Cronos Group (NASDAQ: CRON) posts higher Q1 2026 profit and expands buybacks
Filing Impact
Filing Sentiment
Form Type
10-Q
Cronos Group Inc. reported significantly stronger results for the quarter ended March 31, 2026. Net revenue rose to 45,210 (thousands of U.S. dollars) from 32,262 a year earlier, driven by cannabis flower and extracts in Canada and Israel. Net income attributable to Cronos increased to 13,752, with basic and diluted EPS of 0.04 versus 0.02. Adjusted EBITDA improved to 5,079 from 2,289, reflecting higher gross profit despite ongoing restructuring and transaction costs. The company ended the quarter with 821,856 in cash and cash equivalents and no debt, after repurchasing 6,365,700 common shares for 16,730 under its 50,000 share repurchase authorization. A new 50,000 repurchase program was approved to follow the current one, and Cronos continues to pursue the pending acquisition of CanAdelaar and manage legal and regulatory matters, including a proposed 10,000 class action settlement that remains subject to court approval.
Positive
- Revenue and earnings inflection: Net revenue increased to 45,210 from 32,262 and Adjusted EBITDA more than doubled to 5,079, with net income attributable to Cronos rising to 13,752 and EPS improving to 0.04 from 0.02.
- Strong liquidity and capital return: Cronos held 821,856 in cash and cash equivalents with no reported debt, repurchased 6,365,700 shares for 16,730, and the board approved a new 50,000 share repurchase authorization to follow the current program.
Negative
- None.
Insights
Strong revenue growth, positive earnings and continued buybacks mark a solid quarter for Cronos Group.
Cronos Group delivered net revenue of 45,210 for Q1 2026, up from 32,262, as cannabis flower and extract sales expanded in Canada, Israel and other markets. Net income attributable to the company more than doubled to 13,752, and Adjusted EBITDA rose to 5,079 from 2,289.
The balance sheet remains very conservative, with 821,856 of cash and cash equivalents and no reported debt, even after 16,730 of share repurchases for 6,365,700 shares. Operating expenses increased with higher general and administrative and transaction costs, and foreign currency losses drove a comprehensive loss despite solid underlying profitability.
Management is layering capital returns onto growth: the board authorized a new 50,000 repurchase program to follow the existing one, while the company advances the CanAdelaar acquisition and manages class action and regulatory matters, including a proposed 10,000 settlement that is still pending court approval. Future filings will show whether revenue momentum and positive Adjusted EBITDA are sustained as these initiatives progress.
Key Figures
Net revenue: 45,210 (thousands of U.S. dollars)
Net income attributable to Cronos Group: 13,752 (thousands of U.S. dollars)
Adjusted EBITDA: 5,079 (thousands of U.S. dollars)
+5 more
8 metrics
Net revenue
45,210 (thousands of U.S. dollars)
Three months ended March 31, 2026 vs 32,262 in 2025
Net income attributable to Cronos Group
13,752 (thousands of U.S. dollars)
Three months ended March 31, 2026 vs 6,122 in 2025
Adjusted EBITDA
5,079 (thousands of U.S. dollars)
Three months ended March 31, 2026 vs 2,289 in 2025
Cash and cash equivalents
821,856 (thousands of U.S. dollars)
As of March 31, 2026
Share repurchases in Q1 2026
16,730 (thousands of U.S. dollars)
6,365,700 common shares repurchased in the quarter
Total assets
1,172,109 (thousands of U.S. dollars)
As of March 31, 2026
Total liabilities
48,295 (thousands of U.S. dollars)
As of March 31, 2026
Basic EPS
0.04
Three months ended March 31, 2026 vs 0.02 in 2025
Key Terms
Adjusted EBITDA, Realignment, High Tide Loan, Anti-Dumping Investigation, +2 more
6 terms
Adjusted EBITDA financial
"The CODM reviews adjusted earnings (loss) before interest, tax, depreciation and amortization (“Adjusted EBITDA”) as the measure of segment profit or loss"
Adjusted EBITDA is a way companies measure how much money they make from their core operations, like running a business, by removing certain costs or income that aren’t part of regular business activities. It helps investors see how well a company is doing without distractions from unusual expenses or gains, making it easier to compare companies or track performance over time.
Realignment financial
"the Company initiated a strategic plan to realign the business around its brands, centralize functions and evaluate the Company’s supply chain (the “Realignment”)."
High Tide Loan financial
"entered into a loan agreement for junior secured convertible debt with a principal amount of C$30,000 ... (the “High Tide Loan”)."
Anti-Dumping Investigation regulatory
"public investigation into Canadian licensed producers of alleged dumping of medical cannabis imports from Canada into Israel by the Trade Levies Commissioner (the “Anti-Dumping Investigation”)"
A government inquiry into whether imported goods are being sold abroad at unfairly low prices or with hidden subsidies that harm local producers; investigators gather evidence and may impose extra duties if dumping is found. For investors, the outcome can raise costs for importers, protect or revive domestic suppliers, disrupt supply chains and change profit margins and stock values—like a referee checking if a player is cheating and then changing the score.
share repurchase program financial
"the Board authorized a share repurchase program of up to $50,000."
A share repurchase program is when a company buys back its own shares from the marketplace. This reduces the total number of shares available, which can increase the value of each remaining share and signal confidence in the company's prospects. For investors, it often suggests that the company believes its stock is undervalued or that it has extra cash to return to shareholders.
Restatement litigation costs regulatory
"restatement litigation costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement."
UNITED STATES
SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
Form 10-Q
(Mark One)
EXCHANGE ACT OF 1934
For the quarterly period ended March 31, 2026
or
For the transition period from to .
Commission File No. 001-38403
__________________________
(Exact name of registrant as specified in its charter)
__________________________
British Columbia, | N/A | |||||||
| (State or other jurisdiction of | (I.R.S. Employer | |||||||
| incorporation or organization) | Identification No.) | |||||||
| (Address of principal executive offices) | (Zip Code) | |||||||
(Registrant’s telephone number, including area code)
| N/A | ||||||||||||||
(Former name, former address and former fiscal year, if changed since last report)
Securities registered pursuant to Section 12(b) of the Act:
| Title of each class | Trading Symbol(s) | Name of each exchange on which registered | ||||||||||||
Indicate by check mark whether the registrant: (1) has filed all reports required to be filed by Section 13 or Section 15(d) of the Securities Exchange Act of 1934 during the preceding 12 months (or for such shorter period that the registrant was required to file such reports), and (2) has been subject to such filing requirements for the past 90 days. Yes x No o
Indicate by check mark whether the registrant has submitted electronically every Interactive Data File required to be submitted pursuant to Rule 405 of Regulation S-T (§232.405 of this chapter) during the preceding 12 months (or for such shorter period that the registrant was required to submit such files). Yes x No o
Indicate by check mark whether the registrant is a large accelerated filer, an accelerated filer, a non-accelerated filer, smaller reporting company, or an emerging growth company. See the definitions of “large accelerated filer,” “accelerated filer,” “smaller reporting company,” and “emerging growth company” in Rule 12b-2 of the Exchange Act.
| Large accelerated filer | o | x | ||||||||||||
| Non-accelerated filer | o | Smaller reporting company | ||||||||||||
| Emerging growth company | ||||||||||||||
If an emerging growth company, indicate by check mark if the registrant has elected not to use the extended transition period for complying with any new or revised financial accounting standards provided pursuant to Section 13(a) of the Exchange Act. o
Indicate by check mark whether the registrant is a shell company (as defined in Rule 12b-2 of the Exchange Act). Yes ☐ No x
As of May 6, 2026, there were 373,662,039 common shares of the registrant issued and outstanding.
1
Table of Contents | ||||||||||||||
PART I | ||||||||||||||
| FINANCIAL INFORMATION | ||||||||||||||
| Item 1. | Financial Statements. | 3 | ||||||||||||
| Item 2. | Management’s Discussion and Analysis of Financial Condition and Results of Operations. | 27 | ||||||||||||
| Item 3. | Quantitative and Qualitative Disclosures About Market Risk. | 40 | ||||||||||||
| Item 4. | Controls and Procedures. | 42 | ||||||||||||
| PART II | ||||||||||||||
| OTHER INFORMATION | ||||||||||||||
| Item 1. | Legal Proceedings. | 43 | ||||||||||||
| Item 1A. | Risk Factors. | 43 | ||||||||||||
| Item 2. | Unregistered Sales of Equity Securities and Use of Proceeds. | 43 | ||||||||||||
| Item 3. | Defaults upon Senior Securities. | 43 | ||||||||||||
| Item 4. | Mine Safety Disclosures. | 43 | ||||||||||||
| Item 5. | Other Information. | 43 | ||||||||||||
| Item 6. | Exhibits. | 44 | ||||||||||||
Unless otherwise noted or the context indicates otherwise, references in this Quarterly Report on Form 10-Q (this “Quarterly Report”) to the “Company,” “Cronos Group,” “we,” “us” and “our” refer to Cronos Group Inc., its direct and indirect wholly owned subsidiaries and, if applicable, its joint ventures and investments accounted for by the equity method; the term “cannabis” means the plant of any species or subspecies of genus Cannabis and any part of that plant, including all derivatives, extracts, cannabinoids, isomers, acids, salts, and salts of isomers; the term “U.S. hemp” has the meaning given to the term “hemp” in the United States (“U.S.”) Agricultural Improvement Act of 2018 (the “2018 Farm Bill”), including hemp-derived cannabidiol (“CBD”); and the term “U.S. Schedule I cannabis” means cannabis excluding U.S. hemp.
This Quarterly Report contains references to our trademarks and trade names and to trademarks and trade names belonging to other entities. Solely for convenience, trademarks and trade names referred to in this Quarterly Report may appear without the ® or ™ symbols, but such references are not intended to indicate, in any way, that their respective owners will not assert, to the fullest extent under applicable law, their rights thereto. We do not intend our use or display of other companies’ trademarks or trade names to imply a relationship with, or endorsement or sponsorship of us or our business by, any other companies. In addition, this Quarterly Report includes website addresses. These website addresses are intended to provide inactive, textual references only. The information on or referred to on these websites is not part of or incorporated into this Quarterly Report.
All currency amounts in this Quarterly Report are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to “dollars” or “$” are to U.S. dollars; all references to “C$” are to Canadian dollars; and all references to “ILS” are to New Israeli Shekels.
| (Exchange rates are shown as C$ per $) | As of | ||||||||||||||||
| March 31, 2026 | March 31, 2025 | December 31, 2025 | |||||||||||||||
| Spot rate | 1.3916 | 1.4393 | 1.3698 | ||||||||||||||
| Year-to-date average rate | 1.3720 | 1.4356 | N/A | ||||||||||||||
| (Exchange rates are shown as ILS per $) | As of | ||||||||||||||||
| March 31, 2026 | March 31, 2025 | December 31, 2025 | |||||||||||||||
| Spot rate | 3.1441 | 3.7191 | 3.1863 | ||||||||||||||
| Year-to-date average rate | 3.1240 | 3.6145 | N/A | ||||||||||||||
All summaries of agreements described herein are qualified by the full text of such agreements (certain of which have been filed as exhibits with the U.S. Securities and Exchange Commission).
2
PART I
FINANCIAL INFORMATION
FINANCIAL INFORMATION
Table of Contents
Item 1. Financial Statements
| Table of Contents | |||||
Condensed Consolidated Balance Sheets as of March 31, 2026 (Unaudited) and December 31, 2025 | 4 | ||||
Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) for the three months ended March 31, 2026 and 2025 (Unaudited) | 5 | ||||
Condensed Consolidated Statements of Changes in Equity for the three months ended March 31, 2026 and 2025 (Unaudited) | 6 | ||||
Condensed Consolidated Statements of Cash Flows for the three months ended March 31, 2026 and 2025 (Unaudited) | 7 | ||||
Notes to Condensed Consolidated Financial Statements (Unaudited) | 8 | ||||
3
| Cronos Group Inc. | |||||
| Condensed Consolidated Balance Sheets | |||||
(In thousands of U.S. dollars, except share amounts, unaudited) | Table of Contents | ||||
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||
| Assets | |||||||||||
| Current assets | |||||||||||
| Cash and cash equivalents | $ | $ | |||||||||
| Short-term investments | |||||||||||
| Accounts receivable, net | |||||||||||
| Interest receivable | |||||||||||
| Other receivables | |||||||||||
| Current portion of loans receivable, net | |||||||||||
| Inventory, net | |||||||||||
| Prepaids and other current assets | |||||||||||
| Total current assets | |||||||||||
| Other investments | |||||||||||
| Non-current portion of loans receivable, net | |||||||||||
| Property, plant and equipment, net | |||||||||||
| Right-of-use assets | |||||||||||
| Goodwill | |||||||||||
| Intangible assets, net | |||||||||||
| Deferred tax assets | |||||||||||
| Total assets | $ | $ | |||||||||
| Liabilities | |||||||||||
| Current liabilities | |||||||||||
| Accounts payable | $ | $ | |||||||||
| Income taxes payable | |||||||||||
| Accrued liabilities | |||||||||||
| Current portion of lease obligation | |||||||||||
| Total current liabilities | |||||||||||
| Non-current portion due to non-controlling interests | |||||||||||
| Non-current portion of lease obligation | |||||||||||
| Deferred tax liabilities | |||||||||||
| Total liabilities | |||||||||||
| Shareholders’ equity | |||||||||||
Share capital and additional paid-in capital (no par value; authorized for issue as of March 31, 2026 and December 31, 2025: unlimited; shares outstanding as of March 31, 2026 and December 31, 2025: | |||||||||||
| Retained earnings | |||||||||||
| Accumulated other comprehensive loss | ( | ( | |||||||||
| Total equity attributable to shareholders of Cronos Group | |||||||||||
| Non-controlling interests | |||||||||||
| Total shareholders’ equity | |||||||||||
| Total liabilities and shareholders’ equity | $ | $ | |||||||||
See notes to condensed consolidated interim financial statements.
4
| Cronos Group Inc. | |||||
Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) | |||||
(In thousands of U.S. dollars, except share and per share amounts, unaudited) | Table of Contents | ||||
| Three months ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net revenue, before excise taxes | $ | $ | |||||||||||||||||||||
| Excise taxes | ( | ( | |||||||||||||||||||||
| Net revenue | |||||||||||||||||||||||
| Cost of sales | |||||||||||||||||||||||
| Inventory write-down | |||||||||||||||||||||||
| Gross profit | |||||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| General and administrative | |||||||||||||||||||||||
| Restructuring costs | |||||||||||||||||||||||
| Share-based compensation | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total operating expenses | |||||||||||||||||||||||
| Operating loss | ( | ( | |||||||||||||||||||||
Other income (expense) | |||||||||||||||||||||||
| Interest income, net | |||||||||||||||||||||||
Gain (loss) on revaluation of financial instruments | ( | ||||||||||||||||||||||
| Foreign currency gain | |||||||||||||||||||||||
| Change in allowance for credit loss on non-operating loan | ( | ||||||||||||||||||||||
| Other, net | |||||||||||||||||||||||
Total other income | |||||||||||||||||||||||
| Income before income taxes | |||||||||||||||||||||||
| Income tax provision (benefit) | ( | ||||||||||||||||||||||
| Net income | |||||||||||||||||||||||
| Net income attributable to non-controlling interest | |||||||||||||||||||||||
| Net income attributable to Cronos Group | $ | $ | |||||||||||||||||||||
| Comprehensive income (loss) | |||||||||||||||||||||||
| Net income | $ | $ | |||||||||||||||||||||
| Other comprehensive loss | |||||||||||||||||||||||
| Foreign exchange loss on translation | ( | ( | |||||||||||||||||||||
| Comprehensive income (loss) | ( | ||||||||||||||||||||||
| Comprehensive income attributable to non-controlling interests | |||||||||||||||||||||||
| Comprehensive income (loss) attributable to Cronos Group | $ | ( | $ | ||||||||||||||||||||
| Net income per share | |||||||||||||||||||||||
| Basic net income per share attributable to Cronos Group | $ | $ | |||||||||||||||||||||
| Diluted net income per share attributable to Cronos Group | $ | $ | |||||||||||||||||||||
5
| Cronos Group Inc. | ||
| Condensed Consolidated Statements of Changes in Equity | ||
| For the three months ended March 31, 2026 and 2025 | ||
| (In thousands of U.S. dollars, except share amounts, unaudited) | ||
| Number of shares | Share capital and additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Non-controlling interests | Total shareholders’ equity | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Activities relating to share-based compensation | ( | — | — | ( | |||||||||||||||||||||||||||||||
| Share repurchases | ( | ( | — | — | — | ( | |||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Foreign exchange loss on translation | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance as of March 31, 2026 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Number of shares | Share capital and additional paid-in capital | Retained earnings | Accumulated other comprehensive loss | Non-controlling interests | Total shareholders’ equity | ||||||||||||||||||||||||||||||
| Balance as of December 31, 2024 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
| Activities relating to share-based compensation | ( | ( | — | — | ( | ||||||||||||||||||||||||||||||
| Net income | — | — | — | ||||||||||||||||||||||||||||||||
| Foreign exchange loss on translation | — | — | — | ( | ( | ( | |||||||||||||||||||||||||||||
| Balance as of March 31, 2025 | $ | $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||
See notes to condensed consolidated interim financial statements.
6
| Cronos Group Inc. | |||||
| Condensed Consolidated Statements of Cash Flows | |||||
| (In thousands of U.S. dollars, except share amounts, unaudited) | Table of Contents | ||||
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Operating activities | |||||||||||
| Net income | $ | $ | |||||||||
| Adjustments to reconcile net income to net cash used in operating activities: | |||||||||||
| Share-based compensation | |||||||||||
| Depreciation and amortization | |||||||||||
| Loss from investments | |||||||||||
| Changes in expected credit losses on long-term financial assets | |||||||||||
Inventory step-up recorded to cost of sales | |||||||||||
| Foreign currency gain | ( | ( | |||||||||
| Other non-cash operating activities, net | |||||||||||
| Changes in operating assets and liabilities: | |||||||||||
| Accounts receivable, net | ( | ||||||||||
| Interest receivable | |||||||||||
| Other receivables | ( | ||||||||||
| Prepaids and other current assets | ( | ||||||||||
| Inventory, net | ( | ( | |||||||||
| Accounts payable | ( | ( | |||||||||
| Income taxes payable | |||||||||||
| Accrued liabilities | ( | ( | |||||||||
| Net cash provided by (used in) operating activities | ( | ||||||||||
| Investing activities | |||||||||||
| Purchase of short-term investments | ( | ||||||||||
| Proceeds from short-term investments | |||||||||||
| Purchase of property, plant and equipment | ( | ( | |||||||||
| Purchase of intangible assets | ( | ( | |||||||||
Net cash provided by (used in) investing activities | ( | ||||||||||
| Financing activities | |||||||||||
| Repurchases of common stock | ( | ||||||||||
| Withholding taxes paid on share-based awards | ( | ( | |||||||||
| Net cash used in financing activities | ( | ( | |||||||||
| Effect of foreign currency translation on cash and cash equivalents | ( | ( | |||||||||
| Net change in cash and cash equivalents | ( | ||||||||||
| Cash and cash equivalents, beginning of period | |||||||||||
| Cash and cash equivalents, end of period | $ | $ | |||||||||
| Supplemental cash flow information | |||||||||||
| Interest paid | $ | $ | |||||||||
| Interest received | $ | $ | |||||||||
| Income taxes paid | $ | $ | |||||||||
See notes to condensed consolidated interim financial statements.
7
| Cronos Group Inc. | |||||
| Notes to Condensed Consolidated Financial Statements (Unaudited) | |||||
| (In thousands of U.S. dollars, except share amounts) | Table of Contents | ||||
1. Background, Basis of Presentation, and Summary of Significant Accounting Policies
(a)Background
Cronos Group Inc. (“Cronos” or the “Company”) is incorporated in the province of British Columbia under the Business Corporations Act (British Columbia) with principal executive offices at 4491 Concession Rd 12, Stayner, Ontario, L0M 1S0. The Company’s common shares are currently listed on the Toronto Stock Exchange (“TSX”) and Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CRON.”
Cronos is a global cannabis company focused on scaling leading consumer goods products through research and development and innovation. With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach®, PEACE NATURALS®, LIT™ and Lord Jones®.
(b)Basis of presentation
These condensed consolidated interim financial statements of Cronos are unaudited. They have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and with applicable rules and regulations of the U.S. Securities and Exchange Commission (the “SEC”) relating to interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring adjustments) considered necessary for a fair presentation have been included. Operating results for the three months ended March 31, 2026 are not necessarily indicative of the results that may be expected for any other reporting period.
These condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”).
Certain prior period amounts have been reclassified to conform to the current period presentation of our condensed consolidated interim financial statements. These reclassifications had no effect on the reported results of operations and ending shareholders’ equity.
(c)Segment information
Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”) manages the business, makes operating decisions and assesses the Company’s performance. The Company has determined that it has one operating segment and therefore one reportable segment, which is comprised of operations in Canada and Israel and is involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets.
(d)Revenue recognition
The following table presents the Company’s revenue by major product category:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cannabis flower | $ | $ | |||||||||
| Cannabis extracts | |||||||||||
| Other | |||||||||||
| Net revenue | $ | $ | |||||||||
Net revenues attributed to a geographic region based on the location of the customer were as follows:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Canada | $ | $ | |||||||||
| Israel | |||||||||||
| Other countries | |||||||||||
| Net revenue | $ | $ | |||||||||
8
| Cronos Group Inc. | |||||
| Notes to Condensed Consolidated Financial Statements (Unaudited) | |||||
| (In thousands of U.S. dollars, except share amounts) | Table of Contents | ||||
(e)Short-term Investments
Short-term investments are classified as held-to-maturity and recorded at cost. Interest earned on short-term investments is recorded in interest receivables on the consolidated balance sheets and interest income, net on the condensed consolidated statements of net income (loss) and comprehensive income (loss). Cash inflows and outflows related to the purchase and maturity of short-term investments are classified as investing activities in the Company’s condensed consolidated statements of cash flows. As of March 31, 2026 and December 31, 2025, the Company’s short-term investments of nil and $40,000 , respectively, were comprised of Guaranteed Investment Certificates held in Canada.
(f)Concentration of risk
Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities, primarily accounts receivable and other receivables, and its investing activities, including cash held with banks and financial institutions, short-term investments and loans receivable. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $895,029 and $909,839 as of March 31, 2026 and December 31, 2025, respectively.
An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on the days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events and current conditions. Effective January 1, 2026, the Company elected the practical expedient under ASU 2025-05, which permits the assumption that current conditions as of the reporting date remain unchanged for the remaining life of the asset when developing the expected credit loss estimate for current accounts receivable and current contract assets arising from contracts with customers. Accounts receivable are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan, and a failure to make contractual payments for a period of greater than 120 days past due. As of March 31, 2026 and December 31, 2025, the Company had $12 and $9 , respectively, in expected credit losses that have been recognized on receivables from contracts with customers.
As of March 31, 2026, the Company assessed that there is a concentration of credit risk, as 21 % of the Company’s accounts receivable were due from one customer with an established credit history with the Company. As of December 31, 2025, 16 % of the Company’s accounts receivable were due from one customer with an established credit history with the Company.
The Company sells products to a limited number of major customers. Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s net revenue before excise taxes. During the three months ended March 31, 2026, the Company earned a total net revenue before excise taxes of $24,597 from two major customers, together accounting for 42 % of the Company’s total net revenue before excise taxes. During the three months ended March 31, 2025, the Company earned a total net revenue before excise taxes of $17,751 from two major customers, together accounting for 42 % of the Company’s total net revenue before excise taxes.
(g)Adoption of new accounting pronouncement
In July 2025, the Financial Accounting Standards Board issued ASU 2025-05, Financial Instruments—Credit Losses (Topic 326): Measurement of Credit Losses for Accounts Receivable and Contract Assets (“ASU 2025-05”). ASU 2025-05 is effective for annual reporting periods beginning after December 15, 2025, and interim reporting periods within those annual reporting periods, with early adoption permitted. Entities should apply the new guidance prospectively. This ASU effectively simplifies the expected credit loss analysis on accounts receivable and contract assets. Entities may now elect a practical expedient that assumes that current conditions as of the balance sheet date will not change for the remaining life of the asset when evaluating the likelihood of repayment. The adoption of ASU 2025-05 did not have a material effect on the Company’s condensed consolidated financial statements.
9
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| (In thousands of U.S. dollars, except share amounts) | Table of Contents | ||||
(h)New accounting pronouncements not yet adopted
In November 2024, the Financial Accounting Standards Board issued ASU 2024-03, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40) Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2024-03”). ASU 2024-03 adds an obligation under ASC 220-40 to require a footnote disclosure about specific expenses by requiring public business entities to disaggregate, in a tabular presentation, each relevant expense caption on the face of the income statement that includes any of the following natural expenses: (1) purchases of inventory, (2) employee compensation, (3) depreciation, (4) intangible asset amortization, and (5) depreciation, depletion, and amortization recognized as part of oil and gas-producing activities or other types of depletion expenses. The tabular disclosure would also include certain other expenses, when applicable. ASU 2024-03 does not change or remove existing expense disclosure requirements; however, it may affect where that information appears in the footnotes to the financial statements. ASU 2024-03 is effective for fiscal years beginning after December 15, 2026, and interim periods within fiscal years beginning after December 15, 2027. Early adoption is permitted, and applicable entities are required to adopt ASU 2024-03 prospectively; however, companies are permitted to apply the amendments in ASU 2024-03 retrospectively. The Company does not expect the adoption of ASU 2024-03 to have a material impact on its consolidated financial statements. In January 2025, the effective date was further clarified with the issuance of ASU 2025-01, Income Statement—Reporting Comprehensive Income—Expense Disaggregation Disclosures (Subtopic 220-40): Clarifying the Effective Date (“ASU 2025-01”). No guidance was changed with ASU 2025-01, but the issuance simply ensures that all public business entities have a clear and consistent timeline for implementing the enhanced expense disaggregation disclosures.
In December 2025, the Financial Accounting Standards Board issued ASU 2025-11, Interim Reporting (Topic 270): Improvements to Interim Disclosure Requirements. The ASU clarifies and reorganizes existing interim reporting guidance to improve its operability and consistency, primarily by emphasizing that interim disclosures should focus on significant changes since the most recent annual reporting period. The amendments do not change the recognition or measurement of amounts reported in the financial statements. The guidance is effective for interim reporting periods within annual reporting periods beginning after December 15, 2027. The adoption of ASU 2025-11 is not expected to have a material impact on the Company’s consolidated financial statements.
2. Inventory, net
Inventory, net is comprised of the following items:
| As of March 31, 2026 | December 31, 2025 | |||||||||||||
| Raw materials | $ | $ | ||||||||||||
| Work-in-progress | ||||||||||||||
| Finished goods | ||||||||||||||
| Supplies and consumables | ||||||||||||||
| Total | $ | $ | ||||||||||||
As a result of the transaction by which we obtained majority control of the board of directors of Cronos GrowCo (the “Cronos GrowCo Transaction”), the Company recorded a step-up to Cronos GrowCo’s existing inventory of $5,605 to bring the inventory balance acquired by the Company to its fair value. For the three months ended March 31, 2026 and 2025, the Company recognized nil and $517 , respectively, of this inventory step-up into cost of sales on the condensed consolidated statements of net income (loss) and comprehensive income (loss). As of both March 31, 2026 and December 31, 2025, none of the inventory step-up was remaining in the Company’s inventory on the condensed consolidated balance sheets.
3. Investments
Other investments
Other investments consist of investments in common shares and warrants of companies in the cannabis industry.
Vitura
On February 12, 2025, Vitura Health Limited (“Vitura”) issued an additional 74,814,757 common shares diluting the Company’s ownership in Vitura from approximately 10 % to approximately 8.3 %. As of March 31, 2026, the Company’s ownership percentage in Vitura remained at approximately 8.3 % of its outstanding common shares. The investment is considered an equity security with a readily determinable fair value. Changes in the fair value of the investment are recorded as gain (loss) on revaluation of financial instruments on the condensed consolidated statements of net income (loss) and comprehensive income (loss).
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High Tide Warrant
On July 16, 2025, the Company, as lender, and High Tide Inc. (“High Tide”), as borrower, entered into a loan agreement for junior secured convertible debt with a principal amount of C$30,000 ($21,558 ) and an original issue discount of 16 % (the “High Tide Loan”). Additionally, the Company received a common share purchase warrant (the “High Tide Warrant”) with a five-year term, which is exercisable into up to 3,836,317 common shares (the “Warrant Shares”) of High Tide at an exercise price of C$3.91 per Warrant Share.
The High Tide Warrant is classified as a derivative that is not being held as a hedge and was initially recorded at a fair value of C$6,989 ($5,106 ) to other investments on the condensed consolidated balance sheet on the transaction date. The High Tide Warrant’s fair value is estimated at each reporting date using a Black-Scholes model. Key inputs include the share price and volatility of High Tide common shares, the risk-free rate and the remaining term of the High Tide Warrant. Changes in the fair value of the High Tide Warrant are recorded as income (loss) on revaluation of financial instruments on the condensed consolidated statements of net income (loss) and comprehensive income (loss). See Note 4 “Loans Receivable, net” for discussion of the loan receivable recognized as part of the agreement with High Tide.
The following tables summarize the Company’s other investments activity:
| As of December 31, 2025 | Unrealized loss | Foreign exchange effect | As of March 31, 2026 | ||||||||||||||||||||||||||||||||
| Vitura | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| High Tide Warrant | ( | ( | |||||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
| As of December 31, 2024 | Unrealized loss | Foreign exchange effect | As of March 31, 2025 | ||||||||||||||||||||||||||||||||
| Vitura | $ | $ | ( | $ | $ | ||||||||||||||||||||||||||||||
| $ | $ | ( | $ | $ | |||||||||||||||||||||||||||||||
4. Loans Receivable, net
Loans receivable, net consists of the following:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||
| Current portion of Mucci Promissory Note accrued interest | $ | $ | |||||||||
Total current portion of loans receivable, net | |||||||||||
High Tide Loan | |||||||||||
Mucci Promissory Note | |||||||||||
| Cannasoul Collaboration Loan | |||||||||||
| Add: Long-term portion of accrued interest | |||||||||||
Total long-term portion of loans receivable, net | |||||||||||
| Total loans receivable, net | $ | $ | |||||||||
Mucci Promissory Note
On June 28, 2019, the Company entered into a promissory note receivable agreement (the “Mucci Promissory Note”) for C$16,350 (approximately $11,749 ) with the Cronos GrowCo joint venture partner (“Mucci”). The Mucci Promissory Note is secured by a general security agreement covering all the assets of Mucci. Prior to July 1, 2022, interest accrued on the Mucci Promissory Note was capitalized as part of the principal balance. On September 30, 2022, the Mucci Promissory Note was amended and restated to increase the interest rate from 3.95 % to the Canadian Prime Rate plus 1.25 %, change the interest payments from quarterly to annual, and defer Mucci’s initial cash interest payment from September 30, 2022 to July 1, 2023. On June 20, 2024, the Mucci Promissory Note was amended and restated. As a result, interest accrued on the Mucci Promissory Note between July 1, 2023 and July 1, 2024 was capitalized as part of the principal balance. As of July 1, 2024, interest accruing on the Mucci Promissory Note is required to be paid in cash beginning on July 1, 2025. For both the three months ended March 31, 2026 and 2025, there were no
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Cannasoul Collaboration Loan
The Company holds a variable interest in Cannasoul Lab Services Ltd. (“CLS”). CLS is a wholly owned subsidiary of Cannasoul Analytics Ltd., which has established a commercial cannabis analytical testing laboratory (the “Cannasoul Laboratory”) located on the premises of Cronos Israel (the “Cannasoul Collaboration”). Cronos Israel agreed to advance up to ILS 8,297 ($2,639 ) by a non-recourse loan (the “Cannasoul Collaboration Loan”) to CLS over a period of two years from April 1, 2020 for the capital and operating expenditures of the Cannasoul Laboratory. The Cannasoul Collaboration Loan bears interest at 3.5 % annually. Cronos Israel will receive 70 % of the profits of the Cannasoul Laboratory until such time as it has recovered 150 % of the amounts advanced to CLS, after which time it will receive 50 % of the Cannasoul Laboratory profits. As a result, the Company is exposed to economic variability from CLS’s performance. The Company does not consolidate CLS as it does not have the power to direct the activities that most significantly impact the entity’s economic performance; thus, the Company is not considered the primary beneficiary of the entity. The carrying amount of the Cannasoul Collaboration Loan is recorded under loans receivable and the full amount of the Cannasoul Collaboration Loan, ILS 8,297 , represents the Company’s maximum potential exposure to losses through the Cannasoul Collaboration.
As of both March 31, 2026 and December 31, 2025, CLS has received ILS 8,297 2,639 and $2,604 , respectively), from the Cannasoul Collaboration Loan.
High Tide Loan
On July 16, 2025, the Company, as lender, and High Tide, as borrower, entered into the High Tide Loan. The High Tide Loan bears interest at 4 % per annum, payable in cash quarterly, and provides for conversion of the debt into common shares of High Tide at a price of C$4.20 per common share. The High Tide Loan is convertible only upon the agreement of the Company and High Tide. The High Tide Loan has a term of five years and may be repaid early with no penalty. Additionally, the Company received the High Tide Warrant, which is exercisable into up to 3,836,317 common shares of High Tide at an exercise price of C$3.91 per Warrant Share. See Note 3 “Investments” for discussion of the High Tide Warrant.
The loan receivable was recorded at a fair value as of the transaction date of C$18,591 ($13,359 ) and will be amortized using the effective interest method over the estimated life of the loan. For the three months ended March 31, 2026, High Tide paid $212 in interest. As of March 31, 2026, the High Tide loan receivable included an unamortized discount of $7,373 and an expected credit loss of $4,951 as presented in the tables below.
Credit Quality Indicators
The Company is exposed to credit risk on loan receivables. Credit risk is the risk of loss arising from the failure of borrowers to meet the terms of the contract or otherwise fail to perform as agreed. Because each borrower has distinct risk characteristics, the Company evaluates each loan individually rather than as part of a broader portfolio. The Company routinely reviews its borrowers and assesses their financial health to estimate current expected credit losses. This assessment involves examining historical loss data—including benchmarking risk grades using Moody’s reports across different economic cycles—analyzing asset-specific risks, particularly those unique to the cannabis industry, and evaluating the current financial status and forecasted financial results of each borrower. Furthermore, the Company assigns credit risk ratings through an ordinal logit regression model, which compares borrowers’ credit quality to other rated companies by analyzing key financial metrics such as total assets, debt, revenue, earnings before interest and taxes, and net income.
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| (In thousands of U.S. dollars, except share amounts) | Table of Contents | ||||
Expected credit loss allowances on the Company’s long-term financial assets for the three months ended March 31, 2026 and 2025 were comprised of the following items:
| As of December 31, 2025 | Increase(i) | Foreign exchange effect | As of March 31, 2026 | ||||||||||||||||||||
| Mucci Promissory Note | $ | $ | $ | ( | $ | ||||||||||||||||||
| Cannasoul Collaboration Loan | |||||||||||||||||||||||
High Tide Loan | ( | ||||||||||||||||||||||
| $ | $ | $ | ( | $ | |||||||||||||||||||
| As of December 31, 2024 | Increase(ii) | Foreign exchange effect | As of March 31, 2025 | ||||||||||||||||||||
| Mucci Promissory Note | |||||||||||||||||||||||
| Cannasoul Collaboration Loan | ( | ||||||||||||||||||||||
| $ | $ | $ | ( | $ | |||||||||||||||||||
(i)During the three months ended March 31, 2026, $6 was recorded as an increase to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses. During the three months ended March 31, 2026, $106 was recorded as a change in allowance for credit loss on non-operating loan on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our allowance for expected credit loss on the High Tide Loan.
(ii)During the three months ended March 31, 2025, $9 was recorded as an increase to general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss) as a result of adjustments to our expected credit losses.
5. Property, Plant and Equipment, net
Property, plant and equipment, net consisted of the following:
| As of March 31, 2026 | As of December 31, 2025 | |||||||||||||
| Cost | ||||||||||||||
| Land | $ | $ | ||||||||||||
| Building and leasehold improvements | ||||||||||||||
| Machinery and Equipment | ||||||||||||||
| Furniture and fixtures | ||||||||||||||
| Construction in progress | ||||||||||||||
| Total Cost | ||||||||||||||
| Less: accumulated depreciation | ( | ( | ||||||||||||
| Less: accumulated impairment charges | ( | ( | ||||||||||||
| Property, Plant and Equipment, net | $ | $ | ||||||||||||
For the three months ended March 31, 2026, depreciation expense on property, plant and equipment was $3,097 . For the three months ended March 31, 2025, depreciation expense on property, plant and equipment was $2,144 . This depreciation expense was included in cost of sales as well as depreciation and amortization in operating expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss).
As of March 31, 2026 and December 31, 2025, the Company had $465 and $760 , respectively, of unpaid purchases of property, plant and equipment accrued in accounts payable on the condensed consolidated balance sheets.
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6. Goodwill and Intangible Assets, net
(a) Goodwill
Goodwill is comprised of the following items as of March 31, 2026 and December 31, 2025:
| As of March 31, 2026 | |||||||||||||||||
| Cost | Accumulated Impairment Charges | Net | |||||||||||||||
| Peace Naturals | $ | $ | $ | ||||||||||||||
| Cronos GrowCo | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
| As of December 31, 2025 | |||||||||||||||||
| Cost | Accumulated Impairment Charges | Net | |||||||||||||||
| Peace Naturals | $ | $ | $ | ||||||||||||||
| Cronos GrowCo | |||||||||||||||||
| $ | $ | $ | |||||||||||||||
(b) Intangible assets, net
Intangible assets, net are comprised of the following items as of March 31, 2026 and December 31, 2025:
| As of March 31, 2026 | |||||||||||||||||||||||
| Cost | Accumulated amortization | Accumulated impairment charges | Net | ||||||||||||||||||||
| Software | $ | $ | ( | $ | ( | $ | |||||||||||||||||
| Health Canada licenses | ( | ( | |||||||||||||||||||||
Israeli codes(i) | ( | — | |||||||||||||||||||||
Know-how(ii) | ( | — | |||||||||||||||||||||
| Total definite-lived intangible assets | ( | ( | |||||||||||||||||||||
Lord Jones® brand | — | ( | |||||||||||||||||||||
| Trademarks | — | ( | |||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ( | $ | |||||||||||||||||
| As of December 31, 2025 | |||||||||||||||||||||||
| Cost | Accumulated amortization | Accumulated impairment charges | Net | ||||||||||||||||||||
| Software | $ | $ | ( | $ | ( | $ | |||||||||||||||||
| Health Canada licenses | ( | ( | |||||||||||||||||||||
Israeli codes(i) | ( | — | |||||||||||||||||||||
Know-how(ii) | ( | — | |||||||||||||||||||||
| Total definite-lived intangible assets | ( | ( | |||||||||||||||||||||
Lord Jones® brand | — | ( | |||||||||||||||||||||
| Trademarks | — | ( | |||||||||||||||||||||
| Total intangible assets | $ | $ | ( | $ | ( | $ | |||||||||||||||||
(i)The Israeli codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities.
(ii)Know-how was acquired as part of the Cronos GrowCo Transaction. Amortization costs associated with the know-how intangible asset are recorded to cost of sales on the condensed consolidated statements of net income (loss) and comprehensive income (loss).
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| (In thousands of U.S. dollars, except share amounts) | Table of Contents | ||||
As of March 31, 2026, the estimated future amortization of definite-lived intangible assets is as follows:
| As of March 31, 2026 | ||||||||
| Remainder of 2026 (9 months) | $ | |||||||
| 2027 | ||||||||
| 2028 | ||||||||
| 2029 | ||||||||
| 2030 | ||||||||
| Thereafter | ||||||||
| $ | ||||||||
7. Restructuring
In the first quarter of 2022, the Company initiated a strategic plan to realign the business around its brands, centralize functions and evaluate the Company’s supply chain (the “Realignment”). As part of the Realignment, on February 28, 2022, the Company’s Board of Directors (the “Board”) approved plans to leverage the Company’s strategic partnerships to improve supply chain efficiencies and reduce manufacturing overhead by exiting its production facility in Stayner, Ontario, Canada (the “Peace Naturals Campus”). On February 27, 2023, the Board approved revisions to the Realignment, under which the Company was maintaining select components of its operations at the Peace Naturals Campus, namely distribution warehousing, certain research and development activities and manufacturing of certain of the Company’s products. In the third quarter of 2023, the Board approved revisions to the Realignment to wind-down operations at the Company’s Winnipeg, Manitoba facility (the “Cronos Fermentation Facility”), list the Cronos Fermentation Facility assets for sale, and implement additional organization-wide cost reductions as the Company continues its Realignment initiatives. On November 26, 2023, the Company entered into an agreement for the sale and leaseback of the Peace Naturals Campus, which was subsequently terminated pursuant to its terms during the second quarter of 2024. The Company plans to continue and expand operations at the Peace Naturals Campus. In the first quarter of 2025, the Company continued its Realignment initiatives to transform its IT infrastructure and finance departments to drive long-term cost efficiencies, improve cross-functional collaboration, and support global scalability. These actions included leadership transitions, consolidation of certain roles, and assessment of, and investment in, critical IT infrastructure. The Realignment initiatives are intended to position the Company to drive profitable and sustainable growth over time.
During the three months ended March 31, 2026, the Company incurred $484 of restructuring costs in connection with the Realignment. During the three months ended March 31, 2025, the Company incurred $555 of restructuring costs in connection with the Realignment. Charges related thereto include employee-related costs such as severance and other termination benefits, as well as IT infrastructure and finance transformation costs associated with the Realignment.
The following tables summarize the Company’s restructuring activity for the three months ended March 31, 2026 and three months ended March 31, 2025:
| Accrual as of December 31, 2025 | Expenses | Payments/Write-offs | Accrual as of March 31, 2026 | ||||||||||||||||||||
| Employee Termination Benefits | $ | $ | $ | ( | $ | ||||||||||||||||||
| Other Restructuring Costs | ( | ||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||||||||
| Accrual as of December 31, 2024 | Expenses | Payments/Write-offs | Accrual as of March 31, 2025 | ||||||||||||||||||||
| Employee Termination Benefits | $ | $ | $ | $ | |||||||||||||||||||
| Other Restructuring Costs | ( | ||||||||||||||||||||||
| Total | $ | $ | $ | ( | $ | ||||||||||||||||||
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8. Share-based Compensation
(a)Share-based award plans
The Company has granted stock options, restricted share units (“RSUs”) and deferred share units (“DSUs”) to employees and non-employee directors under the 2020 Omnibus Equity Incentive Plan dated March 29, 2020 (the “2020 Omnibus Plan”) and the DSU Plan dated August 10, 2019 (the “DSU Plan”).
The following table summarizes the total share-based compensation expense associated with the Company’s stock options, RSUs and DSUs for the three months ended March 31, 2026 and 2025:
| Three months ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Stock options | $ | $ | |||||||||||||||||||||
| RSUs | |||||||||||||||||||||||
DSUs | ( | ||||||||||||||||||||||
| Total share-based compensation | $ | $ | |||||||||||||||||||||
Share-based compensation for the three months ended March 31, 2026 included a gain of $43 associated with the Company’s DSUs. For the three months ended March 31, 2025, a gain of $117 was included in revaluation of financial instruments in the Company’s condensed consolidated statements of net income (loss) and comprehensive income (loss), related to the revaluation of DSUs.
(b)Stock options
Vesting conditions for grants of options are determined by the Compensation Committee of the Board. The typical vesting for stock option grants made under the 2020 Omnibus Plan is annual vesting over three to five years with a maximum term of ten years . The 2020 Omnibus Plan does not authorize grants of options with an exercise price below fair market value.
The following is a summary of the changes in stock options for the three months ended March 31, 2026 and 2025:
Weighted-average exercise price (C$) (i) | Number of options | Weighted-average remaining contractual term (years) | |||||||||||||||
| Balance as of December 31, 2025 | $ | ||||||||||||||||
| Balance as of March 31, 2026 | $ | ||||||||||||||||
| Exercisable as of March 31, 2026 | $ | ||||||||||||||||
Weighted-average exercise price (C$) (i) | Number of options | Weighted-average remaining contractual term (years) | |||||||||||||||
| Balance as of December 31, 2024 | $ | ||||||||||||||||
| Balance as of March 31, 2025 | $ | ||||||||||||||||
| Exercisable as of March 31, 2025 | $ | ||||||||||||||||
(i)The weighted-average exercise price reflects the conversion of foreign currency-denominated stock options translated into C$ using the average foreign exchange rate as of the date of issuance.
The following table summarizes stock options outstanding:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||||||||||||||
| 2020 Omnibus Plan | |||||||||||||||||||||||
| Total stock options outstanding | |||||||||||||||||||||||
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(c)Restricted share units
The following is a summary of the changes in RSUs for the three months ended March 31, 2026 and 2025:
Weighted-average grant date fair value (C$)(ii) | Number of RSUs | ||||||||||
| Balance as of December 31, 2025 | $ | ||||||||||
Granted(i) | |||||||||||
| Vested and issued | ( | ||||||||||
| Balance as of March 31, 2026 | $ | ||||||||||
Weighted-average grant date fair value (C$)(ii) | Number of RSUs | ||||||||||
| Balance as of December 31, 2024 | $ | ||||||||||
Granted(i) | |||||||||||
| Vested and issued | ( | ||||||||||
| Cancellation and forfeitures | ( | ||||||||||
| Balance as of March 31, 2025 | $ | ||||||||||
(i)RSUs granted in the period vest annually in equal installments over a three-year period from the grant date. All RSUs are subject to such holder’s continued employment through each vesting date. The vesting of such RSUs is not subject to the achievement of any performance criteria.
(ii)The weighted-average grant date fair value reflects the conversion of foreign currency-denominated RSUs translated into C$ using the foreign exchange rate as of the date of issuance.
(d)Deferred share units
The following is a summary of the changes in DSUs for the three months ended March 31, 2026 and 2025:
| Financial liability | Number of DSUs | ||||||||||
| Balance as of December 31, 2025 | $ | ||||||||||
| Gain on revaluation | ( | — | |||||||||
Foreign exchange effect | ( | — | |||||||||
| Balance as of March 31, 2026 | $ | ||||||||||
| Financial liability | Number of DSUs | ||||||||||
| Balance as of December 31, 2024 | $ | ||||||||||
| Gain on revaluation | ( | — | |||||||||
Foreign exchange effect | ( | — | |||||||||
| Balance as of March 31, 2025 | $ | ||||||||||
9. Share Repurchase Program
On May 7, 2025, the Board authorized a share repurchase program of up to $50,000 . The repurchase program commenced on May 14, 2025 and is expected to terminate on May 13, 2026, unless earlier terminated. Repurchases under the program may be made from time to time, either through open market purchases at then-prevailing market prices through the facilities of the Nasdaq or other U.S. published markets, privately negotiated transactions or otherwise. Open market repurchases will not exceed 19,270,951 common shares, being 5 % of the outstanding common shares as of May 7, 2025. The timing and amount of repurchases are subject to market conditions, compliance with applicable laws and regulations and any other factors management of the Company may deem relevant. The program does not obligate Cronos to acquire any specific dollar amount or number of common shares and may be modified, suspended, or discontinued at any time.
During the three months ended March 31, 2026, the Company repurchased 6,365,700 common shares for $16,730 , inclusive of commissions and excise taxes. All common shares repurchased under this program were retired and cancelled upon settlement. As a result, the repurchased common shares were removed from issued and outstanding share capital, reducing the number of common shares outstanding. The value of the retired common shares was charged against share capital and additional paid-in capital. The Company funded the repurchases using available cash resources.
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Subsequent to March 31, 2026, the Board authorized a new share repurchase program intended to succeed the Company’s existing share repurchase program. See Note 15, “Subsequent Events.”
10. Commitments and Contingencies
(a)Commitments
There have been no material changes in the information regarding commitments as disclosed in the Company’s Annual Report.
(b)Contingencies
The Company is subject to various legal proceedings in the ordinary course of its business and in connection with its marketing, distribution and sale of its products. Many of these legal proceedings are in the early stages of litigation and seek damages that are unspecified or not quantified. Although the outcome of these matters cannot be predicted with certainty, the Company does not believe these legal proceedings, individually or in the aggregate, will have a material adverse effect on its consolidated financial condition but could be material to its results of operations for any particular reporting period depending, in part, on its results for that period.
(i)Class action complaints relating to restatement of 2019 interim financial statements
On March 11 and 12, 2020, two alleged shareholders of the Company separately filed two putative class action complaints in the U.S. District Court for the Eastern District of New York against the Company and its Chief Executive Officer and former Chief Financial Officer. The court consolidated the cases, and the consolidated amended complaint alleges violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5, promulgated thereunder, against all defendants, and Section 20(a) of the Exchange Act against the individual defendants. The consolidated amended complaint generally alleges that certain of the Company’s prior public statements about revenue and internal controls were incorrect based on the Company’s disclosures relating to the Audit Committee of the Board of Directors’ review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel. The consolidated amended complaint does not quantify a damage request. The defendants moved to dismiss on February 8, 2021. On November 17, 2023, the court entered an order granting the motion and dismissed the case with prejudice. On December 1, 2023, the shareholder plaintiffs sought reconsideration of the dismissal, requesting that the court instead dismiss the action without prejudice and permit the plaintiffs to seek leave to further amend the complaint. On December 3, 2024, the court issued an opinion and order granting the plaintiffs’ motion for reconsideration, and on January 10, 2025, the plaintiffs filed a second amended class action complaint, which the defendants moved to dismiss. On May 30, 2025, the parties jointly informed the court that they had reached an agreement-in-principle to settle the action and the court then stayed all deadlines in the action. On December 2, 2025, the plaintiffs moved for preliminary approval of the proposed settlement. The proposed settlement includes a payment of $10 million to be distributed, after fees and expenses, to members of the settlement class and a release by class members of their claims, including in the New York and Ontario actions, based on shares acquired on the Nasdaq or any other public U.S. market for trading stocks during the class period. The release would apply to claims relating to shares acquired on the Nasdaq or any other public U.S. market during the class period but would not resolve claims of persons who acquired shares on the TSX. The proposed settlement remains subject to preliminary and final approval by the court and certain other conditions not within the Company’s control. One of the shareholder plaintiffs in the Ontario action has informed the court that he intends to oppose approval of the settlement.
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On June 3, 2020, an alleged shareholder filed a Statement of Claim, as amended on August 12, 2020, in the Ontario Superior Court of Justice in Toronto, Ontario, Canada, seeking, among other things, an order certifying the action as a class action on behalf of a putative class of shareholders and damages of an unspecified amount. The Amended Statement of Claim named (i) the Company, (ii) its Chief Executive Officer, (iii) former Chief Financial Officer, (iv) former Chief Financial Officer and Chief Commercial Officer, and (v) current and former members of the Board as defendants and alleged breaches of the Ontario Securities Act, oppression under the Ontario Business Corporations Act and common law misrepresentation. The Amended Statement of Claim generally alleged that certain of the Company’s prior public statements about revenue and internal controls were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of the Board of Directors was conducting a review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel, and the Company’s subsequent restatement. The Amended Statement of Claim did not quantify a damage request. On June 28, 2021, the Court dismissed motions brought by the plaintiff for leave to commence a claim for misrepresentation under the Ontario Securities Act and for certification of the action as a class action. The plaintiff appealed the Court’s dismissal of the motions only with respect to the Company, the Chief Executive Officer, and the now former Chief Financial Officer; the remaining defendants were dismissed from the matter with prejudice and the Company and all individual defendants agreed not to seek costs from the plaintiff in connection with the dismissal of the motions. On September 26, 2022, the Court of Appeal for Ontario reversed the Superior Court’s dismissal of the leave and certification motions, granted the plaintiff leave to proceed to bring a claim for misrepresentation under the Ontario Securities Act, and remitted the certification motion back to the Superior Court. On April 11, 2023, the plaintiff filed a Fresh as Amended Statement of Claim, which reflected the dismissal of the defendants for which an appeal was not sought, the removal of the claims for oppression under the Ontario Business Corporations Act and common law misrepresentation, as well as shortening the proposed class period. On October 10, 2023, the Superior Court certified the action on behalf of a class of persons or entities who acquired shares in the secondary market, including on the TSX and Nasdaq, during the period from May 9, 2019 to March 30, 2020, other than certain excluded persons.
(ii)Regulatory reviews relating to restatements
On October 24, 2022, the Company announced regulatory settlements as follows:
SEC Settlement
On October 24, 2022, the SEC issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8(a) of the Securities Act of 1933, as amended (the “Securities Act”) and Section 21(c) of the Exchange Act, Making Findings, and Imposing a Cease-and-Desist Order (the “Settlement Order”) resolving the restatements of our 2019 and 2021 interim financial statements (the “Restatements”).
The Company agreed to settle with the SEC, without admitting or denying the allegations described in the Settlement Order. The Settlement Order fully and finally disposed of the investigation of the Company by the SEC into the Restatements without the payment of any civil penalty or other amount.
The Settlement Order required the Company to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Sections 10(b), 13(a), 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 13a-13, 13a-15(a), 13a-16 and 12b-20 thereunder.
As a result of the Settlement Order, the Company (i) lost its status as a well-known seasoned issuer for a period of three years, (ii) is unable to rely on the private offering exemptions provided by Regulations A and D under the Securities Act for a period of five years and (iii) was unable to rely on the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 for a period of three years.
OSC Settlement
On October 24, 2022, the Ontario Capital Markets Tribunal approved a settlement agreement (the “Settlement Agreement”) between the Company and the staff of the Ontario Securities Commission (the “OSC”), resolving the Restatements.
Pursuant to the terms of the Settlement Agreement, which fully and finally disposed the investigation of the Company by the OSC, Cronos agreed to pay a total of C$1.34 million to fully settle the matter, and acknowledged that it had failed to comply with the requirement under Section 77 of the Ontario Securities Act to file interim financial reports in the manner set out therein and had acted in a manner contrary to the public interest.
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(iii)Litigation and regulatory inquiries relating to marketing, distribution, import and sale of products
On April 17, 2023, a group of plaintiffs led by the Green Leaf (Ale Yarok) political party filed a Statement of Claim and Request for Approval of a Class Action on behalf of a purported class of Israeli cannabis consumers in the District Court of Tel Aviv, Israel, against 26 cannabis-related parties, including three Cronos Israel entities. The Statement of Claim alleges that the defendants violated certain laws relating to the marketing of medical cannabis products, including marketing to unlicensed cannabis consumers. The lawsuit seeks a total of ILS 420 million. The Cronos Israel defendants moved to dismiss the action on August 13, 2023. The court granted the motion (and similar motions filed by other defendants) on May 16, 2024, dismissing the plaintiffs’ petition for class certification without prejudice and their individual claims with prejudice, and ordering the plaintiffs to pay ILS 10 thousand to each of the defendants for costs. On July 14, 2024, the plaintiffs appealed to the Supreme Court of Israel seeking to overturn both the dismissal of plaintiffs’ individual claims and the award of costs. The appeal is pending.
On January 18, 2024, the Company was notified that the Trade Levies Commissioner of the Israel Ministry of Economy and Industry initiated a public investigation of alleged dumping of medical cannabis imports from Canada into Israel. On July 9, 2024, the Commissioner announced a preliminary determination proposing to impose an anti-dumping duty on Canadian licensed producers. Under the proposal, the Company would have been subject to a proposed duty of 369%. The Commissioner determined not to impose a provisional duty at that time pending the conclusion of the Ministry’s investigation. The Company responded to requests for information from the Ministry. On November 10, 2024, the Trade Levies Commissioner published final findings under which the Company would be subject to a proposed duty of 175%. The Commissioner’s findings were then evaluated by an ad hoc advisory committee. On December 12, 2024, the Minister of Economy announced a conflict of interest and recused himself from the evaluation of whether to impose a duty. On April 10, 2025, notwithstanding the previous recusal, the Minister of Finance released a memorandum opposing the imposition of the duty, which acted as a veto of the Minister of Economy’s approval. On April 29, 2025, the Ministry of Justice issued a memorandum sustaining the Minister of Finance’s veto. A provisional duty is not being imposed at this time. The Company cannot predict further proceedings or determinations of the Ministers of Economy or Finance, or the Finance Committee or the Knesset and cannot predict whether a duty will ultimately be imposed on its products.
On July 25, 2024, a group of cannabis cultivators filed an administrative petition in the District Court of Jerusalem, Israel, against the Trade Levies Commissioner and certain Israeli and Canadian businesses. The administrative petition sought a court order requiring the Trade Levies Commissioner to impose a temporary duty on cannabis imported from Canada during the pendency of the investigation until the date on which a final determination is made by the Ministry of Economy whether to impose a duty. On September 9, 2024, the Company filed a motion to join the litigation; the court granted the Company’s motion on September 23, 2024. On February 6, 2025, the court dismissed the administrative petition. On June 12, 2025, a group of cannabis cultivators initiated a second administrative proceeding against the government and certain importers, including the Company’s subsidiaries in Israel, asking the court to declare the Minister of Finance’s veto void and order the Minister of Economy to impose an anti-dumping duty. On June 26, 2025, the cultivators moved the court for an interim injunction, which the court denied on July 13, 2025. On December 18, 2025, the court dismissed the administrative petition. The deadline for petitioners to appeal was February 16, 2026.
We expect litigation and regulatory proceedings relating to the marketing, distribution, import and sale of our products to increase.
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11. Segment Information
Segment reporting is prepared on the same basis that the CODM manages the business, makes operating decisions and assesses the Company’s performance. The CODM is the Company’s Chief Executive Officer. The Company operates as a single segment with the purpose of providing high-quality cannabis products to adult-use, wholesale, and medical market customers globally. The consolidated results are regularly reviewed by the CODM to assess the performance of the Company’s single segment operations and make decisions regarding the allocation of resources. The CODM reviews adjusted earnings (loss) before interest, tax, depreciation and amortization (“Adjusted EBITDA”) as the measure of segment profit or loss to evaluate performance of and allocate resources for its reportable segment. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, and non-cash items and items that do not reflect management’s assessment of ongoing business performance. The CODM believes Adjusted EBITDA provides useful insight into underlying business trends and results and facilitates comparison of period-over-period results. In addition, certain significant expenses are regularly reviewed by the CODM and considered for business decisions and allocation of resources; these significant expenses include: sales and marketing, research and development, general and administrative, depreciation and amortization, and share-based compensation expense, which are presented within operating expenses on the Company’s condensed consolidated statements of net income (loss) and comprehensive income (loss). Furthermore, the CODM regularly reviews total cash and short-term investments to aid in capital allocation decisions.
The table below sets forth consolidated Adjusted EBITDA and significant expenses for our single segment:
| Three months ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Adjusted EBITDA | $ | $ | |||||||||||||||||||||
| Significant expenses: | |||||||||||||||||||||||
| Sales and marketing | |||||||||||||||||||||||
| Research and development | |||||||||||||||||||||||
| General and administrative, excluding transaction costs | |||||||||||||||||||||||
| Share-based compensation | |||||||||||||||||||||||
| Depreciation and amortization | |||||||||||||||||||||||
| Total significant expenses | |||||||||||||||||||||||
| Restructuring costs | |||||||||||||||||||||||
Transaction costs | |||||||||||||||||||||||
| Total operating expense | $ | $ | |||||||||||||||||||||
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The following tables set forth a reconciliation of net income as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated:
| Three months ended March 31, 2026 | |||||
| Net income | $ | ||||
| Interest income, net | ( | ||||
| Income tax provision | |||||
| Depreciation and amortization | |||||
| EBITDA | |||||
Loss on revaluation of financial instruments(i) | |||||
| Foreign currency transaction gain | ( | ||||
Transaction costs(ii) | |||||
Other, net(iii) | ( | ||||
Restructuring costs(iv) | |||||
Share-based compensation(v) | |||||
Restatement litigation costs(vi) | |||||
Israel Ministry of Economy and Industry dumping inquiry expense(vii) | |||||
Change in allowance for credit loss on non-operating loan(viii) | |||||
| Adjusted EBITDA | $ | ||||
| Three months ended March 31, 2025 | |||||
| Net income | $ | ||||
| Interest income, net | ( | ||||
| Income tax benefit | ( | ||||
| Depreciation and amortization | |||||
| EBITDA | |||||
Gain on revaluation of financial instruments(i) | ( | ||||
| Foreign currency transaction gain | ( | ||||
Transaction costs(ii) | |||||
Other, net(iii) | ( | ||||
Restructuring costs(iv) | |||||
Share-based compensation(v) | |||||
Restatement litigation costs(vi) | |||||
Inventory step-up recorded to cost of sales(ix) | |||||
Israel Ministry of Economy and Industry dumping inquiry expense(vii) | |||||
| Adjusted EBITDA | $ | ||||
(i)For the three months ended March 31, 2026, the loss on revaluation of financial instruments was driven by a loss related to the Company’s High Tide Warrant and the Company’s equity securities in Vitura. For the three months ended March 31, 2025, the gain on revaluation of financial instruments related primarily to the revaluation of the Company’s DSU liability, partially offset by a loss on the Company’s equity securities in Vitura.
(ii)For the three months ended March 31, 2026, transaction costs represented fees related to the pending acquisition of CanAdelaar B.V. For the three months ended March 31, 2025, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction. These costs are included in general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss).
(iii)For the three months ended March 31, 2026, other, net related to rental income. For the three months ended March 31, 2025, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.
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(iv)For the three months ended March 31, 2026 and 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 7 “Restructuring.”
(v)For the three months ended March 31, 2026, share-based compensation related to the expenses of share-based compensation awarded to employees and DSUs issued to our Board of Directors, each under the Company’s share-based award plans, as described in Note 8 “Share-based Compensation.” For the three months ended March 31, 2025, share-based compensation related to the expenses of share-based compensation awarded to employees under the Company’s share-based award plans, as described in Note 8 “Share-based Compensation.”
(vi)For the three months ended March 31, 2026 and 2025, restatement litigation costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement.
(vii)For the three months ended March 31, 2026 and 2025, Israel Ministry of Economy and Industry dumping inquiry expense included expenditures relating to the regulatory inquiry about alleged dumping of medical cannabis products in Israel and related litigation and external relations expenses.
(viii)For the three months ended March 31, 2026, change in allowance for credit loss on non-operating loan represents the allowance recognized on the High Tide loan receivable, as described in Note 4, “Loans Receivable, net.”
(ix)For the three months ended March 31, 2025, inventory step-up recorded to cost of sales represents the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the condensed consolidated statements of net income (loss) and comprehensive income (loss).
The following tables present the Company’s revenue by major product category for our single segment:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Cannabis flower | $ | $ | |||||||||
| Cannabis extracts | |||||||||||
| Other | |||||||||||
| Net revenue | $ | $ | |||||||||
Net revenue attributed to a geographic region based on the location of the customer was as follows:
| Three months ended March 31, | |||||||||||
| 2026 | 2025 | ||||||||||
| Canada | $ | $ | |||||||||
| Israel | |||||||||||
| Other countries | |||||||||||
| Net revenue | $ | $ | |||||||||
The table below sets forth total cash and cash equivalents and short-term investments for our single segment:
| As of March 31, 2026 | As of December 31, 2025 | |||||||||||||
| Total cash and cash equivalents and short-term investments | $ | $ | ||||||||||||
Property, plant and equipment, net were physically located in the following geographic regions:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||
| Canada | $ | $ | |||||||||
| Israel | |||||||||||
| Total | $ | $ | |||||||||
Intangibles, net were physically located in the following geographic regions:
| As of March 31, 2026 | As of December 31, 2025 | ||||||||||
| Canada | $ | $ | |||||||||
| Israel | |||||||||||
| Total | $ | $ | |||||||||
For additions to our property, plant and equipment, net and intangibles, net for the three months ended March 31, 2026 and March 31, 2025, please see Note 5 “Property, Plant and Equipment, net” and the condensed consolidated statements of cash flows.
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12. Income per Share
Basic and diluted income (loss) per share are calculated as follows (in thousands, except share and per share amounts):
| Three months ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Basic income per share computation | |||||||||||||||||||||||
| Net income attributable to the shareholders of Cronos Group | $ | $ | |||||||||||||||||||||
| Weighted-average number of common shares outstanding for computation for basic income per share | |||||||||||||||||||||||
| Basic income per share | $ | $ | |||||||||||||||||||||
| Diluted income per share computation | |||||||||||||||||||||||
| Net income attributable to the shareholders of Cronos Group | $ | $ | |||||||||||||||||||||
| Weighted-average number of common shares outstanding used in the computation of basic income per share | |||||||||||||||||||||||
| Dilutive effect of stock options | |||||||||||||||||||||||
| Dilutive effect of RSUs | |||||||||||||||||||||||
| Dilutive effect of Top-up Rights – market price | |||||||||||||||||||||||
| Weighted-average number of common shares for computation of diluted income from continuing operations per share | |||||||||||||||||||||||
| Diluted income per share | $ | $ | |||||||||||||||||||||
For the three months ended March 31, 2026 and 2025, total securities of 1,288,578 and 18,273,597 , respectively, were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive.
13. Fair Value Measurements
The Company complies with ASC 820 Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values are determined by:
•Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities.
•Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves.
•Level 3 inputs are unobservable data points for the asset or liability, and include situations where there is little, if any, market activity for the asset or liability.
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The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis:
| March 31, 2026 | |||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | ||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | |||||||||||||||||||
Other investments(i)(ii) | |||||||||||||||||||||||
| December 31, 2025 | ||||||||||||||||||||||||||
| Level 1 | Level 2 | Level 3 | Total | |||||||||||||||||||||||
| Cash and cash equivalents | $ | $ | $ | $ | ||||||||||||||||||||||
Other investments(i)(ii) | ||||||||||||||||||||||||||
(i)As of March 31, 2026 and December 31, 2025, the Company’s influence on Vitura is deemed non-significant and the investment is considered an equity security with a readily determinable fair value. See Note 3 “Investments” for further information.
(ii)As of March 31, 2026 and December 31, 2025, the fair value of the Company’s warrants in High Tide is estimated using a Black-Scholes model with key inputs including share price and volatility of High Tide common shares, the risk-free rate and the remaining term of the High Tide Warrant. See Note 3 “Investments” for further information.
There were no transfers between fair value categories during the periods presented.
14. Related Party Transactions
(a)Vendor Agreement
In November 2022, the Company entered into an agreement with an external vendor whereby the vendor would provide certain manufacturing services to the Company. The vendor then subcontracted out a portion of those services to another company whose chief executive officer is an immediate family member of an executive of the Company. In November 2023, the Company negotiated a direct contract with the related-party vendor. In April 2026, subsequent to the period end, this vendor restructured its management team and, as a result, the vendor no longer meets the definition of a related party to the Company.
| Three months ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Related party – purchases of products and services | $ | $ | |||||||||||||||||||||
The Company had outstanding accounts payable related to the agreement of $248 and $208 as of March 31, 2026 and December 31, 2025, respectively.
(b)Consulting Agreement
In connection with the Cronos GrowCo Transaction, Cronos GrowCo entered into a consulting services agreement with a consulting firm managed by a member of the group of investors holding the remaining 50 % ownership of Cronos GrowCo, pursuant to which the consulting firm provides management services to Cronos GrowCo. During the three months ended March 31, 2026 and 2025, the Company incurred $437 and $209 of expense under this agreement. As of both March 31, 2026 and December 31, 2025, the Company had no
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15. Subsequent Events
Share Repurchase Authorization
On May 8, 2026, the Board unanimously authorized a share repurchase program of up to $50,000 , which is intended to succeed the Company’s existing share repurchase program upon its scheduled expiration on May 13, 2026. The share repurchase program is expected to commence on May 14, 2026, and terminate on May 13, 2027, unless earlier terminated. Repurchases under the program may be made from time to time, either through open market purchases at then-prevailing market prices through the facilities of the Nasdaq Global Market or other U.S. published markets, privately negotiated transactions or otherwise. Open market repurchases will be limited to 5 % of the number of common shares outstanding as of the applicable measurement time, the maximum amount permitted by applicable Canadian securities laws. The timing and amount of repurchases are subject to market conditions, compliance with applicable laws and regulations and any other factors management of the Company may deem relevant. The program does not obligate Cronos to acquire any specific dollar amount or number of shares and may be modified, suspended, or discontinued at any time.
The Company intends to fund repurchases using available cash resources. All shares repurchased under this program will be retired and cancelled upon settlement. As a result, the repurchased shares will be removed from issued and outstanding share capital, reducing the number of shares outstanding. The value of the retired shares will be charged against share capital and additional paid-in capital and, if necessary, to retained earnings, in accordance with ASC 505-30.
Pending Acquisition
On December 9, 2025, the Company entered into a definitive share sale and purchase agreement (the “SPA”) to acquire all of the issued and outstanding shares of CanAdelaar, one of ten licensed cannabis producers participating in the Dutch Controlled Cannabis Supply Chain Experiment.
On May 8, 2026, the Company entered into an amendment to the SPA pursuant to which the parties agreed to extend the Long Stop Date (as defined in the SPA) for closing of the acquisition from June 9, 2026 to September 9, 2026. The extension provides additional time to satisfy certain closing conditions, including obtaining required regulatory clearances in the Netherlands, receipt of confirmations relating to CanAdelaar’s licenses and completion of the Bibob review (a background check conducted by Dutch authorities). No other material changes were made to the terms of the transaction.
Table of Contents
Item 2. Management’s Discussion and Analysis of Financial Condition and Results of Operations.
The following discussion and analysis should be read together with other information, including the Company’s condensed consolidated financial statements and the related notes to those statements, included in Part I, Item 1 of this Quarterly Report on Form 10-Q for the quarterly period ended March 31, 2026 (this “Quarterly Report”), consolidated financial statements appearing in the Company’s Annual Report on Form 10-K for the year ended December 31, 2025 (the “Annual Report”), Part I, Item 1A, Risk Factors, of the Annual Report and Part II, Item 1A, Risk Factors, of this Quarterly Report.
Forward-Looking Statements
This Quarterly Report, the documents incorporated into this Quarterly Report by reference, other reports we file with, or furnish to, the United States (“U.S.”) Securities and Exchange Commission (“SEC”) and other regulatory agencies, and statements by our directors, officers, other employees and other persons authorized to speak on our behalf contain information that may constitute forward-looking information and forward-looking statements within the meaning of applicable U.S. and Canadian securities laws and court decisions (collectively, “Forward-Looking Statements”), which are based upon our current internal expectations, estimates, projections, assumptions and beliefs. Information that is not clearly historical in nature may constitute Forward-Looking Statements. In some cases, Forward-Looking Statements can be identified by the use of forward-looking terminology, such as “expect,” “likely,” “may,” “will,” “should,” “intend,” “anticipate,” “potential,” “proposed,” “estimate,” “believe,” “plan” and other similar words, expressions and phrases, including negative and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen, or by discussion of strategy. Forward-Looking Statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of historical fact.
Forward-Looking Statements include, but are not limited to, statements with respect to:
•the ongoing impact of the public investigation into Canadian licensed producers of alleged dumping of medical cannabis imports from Canada into Israel by the Trade Levies Commissioner of the Israel Ministry of Economy and Industry (the “Anti-Dumping Investigation”) and the proposed anti-dumping duty to which the Company’s imports would be subject;
•expectations related to the conflict involving the United States, Israel, Hamas, Hezbollah, Houthis, Iran, Iran’s proxies and other stakeholders in the region (the “Middle East Conflict”) and its impact on our operations in Israel, the supply of product in the market and the demand for product by medical patients in Israel, as well as any regional or global escalations and their impact to global commerce and stability;
•expectations related to markets outside of Canada and Israel, and our ability to successfully distribute the PEACE NATURALS® brand in those markets;
•expectations related to the impact of our decision to exit our U.S. hemp-derived cannabinoid product operations and any future plans to re-enter the U.S. market;
•the ongoing impact of our announced realignment (inclusive of any revisions thereto, the “Realignment”) and any progress, challenges and effects related thereto as well as changes in strategy, metrics, investments, reporting structure, costs, operating expenses, employee turnover and other changes with respect thereto;
•our expectations as to the use and expansion of our facility in Stayner, Ontario (the “Peace Naturals Campus”);
•our ability to acquire raw materials from suppliers, including Cronos Growing Company Inc. (“Cronos GrowCo”), and the costs and timing associated therewith;
•expectations regarding the potential success of, and the costs and benefits associated with, our joint ventures, strategic alliances and equity investments;
•expectations related to transaction by which we obtained majority control of the board of directors of Cronos GrowCo (the “Cronos GrowCo Transaction”), which qualified as a business combination under Accounting Standards Codification (“ASC”) 805, and the expansion of Cronos GrowCo’s purpose-built cultivation and processing facilities and any additional supply or growth opportunities (including in the wholesale market) provided thereby;
•expectations related to the transaction by which we, as lender, obtained junior secured convertible debt (the “High Tide Loan”) from High Tide Inc. (“High Tide”), as borrower, and a warrant (the “High Tide Warrant”) to purchase common shares of High Tide, the performance of the High Tide Loan and the High Tide Warrant, and High Tide’s ability to repay the High Tide Loan;
•expectations related to our agreement to acquire CanAdelaar B.V. (“CanAdelaar”), including the timing and completion of the transaction, and the anticipated costs, benefits and integration matters associated therewith and the performance of the business from and following closing;
•expectations related to the impact of the renewed share repurchase program that was authorized on May 8, 2026, including the timing and amount of repurchases;
•our ability or plans to identify, develop, commercialize or expand our technology and research and development (“R&D”) initiatives in cannabinoids, or the success thereof;
•expectations regarding revenues, expenses, gross margins and capital expenditures;
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•expectations regarding our future production and manufacturing strategy and operations, the costs and timing associated therewith and the receipt of applicable production and sale licenses;
•the ongoing impact of the legalization of additional cannabis product types and forms for adult-use in Canada, including federal, provincial, territorial and municipal regulations pertaining thereto, the related timing and impact thereof and our intentions to participate in such markets;
•the legalization of the use of cannabis for medical or adult-use in jurisdictions outside of Canada, the related timing and impact thereof and our intentions to participate in such markets, if, when and to the extent such use is legalized;
•the grant, renewal, withdrawal, suspension, delay and impact of any license or supplemental license to conduct activities with cannabis or any amendments thereof;
•our ability to successfully create, launch and scale brands and cannabis products;
•expectations related to the differentiation of our products, including through the utilization of rare cannabinoids;
•the benefits, viability, safety, efficacy, dosing and social acceptance of cannabis, including CBD and other cannabinoids;
•laws and regulations and any amendments thereto applicable to our business and the impact thereof, including uncertainty regarding the application of U.S. state and federal law to cannabis and U.S. hemp (including CBD and other U.S. hemp-derived cannabinoids) products and the scope of any regulations by the U.S. Department of Health and Human Services (“HHS”), U.S. Food and Drug Administration (the “FDA”), the U.S. Drug Enforcement Administration (the “DEA”), the U.S. Federal Trade Commission (the “FTC”), the U.S. Patent and Trademark Office (the “PTO”) and any state equivalent regulatory agencies over cannabis and U.S. hemp (including CBD and other U.S. hemp-derived cannabinoids) products, including the final order issued by the U.S. Department of Justice (the “DOJ”) in April 2026, which moved certain categories of medical marijuana products from Schedule I to Schedule III of the U.S. Controlled Substances Act and any future actions that may be taken or considered by the DOJ or other government agencies;
•the anticipated benefits and impact of Altria Group, Inc.’s investment in the Company (the “Altria Investment”), pursuant to a subscription agreement dated December 7, 2018;
•expectations regarding the implementation and effectiveness of key personnel changes;
•expectations regarding business combinations and dispositions and the anticipated benefits therefrom;
•expectations of the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;
•the impact of the ongoing military conflict between Russia and Ukraine (and resulting sanctions) on our business, financial condition and results of operations or cash flows;
•our compliance with the terms of the settlement (the “Settlement Order”) with the SEC and the settlement agreement (the “Settlement Agreement”) with the Ontario Securities Commission (the “OSC”); and
•the impact of the loss of our ability to rely on private offering exemptions under Regulation A and Regulation D of the Securities Act of 1933, as amended (the “Securities Act”), as a result of the Settlement Order.
Certain of the Forward-Looking Statements contained herein concerning the industries in which we conduct our business are based on estimates prepared by us using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which we believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. The industries in which we conduct our business involve risks and uncertainties that are subject to change based on various factors, which are described further below.
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The Forward-Looking Statements contained herein are based upon certain material assumptions that were applied in drawing a conclusion or making a forecast or projection, including: (i) our ability to effectively navigate developments related to the Anti-Dumping Investigation and the proposed anti-dumping duty to which the Company’s imports would be subject and its impact on our operations in Israel; (ii) our ability to effectively navigate developments related to the Middle East Conflict and its impact on our employees and operations in Israel, the supply of product in the market and demand for product by medical patients in Israel; (iii) our ability to efficiently and effectively distribute our PEACE NATURALS® brand in markets outside of Canada and Israel; (iv) expectations related to the impact of our decision to exit our U.S. hemp-derived cannabinoid product operations; (v) our ability to realize the expected cost-savings, efficiencies and other benefits of our Realignment and other announced cost-cutting measures and employee turnover related thereto; (vi) our ability to efficiently and effectively manage our operations at our Peace Naturals Campus; (vii) our ability to efficiently and effectively acquire raw materials on a timely and cost-effective basis from third parties or Cronos GrowCo; (viii) our ability to realize the expected benefits related to the expansion of Cronos GrowCo’s purpose-built cannabis facility (including the quantity and quality of any additional supply provided thereby and the stability of pricing and demand with respect to such supply) and the ability of Cronos GrowCo to repay the credit facility provided by Cronos; (ix) High Tide’s ability to repay the High Tide Loan, the performance of the High Tide Loan and the High Tide Warrant, and our ability to realize benefits related to the performance of the High Tide Warrant; (x) our ability to complete the acquisition of CanAdelaar on the terms and within the timelines anticipated, including the timely receipt of required regulatory approvals and the satisfaction of other closing conditions, and our ability to realize any expected benefits, synergies and operational performance associated with such acquisition; (xi) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our business combinations and strategic investments; (xii) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments; (xiii) government regulation of our activities and products including, but not limited to, the areas of cannabis taxation and environmental protection; (xiv) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; (xv) consumer interest in and the scalability of our products; (xvi) our ability to differentiate our products, including through the utilization of rare cannabinoids; (xvii) competition; (xviii) anticipated and unanticipated costs; (xix) our ability to generate cash flow from operations; (xx) our ability to conduct operations in a safe, efficient and effective manner; (xxi) our ability to hire and retain qualified staff and acquire equipment and services in a timely and cost-efficient manner; (xxii) our ability to complete planned dispositions and, if completed, obtain our anticipated sales price; (xxiii) general economic, financial market, regulatory and political conditions in which we operate; (xxiv) management’s perceptions of historical trends, current conditions and expected future developments; and (xxv) other considerations that management believes to be appropriate in the circumstances. While our management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.
By their nature, Forward-Looking Statements are subject to inherent risks and uncertainties that may be general or specific and which give rise to the possibility that expectations, forecasts, predictions, projections or conclusions will not prove to be accurate, that assumptions may not be correct, and that objectives, strategic goals and priorities will not be achieved. A variety of factors, including known and unknown risks, many of which are beyond our control, could cause actual results to differ materially from the Forward-Looking Statements in this Quarterly Report and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf. Such factors include, without limitation, negative impacts on our business and operations in Israel due to the Anti-Dumping Investigation, including that we may not be able to produce, import or sell our products in Israel as a result thereof; negative impacts on our employees, business and operations in Israel due to the Middle East Conflict, including that we may not be able to produce, import or sell our products or protect our people or facilities in Israel during the Middle East Conflict, the supply of product in the market and the demand for product by medical patients in Israel, and inflationary pressures and related increases in input, production, transportation and other operating costs, as well as potential impacts on consumer purchasing power; that we may not be able to successfully maintain or expand distribution of our products in our markets outside of Canada or Israel or generate meaningful revenue in those markets; that we may be unable to further streamline our operations and expenses; that we may not be able to effectively and efficiently re-enter the U.S. market in the future; that we may not be able to access raw materials on a timely and cost-effective basis from third parties or Cronos GrowCo; that the expected benefits of the expansion of Cronos GrowCo’s purpose-built cannabis facility (including any additional supply provided thereby) may not be fully realized within a reasonable time or at all or that Cronos GrowCo may not be able to repay its borrowings under the credit facility provided by Cronos; that the expected benefits of the High Tide Warrant and the High Tide Loan may not be fully realized within a reasonable time or at all or that High Tide may not be able to repay its borrowings under the High Tide Loan; that we may not be able to consummate our planned acquisition of CanAdelaar on the anticipated timeline or at all; the military conflict between Russia and Ukraine may disrupt our operations and those of our suppliers and distribution channels and negatively impact the demand for and use of our products; the risk that cost savings and any other synergies from the Altria Investment may not be fully realized or may take longer to realize than expected; failure to execute key personnel changes; that our Realignment and our further leveraging of our strategic partnerships will not result in the expected cost-savings, efficiencies and other benefits or will result in greater than anticipated turnover in personnel; that we may not be able to efficiently and effectively manage our operations, and any changes thereto, at our Peace Naturals Campus; lower levels of revenues; the lack of consumer demand for or our inability or challenges in successfully scaling our products; our inability to manage disruptions in credit markets; unanticipated future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses; failure to realize expected growth opportunities; the lack of cash flow necessary to execute our business plan (either within the expected timeframe or at
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all); difficulty raising capital; the potential adverse effects of judicial, regulatory or other proceedings, or threatened litigation or proceedings, on our business, financial condition, results of operations and cash flows; volatility in and/or degradation of general economic, market, industry or business conditions; compliance with applicable environmental, economic, health and safety, energy and other policies and regulations and in particular health concerns with respect to vaping and the use of cannabis and U.S. hemp products in vaping devices; the unexpected effects of actions of third parties such as competitors, activist investors or federal (including U.S. federal), state, provincial, territorial or local regulatory authorities or self-regulatory organizations; adverse changes in regulatory requirements in relation to our business and products; our failure to improve our internal control environment and our systems, processes and procedures; and the factors discussed under Part II, Item 1A “Risk Factors” in this Quarterly Report. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on Forward-Looking Statements.
Forward-Looking Statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management’s current expectations and plans relating to the future, and the reader is cautioned not to place undue reliance on these Forward-Looking Statements because of their inherent uncertainty and to appreciate the limited purposes for which they are being used by management. While we believe that the assumptions and expectations reflected in the Forward-Looking Statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct. Forward-Looking Statements are made as of the date they are made and are based on the beliefs, estimates, expectations and opinions of management on that date. We undertake no obligation to update or revise any Forward-Looking Statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such Forward-Looking Statements. The Forward-Looking Statements contained in this Quarterly Report and other reports we file with, or furnish to, the SEC and other regulatory agencies and made by our directors, officers, other employees and other persons authorized to speak on our behalf are expressly qualified in their entirety by these cautionary statements.
Foreign currency exchange rates
All currency amounts in this Quarterly Report are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to “dollars” or “$” are to U.S. dollars. The assets and liabilities of our foreign operations are translated into dollars at the exchange rate in effect as of March 31, 2026, March 31, 2025, and December 31, 2025. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates. The condensed consolidated statements of net income (loss) and comprehensive income (loss) and condensed consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the reporting period as reported on Bloomberg.
The exchange rates used to translate from Canadian dollars (“C$”) to dollars are shown below:
| (Exchange rates are shown as C$ per $) | As of | ||||||||||||||||
| March 31, 2026 | March 31, 2025 | December 31, 2025 | |||||||||||||||
| Spot rate | 1.3916 | 1.4393 | 1.3698 | ||||||||||||||
Year-to-date average rate | 1.3720 | 1.4356 | N/A | ||||||||||||||
The exchange rates used to translate from New Israeli Shekels (“ILS”) to dollars are shown below:
| (Exchange rates are shown as ILS per $) | As of | ||||||||||||||||
| March 31, 2026 | March 31, 2025 | December 31, 2025 | |||||||||||||||
| Spot rate | 3.1441 | 3.7191 | 3.1863 | ||||||||||||||
Year-to-date average rate | 3.1240 | 3.6145 | N/A | ||||||||||||||
Business Overview
Cronos is a global cannabis company focused on scaling leading consumer goods products through research and development and innovation. With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach®, PEACE NATURALS®, LIT™ and Lord Jones®.
Strategy
Cronos seeks to create value for shareholders by focusing on four core strategic priorities:
•growing a portfolio of iconic brands that responsibly elevate the consumer experience;
•developing a diversified global sales and distribution network;
•establishing an efficient global supply chain; and
•creating and monetizing disruptive intellectual property.
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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”). Cronos also consolidates the results of operations of Cronos GrowCo in its consolidated financial statements. Cronos maintains its 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.
In Israel, the Company 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.
Recent Developments
CanAdelaar Acquisition
On December 9, 2025, the Company entered into a definitive share sale and purchase agreement (the “SPA”) to acquire all of the issued and outstanding shares of CanAdelaar, one of ten licensed cannabis producers participating in the Dutch Controlled Cannabis Supply Chain Experiment.
On May 8, 2026, the Company entered into an amendment to the SPA pursuant to which the parties agreed to extend the Long Stop Date (as defined in the SPA) for closing of the acquisition from June 9, 2026 to September 9, 2026. The extension provides additional time to satisfy certain closing conditions, including obtaining required regulatory clearances in the Netherlands, receipt of confirmations relating to CanAdelaar’s licenses and completion of the Bibob review (a background check conducted by Dutch authorities). No other material changes were made to the terms of the transaction.
The Company expects the acquisition to close in the summer of 2026.
Conflict in Middle East
The Middle East Conflict, including the recent escalation involving the United States, Israel and Iran, has contributed to increased energy and shipping costs. While the impact of these cost increases on the Company’s results for the three months ended March 31, 2026, was not material, the Company expects such cost pressures to have an adverse effect on gross margins in the second quarter of 2026. The Company is monitoring these impacts and pursuing mitigation efforts through supply chain optimization and cost reduction initiatives.
U.S. Marijuana Scheduling Developments
In April 2026, the DOJ announced a final rule placing certain FDA-approved marijuana products and marijuana products subject to qualifying state medical marijuana licenses in Schedule III of the U.S. Controlled Substances Act and announced a new administrative hearing process regarding the broader proposed rescheduling of marijuana. The Company continues to monitor these developments and assess whether they may have any implications for its business.
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Consolidated Results of Operations
The tables below set forth our condensed consolidated results of operations, expressed in thousands of U.S. dollars for the periods presented. Our condensed consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods.
| Three months ended March 31, | |||||||||||||||||||||||
| 2026 | 2025 | ||||||||||||||||||||||
| Net revenue, before excise taxes | $ | 58,965 | $ | 41,898 | |||||||||||||||||||
| Excise taxes | (13,755) | (9,636) | |||||||||||||||||||||
| Net revenue | 45,210 | 32,262 | |||||||||||||||||||||
| Cost of sales | 25,392 | 18,528 | |||||||||||||||||||||
| Inventory write-down | 665 | — | |||||||||||||||||||||
| Gross profit | 19,153 | 13,734 | |||||||||||||||||||||
| Operating expenses | |||||||||||||||||||||||
| Sales and marketing | 5,615 | 4,565 | |||||||||||||||||||||
| Research and development | 1,413 | 793 | |||||||||||||||||||||
| General and administrative | 11,736 | 9,309 | |||||||||||||||||||||
| Restructuring costs | 484 | 555 | |||||||||||||||||||||
| Share-based compensation | 1,313 | 2,088 | |||||||||||||||||||||
| Depreciation and amortization | 425 | 496 | |||||||||||||||||||||
| Total operating expenses | 20,986 | 17,806 | |||||||||||||||||||||
| Operating loss | (1,833) | (4,072) | |||||||||||||||||||||
Other income | 19,972 | 11,340 | |||||||||||||||||||||
| Income tax provision (benefit) | 2,428 | (455) | |||||||||||||||||||||
| Net income | 15,711 | 7,723 | |||||||||||||||||||||
| Net income attributable to non-controlling interest | 1,959 | 1,601 | |||||||||||||||||||||
| Net income attributable to Cronos Group | $ | 13,752 | $ | 6,122 | |||||||||||||||||||
Summary of select financial results
| Three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
| Net revenue | $ | 45,210 | $ | 32,262 | $ | 12,948 | 40 | % | |||||||||||||||||||||||||||||||||||||||
| Cost of sales | 25,392 | 18,528 | 6,864 | 37 | % | ||||||||||||||||||||||||||||||||||||||||||
| Inventory write-down | 665 | — | 665 | N/A | |||||||||||||||||||||||||||||||||||||||||||
| Gross profit | 19,153 | $ | 13,734 | 5,419 | 39 | % | |||||||||||||||||||||||||||||||||||||||||
Gross margin(i) | 42 | % | 43 | % | N/A | (1) | pp | ||||||||||||||||||||||||||||||||||||||||
(i)Gross margin is defined as gross profit divided by net revenue.
Net revenue
For the three months ended March 31, 2026, we reported consolidated net revenue of $45.2 million, representing an increase of $12.9 million from the three months ended March 31, 2025. The increase was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, and higher cannabis extract and flower sales in the Canadian market.
Cost of sales
For the three months ended March 31, 2026, we reported consolidated cost of sales of $25.4 million, representing an increase of $6.9 million from the three months ended March 31, 2025. The increase was primarily due to higher sales volumes in the period. For the three months ended March 31, 2025, we recognized $0.5 million of inventory step-up from the Cronos GrowCo Transaction into cost of sales. No such costs were recognized for the three months ended March 31, 2026.
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Inventory write-down
For the three months ended March 31, 2026, we reported inventory write-down of $0.7 million, representing an increase of $0.7 million from the three months ended March 31, 2025. The current year write-downs relate to unusable inventory that was scrapped in the period. There were no such write-downs for the three months ended March 31, 2025.
Gross profit
For the three months ended March 31, 2026, we reported gross profit of $19.2 million, representing an increase of $5.4 million from the three months ended March 31, 2025. The increase was primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise taxes, and higher sales volumes. For the three months ended March 31, 2025, gross profit was reduced by $0.5 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales. No such costs were recognized for the three months ended March 31, 2026.
Operating expenses
| Three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
| Sales and marketing | $ | 5,615 | $ | 4,565 | $ | 1,050 | 23 | % | |||||||||||||||||||||||||||||||||||||||
| Research and development | 1,413 | 793 | 620 | 78 | % | ||||||||||||||||||||||||||||||||||||||||||
| General and administrative | 11,736 | 9,309 | 2,427 | 26 | % | ||||||||||||||||||||||||||||||||||||||||||
| Restructuring costs | 484 | 555 | (71) | (13) | % | ||||||||||||||||||||||||||||||||||||||||||
| Share-based compensation | 1,313 | 2,088 | (775) | (37) | % | ||||||||||||||||||||||||||||||||||||||||||
| Depreciation and amortization | 425 | 496 | (71) | (14) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total operating expenses | $ | 20,986 | $ | 17,806 | $ | 3,180 | 18 | % | |||||||||||||||||||||||||||||||||||||||
Sales and marketing
For the three months ended March 31, 2026, sales and marketing expenses were $5.6 million, representing an increase of $1.1 million compared to the three months ended March 31, 2025. The increase was primarily due to higher marketing expenses and salaries and benefits.
Research and development
For the three months ended March 31, 2026, research and development expenses were $1.4 million, representing an increase of $0.6 million compared to the three months ended March 31, 2025. The increase was primarily due to higher product development costs and salaries and benefits.
General and administrative
For the three months ended March 31, 2026, general and administrative expenses were $11.7 million, representing an increase of $2.4 million from the three months ended March 31, 2025. The increase was primarily due to higher salaries and benefits, transaction costs related to the pending CanAdelaar acquisition, and restatement litigation costs, partially offset by lower anti-dumping costs.
Restructuring costs
For the three months ended March 31, 2026, restructuring costs were $0.5 million, representing a decrease of $0.1 million from the three months ended March 31, 2025. For further information, see Note 7 “Restructuring” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.
Share-based compensation
For the three months ended March 31, 2026, share-based compensation expense was $1.3 million, representing a decrease of $0.8 million from the three months ended March 31, 2025. The decrease was primarily due to lower average amounts of share-based compensation awards outstanding.
Depreciation and amortization
For the three months ended March 31, 2026, depreciation and amortization expenses were $0.4 million, representing a decrease of $0.1 million from the three months ended March 31, 2025. The decrease was primarily due to lower amortization of intangible assets, partially offset by higher depreciation of property, plant and equipment.
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Other income and income tax expense (benefit)
| Three months ended March 31, | Change | ||||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
| Interest income, net | $ | 8,853 | $ | 9,665 | $ | (812) | (8) | % | |||||||||||||||||||||||||||||||||||||||
Gain (loss) on revaluation of financial instruments | (2,484) | 49 | (2,533) | N/M | |||||||||||||||||||||||||||||||||||||||||||
| Foreign currency gain | 13,699 | 1,583 | 12,116 | 765 | % | ||||||||||||||||||||||||||||||||||||||||||
| Change in allowance for credit loss on non-operating loan | (106) | — | (106) | N/A | |||||||||||||||||||||||||||||||||||||||||||
| Other, net | 10 | 43 | (33) | (77) | % | ||||||||||||||||||||||||||||||||||||||||||
| Total other income | 19,972 | 11,340 | 8,632 | 76 | % | ||||||||||||||||||||||||||||||||||||||||||
| Income tax provision (benefit) | 2,428 | (455) | 2,883 | N/M | |||||||||||||||||||||||||||||||||||||||||||
| Net income | 15,711 | $ | 7,723 | 7,988 | 103 | % | |||||||||||||||||||||||||||||||||||||||||
(i)“N/M” is defined as not meaningful.
Interest income, net
For the three months ended March 31, 2026, interest income, net was $8.9 million, representing a decrease of $0.8 million from the three months ended March 31, 2025. The decrease in net interest income was primarily due to lower interest rates in the current period, partially offset by interest on our High Tide Loan.
Gain (loss) on revaluation of financial instruments
For the three months ended March 31, 2026, the loss on revaluation of financial instruments was $2.5 million, representing a deterioration of $2.5 million from the three months ended March 31, 2025. The change was primarily related to the change in fair value of our High Tide Warrant and our investment in Vitura Health Limited (“Vitura”). For further information, see Note 3 “Investments” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.
Foreign currency gain
For the three months ended March 31, 2026, foreign currency gain was $13.7 million, representing an improvement of $12.1 million from the three months ended March 31, 2025. The change was primarily due to the strengthening of the U.S. dollar compared to the Canadian dollar impacting the revaluation of certain foreign currency-denominated cash equivalents and short-term investments held in Canada, as well as the strengthening of the New Israeli Shekel compared to the Canadian dollar impacting the revaluation of certain foreign currency-denominated intercompany loans anticipated to be settled in the foreseeable future.
Change in allowance for credit loss on non-operating loan
For the three months ended March 31, 2026, change in allowance for credit loss on non-operating loan was $0.1 million. There was no such activity during the three months ended March 31, 2025. The expense relates to the change in the allowance for credit loss on the High Tide Loan. For further information, see Note 4 “Loans Receivable, net.”
Other, net
For the three months ended March 31, 2026, other, net primarily related to non-operating rental income. For the three months ended March 31, 2025, other, net primarily related to gains and losses on the disposal of assets.
Income tax provision (benefit)
For the three months ended March 31, 2026, income tax provision was $2.4 million, compared to a benefit of $0.5 million for the three months ended March 31, 2025. The increased expense was primarily due to decreased net operating loss utilization compared to the three months ended March 31, 2025.
Net income
For the three months ended March 31, 2026, net income was $15.7 million, compared to net income of $7.7 million for the three months ended March 31, 2025. The improvement in net income was primarily due to higher gross profit and other income, partially offset by higher operating expenses.
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Non-GAAP Measures
Cronos reports its financial results in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). This Quarterly Report refers to measures not recognized under U.S. GAAP (“non-GAAP measures”). These non-GAAP measures do not have a standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these non-GAAP measures are provided as a supplement to corresponding U.S. GAAP measures to provide additional information regarding our results of operations from management’s perspective. Accordingly, non-GAAP measures should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. All non-GAAP measures presented in this Quarterly Report are reconciled to their closest reported U.S. GAAP measure. Reconciliations of historical adjusted financial measures to corresponding U.S. GAAP measures are provided below.
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. 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 restatement litigation 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 10(b) “Contingencies,” to the condensed consolidated financial statements under Item 1 of this Quarterly 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). Results are reported as total consolidated results, reflecting our reporting structure of one reportable segment.
Management believes that Adjusted EBITDA provides useful insight into underlying business trends and results and facilitates comparison of period-over-period results. Management uses Adjusted EBITDA for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets.
Beginning in 2025, the Company modified the composition of Adjusted EBITDA to exclude the impact of the provision for expected credit losses recognized under ASC 326 solely with respect to the High Tide Loan (see Note 4 “Loans Receivable, net” to the condensed consolidated financial statements under Item 1 of this Quarterly Report for further information). Management determined that excluding this non-cash provision provides investors with additional insight into period-over-period operating performance by isolating credit-risk movements unrelated to the Company’s core operations.
Management believes that this change provides additional information regarding the Company’s ongoing operational results and enhances comparability with peers that do not routinely extend credit to third parties. This change does not affect the Company’s GAAP financial statements.
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The following tables set forth a reconciliation of Net income as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated:
| Three months ended March 31, 2026 | |||||
| Net income | $ | 15,711 | |||
| Interest income, net | (8,853) | ||||
| Income tax provision | 2,428 | ||||
| Depreciation and amortization | 3,727 | ||||
| EBITDA | 13,013 | ||||
Loss on revaluation of financial instruments(i) | 2,484 | ||||
| Foreign currency transaction gain | (13,699) | ||||
Transaction costs(ii) | 959 | ||||
Other, net(iii) | (10) | ||||
Restructuring costs(iv) | 484 | ||||
Share-based compensation(v) | 1,313 | ||||
Restatement litigation costs(vi) | 411 | ||||
Israel Ministry of Economy and Industry dumping inquiry expense(vii) | 18 | ||||
Change in allowance for credit loss on non-operating loan(viii) | 106 | ||||
| Adjusted EBITDA | $ | 5,079 | |||
| Three months ended March 31, 2025 | |||||
| Net income | $ | 7,723 | |||
| Interest income, net | (9,665) | ||||
| Income tax benefit | (455) | ||||
| Depreciation and amortization | 2,840 | ||||
| EBITDA | 443 | ||||
Gain on revaluation of financial instruments(i) | (49) | ||||
| Foreign currency transaction gain | (1,583) | ||||
Transaction costs(ii) | 40 | ||||
Other, net(iii) | (43) | ||||
Restructuring costs(iv) | 555 | ||||
Share-based compensation(v) | 2,088 | ||||
Restatement litigation costs(vi) | 47 | ||||
Israel Ministry of Economy and Industry dumping inquiry expense(vii) | 274 | ||||
Inventory step-up recorded to cost of sales(ix) | 517 | ||||
| Adjusted EBITDA | $ | 2,289 | |||
(i)For the three months ended March 31, 2026, the loss on revaluation of financial instruments was driven by a loss related to the Company’s High Tide Warrant and the Company’s equity securities in Vitura. For the three months ended March 31, 2025, the gain on revaluation of financial instruments related primarily to the revaluation of the Company’s DSU liability, partially offset by a loss on the Company’s equity securities in Vitura.
(ii)For the three months ended March 31, 2026, transaction costs represented fees related to the pending acquisition of CanAdelaar. For the three months ended March 31, 2025, transaction costs represented legal, financial and other advisory fees and expenses incurred in connection with the Cronos GrowCo Transaction. These costs are included in general and administrative expenses on the condensed consolidated statements of net income (loss) and comprehensive income (loss).
(iii)For the three months ended March 31, 2026, other, net related to rental income. For the three months ended March 31, 2025 other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.
(iv)For the three months ended March 31, 2026 and 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 7 “Restructuring.”
(v)For the three months ended March 31, 2026, share-based compensation related to the expenses of share-based compensation awarded to employees and DSUs issued to our Board of Directors, each under the Company’s share-based award plans, as described in Note 8 “Share-based Compensation.” For the three months ended March 31, 2025, share-based compensation related to the expenses of share-based compensation awarded to employees under the Company’s share-based award plans, as described in Note 8 “Share-based Compensation.”
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(vi)For the three months ended March 31, 2026 and 2025, restatement litigation costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement.
(vii)For the three months ended March 31, 2026 and 2025, Israel Ministry of Economy and Industry dumping inquiry expense included expenditures relating to the regulatory inquiry about alleged dumping of medical cannabis products in Israel and related litigation and external relations expenses.
(viii)For the three months ended March 31, 2026, change in allowance for credit loss on non-operating loan represents the allowance recognized on the High Tide loan receivable, as described in Note 4, “Loans Receivable, net.”
(ix)For the three months ended March 31, 2025, inventory step-up recorded to cost of sales represents the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the condensed consolidated statements of income (loss) and comprehensive income (loss).
For the three months ended March 31, 2026, Adjusted EBITDA was $5.1 million, representing an improvement of $2.8 million from the three months ended March 31, 2025. The improvement was primarily due to higher gross profit, partially offset by higher operating expenses due to higher sales and marketing, general and administrative, and research and development costs.
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. Results are reported as total consolidated results, reflecting our reporting structure of one reportable segment.
Management believes that Adjusted Gross Profit and Adjusted Gross Margin provide useful insight into underlying business trends to facilitate comparisons of period-over-period results by removing the impacts of inventory-related purchase accounting adjustments resulting from the Cronos GrowCo Transaction, which reflect a one-time event and do not reflect management’s assessment of ongoing business performance.
The following table sets forth a reconciliation of Gross profit and Gross margin, each as determined in accordance with U.S. GAAP, to Adjusted Gross Profit and Adjusted Gross Margin, respectively, for the periods indicated:
| (in thousands of USD) | Three months ended March 31, | Change | |||||||||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | ||||||||||||||||||||||||||||||||||||||||||||
Net revenue | $ | 45,210 | $ | 32,262 | $ | 12,948 | 40 | % | |||||||||||||||||||||||||||||||||||||||
| Gross profit | $ | 19,153 | $ | 13,734 | $ | 5,419 | 39 | % | |||||||||||||||||||||||||||||||||||||||
| Inventory step-up recorded to cost of sales | — | 517 | (517) | N/A | |||||||||||||||||||||||||||||||||||||||||||
Adjusted Gross Profit | $ | 19,153 | $ | 14,251 | $ | 4,902 | 34 | % | |||||||||||||||||||||||||||||||||||||||
Gross margin(i) | 42 | % | 43 | % | N/A | (1) | pp | ||||||||||||||||||||||||||||||||||||||||
Adjusted Gross Margin(ii) | 42 | % | 44 | % | N/A | (2) | pp | ||||||||||||||||||||||||||||||||||||||||
(i)Gross margin is defined as gross profit divided by net revenue.
(ii)Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net revenue.
For the three months ended March 31, 2026, Adjusted Gross Profit was $19.2 million, representing an increase of $4.9 million from the three months ended March 31, 2025. The increase was primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise taxes, and higher sales volumes.
Constant Currency
To supplement the consolidated financial statements presented in accordance with U.S. GAAP, we have presented constant currency adjusted financial measures for net revenue, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for the three months ended March 31, 2026, as well as cash and cash equivalents and short-term investment balances as of March 31, 2026 compared to December 31, 2025, which are considered non-GAAP financial measures. We present constant currency information to provide a framework for assessing how our underlying operations performed excluding the effect of foreign currency rate fluctuations. To present this information, current and comparative 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 three month comparative period in 2025, rather than the actual average exchange rates in effect during the respective current period; constant currency current and prior comparative balance sheet information is translated at the prior year-end spot rate rather than the current period spot rate. All growth comparisons relate to the corresponding period in 2025. We have provided this non-GAAP financial information to aid investors in better understanding the performance of our operations. The non-GAAP financial measures presented in this Quarterly Report should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP. See further discussion on foreign currency risk as noted in Item 3 “Quantitative and Qualitative Disclosures About Market Risk.”
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The table below sets forth certain measures of consolidated results from continuing operations on a constant currency basis for the three months ended March 31, 2026 compared to the three months ended March 31, 2025 as well as cash and cash equivalents and short-term investments as of March 31, 2026 and December 31, 2025, both on an as-reported and constant currency basis (in thousands):
| As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||||||||||||||||||
| Three months ended March 31, | As Reported Change | Three months ended March 31, | Constant Currency Change | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | $ | % | |||||||||||||||||||||||||||||||||||
| Net revenue | $ | 45,210 | $ | 32,262 | $ | 12,948 | 40 | % | $ | 41,913 | $ | 9,651 | 30 | % | |||||||||||||||||||||||||||
| Gross profit | 19,153 | 13,734 | 5,419 | 39 | % | 17,588 | 3,854 | 28 | % | ||||||||||||||||||||||||||||||||
| Gross margin | 42 | % | 43 | % | N/A | (1) | pp | 42 | % | N/A | (1) | pp | |||||||||||||||||||||||||||||
| Operating expenses | 20,986 | 17,806 | 3,180 | 18 | % | 20,005 | 2,199 | 12 | % | ||||||||||||||||||||||||||||||||
Net income | 15,711 | 7,723 | 7,988 | 103 | % | 14,809 | 7,086 | 92 | % | ||||||||||||||||||||||||||||||||
| Adjusted EBITDA | $ | 5,079 | $ | 2,289 | $ | 2,790 | 122 | % | $ | 4,153 | $ | 1,864 | 81 | % | |||||||||||||||||||||||||||
| As of March 31, | As of December 31, | As Reported Change | As of March 31, | Constant Currency Change | |||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | $ | % | |||||||||||||||||||||||||||||||||||
| Cash and cash equivalents | $ | 821,856 | $ | 791,794 | $ | 30,062 | 4 | % | $ | 822,316 | $ | 30,522 | 4 | % | |||||||||||||||||||||||||||
| Short-term investments | — | 40,000 | (40,000) | N/A | — | (40,000) | N/A | ||||||||||||||||||||||||||||||||||
| Total cash and cash equivalents and short-term investments | $ | 821,856 | $ | 831,794 | $ | (9,938) | (1) | % | $ | 822,316 | $ | (9,478) | (1) | % | |||||||||||||||||||||||||||
Net revenue
| As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||||||||||||||||||
| Three months ended March 31, | As Reported Change | Three months ended March 31, | Constant Currency Change | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | $ | % | |||||||||||||||||||||||||||||||||||
| Cannabis flower | $ | 33,734 | $ | 23,344 | $ | 10,390 | 45 | % | $ | 30,972 | $ | 7,628 | 33 | % | |||||||||||||||||||||||||||
| Cannabis extracts | 11,457 | 8,608 | 2,849 | 33 | % | 10,923 | 2,315 | 27 | % | ||||||||||||||||||||||||||||||||
| Other | 19 | 310 | (291) | (94) | % | 18 | (292) | (94) | % | ||||||||||||||||||||||||||||||||
| Net revenue | $ | 45,210 | $ | 32,262 | $ | 12,948 | 40 | % | $ | 41,913 | $ | 9,651 | 30 | % | |||||||||||||||||||||||||||
| As Reported | As Adjusted for Constant Currency | ||||||||||||||||||||||||||||||||||||||||
| Three months ended March 31, | As Reported Change | Three months ended March 31, | Constant Currency Change | ||||||||||||||||||||||||||||||||||||||
| 2026 | 2025 | $ | % | 2026 | $ | % | |||||||||||||||||||||||||||||||||||
| Canada | $ | 25,351 | $ | 20,130 | $ | 5,221 | 26 | % | $ | 24,221 | $ | 4,091 | 20 | % | |||||||||||||||||||||||||||
| Israel | 14,151 | 9,229 | 4,922 | 53 | % | 12,240 | 3,011 | 33 | % | ||||||||||||||||||||||||||||||||
| Other countries | 5,708 | 2,903 | 2,805 | 97 | % | 5,452 | 2,549 | 88 | % | ||||||||||||||||||||||||||||||||
| Net revenue | $ | 45,210 | $ | 32,262 | $ | 12,948 | 40 | % | $ | 41,913 | $ | 9,651 | 30 | % | |||||||||||||||||||||||||||
For the three months ended March 31, 2026, net revenue on a constant currency basis was $41.9 million, representing a 30% increase from the three months ended March 31, 2025. On a constant currency basis, net revenue increased for the three months ended March 31, 2026, primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, and higher cannabis extract and flower sales in the Canadian market.
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Gross profit
For the three months ended March 31, 2026, gross profit on a constant currency basis was $17.6 million, representing a 28% increase from the three months ended March 31, 2025. On a constant currency basis, gross profit increased for the three months ended March 31, 2026, primarily due to higher average sales prices, largely driven by a mix shift to Israel and other countries, which carry no excise tax, higher sales volumes, and the impact of the inventory step-up from the Cronos GrowCo Transaction recognized in the three months ended March 31, 2025. For the three months ended March 31, 2025, we recognized $0.5 million of inventory step-up from the Cronos GrowCo Transaction in cost of sales. No such costs were recognized for the three months ended March 31, 2026.
Operating expenses
For the three months ended March 31, 2026, operating expenses on a constant currency basis were $20.0 million, representing a 12% increase from the three months ended March 31, 2025. On a constant currency basis, operating expenses increased for the three months ended March 31, 2026, primarily due to higher salaries and benefits, transaction costs and product development costs, partially offset by lower share-based compensation expense.
Net income
For the three months ended March 31, 2026, net income on a constant currency basis was $14.8 million, representing an increase in net income of $7.1 million from the three months ended March 31, 2025. On a constant currency basis, the improvement in net income for the three months ended March 31, 2026, was primarily due to higher gross profit and other income, partially offset by higher operating expenses.
Adjusted EBITDA
For the three months ended March 31, 2026, Adjusted EBITDA on a constant currency basis was $4.2 million, representing a $1.9 million improvement from the three months ended March 31, 2025. The improvement in Adjusted EBITDA for the three months ended March 31, 2026 on a constant currency basis was driven by higher gross profit, partially offset by higher operating expenses due to higher sales and marketing, general and administrative, and research and development costs.
Cash and cash equivalents & short-term investments
Cash and cash equivalents and short-term investments on a constant currency basis decreased 1% to $822.3 million as of March 31, 2026, from $831.8 million as of December 31, 2025. The decrease in cash and cash equivalents and short-term investments on a constant currency basis is primarily due to repurchases of common stock, purchases of property, plant and equipment, and withholding taxes paid on share-based awards, partially offset by positive cash from operating activities.
Liquidity and Capital Resources
As of March 31, 2026, we had $822 million in cash and cash equivalents and no short-term investments. We believe that the existing cash and cash equivalents will be sufficient to fund the business operations and capital expenditures over the next twelve months. The following table summarizes the cash flows from operating, investing and financing activities:
| (In thousands of U.S. dollars) | Three months ended March 31, | ||||||||||
| 2026 | 2025 | ||||||||||
| Net cash provided by (used in) operating activities | $ | 10,898 | $ | (2,096) | |||||||
Net cash provided by (used in) investing activities | 38,029 | (55,356) | |||||||||
| Net cash used in financing activities | (18,268) | (2,930) | |||||||||
| Effect of foreign currency translation on cash and cash equivalents | (597) | (604) | |||||||||
| Net change in cash | $ | 30,062 | $ | (60,986) | |||||||
Comparison of cash flows between the three months ended March 31, 2026 and the three months ended March 31, 2025
Operating activities
During the three months ended March 31, 2026, we generated $10.9 million of cash from operating activities as compared to $2.1 million of cash used in the three months ended March 31, 2025, representing an increase in cash generated of $13.0 million. This change is primarily driven by decreases in accounts receivable, prepaids and other current assets, and other receivables, as well as a lower decrease in accrued liabilities compared to the three months ended March 31, 2025. These were partially offset by a $1.8 million decrease in net income after adjusting for non-cash items during the three months ended March 31, 2026, compared to the three months ended March 31, 2025, and a lower decrease to interest receivable.
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Investing activities
During the three months ended March 31, 2026, we generated $38.0 million of cash from investing activities, compared to $55.4 million of cash used in investing activities during the three months ended March 31, 2025, representing a change of $93.4 million. This change was driven by the maturity of $40.0 million of short-term investments and lower capital expenditures during the three months ended March 31, 2026, compared to the purchase of $40.0 million of short-term investments during the three months ended March 31, 2025.
Financing activities
During the three months ended March 31, 2026, cash used in financing activities was $18.3 million, compared to $2.9 million of cash used in financing activities during the three months ended March 31, 2025, representing an increase in cash used of $15.3 million. This change is primarily driven by $16.7 million of share repurchases, partially offset by a decrease in withholding taxes paid on share-based awards during the three months ended March 31, 2026 compared to the three months ended March 31, 2025.
Share Repurchase Program
On May 7, 2025, the Company’s Board of Directors (the “Board”) authorized a share repurchase program of up to $50 million, but not to exceed 19,270,951 common shares, being 5% of the outstanding common shares as of May 7, 2025. The repurchase program commenced on May 14, 2025 and is expected to terminate on May 13, 2026 unless earlier terminated. In the three months ended March 31, 2026, we repurchased 6,365,700 common shares at costs of approximately $16.7 million, inclusive of commissions and excise taxes. As of March 31, 2026, the Company has repurchased a total of 10,785,181 common shares at costs of approximately $26.5 million, inclusive of commissions and excise taxes, under the repurchase program. Commissions and excise taxes do not reduce the Company’s remaining repurchase authorization. Accordingly, the Company has remaining authorization to repurchase up to $23.9 million of additional common shares, not to exceed the remaining 8,485,770 common shares authorized by the Board.
Subsequent to March 31, 2026, the Board authorized a new share repurchase program intended to succeed the Company’s existing share repurchase program. See Note 15, “Subsequent Events.”
Cash Requirements
The Company’s cash requirements have not changed significantly since the filing of the Annual Report.
Cronos GrowCo Credit Facility
On August 23, 2019, the Company, as lender, and Cronos GrowCo, as borrower, entered into a senior secured credit agreement for an aggregate principal amount of C$100.0 million (as amended, the “GrowCo Credit Facility”). The GrowCo Credit Facility is secured by substantially all present and after-acquired personal and real property of Cronos GrowCo. In August 2021, the GrowCo Credit Facility was amended to increase the aggregate principal amount available to C$105.0 million, and in June 2024, the GrowCo Credit Facility was amended to increase the aggregate principal amount available by C$70.0 million to C$175.0 million by providing a second secured non-revolving credit facility.
As a result of the Cronos GrowCo Transaction on July 1, 2024, the existing loans receivable under the GrowCo Credit Facility were remeasured at their fair value and effectively settled for accounting purposes. Beginning in the third quarter of 2024, the GrowCo Credit Facility has been treated as an intercompany loan and eliminated upon consolidation.
For the three months ended March 31, 2026, Cronos GrowCo repaid an aggregate C$3.4 million ($2.5 million) and C$1.8 million ($1.3 million) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.
As of March 31, 2026, Cronos GrowCo had repaid an aggregate C$39.3 million ($28.6 million) and C$38.2 million ($27.8 million) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.
As of March 31, 2026, the closing balance of the GrowCo Credit Facility was C$127.7 million ($91.8 million).
Critical Accounting Policies and Estimates
Our critical accounting policies and estimates are discussed in Item 7, “Management’s Discussion and Analysis of Financial Condition and Results of Operations” in our Annual Report. Our critical accounting policies and estimates have not changed significantly since the filing of the Annual Report.
Item 3. Quantitative and Qualitative Disclosures About Market Risk.
The Company is exposed to certain market risks, including changes from foreign currency exchange rates related to our international operations. Except as updated below, the Company’s market risks have not changed significantly from the market risk disclosed in Item 7A, “Quantitative and Qualitative Disclosures About Market Risk” in our Annual Report.
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Foreign currency risk
The Company’s condensed consolidated financial statements included in Part I, Item 1. “Financial Statements” of this Quarterly Report are expressed in U.S. dollars. The Company is exposed to foreign currency risk based on its net assets, liabilities, and revenue denominated in foreign currencies, including Canadian dollars and Israeli new shekels. As a result, we are exposed to foreign currency translation gains and losses. Revenue and expenses of all foreign operations are translated into U.S. dollars at the foreign currency exchange rates that approximate the rates in effect during the period when such items are recognized. Appreciating foreign currencies relative to the U.S. dollar will positively impact operating income and net earnings, while depreciating foreign currencies relative to the U.S. dollar will have an adverse impact.
A 10% change in the exchange rates for the Canadian dollar would have affected the carrying amount of the net assets by approximately $37.7 million and $40.5 million as of March 31, 2026 and December 31, 2025, respectively. The corresponding impact would be recorded in accumulated other comprehensive income. We have not historically engaged in hedging transactions and do not currently contemplate engaging in hedging transactions to mitigate foreign exchange risks. 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 the Company’s results of operations.
During the three months ended March 31, 2026, the Company had foreign currency loss on translation of $17.9 million. During the three months ended March 31, 2025, the Company had foreign currency loss on translation of $3.1 million.
Interest rate risk
Interest rate risk is the risk that the value or yield of fixed-income investments may decline if interest rates change. Fluctuations in interest rates may impact the level of income and expense recorded on the cash equivalents and short-term investments, and the market value of all interest-earning assets, other than those which possess a short term to maturity. During the three months ended March 31, 2026 and 2025, we had interest income, net of $8.9 million and $9.7 million, respectively. A 10% decrease in the interest rate in effect on March 31, 2026 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% decrease in the interest rate in effect for the three months ended March 31, 2026 would have an effect of $1.1 million on interest income, net earned on our cash equivalents and short-term investments.
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Item 4. Controls and Procedures.
(a)Evaluation of Disclosure Controls and Procedures
The Company’s management, with the participation of the Chief Executive Officer and the Chief Financial Officer, performed an evaluation of the disclosure controls and procedures, as defined in Rules 13a-15(e) and 15d-15(e) of the Securities Exchange Act of 1934 (the “Exchange Act”), as of March 31, 2026. Based on that evaluation, management has concluded that, as of March 31, 2026, the disclosure controls and procedures were effective to provide reasonable assurance that the information required to be disclosed by us in reports we file or submit under the Exchange Act were recorded, processed, summarized and reported within the time periods specified in the rules and forms of the SEC, and to ensure that the information required to be disclosed by us in reports that we file or submit under the Exchange Act, is accumulated and communicated to management, including the principal executive officer and principal financial officer, as appropriate, to allow timely decisions regarding required disclosure.
(b)Changes in Internal Control over Financial Reporting
There were no changes in the Company’s internal control over financial reporting (as defined in Rules 13a-15(f) and 15d-15(f) under the Exchange Act), that occurred during the three months ended March 31, 2026, that have materially affected, or are reasonably likely to materially affect, the Company’s internal control over financial reporting.
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PART II
OTHER INFORMATION
OTHER INFORMATION
Item 1: Legal Proceedings.
The information set forth under Note 10(b), Contingencies, to the Company’s condensed consolidated interim financial statements included in Part I, Item 1 “Financial Statements” of this Quarterly Report is incorporated herein by reference.
Item 1A: Risk Factors.
An investment in us involves a number of risks. A detailed discussion of our risk factors appears in Part I, Item 1A. Risk Factors of the Annual Report. Any of the matters highlighted in the risk factors described in the Annual Report could adversely affect our business, results of operations and financial condition, causing an investor to lose all, or part of, its, his or her investment. These risks and uncertainties are those we currently believe to be material, but they are not the only ones we face. If any of these risks and uncertainties, 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.
Item 2. Unregistered Sales of Equity Securities and Use of Proceeds.
Purchases of Equity Securities by the Issuer and Affiliated Purchasers
Share repurchase activity during the three months ended March 31, 2026 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 on repurchase plan(i) | Approximate shares that may yet be purchased on repurchase plan | ||||||||||||||||||||||||
| January 1, 2026 to January 31, 2026 | 1,436,939 | $ | 2.61 | $ | 3,875 | $ | 36,534 | 13,414,531 | |||||||||||||||||||||
| February 1, 2026 to February 28, 2026 | 1,465,978 | 2.63 | 3,935 | 32,683 | 11,948,553 | ||||||||||||||||||||||||
| March 1, 2026 to March 31, 2026 | 3,462,783 | 2.54 | 8,920 | 23,906 | 8,485,770 | ||||||||||||||||||||||||
| 6,365,700 | $ | 16,730 | |||||||||||||||||||||||||||
(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. During the three months ended March 31, 2026, the Company repurchased $16,730 of its common shares, including $272 of excise taxes. The repurchase program is expected to terminate on May 13, 2026, unless earlier terminated. Subsequent to March 31, 2026, the Board authorized a new share repurchase program intended to succeed the Company’s existing share repurchase program. See Note 15, “Subsequent Events.”
Item 3. Defaults Upon Senior Securities.
None.
Item 4. Mine Safety Disclosures.
Not applicable.
Item 5. Other Information.
Rule 10b5-1 Trading Plans
Securities Trading Plans of Directors and Executive Officers
During the three months ended March 31, 2026, no directors or executive officers entered into terminated
Certain of our officers or directors have made, and may from time to time make, elections to have shares withheld to cover withholding taxes or pay the exercise price of options, which may be designed to satisfy the affirmative defense conditions of Rule 10b5-1 under the Exchange Act or may constitute non-Rule 10b5–1 trading arrangements (as defined in Item 408(c) of Regulation S-K).
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Item 6. Exhibits
The exhibits listed in the Exhibit Index immediately below are filed as part of this Quarterly Report, which Exhibit Index is incorporated by reference herein.
| Exhibit Number | Exhibit Index | |||||||
3.1 | Certificate of Continuance and Articles of Cronos Group Inc. (incorporated by reference to Exhibit 3.1 to the Quarterly Report on Form 10-Q of Cronos Group Inc., filed on August 8, 2024). | |||||||
10.1†* | Amended and Restated Executive Employment Agreement, dated April 1, 2024, by and among Cronos Israel G.S. Cultivation Ltd., the Company and Adam Wagner. | |||||||
10.2†* | Letter Agreement, dated May 6, 2025, by and among Cronos Israel G.S. Cultivation Ltd., the Company and Adam Wagner. | |||||||
10.3†* | Letter Agreement, dated October 31, 2025, by and among Cronos Israel G.S. Cultivation Ltd., the Company and Adam Wagner. | |||||||
| 31.1* | Certification of the Principal Executive Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 31.2* | Certification of the Principal Financial Officer pursuant to Rules 13a-14(a) and 15d-14(a) of the Securities Exchange Act of 1934, as amended, as adopted pursuant to Section 302 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.1** | Certification of the Principal Executive Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 32.2** | Certification of the Principal Financial Officer pursuant to 18 U.S.C. Section 1350, as adopted pursuant to Section 906 of the Sarbanes-Oxley Act of 2002. | |||||||
| 101.INS* | XBRL Instance Document. | |||||||
| 101.SCH* | XBRL Taxonomy Extension Schema Document. | |||||||
| 101.CAL* | XBRL Taxonomy Extension Calculation Linkbase Document. | |||||||
| 101.DEF* | XBRL Taxonomy Extension Definition Linkbase Document. | |||||||
| 101.LAB* | XBRL Taxonomy Extension Label Linkbase Document. | |||||||
| 101.PRE* | XBRL Taxonomy Extension Presentation Linkbase Document. | |||||||
† Management contract or compensatory plan or arrangement.
* Filed herewith.
** Furnished herewith and not “filed” for purposes of Section 18 of the Securities Exchange Act of 1934, as amended.
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SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934, the registrant has duly caused this report to be signed on its behalf by the undersigned thereunto duly authorized.
| CRONOS GROUP INC. | ||||||||
| By: | /s/ Anna Shlimak | |||||||
Anna Shlimak Chief Financial Officer and Principal Financial Officer | ||||||||
| May 11, 2026 | ||||||||
| By: | /s/ Jared Kenost | |||||||
Jared Kenost Vice President, Controller and Principal Accounting Officer | ||||||||
| May 11, 2026 | ||||||||
45
FAQ
How did Cronos Group (CRON) perform financially in Q1 2026?
Cronos Group reported net revenue of 45,210 and net income attributable to the company of 13,752 for Q1 2026. Adjusted EBITDA improved to 5,079 from 2,289 a year earlier, reflecting higher gross profit despite restructuring and transaction costs.
What were Cronos Group (CRON) earnings per share for Q1 2026?
Cronos Group posted basic and diluted net income per share of 0.04 for Q1 2026, up from 0.02 in the prior-year quarter. The improvement came from higher net revenue and other income, including interest and foreign currency gains.
What is Cronos Group’s cash position and debt level as of March 31, 2026?
As of March 31, 2026, Cronos Group held 821,856 in cash and cash equivalents and reported no debt in its balance sheet. Total assets were 1,172,109 and total liabilities were 48,295, supporting shareholders’ equity of 1,123,814.
Did Cronos Group (CRON) repurchase shares in Q1 2026?
Yes. Cronos Group repurchased 6,365,700 common shares for 16,730, inclusive of commissions and excise taxes, under its 50,000 share repurchase authorization. All repurchased shares were retired and cancelled, reducing outstanding common shares to 376,258,707 at quarter-end.
Has Cronos Group authorized a new share repurchase program?
On May 8, 2026, the board authorized a new share repurchase program of up to 50,000, commencing May 14, 2026 and expected to run until May 13, 2027. Open market repurchases will be limited to 5% of outstanding shares, and will be funded with available cash resources.
What is the status of Cronos Group’s class action litigation related to past restatements?
For the U.S. class action in New York, the parties reached an agreement-in-principle for a 10,000 settlement to be distributed to class members, subject to court approval. The proposed settlement would not resolve claims of persons who acquired shares on the TSX.
What major strategic initiatives is Cronos Group (CRON) pursuing?
Cronos Group continues its Realignment program, has a pending acquisition of CanAdelaar under an amended share purchase agreement extending the long stop date to September 9, 2026, and maintains significant R&D and brand-building efforts in cannabis flower and extracts markets in Canada, Israel and other countries.