur cybersecurity processes include: • Security awareness online training for personnel with Company email, at least annually; • Periodic updates and reminders distributed to personnel with Company email relating to cybersecurity awareness and trends; • Phishing tests for personnel with Company email on a periodic basis; • Reviews of certain third-party vendors’ information security programs (as discussed below); • Periodic reviews of industry standards to strengthen our practices and policies, on an ad hoc basis; • Electronic monitoring and logging of the majority of our technology environments to identify cybersecurity events, including the use of a security information and event management system; • Periodic assessments of existing technology hardware configurations, patches, security and lifecycle; and • Periodic assessments, in consultation with software providers, of existing software versions, configurations, patches and updates.
We determine risk level based on a set of internally developed criteria. We do not, however, review the information security programs of all third-party vendors.
We determine risk level based on internally developed criteria. We do not, however, review the information security programs of all third-party vendors.
Certain information technology general controls are reviewed and tested as part of our internal control over financial reporting. We rely on third-party services for penetration testing, security incident monitoring, managing our enterprise-wide cybersecurity processes, incident response preparation, end point protection, and security awareness online training.
Certain information technology general controls are reviewed and tested as part of our internal control over financial reporting. We rely on third-party services for penetration testing, security incident monitoring and security awareness online training.
In the event we discover a material cybersecurity incident, Information Systems personnel reports such incident to our Chief Strategy Officer, who then reports to our Chief Executive Officer and the Audit Committee, as appropriate.
In the event we discover a material cybersecurity incident, Information Systems personnel report such incident to our Senior Vice President, Global Head of People and Technology, who then reports to our Chief Executive Officer and the Audit Committee, as appropriate.
Our Information Systems department relies on a third-party managed security service provider (“MSSP”) to implement, manage and monitor our cybersecurity systems. Personnel in our Information Systems department, together with personnel at the MSSP, collectively have decades of experience in information security, information technology and cybersecurity operations.
Our Information Systems department has a dedicated cybersecurity professional who, in conjunction with a third-party managed security service provider (“MSSP”), implements, manages, and monitors our cybersecurity systems. Personnel in our Information Systems department, together with personnel at the MSSP, collectively have decades of experience in information security, information technology and cybersecurity operations.
We do not currently have a permanent Chief Information Security Officer or other senior security officer of a similar title and rely significantly on the MSSP for management of enterprise-wide cybersecurity processes.
We do not currently have a Chief Information Security Officer; however, we do have a professional solely dedicated to enterprise-wide cybersecurity processes, as well as overseeing our MSSP relationship.
Added
We generally manage our enterprise-wide cybersecurity program and processes, incident response preparation and end point protection, and internally, with the assistance of third-party service providers as we deem appropriate.

Item 2. Properties

Properties — owned and leased real estate

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Biggest changeITEM 2. PROPERTIES. As of December 31, 2024, the Company owned various manufacturing facilities in Canada and in Gan Shmuel, Israel. The Company has ceased operations at the Cronos Fermentation Facility in Manitoba and has listed the property for sale. See Part I, Item 1 “Business – Operations and Investments ” for further information.
Biggest changeITEM 2. PROPERTIES. As of December 31, 2025, the Company owned various manufacturing facilities in Canada and Gan Shmuel, Israel. The Company ceased operations at the Cronos Fermentation Facility in Manitoba and sold the property on November 15, 2025. See Part I, Item 1 “Business – Operations and Investments ” for further information.
Management believes that our existing facilities and the anticipated changes described herein are adequate to meet our current requirements and, to the extent that our facilities are leased, comparable space is readily available.
Management believes that our existing facilities and the anticipated changes described herein are adequate to meet our current requirements and, to the extent that our facilities are leased, comparable space is readily available. 44 Table of Contents

Item 3. Legal Proceedings

Legal Proceedings — active lawsuits and investigations

1 edited+0 added−0 removed2 unchanged
Biggest changeSee Part II, Note 12(b) “ Contingencies ,” to the consolidated financial statements under Item 8 of this Annual Report for a description of legal proceedings. ITEM 4. MINE SAFETY DISCLOSURE. Not applicable. 48 Table of Contents PART II
Biggest changeSee Part II, Note 12(b) “ Contingencies ,” to the consolidated financial statements under Item 8 of this Annual Report for a description of legal proceedings. ITEM 4. MINE SAFETY DISCLOSURE. Not applicable. 45 Table of Contents PART II

Item 5. Market for Registrant's Common Equity

Market for Common Equity — stock, dividends, buybacks

6 edited+2 added−1 removed4 unchanged
Biggest changeS&P 500 Peer Group December 31, 2019 $ 100.00 $ 100.00 $ 100.00 March 31, 2020 $ 73.92 $ 80.40 $ 61.06 June 30, 2020 $ 78.36 $ 96.92 $ 73.73 September 30, 2020 $ 65.32 $ 105.57 $ 69.83 December 31, 2020 $ 90.48 $ 118.40 $ 122.46 March 31, 2021 $ 123.34 $ 125.71 $ 169.90 June 30, 2021 $ 112.13 $ 136.46 $ 146.42 September 30, 2021 $ 73.79 $ 137.25 $ 100.28 December 31, 2021 $ 51.11 $ 152.39 $ 74.25 March 31, 2022 $ 50.72 $ 145.38 $ 65.56 June 30, 2022 $ 36.77 $ 121.97 $ 28.80 September 30, 2022 $ 36.77 $ 116.02 $ 26.57 December 31, 2022 $ 33.12 $ 124.79 $ 24.07 March 31, 2023 $ 25.29 $ 134.14 $ 20.17 June 30, 2023 $ 25.68 $ 145.87 $ 13.76 September 30, 2023 $ 26.08 $ 141.10 $ 20.54 December 31, 2023 $ 27.25 $ 157.59 $ 19.06 March 31, 2024 $ 34.03 $ 174.23 $ 27.20 June 30, 2024 $ 30.38 $ 181.69 $ 20.84 September 30, 2024 $ 28.55 $ 192.39 $ 21.54 December 31, 2024 $ 26.34 $ 197.02 $ 13.91 Copyright© 2024 Standard & Poor’s, a division of S&P Global.
Biggest changeS&P 500 Peer Group December 31, 2020 $ 100.00 $ 100.00 $ 100.00 March 31, 2021 $ 136.31 $ 106.17 $ 61.06 June 30, 2021 $ 123.92 $ 115.25 $ 73.73 September 30, 2021 $ 81.56 $ 115.92 $ 69.83 December 31, 2021 $ 56.48 $ 128.71 $ 122.46 March 31, 2022 $ 56.05 $ 122.79 $ 169.90 June 30, 2022 $ 40.63 $ 103.02 $ 146.42 September 30, 2022 $ 40.63 $ 97.99 $ 100.28 December 31, 2022 $ 36.59 $ 105.40 $ 74.25 March 31, 2023 $ 27.95 $ 113.30 $ 65.56 June 30, 2023 $ 28.39 $ 123.20 $ 28.80 September 30, 2023 $ 28.82 $ 119.17 $ 26.57 December 31, 2023 $ 30.12 $ 133.10 $ 24.07 March 31, 2024 $ 37.61 $ 147.15 $ 20.17 June 30, 2024 $ 33.57 $ 153.46 $ 13.76 September 30, 2024 $ 31.56 $ 162.49 $ 20.54 December 31, 2024 $ 29.11 $ 166.40 $ 19.06 March 31, 2025 $ 26.08 $ 159.30 $ 27.20 June 30, 2025 $ 27.52 $ 176.73 $ 20.84 September 30, 2025 $ 40.06 $ 191.08 $ 21.54 December 31, 2025 $ 37.90 $ 196.16 $ 13.91 Copyright© 2025 Standard & Poor’s, a division of S&P Global.
Securities Authorized for Issuance under Equity Compensation Plans Information concerning securities authorized for issuance under equity compensation plans will be set forth in the Company’s definitive proxy statement for its 2025 Annual Meeting of Shareholders or an amendment to this Annual Report to be filed within 120 days of our fiscal year end.
Securities Authorized for Issuance under Equity Compensation Plans Information concerning securities authorized for issuance under equity compensation plans will be set forth in the Company’s definitive proxy statement for its 2026 Annual Meeting of Shareholders or an amendment to this Annual Report to be filed within 120 days of our fiscal year end.
The graph assumes that $100 is invested in each of our common shares, the S&P 500 Index, and the indices of publicly traded peers on December 31, 2019, and that all dividends, if applicable, were reinvested. Past performance may not be indicative of future performance. 49 Table of Contents Date Cronos Group Inc.
The graph assumes that $100 is invested in each of our common shares, the S&P 500 Index, and the indices of publicly traded peers on December 31, 2020, and that all dividends, if applicable, were reinvested. Past performance may not be indicative of future performance. 46 Table of Contents Date Cronos Group Inc.
Performance Graph The following performance graph compares the cumulative total shareholder return of our common shares as listed on Nasdaq with the cumulative total return of the S&P 500 Index and a market-weighted index of publicly traded peers over the 60-month period beginning on December 31, 2019, and ending on December 31, 2024.
Performance Graph The following performance graph compares the cumulative total shareholder return of our common shares as listed on Nasdaq with the cumulative total return of the S&P 500 Index and a market-weighted index of publicly traded peers over the 60-month period beginning on December 31, 2020, and ending on December 31, 2025.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common shares are traded on Nasdaq and the TSX under the symbol “CRON.” Holders As of February 24, 2025, there were approximately 139 holders of record of our common shares.
ITEM 5. MARKET FOR REGISTRANT’S COMMON EQUITY, RELATED SHAREHOLDER MATTERS AND ISSUER PURCHASES OF EQUITY SECURITIES. Our common shares are traded on Nasdaq and the TSX under the symbol “CRON.” Holders As of February 23, 2026, there were approximately 140 holders of record of our common shares.
All rights reserved. 50 Table of Contents ITEM 6. RESERVED Not applicable.
All rights reserved. 47 Table of Contents ITEM 6. RESERVED Not applicable.
Removed
Purchases of Equity Securities by the Issuer and Affiliated Persons None. Recent Sales of Unregistered Securities None.
Added
Purchases of Equity Securities by the Issuer and Affiliated Purchasers Share repurchase activity during the three months ended December 31, 2025 was as follows (in thousands, except share and per share amounts): Period Number of shares purchased Weighted average price per share Purchased as part of publicly announced repurchase plan (i) Approximate dollar value of shares that may yet be purchased under repurchase plan (i) Approximate shares that may yet be purchased under repurchase plan October 1, 2025 to October 31, 2025 — — $ — $ 44,535 16,478,138 November 1, 2025 to November 30, 2025 499,502 $ 2.45 $ 1,228 $ 43,310 15,978,636 December 1, 2025 to December 31, 2025 1,127,166 $ 2.65 $ 3,042 $ 40,326 14,851,470 1,626,668 $ 4,270 (i) On May 7, 2025, the Company was authorized by the Board to purchase up to $50,000 of the Company’s common shares under a share repurchase program announced on May 8, 2025, of which $9,741 had been repurchased as of December 31, 2025.
Added
The repurchase program is expected to terminate on May 13, 2026, unless earlier terminated. Recent Sales of Unregistered Securities None.

Item 7. Management's Discussion & Analysis

Management's Discussion & Analysis (MD&A) — revenue / margin commentary

93 edited+52 added−43 removed52 unchanged
Biggest changeGAAP to Adjusted EBITDA for the periods indicated: (in thousands of U.S. dollars) For the year ended December 31, 2024 Continuing Operations Discontinued Operations Total Net income $ 40,022 $ — $ 40,022 Interest income, net (52,019) — (52,019) Income tax expense (benefit) (3,436) — (3,436) Depreciation and amortization 9,336 — 9,336 EBITDA (6,097) — (6,097) Share of income from equity method investments (2,365) — (2,365) Impairment loss on long-lived assets (i) 16,350 — 16,350 Revaluation gain on loan receivable (ii) (11,804) — (11,804) Gain on revaluation of equity method investment (iii) (32,469) — (32,469) Gain on revaluation of derivative liabilities (iv) (49) — (49) Loss on revaluation of financial instruments (v) 6,248 — 6,248 Impairment loss on other investments (vi) 25,650 — 25,650 Foreign currency transaction gain (57,859) — (57,859) Transaction costs (vii) 701 — 701 Loss on held-for-sale assets (viii) 11,202 — 11,202 Other, net (ix) 350 — 350 Restructuring costs (x) 630 — 630 Share-based compensation (xi) 8,700 — 8,700 Financial statement review costs (xii) (1) — (1) Inventory step-up recorded to cost of sales (xiv) 5,284 — 5,284 Israel Ministry of Economy and Industry dumping inquiry (xv) 587 — 587 Adjusted EBITDA $ (34,942) $ — $ (34,942) 58 Table of Contents (in thousands of U.S. dollars) For the year ended December 31, 2023 Continuing Operations Discontinued Operations Total Net loss $ (70,439) $ (4,114) $ (74,553) Interest income, net (51,235) (10) (51,245) Income tax expense (benefit) (3,230) — (3,230) Depreciation and amortization 7,866 244 8,110 EBITDA (117,038) (3,880) (120,918) Share of income from equity method investments (1,583) — (1,583) Impairment loss on long-lived assets (i) 3,366 205 3,571 Loss on revaluation of derivative liabilities (iv) 85 — 85 Loss on revaluation of financial instruments (v) 12,042 — 12,042 Impairment loss on other investments (vi) 23,350 — 23,350 Foreign currency transaction loss 7,324 — 7,324 Other, net (ix) (1,114) 118 (996) Restructuring costs (x) 1,524 523 2,047 Share-based compensation (xi) 8,756 13 8,769 Financial statement review costs (xii) 919 — 919 Inventory write-down (xiii) 805 839 1,644 Adjusted EBITDA $ (61,564) $ (2,182) $ (63,746) (in thousands of U.S. dollars) For the year ended December 31, 2022 Continuing Operations Discontinued Operations Total Net loss $ (155,178) $ (13,556) $ (168,734) Interest income, net (22,514) (23) (22,537) Income tax expense (benefit) 34,175 — 34,175 Depreciation and amortization 11,924 1,198 13,122 EBITDA (131,593) (12,381) (143,974) Share of income from equity method investments (3,114) — (3,114) Impairment loss on long-lived assets (i) 3,493 — 3,493 Gain on revaluation of derivative liabilities (iv) (14,060) — (14,060) Gain on revaluation of financial instruments (v) (14,739) — (14,739) Impairment loss on other investments (vi) 61,392 — 61,392 Foreign currency transaction loss 2,286 — 2,286 Other, net (ix) 324 169 493 Restructuring costs (x) 3,545 1,788 5,333 Share-based compensation (xi) 15,008 107 15,115 Financial statement review costs (xii) 7,167 — 7,167 Adjusted EBITDA $ (70,291) $ (10,317) $ (80,608) (i) For the year ended December 31, 2024, impairment loss on long-lived assets included $14,258 related to the write-down of our Ginkgo Exclusive Licenses and $1,631 related to the cessation of operations of Cronos Fermentation.
Biggest changeGAAP to Adjusted EBITDA for the periods indicated: (in thousands of U.S. dollars) For the year ended December 31, 2025 Continuing Operations Discontinued Operations Total Net loss $ (2,929) $ — $ (2,929) Interest income, net (39,963) — (39,963) Income tax benefit (14,191) — (14,191) Depreciation and amortization 14,231 — 14,231 EBITDA (42,852) — (42,852) Impairment loss on goodwill and indefinite-lived intangible assets (i) 700 — 700 Impairment loss on long-lived assets (ii) 36 — 36 Loss on revaluation of financial instruments (v) 452 — 452 Foreign currency transaction loss 28,588 — 28,588 Transaction costs (vii) 1,965 — 1,965 Loss on held-for-sale assets (viii) 5,532 — 5,532 Other, net (ix) 241 — 241 Restructuring costs (x) 2,037 — 2,037 Share-based compensation (xi) 7,050 — 7,050 Restatement litigation costs (xii) 275 — 275 Inventory step-up recorded to cost of sales (xiii) 517 — 517 Israel Ministry of Economy and Industry dumping inquiry (xiv) 694 — 694 Change in allowance for credit loss on non-operating loan (xv) 4,875 — 4,875 Adjusted EBITDA $ 10,110 $ — $ 10,110 (in thousands of U.S. dollars) For the year ended December 31, 2024 Continuing Operations Discontinued Operations Total Net income $ 40,022 $ — $ 40,022 Interest income, net (52,019) — (52,019) Income tax benefit (3,436) — (3,436) Depreciation and amortization 9,336 — 9,336 EBITDA (6,097) — (6,097) Share of income from equity method investments (2,365) — (2,365) Impairment loss on long-lived assets (ii) 16,350 — 16,350 Revaluation gain on loan receivable (iii) (11,804) — (11,804) Gain on revaluation of equity method investment (iv) (32,469) — (32,469) Loss on revaluation of financial instruments (v) 6,248 — 6,248 Impairment loss on other investments (vi) 25,650 — 25,650 Foreign currency transaction gain (57,859) — (57,859) Transaction costs (vii) 701 — 701 Loss on held-for-sale assets (viii) 11,202 — 11,202 Other, net (ix) 301 — 301 Restructuring costs (x) 630 — 630 Share-based compensation (xi) 8,700 — 8,700 Restatement litigation costs (xii) (1) — (1) Inventory step-up recorded to cost of sales (xiii) 5,284 — 5,284 Israel Ministry of Economy and Industry dumping inquiry (xiv) 587 — 587 Adjusted EBITDA $ (34,942) $ — $ (34,942) 56 Table of Contents (in thousands of U.S. dollars) For the year ended December 31, 2023 Continuing Operations Discontinued Operations Total Net loss $ (70,439) $ (4,114) $ (74,553) Interest income, net (51,235) (10) (51,245) Income tax benefit (3,230) — (3,230) Depreciation and amortization 7,866 244 8,110 EBITDA (117,038) (3,880) (120,918) Share of income from equity method investments (1,583) — (1,583) Impairment loss on long-lived assets (ii) 3,366 205 3,571 Loss on revaluation of financial instruments (v) 12,042 — 12,042 Impairment loss on other investments (vi) 23,350 — 23,350 Foreign currency transaction loss 7,324 — 7,324 Other, net (ix) (1,029) 118 (911) Restructuring costs (x) 1,524 523 2,047 Share-based compensation (xi) 8,756 13 8,769 Restatement litigation costs (xii) 919 — 919 Inventory write-down (xvi) 805 839 1,644 Adjusted EBITDA $ (61,564) $ (2,182) $ (63,746) (i) For the year ended December 31, 2025, impairment loss on goodwill and indefinite-lived intangible assets related to our Lord Jones ® brand intangible asset, which was assessed for impairment in the fourth quarter of 2025.
To be classified as held-for-sale, management must have committed to a plan to sell, the asset (or asset group) must be available for immediate sale in its present condition, an active program to locate a buyer must have been initiated, the sale must be probable to close within one year, the asset (or asset group) must be marketed at a reasonable sales price, and it must be unlikely that significant changes to the plan will be made.
To be classified as held-for-sale, management must have committed to a plan to sell, the asset (or asset group) must be available for immediate sale in its present condition, an active program to locate a buyer must have been initiated, the sale must be probable to close within one year, the asset (or asset group) must be marketed at a reasonable sales price, and it must be unlikely that significant changes to the plan will be made.
Once an asset (or asset group) meets all of the above criteria, it is reclassified as assets held-for-sale on the consolidated balance sheet, and the asset(s) cease depreciation and are written down to their fair value, less costs to sell, if applicable.
Once an asset (or asset group) meets all of the above criteria, it is reclassified as assets held-for-sale on the consolidated balance sheet, and the asset(s) cease depreciation and are written down to their fair value, less costs to sell, if applicable.
(x) For the year ended December 31, 2024, restructuring costs from continuing operations related to shutdown costs at the Cronos Fermentation Facility, as well as employee-related severance costs associated with the Realignment, as described in Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report.
For the year ended December 31, 2024, restructuring costs from continuing operations related to shutdown costs at the Cronos Fermentation Facility, as well as employee-related severance costs associated with the Realignment, as described in Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report.
With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach ® , PEACE NATURALS ® and Lord Jones ® .
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 ® .
To present this information, current and prior period income statement results in currencies other than U.S. dollars are converted into U.S. dollars using the average exchange rates from the comparative period in 2023 rather than the actual average exchange rates in effect during 2024; constant currency current period balance sheet information is translated at the prior year-end spot rate rather than the current year-end spot rate.
To present this information, current and prior period income statement results in currencies other than U.S. dollars are converted into U.S. dollars using the average exchange rates from the comparative period in 2024 rather than the actual average exchange rates in effect during 2025; constant currency current period balance sheet information is translated at the prior year-end spot rate rather than the current year-end spot rate.
All growth comparisons relate to the corresponding period in 2023. We have provided this non-GAAP financial information to aid investors in better understanding the performance of our business. The non-GAAP financial measures presented in this Annual Report should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.
All growth comparisons relate to the corresponding period in 2024. We have provided this non-GAAP financial information to aid investors in better understanding the performance of our business. The non-GAAP financial measures presented in this Annual Report should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S.
We may also record a specific reserve for individual accounts when we become aware of specific customer circumstances, such as in the case of a bankruptcy filing or deterioration in the borrower’s operating results or financial condition. Assets held-for-sale We periodically evaluate our long-lived assets that we plan to dispose of through sale for held-for-sale classification.
We may also record a specific reserve for individual accounts when we become aware of specific borrower circumstances, such as in the case of a bankruptcy filing or deterioration in the borrower’s operating results or financial condition. Assets held-for-sale We periodically evaluate our long-lived assets that we plan to dispose of through sale for held-for-sale classification.
Management defines Adjusted EBITDA as net income (loss) before interest, tax expense (benefit), depreciation and amortization adjusted for: share of (income) loss from equity method investments; impairment loss on goodwill and intangible assets; impairment loss on long-lived assets; (gain) loss on revaluation of derivative liabilities; (gain) loss on revaluation of financial instruments; gain on revaluation of loan receivable; gain on revaluation of equity method investment; transaction costs related to strategic projects; loss on held-for-sale assets; impairment loss on other investments; foreign currency transaction loss; other, net; loss from discontinued operations; restructuring costs; inventory write-downs resulting from restructuring actions; share-based compensation; costs related to the Israel Ministry of Economy and Industry dumping inquiry; purchase accounting adjustment-related inventory step-up adjustments recorded through cost of sales; and financial statement review costs and reserves related to the restatements of our 2019 and 2021 interim financial statements (the “Restatements”), including the costs related to the settlement of the SEC’s and the OSC’s investigations of the Restatements and legal costs of defending shareholder class action complaints brought against us as a result of the 2019 restatement (see Note 12(b) “ Contingencies ,” to the consolidated financial statements under Item 8 of this Annual Report for a discussion of the shareholder class action complaints relating to the restatement of the 2019 interim financial statements and the settlement of the SEC’s and the OSC’s investigations of the Restatements).
Management defines Adjusted EBITDA as net income (loss) before interest, tax expense (benefit), depreciation and amortization adjusted for: share of (income) loss from equity method investments; impairment loss on goodwill and intangible assets; impairment loss on long-lived assets; (gain) loss on revaluation of derivative liabilities; (gain) loss on revaluation of financial instruments; gain on revaluation of loan receivable; gain on revaluation of equity method investment; transaction costs related to strategic projects; loss on held-for-sale assets; impairment loss on other investments; foreign currency transaction (gain) loss; other, net; loss from discontinued operations; change in allowance for credit loss on non-operating loan; restructuring costs; inventory write-downs resulting from restructuring actions; share-based compensation; costs related to the Israel Ministry of Economy and Industry dumping inquiry; purchase accounting adjustment-related inventory step-up adjustments recorded through cost of sales; and financial statement review costs and reserves related to the restatements of our 2019 and 2021 interim financial statements (the “Restatements”), including the costs related to the settlement of the SEC’s and the OSC’s investigations of the Restatements and legal costs of defending shareholder class action complaints brought against us as a result of the 2019 restatement (see Note 12(b) “ Contingencies ,” to the consolidated financial statements under Item 8 of this Annual Report for a discussion of the shareholder class action complaints relating to the restatement of the 2019 interim financial statements and the settlement of the SEC’s and the OSC’s investigations of the Restatements).
GAAP, we have presented constant currency adjusted financial measures for net revenues, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for 2024, as well as cash and cash equivalents and short-term investment balances as of December 31, 2024 compared to December 31, 2023, which are considered non-GAAP financial measures.
GAAP, we have presented constant currency adjusted financial measures for net revenues, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for 2025, as well as cash and cash equivalents and short-term investment balances as of December 31, 2025 compared to December 31, 2024, which are considered non-GAAP financial measures.
The consolidated statements of net income (loss) and comprehensive income (loss) and consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, as reported on Bloomberg.
The consolidated statements of net income (loss) and comprehensive income (loss) and consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the years ended December 31, 2025, December 31, 2024, and December 31, 2023, as reported on Bloomberg.
The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of December 31, 2024 and December 31, 2023, as reported on Bloomberg. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates.
The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of December 31, 2025 and December 31, 2024, as reported on Bloomberg. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates.
GAAP measures are provided below. 57 Table of Contents Adjusted EBITDA Management reviews Adjusted EBITDA, a non-GAAP measure, which excludes non-cash items and items that do not reflect management’s assessment of ongoing business performance.
GAAP measures are provided below. 54 Table of Contents Adjusted EBITDA Management reviews Adjusted EBITDA, a non-GAAP measure, which excludes non-cash items and items that do not reflect management’s assessment of ongoing business performance.
We believe that the accounting estimate for the cannabinoid exclusive licenses is a critical accounting estimate because of the judgment required in assessing their fair values and the expected future cash flows are significantly impacted by the future expectations for products containing each cannabinoid. We estimate the fair value using the relief-from-royalty method.
We believe that the accounting estimate for the cannabinoid exclusive licenses is a critical accounting estimate because of the judgment required in assessing their fair values and the expected future cash flows were significantly impacted by the future expectations for products containing each cannabinoid. We estimated the fair value using the relief-from-royalty method.
In addition, amounts disclosed as net revenue are net of allowances, discounts and rebates. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration and the existence of significant financing components, if any.
In addition, amounts disclosed as net revenue are net of allowances, discounts and rebates. In determining the transaction price for the sale of goods, the Company considers the effects of variable consideration and the existence of significant financing components, if 62 Table of Contents any.
(xi) For the years ended December 31, 2024, 2023 and 2022, share-based compensation related to the vesting expenses of share-based compensation awarded to employees under our share-based award plans, as described in Note 11 “ Share-based Compensation ” to the consolidated financial statements in Item 8 of this Annual Report.
For the years ended December 31, 2024 and 2023, share-based compensation related to the vesting expenses of share-based compensation awarded to employees under our share-based award plans, as described in Note 10 “ Share-based Compensation ” to the consolidated financial statements in Item 8 of this Annual Report.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview 51 Recent Developments 52 Consolidated Results of Operations 54 Non-GAAP Measures 57 Liquidity and Capital Resources 63 Critical Accounting Estimates 64 Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and related notes, which are included in Item 8 of this Annual Report on Form 10-K (this “Annual Report”), to enhance the understanding of our operations and our present business environment.
MANAGEMENT’S DISCUSSION AND ANALYSIS OF FINANCIAL CONDITION AND RESULTS OF OPERATIONS Business Overview 48 Recent Developments 48 Consolidated Results of Operations 51 Non-GAAP Measures 54 Liquidity and Capital Resources 61 Critical Accounting Estimates 62 Management’s discussion and analysis of financial condition and results of operations is provided as a supplement to, and should be read in conjunction with, the consolidated financial statements and related notes, which are included in Item 8 of this Annual Report on Form 10-K (this “Annual Report”), to enhance the understanding of our operations and our present business environment.
Impairment loss on long-lived assets For 2024, impairment loss on long-lived assets was $16.4 million and was primarily due to the impairment of the exclusive rights to use and commercialize the key patented intellectual property related to the production of the target cannabinoids globally (the “Ginkgo Exclusive Licenses”) and the cessation of operations of Thanos Holdings Ltd., known as Cronos Fermentation (“Cronos Fermentation”).
Impairment loss on long-lived assets in 2024 was primarily due to the impairment of the exclusive rights to use and commercialize the key patented intellectual property related to the production of the target cannabinoids (the “Ginkgo Exclusive Licenses”) globally and the cessation of operations of Thanos Holdings Ltd., known as Cronos Fermentation (“Cronos Fermentation”).
Unless otherwise noted or the context indicates otherwise, references in this Annual Report to the “Company”, “Cronos”, “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 U.S.
Unless otherwise noted or the context indicates otherwise, references in this Annual Report to the “Company,” “Cronos,” “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 U.S.
There are subjective and complex judgments in the determination of whether the Cronos Fermentation Facility meets the criteria to be classified as held for sale, including: (1) whether the Cronos Fermentation Facility is available for sale in its present condition subject only to terms that are usual and customary for sales of such businesses, (2) whether the sale of the Cronos Fermentation Facility is probable and that the transfer of assets will be a completed sale within one year from period end, and (3) whether the Cronos Fermentation Facility is being actively marketed at a reasonable price.
There were subjective and complex judgments in the determination of whether the Cronos Fermentation Facility met the criteria to be classified as held for sale, including: (1) whether the Cronos Fermentation Facility was available for sale in its then-present condition subject only to terms that are usual and customary for sales of such businesses, (2) whether the sale of the Cronos Fermentation Facility was probable and that the transfer of assets would be a completed sale within one year from period end, and (3) whether the Cronos Fermentation Facility was being actively marketed at a reasonable price.
(xiii) For the year ended December 31, 2023, inventory write-downs from discontinued operations related to product destruction and obsolescence associated with the exit of our U.S. operations as described in Note 3 “ Discontinued Operations ” to the consolidated financial statements in Item 8 of this Annual Report.and inventory write-downs from continuing operations related to product destruction and obsolescence associated with the planned exit of Cronos Fermentation as described in Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report.
(xvi) For the year ended December 31, 2023, inventory write-downs from discontinued operations related to product destruction and obsolescence associated with the exit of our U.S. operations as described in Note 3 “ Discontinued Operations ” to the consolidated financial statements in Item 8 of this Annual Report and inventory write-downs from continuing operations related to product destruction and obsolescence associated with the winding down of operations at the Cronos Fermentation Facility as described in Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report.
(xiv) For the year ended December 31, 2024, inventory step-up recorded to cost of sales represented the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the consolidated statements of income (loss) and comprehensive income (loss).
(xiii) For the years ended December 31, 2025 and 2024, inventory step-up recorded to cost of sales represented the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the consolidated statements of income (loss) and comprehensive income (loss).
See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. 56 Table of Contents Loss on revaluation of financial instruments For 2024, we reported a loss on revaluation of financial instruments of $6.2 million, compared to a loss of $12.0 million in 2023.
See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Loss on revaluation of financial instruments For 2025, we reported a loss on revaluation of financial instruments of $0.5 million, compared to a loss of $6.2 million in 2024.
For the year ended December 31, 2023, impairment loss on long-lived assets related to certain leased properties associated with the Company’s former U.S. operations and impairment of the Ginkgo Collaboration Agreement’s CBCVA exclusive license.
For the year ended December 31, 2023, impairment loss on long-lived assets related to certain leased properties associated with the Company’s former U.S. operations and impairment of the Ginkgo Collaboration Agreement’s CBCVA exclusive license. On December 15, 2025, Cronos and Ginkgo mutually terminated the Ginkgo Collaboration Agreement.
The exchange rates used to translate from Canadian dollars (“C$”) to dollars are shown below: (Exchange rates are shown as C$ per $) Year ended December 31, 2024 2023 2022 Average rate 1.3700 1.3494 1.3017 Spot rate 1.4351 1.3243 1.3554 53 Table of Contents The exchange rates used to translate from New Israeli Shekels (“ILS”) to dollars are shown below: (Exchange rates are shown as ILS per $) Year ended December 31, 2024 2023 2022 Average rate 3.6997 3.6819 3.3566 Spot rate 3.6526 3.6163 3.5178 Consolidated Results of Operations - 2024 Compared to 2023 The tables below set forth our consolidated results of operations, expressed in thousands of U.S. dollars for the periods presented.
The exchange rates used to translate from Canadian dollars (“C$”) to dollars are shown below: (Exchange rates are shown as C$ per $) Year ended December 31, 2025 2024 2023 Average rate 1.3975 1.3700 1.3494 Spot rate 1.3698 1.4351 1.3243 The exchange rates used to translate from New Israeli Shekels (“ILS”) to dollars are shown below: (Exchange rates are shown as ILS per $) Year ended December 31, 2025 2024 2023 Average rate 3.4432 3.6997 3.6819 Spot rate 3.1863 3.6526 3.6163 50 Table of Contents Consolidated Results of Operations - 2025 Compared to 2024 The tables below set forth our consolidated results of operations, expressed in thousands of U.S. dollars for the periods presented.
Impairment loss on other investments For 2024 and 2023, we recognized $25.7 million and $23.4 million, respectively, of impairment loss on other investments, driven by impairment charges recorded on our PharmaCann Option for the difference between its estimated fair value and its carrying amount.
Impairment loss on other investments For 2025, we recognized no impairment loss on other investments. For 2024, we recognized $25.7 million of impairment loss on other investments, driven by impairment charges recorded on our PharmaCann Option for the difference between its estimated fair value and its carrying amount.
See Note 7 “ Property, Plant and Equipment, net ” and Note 8 “ Goodwill and Intangible Assets, net ” to the consolidated financial statements in Item 8 of this Annual Report. (ii) For the year ended December 31, 2024, a revaluation gain on loan receivable was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024.
See Note 7 “Property, Plant and Equipment, net” and Note 8 “Goodwill and Intangible Assets, net” to the consolidated financial statements in Item 8 of this Annual Report. (iii) For the year ended December 31, 2024, a revaluation gain on loan receivable was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024.
See Note 7 “ Property, plant and equipment, net” to the consolidated financial statements in Item 8 of this Annual Report for discussion regarding our evaluation of the Peace Naturals Campus and the Cronos Fermentation Facility for held-for-sale classification as of December 31, 2024. 66 Table of Contents
See Note 7 “ Property, plant and equipment, net ” to the consolidated financial statements in Item 8 of this Annual Report for discussion regarding our evaluation of the Cronos Fermentation Facility for held-for-sale classification as of December 31, 2024.
The increase in cash and cash equivalents and short-term investments is primarily due to cash flows provided by operating activities in 2024. 62 Table of Contents Liquidity and Capital Resources We believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our business operations and capital expenditures over the next twelve months, including continuing to fund the expansion of Cronos GrowCo’s cultivation and processing facilities (the “Cronos GrowCo Phase 2 Expansion”).
The decrease in cash and cash equivalents and short-term investments is primarily due to cash flows used in investing and financing activities in 2025, partially offset by cash generated in operating activities in 2025. 60 Table of Contents Liquidity and Capital Resources We believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our business operations and capital expenditures over the next twelve months, including continuing to fund the expansion of Cronos GrowCo’s cultivation and processing facilities (the “Cronos GrowCo Phase 2 Expansion”).
See Note 6 “ Loans Receivable, net ” to the consolidated financial statement in Item 8 of this Annual Report for further information. 63 Table of Contents Purchase obligations Our purchase obligations primarily consist of contractual obligations for capital expenditures related to the Cronos GrowCo Phase 2 Expansion, computer software, agricultural supply services and data analytics and to maintain the ordinary course of business through information technology.
See Note 6 “ Loans Receivable, net ” to the consolidated financial statements in Item 8 of this Annual Report for further information. Purchase obligations Our purchase obligations primarily consist of contractual obligations for capital expenditures, computer software, agricultural supply services and data analytics and to maintain the ordinary course of business through information technology.
Long-lived assets Long-lived assets are primarily comprised of property, plant, and equipment and definite-lived intangible assets. We evaluate long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying amount of such assets may not be recoverable. Long-lived asset recoverability is assessed on an asset group basis.
We evaluate long-lived assets for impairment when events or changes in circumstances indicate, in management’s judgment, that the carrying amount of such assets may not be recoverable. Long-lived asset recoverability is assessed on an asset group basis.
GAAP, to Adjusted Gross Profit and Adjusted Gross Margin, respectively, for the periods indicated: (in thousands of USD) Year ended December 31, 2024 2023 2022 Net revenue $ 117,615 $ 87,241 $ 86,749 Gross profit $ 25,198 $ 11,909 $ 15,436 Inventory step-up recorded to cost of sales 5,284 — — Adjusted Gross Profit $ 30,482 $ 11,909 $ 15,436 Gross margin (i) 21 % 14 % 18 % Adjusted Gross Margin (ii) 26 % 14 % 18 % (i) Gross margin is defined as gross profit divided by net revenue.
GAAP, to Adjusted Gross Profit and Adjusted Gross Margin, respectively, for the periods indicated: (in thousands of USD) Year ended December 31, 2025 2024 2023 Net revenue $ 146,587 $ 117,615 $ 87,241 Gross profit $ 62,759 $ 25,198 $ 11,909 Inventory step-up recorded to cost of sales 517 5,284 — Adjusted Gross Profit $ 63,276 $ 30,482 $ 11,909 Gross margin (i) 43 % 21 % 14 % Adjusted Gross Margin (ii) 43 % 26 % 14 % (i) Gross margin is defined as gross profit divided by net revenue.
If these market conditions and resulting expected future cash flows for each reporting unit decline significantly, the actual results for each reporting unit could differ from our estimate, which could cause goodwill to be impaired.
If these market conditions and resulting expected future cash flows for each reporting unit decline significantly, the actual results for each reporting unit could differ from our estimate, which could cause goodwill to be impaired. Our accounting for goodwill and indefinite-lived intangible assets represents our best estimate of future events.
See Note 6 “ Loans Receivable, net ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Gain on revaluation of equity method investment For 2024, we reported a gain on revaluation of equity method investment of $32.5 million.
See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Gain on revaluation of loans receivable For 2025, we reported no gain on revaluation of loans receivable. For 2024, we reported a gain on revaluation of loans receivable of $11.8 million.
As of December 31, 2024, we had $858.8 million in cash and cash equivalents and no short term investments, compared to $669.3 million in cash and cash equivalents and $192.2 million in short term investments as of December 31, 2023. As of both December 31, 2024 and December 31, 2023, we had no external debt financing.
As of December 31, 2025, we had $791.8 million in cash and cash equivalents and $40.0 million in short-term investments, compared to $858.8 million in cash and cash equivalents and no short-term investments as of December 31, 2024. As of both December 31, 2025 and December 31, 2024, we had no external debt financing.
Due to the consolidation of Cronos GrowCo’s results of operations in our financial statements beginning July 1, 2024, Cronos GrowCo contributed $6.4 million of cannabis flower sales in the year ended December 31, 2024.
Due to the consolidation of Cronos GrowCo’s results of operations in our financial statements beginning July 1, 2024, Cronos GrowCo contributed $10.5 million of cannabis flower sales to third parties in the year ended December 31, 2025, on a constant currency basis, compared to $6.4 million of cannabis flower sales to third parties in the year ended December 31, 2024.
(ix) For the years ended December 31, 2024, 2023 and 2022, other, net primarily related to (gain) loss on disposal of assets.
For the years ended 2024 and 2023, other, net primarily related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.
We believe the accounting estimates used in the long-lived asset impairment assessment are critical accounting estimates because of the judgment required in identifying indicators of impairment, determining asset groups, assessing future undiscounted cash flows of the asset groups, and as applicable, evaluating the fair value of the determined asset groups as well as the underlying long-lived assets, once indicators of impairment have been identified.
We believe the accounting estimates used in the long-lived asset impairment assessment are critical accounting estimates because of the judgment required in identifying indicators of impairment, determining asset groups, assessing future undiscounted cash flows of the asset groups, and as applicable, evaluating the fair value of the determined asset groups as well as the underlying long-lived assets, once indicators of impairment have been identified. 63 Table of Contents We periodically evaluate whether impairment indicators related to our property, plant and equipment, operating leases and other long-lived assets are present.
This change is primarily driven by the maturity of certain short-term investments, which were reinvested as cash equivalents upon maturity, as well as cash obtained from the Cronos GrowCo Transaction, partially offset by higher advances of loans receivable, lower loan repayments, and higher purchases of property, plant and equipment in 2024.
This change is primarily driven by the maturity of certain short-term investments, which were reinvested as cash equivalents upon maturity in 2024 that did not recur in 2025, as well as the purchase of short-term investments, higher purchases of property plant, and equipment, higher advances on loans receivable, the purchase of the High Tide Warrant in 2025 and cash obtained from the Cronos GrowCo Transaction in 2024.
Financing activities During 2024, cash used in financing activities was $1.2 million, as compared to $1.0 million in 2023, representing an increase in net cash used of $0.2 million. This change is primarily driven by an increase in withholding taxes paid on share-based awards in 2024.
Financing activities During 2025, cash used in financing activities was $19.9 million, as compared to $1.2 million in 2024, representing an increase in net cash used of $18.7 million. This change is primarily driven by share repurchases and dividends paid to non-controlling interests in 2025 and an increase in withholding taxes paid on share-based awards.
As of December 31, 2024, the Company had purchase obligations of $47.5 million, with $39.0 million payable within 12 months. Other purchase obligations consist of noncancellable obligations related to maintenance, internet, and telecommunication service. As of December 31, 2024, we had other purchase obligations of $0.5 million, with $0.4 million payable within 12 months.
As of December 31, 2025, the Company had purchase obligations of $40.0 million, with $27.6 million payable within 12 months. Other purchase obligations consist of noncancellable obligations related to maintenance, internet, and telecommunication service. As of December 31, 2025, we had other purchase obligations of $2.1 million, with $1.2 million payable within 12 months.
See Note 5 “ Investments ” and Note 11 “ Share-based Compensation ” to the consolidated financial statements in Item 8 of this Annual Report. (vi) For the years ended December 31, 2024, 2023 and 2022, impairment loss on other investments related to the PharmaCann Option for the difference between its fair value and carrying amount.
See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report. (vi) For the years ended December 31, 2024 and 2023, impairment loss on other investments represented the fair value change on the PharmaCann Option. See Note 5 “ Investments” to the consolidated financial statements in Item 8 of this Annual Report.
Cash flows (In thousands of U.S. dollars) Year ended December 31, 2024 2023 2022 Net cash provided by (used in) operating activities $ 18,843 $ (42,835) $ (88,948) Net cash provided by (used in) investing activities 175,149 (59,499) (1,842) Net cash used in financing activities (1,231) (1,030) (2,897) Effect of foreign currency translation on cash and cash equivalents (3,247) 8,011 (28,642) Net change in cash $ 189,514 $ (95,353) $ (122,329) 2024 cash flows vs 2023 cash flows Operating activities During 2024, we generated $18.8 million of cash from operating activities, compared to cash used of $42.8 million in 2023, representing a decrease in cash used of $61.7 million.
Cash flows (In thousands of U.S. dollars) Year ended December 31, 2025 2024 2023 Net cash provided by (used in) operating activities $ 25,866 $ 18,843 $ (42,835) Net cash provided by (used in) investing activities (76,559) 175,149 (59,499) Net cash used in financing activities (19,905) (1,231) (1,030) Effect of foreign currency translation on cash and cash equivalents 3,587 (3,247) 8,011 Net change in cash $ (67,011) $ 189,514 $ (95,353) 2025 cash flows vs. 2024 cash flows Operating activities During 2025, we generated $25.9 million of cash from operating activities, compared to cash generated of $18.8 million in 2024, representing an increase in cash generated of $7.0 million.
See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Foreign currency transaction gain (loss) For 2024, foreign currency transaction gain was $57.9 million, representing an increased gain of $65.2 million from 2023.
See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Foreign currency transaction gain (loss) For 2025, foreign currency transaction loss was $28.6 million, representing a change of $86.4 million from 2024.
(iii) For the year ended December 31, 2024, a gain on revaluation of equity method investment was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024. (iv) For the years ended December 31, 2024, 2023 and 2022, the (gain) loss on revaluation of derivative liabilities represented the fair value changes on the derivative liabilities.
(iv) For the year ended December 31, 2024, a gain on revaluation of equity method investment was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024.
For 2024, gross profit was reduced $5.3 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales since July 1, 2024. No such costs were recognized for 2023.
For 2025 and 2024, gross profit was reduced $0.5 million and $5.3 million, respectively, as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales.
For 2024, gross profit on a constant currency basis was reduced $5.1 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales since July 1, 2024. No such costs were recognized for 2023.
For 2025 and 2024, gross profit on a constant currency basis was reduced $0.6 million and $5.3 million, respectively, as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales.
Impairment of other investments without readily determinable fair values We hold other investments without readily determinable fair values that are measured under the cost method less impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same investee.
Refer to Note 8 “ Goodwill and Intangible Assets, net ” to the consolidated financial statements in Item 8 of this Annual Report. 64 Table of Contents Impairment of other investments without readily determinable fair values We hold other investments without readily determinable fair values that are measured under the cost method less impairment, plus or minus changes resulting from observable price changes in orderly transactions for the identical or similar investment of the same investee.
For 2023, we recorded $3.4 million of impairment charges related to one of our Ginkgo Exclusive Licenses. See Note 8 “ Goodwill and Intangible Assets, net ” and Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report for additional information.
See Note 8 “ Goodwill and Intangible Assets, net ” and Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report for additional information.
Cash and cash equivalents & short-term investments Cash and cash equivalents and short-term investments on a constant currency basis increased 1% to $869.8 million as of December 31, 2024 from $861.5 million as of December 31, 2023.
Cash and cash equivalents & short-term investments Cash and cash equivalents and short-term investments on a constant currency basis decreased 4% to $828.2 million as of December 31, 2025 from $858.8 million as of December 31, 2024.
For the years ended December 31, 2023 and 2022 restructuring costs related to the employee-related severance costs and other restructuring costs associated with the Realignment. See Note 18 “ Restructuring” to the consolidated financial statements in Item 8 of this Annual Report.
(x) For the year ended December 31, 2025, restructuring costs from continuing operations related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report.
Restructuring costs For 2024, we reported restructuring costs of $0.6 million, representing a decrease of $0.9 million from 2023. The restructuring costs in 2024 and 2023 were related to Realignment activities. See Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report for additional information.
See Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Share-based compensation For 2025, we reported share-based compensation expenses of $7.1 million, representing a decrease of $1.7 million compared to 2024.
Investing activities During 2024, we generated $175.1 million of cash in investing activities, compared to cash used of $59.5 million during 2023, representing a decrease of $234.6 million in net cash used.
Investing activities During 2025, we used $76.6 million of cash in investing activities, compared to cash provided by investing activities of $175.1 million during 2024, representing a change of $251.7 million in net cash used.
GAAP, we have presented Adjusted Gross Profit and Adjusted Gross Margin, non-GAAP measures that exclude the impacts of inventory-related purchase accounting adjustments from the calculations of gross profit and gross margin, which resulted from the Cronos GrowCo Transaction. Results are reported as total consolidated results, reflecting our reporting structure of one reportable segment.
Adjusted Gross Profit and Adjusted Gross Margin To supplement the consolidated financial statements presented in accordance with U.S. GAAP, we have presented Adjusted Gross Profit and Adjusted Gross Margin, non-GAAP measures that exclude the impacts of inventory-related purchase accounting adjustments from the calculations of gross profit and gross margin, which resulted from the Cronos GrowCo Transaction.
The cost of cash and equity in Cronos issued in exchange for the cannabinoid exclusive licenses is initially recognized and measured at the date of acquisition. On the date of acquisition, we then test each cannabinoid exclusive license for impairment by comparing the cost and fair value of each license.
On the date of acquisition, we then tested each cannabinoid exclusive license for impairment by comparing the cost and fair value of each license.
The change was primarily due to the change in fair value of our investment in Vitura. See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information.
The decreased loss was primarily related to the changes in fair value of our investment in Vitura Health Limited (“Vitura”) and the warrant (the “High Tide Warrant”) to purchase common shares of High Tide Inc. (“High Tide”). See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information.
Year ended December 31, 2024 2023 Net revenue before excise taxes $ 161,821 $ 120,270 Excise taxes (44,206) (33,029) Net revenue 117,615 87,241 Cost of sales 91,710 74,527 Inventory write-down 707 805 Gross profit 25,198 11,909 Operating expenses: Sales and marketing 21,603 22,701 Research and development 4,229 5,843 General and administrative 46,514 49,475 Restructuring costs 630 1,524 Share-based compensation 8,700 8,756 Depreciation and amortization 3,701 5,044 Impairment loss on long-lived assets 16,350 3,366 Total operating expenses 101,727 96,709 Operating loss (76,529) (84,800) Other income 113,115 11,131 Income tax expense (benefit) (3,436) (3,230) Loss from discontinued operations — (4,114) Net income (loss) 40,022 (74,553) Net loss attributable to non-controlling interest (1,058) (590) Net income (loss) attributable to Cronos Group $ 41,080 $ (73,963) Summary of select financial results Year ended December 31, Change 2024 2023 $ % Net revenue $ 117,615 $ 87,241 $ 30,374 35 % Cost of sales 91,710 74,527 17,183 23 % Inventory write-down 707 805 (98) (12) % Gross profit 25,198 11,909 13,289 112 % Gross margin (i) 21 % 14 % N/A 7 pp (i) Gross margin is defined as gross profit divided by net revenue.
Year ended December 31, 2025 2024 Net revenue before excise taxes $ 193,363 $ 161,821 Excise taxes (46,776) (44,206) Net revenue 146,587 117,615 Cost of sales 83,174 91,710 Inventory write-down 654 707 Gross profit 62,759 25,198 Operating expenses: Sales and marketing 21,764 21,603 Research and development 4,449 4,229 General and administrative 41,999 46,514 Restructuring costs 2,037 630 Share-based compensation 7,050 8,700 Depreciation and amortization 2,119 3,701 Impairment loss on goodwill and indefinite-lived intangible assets 700 — Impairment loss on long-lived assets 36 16,350 Total operating expenses 80,154 101,727 Operating loss (17,395) (76,529) Other income 275 113,115 Income (loss) before income taxes (17,120) 36,586 Income tax benefit (14,191) (3,436) Net income (loss) (2,929) 40,022 Net income (loss) attributable to non-controlling interest 6,518 (1,058) Net income (loss) attributable to Cronos Group $ (9,447) $ 41,080 Summary of select financial results Year ended December 31, Change 2025 2024 $ % Net revenue $ 146,587 $ 117,615 $ 28,972 25 % Cost of sales 83,174 91,710 (8,536) (9) % Inventory write-down 654 707 (53) (7) % Gross profit $ 62,759 $ 25,198 $ 37,561 149 % Gross margin (i) 43 % 21 % N/A 22 pp (i) Gross margin is defined as gross profit divided by net revenue.
See Note 18 “ Restructuring ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Other, net For 2024, other, net was a loss of $0.4 million, compared to income of $1.1 million in 2023.
See Note 8 “ Goodwill and Intangible Assets, net ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Impairment loss on long-lived assets For 2025, impairment loss on long-lived assets was $36 thousand, compared to $16.4 million in 2024.
The inventory valuation adjustment to net realizable value establishes a new cost basis of the inventory that cannot be subsequently reversed. Inventory valuation adjustments are based on inventory levels, expected product life, and estimated product demand. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements compared with inventory levels.
Inventory valuation adjustments are based on inventory levels, expected product life, and estimated product demand. In assessing the ultimate realization of inventories, we are required to make judgments as to future demand requirements compared with inventory levels. Long-lived assets Long-lived assets are primarily comprised of property, plant, and equipment and definite-lived intangible assets.
As a result of the Cronos GrowCo Transaction on July 1, 2024, we now consolidate Cronos GrowCo and no longer account for our investment in Cronos GrowCo as an equity method investment. See Note 5 “ Investments ” to the consolidated financial statements in Item 8 of this Annual Report for additional information.
Share of income from equity method investments For 2025, we had no income from equity method investments, compared to $2.4 million in 2024. As a result of the Cronos GrowCo Transaction on July 1, 2024, we now consolidate Cronos GrowCo and no longer account for our investment in Cronos GrowCo as an equity method investment.
Total other income, income tax expense (benefit) and loss from discontinued operations Year ended December 31, Change (i) 2024 2023 $ % Interest income, net $ 52,019 $ 51,235 $ 784 2 % Gain (loss) on revaluation of derivative liabilities 49 (85) 134 N/M Share of income from equity method investments 2,365 1,583 782 49 % Gain on revaluation of loan receivable 11,804 — 11,804 N/A Gain on revaluation of equity method investment 32,469 — 32,469 N/A Loss on revaluation of financial instruments (6,248) (12,042) 5,794 48 % Impairment loss on other investments (25,650) (23,350) (2,300) (10) % Foreign currency transaction gain (loss) 57,859 (7,324) 65,183 N/M Loss on held-for-sale assets (11,202) — (11,202) N/A Other, net (350) 1,114 (1,464) N/M Total other income 113,115 11,131 101,984 916 % Income tax expense (benefit) (3,436) (3,230) (206) (6) % Loss from discontinued operations — (4,114) 4,114 N/A Net income (loss) $ 40,022 $ (74,553) $ 114,575 N/M (i) “N/M” is defined as not meaningful.
Total other income, income tax expense (benefit) and loss from discontinued operations Year ended December 31, Change (i) 2025 2024 $ % Interest income, net $ 39,963 $ 52,019 $ (12,056) (23) % Share of income from equity method investments — 2,365 (2,365) (100) % Gain on revaluation of loan receivable — 11,804 (11,804) (100) % Gain on revaluation of equity method investment — 32,469 (32,469) (100) % Loss on revaluation of financial instruments (452) (6,248) 5,796 (93) % Impairment loss on other investments — (25,650) 25,650 (100) % Foreign currency transaction gain (loss) (28,588) 57,859 (86,447) N/M Loss on held-for-sale assets (5,532) (11,202) 5,670 (51) % Change in allowance for credit loss on non-operating loan (4,875) — (4,875) N/A Other, net (241) (301) 60 (20) % Total other income 275 113,115 (112,840) (100) % Income tax benefit (14,191) (3,436) (10,755) 313 % Net income (loss) $ (2,929) $ 40,022 $ (42,951) N/M (i) “N/M” is defined as not meaningful.
The activity for both the current and prior period relates primarily to gains and losses on the disposal of assets. Income tax benefit For 2024, we reported an income tax benefit of $3.4 million, compared to an income tax benefit of $3.2 million in 2023.
For further information, see Note 6 “ Loans Receivable, net .” Other, net Other, net primarily includes gains and losses on the disposal of assets. Income tax benefit For 2025, we reported an income tax benefit of $14.2 million, compared to an income tax benefit of $3.4 million in 2024.
Management uses Adjusted EBITDA for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets. The following tables set forth a reconciliation of Net income (loss) as determined in accordance with U.S.
Management uses Adjusted EBITDA for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets.
Net revenue increased on a constant currency basis primarily due to higher cannabis flower and extract sales in the Canadian market and higher cannabis flower sales in Israel and other countries. The Cronos GrowCo Transaction contributed $6.5 million of cannabis flower sales in the year ended December 31, 2024 on a constant currency basis.
Net revenue increased on a constant currency basis primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the inclusion of a full year of Cronos GrowCo sales in the current period, and higher cannabis extract sales in the Canadian market, partially offset by a decrease in cannabis flower sales in the Canadian market due to supply constraints.
Gross profit increased on a constant currency basis primarily due to higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel and other countries, and production cost improvements, partially offset by the impact on cost of sales from the inventory step-up from the Cronos GrowCo Transaction.
Gross profit increased on a constant currency basis primarily due to lower amounts of inventory step-up from the Cronos GrowCo Transaction recognized into cost of sales, the consolidation of Cronos GrowCo for a full year, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, and production efficiencies.
The increase in gross profit was primarily due to higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel and other countries, and production cost improvements, partially offset by the impact on cost of sales from the inventory step-up from the Cronos GrowCo Transaction.
The increase in gross profit was primarily due to lower amounts of inventory step-up from the Cronos GrowCo Transaction recognized into cost of sales, the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, and production efficiencies.
(xii) For the years ended December 31, 2024, 2023 and 2022, financial statement review costs included costs related to the Restatement, costs related to the Company’s responses to requests for information from various regulatory authorities relating to the Restatements, the costs related to the Settlement Order and Settlement Agreement and legal costs defending shareholder class action complaints brought against the Company as a result of the 2019 restatement as well as related insurance reimbursements.
(xii) For the years ended December 31, 2025, 2024 and 2023, restatement litigation costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement.
The decrease was primarily due to lower salaries and benefits and reduced advertising and marketing spend. Research and development For 2024, we reported research and development expenses of $4.2 million, representing a decrease of $1.6 million from 2023. This decrease was primarily due to lower costs associated with the collaboration and license agreement between Ginkgo Bioworks Holdings, Inc.
The increase was primarily due to higher salaries and benefits, partially offset by lower marketing expenses. Research and development For 2025, we reported research and development expenses of $4.4 million, representing an increase of $0.2 million from 2024. The increase was primarily due to higher costs associated with genetics development, partially offset by lower salaries and benefits.
See Note 3 “ Discontinued Operations ” to the consolidated financial statements in Item 8 of this Annual Report for additional information. Non-GAAP Measures Cronos reports its financial results in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). This Annual Report refers to measures not recognized under U.S. GAAP (“non-GAAP measures”).
The change was mainly driven by foreign currency transaction loss, partially offset by higher gross profit and lower operating expenses. Non-GAAP Measures Cronos reports its financial results in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). This Annual Report refers to measures not recognized under U.S. GAAP (“non-GAAP measures”).
See Note 5 “ Investments” to the consolidated financial statements in Item 8 of this Annual Report. (vii) For the year ended December 31, 2024, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction.
(vii) For the years ended December 31, 2025 and 2024, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction and the pending acquisition of CanAdelaar. These costs are included in general and administrative expenses on the consolidated statements of net income (loss) and comprehensive income (loss).
This increase was primarily due to the impact of the inventory step-up from the Cronos GrowCo Transaction, higher cannabis flower and extract sales in the Canadian market, and higher cannabis flower sales in Israel and other countries, partially offset by production cost improvements.
This change was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the inclusion of a full year of Cronos GrowCo sales in the current period, and higher cannabis extract sales in the Canadian market, partially offset by a decrease in cannabis flower sales in the Canadian market due to supply constraints.
During the third quarter of 2024, Cronos adjusted its sales strategy for the assets to market them to a broader buyer pool, resulting in the recognition of a loss on held-for-sale assets. 2023 Compared to 2022 Results of Operations and Cash Flows For a discussion of our 2023 results of operations and cash flows compared to 2022, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2023.
The brand also expanded its presence in concentrates in Canada with the introduction of Lord Jones® Live Resin Caviar in the second quarter of 2025, reinforcing its positioning as a high‑quality, innovation‑driven brand. 2024 Compared to 2023 Results of Operations and Cash Flows For a discussion of our 2024 results of operations and cash flows compared to 2023, see Part II, Item 7 “Management’s Discussion and Analysis of Financial Condition and Results of Operations,” in our Annual Report on Form 10-K for the year ended December 31, 2024.
The gain related to the remeasurement of the existing investment in Cronos GrowCo as a result of the Cronos GrowCo Transaction. No such gain was recognized for 2023.
Gain on revaluation of equity method investment For 2025, we reported no gain on revaluation of equity method investment. For 2024, we reported a gain on revaluation of equity method investment of $32.5 million related to the remeasurement of the existing investment in Cronos GrowCo as a result of the 53 Table of Contents Cronos GrowCo Transaction.
The decrease was primarily due to lower professional fees, largely related to financial statement review costs in the prior year period, and lower salaries and benefits and insurance costs, partially offset by the impact of the Cronos GrowCo Transaction, which increased general and administrative expenses by $1.5 million, and $1.2 million higher expected credit loss allowance on loans receivable related to the increased borrowings by Cronos GrowCo in the second quarter of 2024.
General and administrative For 2025, we reported general and administrative expenses of $42.0 million, representing a decrease of $4.5 million from 2024. The decrease was primarily due to lower salaries and benefits and lower expected credit loss allowances on loans receivable, partially offset by the consolidation of Cronos GrowCo and higher transaction costs.
Our material cash requirements include the following contractual and other obligations as of December 31, 2024: Leases We have operating leases for land, buildings and office and research space. As of December 31, 2024, the future minimum payments required under these leases totaled $2.4 million, with $1.1 million payable within 12 months.
The up-front cash consideration is expected to be paid in the first half of 2026 and will be funded by available cash on hand. Leases We have operating leases for land, buildings and office and research space. As of December 31, 2025, the future minimum payments required under these leases totaled $1.9 million, with $0.5 million payable within 12 months.
Operating expenses Year ended December 31, Change 2024 2023 $ % Sales and marketing $ 21,603 $ 22,701 $ (1,098) (5) % Research and development 4,229 5,843 (1,614) (28) % General and administrative 46,514 49,475 (2,961) (6) % Restructuring costs 630 1,524 (894) (59) % Share-based compensation 8,700 8,756 (56) (1) % Depreciation and amortization 3,701 5,044 (1,343) (27) % Impairment loss on long-lived assets 16,350 3,366 12,984 386 % Operating expenses $ 101,727 $ 96,709 $ 5,018 5 % Sales and marketing For 2024, we reported sales and marketing expenses of $21.6 million, representing a decrease of $1.1 million from 2023.
Operating expenses Year ended December 31, Change 2025 2024 $ % Sales and marketing $ 21,764 $ 21,603 $ 161 1 % Research and development 4,449 4,229 220 5 % General and administrative 41,999 46,514 (4,515) (10) % Restructuring costs 2,037 630 1,407 223 % Share-based compensation 7,050 8,700 (1,650) (19) % Depreciation and amortization 2,119 3,701 (1,582) (43) % Impairment loss on goodwill and indefinite-lived intangible assets 700 — 700 N/A Impairment loss on long-lived assets 36 16,350 (16,314) (100) % Operating expenses $ 80,154 $ 101,727 $ (21,573) (21) % Sales and marketing For 2025, we reported sales and marketing expenses of $21.8 million, representing an increase of $0.2 million from 2024.
For 2024, we recognized $5.3 million of inventory step-up from the Cronos GrowCo Transaction into cost of sales since July 1, 2024. No such costs were recognized for 2023. Inventory write-down For 2024, we reported inventory write-downs of $0.7 million, representing a $0.1 million decrease from 2023.
For 2025 and 2024, we recognized $0.5 million and $5.3 million, respectively, of inventory step-up from the Cronos GrowCo Transaction into cost of sales. Inventory write-down For each of 2025 and 2024, we reported inventory write-downs of $0.7 million. The activity in both years was due to write-downs resulting from unusable inventory that was scrapped in the period.
Gain on revaluation of loans receivable For 2024, we reported a gain on revaluation of loans receivable of $11.8 million. The gain related to the remeasurement of the outstanding loans receivable under the credit facility as a result of the Cronos GrowCo Transaction on July 1, 2024. No such gain was recognized for 2023.
The gain related to the remeasurement of the outstanding loans receivable under the credit facility with Cronos GrowCo as a result of the Cronos GrowCo Transaction on July 1, 2024. See Note 6 “ Loans Receivable, net ” to the consolidated financial statements in Item 8 of this Annual Report for additional information.
The table below sets forth certain measures of consolidated results from continuing operations on an as-reported and constant currency basis for 2024 compared to 2023, as well as cash and cash equivalents and short-term investments as of December 31, 2024, compared to December 31, 2023, on an as-reported and constant currency basis (in thousands): As Reported As Adjusted for Constant Currency Year ended December 31, As Reported Change Year ended December 31, Constant Currency Change 2024 2023 $ % 2024 $ % Net revenue $ 117,615 $ 87,241 $ 30,374 35 % $ 118,983 $ 31,742 36 % Gross profit 25,198 11,909 13,289 112 % 25,505 13,596 114 % Gross margin 21 % 14 % N/A 7 pp 21 % N/A 7 pp Operating expenses 101,727 96,709 5,018 5 % 102,972 6,263 6 % Net income (loss) from continuing operations 40,022 (70,439) 110,461 N/M 42,007 112,446 N/M Adjusted EBITDA (34,942) (61,564) 26,622 43 % (35,891) 25,673 42 % As of December 31, As Reported Change As of December 31, Constant Currency Change 2024 2023 $ % 2024 $ % Cash and cash equivalents $ 858,805 $ 669,291 $ 189,514 28 % $ 869,761 $ 200,470 30 % Short-term investments — 192,237 (192,237) (100) % — (192,237) (100) % Total cash and cash equivalents and short-term investments $ 858,805 $ 861,528 $ (2,723) — % $ 869,761 $ 8,233 1 % 61 Table of Contents Net revenue As Reported As Adjusted for Constant Currency Year ended December 31, As Reported Change Year ended December 31, Constant Currency Change 2024 2023 $ % 2024 $ % Cannabis flower $ 87,912 $ 62,070 $ 25,842 42 % $ 88,904 $ 26,834 43 % Cannabis extracts 29,168 24,569 4,599 19 % 29,552 4,983 20 % Other 535 602 (67) (11) % 527 (75) (12) % Net revenue $ 117,615 $ 87,241 $ 30,374 35 % $ 118,983 $ 31,742 36 % As Reported As Adjusted for Constant Currency Year ended December 31, As Reported Change Year ended December 31, Constant Currency Change 2024 2023 $ % 2024 $ % Canada $ 82,437 $ 64,702 $ 17,735 27 % $ 83,709 $ 19,007 29 % Israel 28,368 21,134 7,234 34 % 28,454 7,320 35 % Other countries 6,810 1,405 5,405 385 % 6,820 5,415 385 % Net revenue $ 117,615 $ 87,241 $ 30,374 35 % $ 118,983 $ 31,742 36 % For 2024, net revenue on a constant currency basis was $119.0 million, representing a 36% increase from 2023.
GAAP. 58 Table of Contents The table below sets forth certain measures of consolidated results from continuing operations on an as-reported and constant currency basis for 2025 compared to 2024, as well as cash and cash equivalents and short-term investments as of December 31, 2025, compared to December 31, 2024, on an as-reported and constant currency basis (in thousands): As Reported As Adjusted for Constant Currency Year ended December 31, As Reported Change Year ended December 31, Constant Currency Change 2025 2024 $ % 2025 $ % Net revenue $ 146,587 $ 117,615 $ 28,972 25 % $ 145,402 $ 27,787 24 % Gross profit 62,759 25,198 37,561 149 % 61,802 36,604 145 % Gross margin 43 % 21 % N/A 22 pp 43 % N/A 22 pp Operating expenses 80,154 101,727 (21,573) (21) % 80,247 (21,480) (21) % Net income (loss) (2,929) 40,022 (42,951) N/M (4,289) (44,311) N/M Adjusted EBITDA 10,110 (34,942) 45,052 N/M 8,555 43,497 N/M As of December 31, As Reported Change As of December 31, Constant Currency Change 2025 2024 $ % 2025 $ % Cash and cash equivalents $ 791,794 $ 858,805 $ (67,011) (8) % $ 788,204 $ (70,601) (8) % Short-term investments 40,000 — 40,000 N/A 40,000 40,000 N/A Total cash and cash equivalents and short-term investments $ 831,794 $ 858,805 $ (27,011) (3) % $ 828,204 $ (30,601) (4) % 59 Table of Contents Net revenue As Reported As Adjusted for Constant Currency Year ended December 31, As Reported Change Year ended December 31, Constant Currency Change 2025 2024 $ % 2025 $ % Cannabis flower $ 108,476 $ 87,912 $ 20,564 23 % $ 106,677 $ 18,765 21 % Cannabis extracts 37,700 29,168 8,532 29 % 38,320 9,152 31 % Other 411 535 (124) (23) % 405 (130) (24) % Net revenue $ 146,587 $ 117,615 $ 28,972 25 % $ 145,402 $ 27,787 24 % As Reported As Adjusted for Constant Currency Year ended December 31, As Reported Change Year ended December 31, Constant Currency Change 2025 2024 $ % 2025 $ % Canada $ 90,330 $ 82,437 $ 7,893 10 % $ 91,840 $ 9,403 11 % Israel 41,796 28,368 13,428 47 % 38,773 10,405 37 % Other countries 14,461 6,810 7,651 112 % 14,789 7,979 117 % Net revenue $ 146,587 $ 117,615 $ 28,972 25 % $ 145,402 $ 27,787 24 % For 2025, net revenue on a constant currency basis was $145.4 million, representing a 24% increase from 2024.
(xv) For the year ended December 31, 2024, Israel Ministry of Economy and Industry dumping inquiry expense included expenditures relating to the regulatory inquiry about alleged dumping of medical cannabis products in Israel and related litigation and external relations expenses. Adjusted Gross Profit and Adjusted Gross Margin To supplement the consolidated financial statements presented in accordance with U.S.
(xiv) For the year ended December 31, 2024, Israel Ministry of Economy and Industry dumping inquiry expense included expenditures relating to the regulatory inquiry about alleged dumping of medical cannabis products in Israel and related litigation and external relations expenses. 57 Table of Contents (xv) For the year ended December 31, 2025, change in allowance for credit loss on non-operating loan represents the allowance recognized on the High Tide loan receivable and adjustments thereto, as described in Note 6, “ Loans Receivable, net ” to the consolidated financial statements in Item 8 of this Annual Report.

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Item 7A. Quantitative and Qualitative Disclosures About Market Risk

Market Risk — interest-rate, FX, commodity exposure

6 edited+0 added−0 removed5 unchanged
Biggest changeA 10% change in the interest rate in effect for 2024 would have an effect of $5.2 million on interest income, net earned on our cash equivalents, short-term investments. Foreign currency risk Our consolidated financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report are expressed in U.S. dollars.
Biggest changeA 10% change in the interest rate in effect for 2025 would have an effect of $3.8 million on interest income, net earned on our cash equivalents, short-term investments. 65 Table of Contents Foreign currency risk Our consolidated financial statements included in Part II, Item 8 “Financial Statements and Supplementary Data” of this Annual Report are expressed in U.S. dollars.
A 10% change in the interest rate in effect on December 31, 2024 would not have a material effect on the fair value of our cash equivalents and short-term investments as the majority of the portfolio had a maturity date of three months or less.
A 10% change in the interest rate in effect on December 31, 2025 would not have a material effect on the fair value of our cash equivalents and short-term investments as the majority of the portfolio had a maturity date of three months or less.
As we continue to recognize gains and losses in foreign currency transactions, depending upon changes in future currency rates, such gains and losses could have a significant, and potentially adverse, effect on our results of operations. 67 Table of Contents
As we continue to recognize gains and losses in foreign currency transactions, depending upon changes in future currency rates, such gains and losses could have a significant, and potentially adverse, effect on our results of operations. 66 Table of Contents
A 10% change in the exchange rates for the Canadian dollar would affect the carrying amount of the net assets by approximately $40.1 million and $97.7 million as of December 31, 2024 and December 31, 2023, respectively. The corresponding impact would be recorded in accumulated other comprehensive income.
A 10% change in the exchange rates for the Canadian dollar would affect the carrying amount of the net assets by approximately $40.5 million and $40.1 million as of December 31, 2025 and December 31, 2024, respectively. The corresponding impact would be recorded in accumulated other comprehensive income.
Appreciating foreign currencies relative to the U.S. dollar will adversely impact operating income and net earnings, while depreciating foreign currencies relative to the U.S. dollar will have a positive impact. For the years ended December 31, 2024 and December 31, 2023, we had foreign currency gain (loss) on translation of $(86.3) million and $21.5 million, respectively.
Appreciating foreign currencies relative to the U.S. dollar will adversely impact operating income and net earnings, while depreciating foreign currencies relative to the U.S. dollar will have a positive impact. For the years ended December 31, 2025 and December 31, 2024, we had foreign currency gain (loss) on translation of $48.7 million and $(86.3) million, respectively.
During the years ended December 31, 2024 and December 31, 2023, we had interest income, net of $52.0 million and $51.2 million, respectively.
During the years ended December 31, 2025 and December 31, 2024, we had interest income, net of $40.0 million and $52.0 million, respectively.

Other CRON 10-K year-over-year comparisons