Cronos Group Inc.

Consolidated Results of Operations - 2025 Compared to 2024

The tables below set forth our consolidated results of operations, expressed in thousands of U.S. dollars for the periods presented. Our consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods.

Summary of select financial results

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

Net revenue

For 2025, we reported consolidated net revenue of $146.6 million, representing a $29.0 million increase from 2024. This change was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the inclusion of a full year of Cronos GrowCo sales in the current period, and higher cannabis extract sales in the Canadian market, partially offset by a decrease in cannabis flower sales in the Canadian market due to supply constraints. Due to the consolidation of Cronos GrowCo’s results of operations in our financial statements beginning July 1, 2024, Cronos GrowCo contributed $10.3 million of cannabis flower sales to third parties in the year ended December 31, 2025, compared to $6.4 million of cannabis flower sales to third parties in the year ended December 31, 2024.

Cost of sales

For 2025, we reported consolidated cost of sales of $83.2 million, representing a $8.5 million decrease from 2024. This decrease was primarily due to lower amounts of inventory step-up from the transaction by which we obtained majority control of the board of directors of Cronos GrowCo (the “Cronos GrowCo Transaction”) recognized into cost of sales, as well as the consolidation of Cronos GrowCo and production efficiencies, partially offset by higher sales volumes. For 2025 and 2024, we recognized $0.5 million and $5.3 million, respectively, of inventory step-up from the Cronos GrowCo Transaction into cost of sales.

Inventory write-down

For each of 2025 and 2024, we reported inventory write-downs of $0.7 million. The activity in both years was due to write-downs resulting from unusable inventory that was scrapped in the period.

Gross profit

For 2025, we reported consolidated gross profit of $62.8 million, representing a $37.6 million increase from 2024. The increase in gross profit was primarily due to lower amounts of inventory step-up from the Cronos GrowCo Transaction recognized into cost of sales, the consolidation of Cronos GrowCo, higher average sales prices driven primarily by a mix shift to Israel and other countries, higher sales volumes, and production efficiencies. For 2025 and 2024, gross profit was reduced $0.5 million and $5.3 million, respectively, as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales.

Operating expenses

Sales and marketing

For 2025, we reported sales and marketing expenses of $21.8 million, representing an increase of $0.2 million from 2024. The increase was primarily due to higher salaries and benefits, partially offset by lower marketing expenses.

Research and development

For 2025, we reported research and development expenses of $4.4 million, representing an increase of $0.2 million from 2024. The increase was primarily due to higher costs associated with genetics development, partially offset by lower salaries and benefits.

General and administrative

For 2025, we reported general and administrative expenses of $42.0 million, representing a decrease of $4.5 million from 2024. The decrease was primarily due to lower salaries and benefits and lower expected credit loss allowances on loans receivable, partially offset by the consolidation of Cronos GrowCo and higher transaction costs. For the year ended December 31, 2025, changes in expected credit loss allowances on loans receivable decreased general and administrative expenses by $16 thousand, compared to an increase to general and administrative expenses of $1.0 million for the year ended December 31, 2024. For the year ended December 31, 2025 and 2024, general and administrative expenses related to Cronos GrowCo were $4.2 million and $1.5 million, respectively.

Restructuring costs

For 2025, we reported restructuring costs of $2.0 million, representing an increase of $1.4 million from 2024. The restructuring costs in 2025 and 2024 were related to Realignment activities. See Note 18 “Restructuring” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Share-based compensation

For 2025, we reported share-based compensation expenses of $7.1 million, representing a decrease of $1.7 million compared to 2024. The decrease was primarily due to lower amounts of share-based compensation awards outstanding, partially offset by the inclusion of expense related to DSUs in share-based compensation in 2025, which was not included in share-based compensation in 2024.

Depreciation and amortization

For 2025, depreciation and amortization expenses were $2.1 million, representing a decrease of $1.6 million from 2024. The decrease was primarily due to lower amortization of intangible assets.

Impairment loss on goodwill and indefinite-lived intangible assets

For 2025, impairment loss on goodwill and indefinite-lived intangible assets was $0.7 million and related to the Company’s Lord Jones® indefinite-lived intangible asset. There were no such impairment losses in 2024. See Note 8 “Goodwill and Intangible Assets, net” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Impairment loss on long-lived assets

For 2025, impairment loss on long-lived assets was $36 thousand, compared to $16.4 million in 2024. Impairment loss on long-lived assets in 2024 was primarily due to the impairment of the exclusive rights to use and commercialize the key patented intellectual property related to the production of the target cannabinoids (the “Ginkgo Exclusive Licenses”) globally and the cessation of operations of Thanos Holdings Ltd., known as Cronos Fermentation (“Cronos Fermentation”). See Note 8 “Goodwill and Intangible Assets, net” and Note 18 “Restructuring” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Total other income, income tax expense (benefit) and loss from discontinued operations

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

Interest income, net

For 2025, we reported interest income, net of $40.0 million, representing a decrease of $12.1 million from 2024, primarily due to lower interest rates in the current period and the absence of income recognized on the Cronos GrowCo loan receivable, which is eliminated in consolidation, effective from and after July 1, 2024.

Share of income from equity method investments

For 2025, we had no income from equity method investments, compared to $2.4 million in 2024. As a result of the Cronos GrowCo Transaction on July 1, 2024, we now consolidate Cronos GrowCo and no longer account for our investment in Cronos GrowCo as an equity method investment. See Note 5 “Investments” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Gain on revaluation of loans receivable

For 2025, we reported no gain on revaluation of loans receivable. For 2024, we reported a gain on revaluation of loans receivable of $11.8 million. The gain related to the remeasurement of the outstanding loans receivable under the credit facility with Cronos GrowCo as a result of the Cronos GrowCo Transaction on July 1, 2024. See Note 6 “Loans Receivable, net” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Gain on revaluation of equity method investment

For 2025, we reported no gain on revaluation of equity method investment. For 2024, we reported a gain on revaluation of equity method investment of $32.5 million related to the remeasurement of the existing investment in Cronos GrowCo as a result of the

Cronos GrowCo Transaction. See Note 5 “Investments” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Loss on revaluation of financial instruments

For 2025, we reported a loss on revaluation of financial instruments of $0.5 million, compared to a loss of $6.2 million in 2024. The decreased loss was primarily related to the changes in fair value of our investment in Vitura Health Limited (“Vitura”) and the warrant (the “High Tide Warrant”) to purchase common shares of High Tide Inc. (“High Tide”). See Note 5 “Investments” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Impairment loss on other investments

For 2025, we recognized no impairment loss on other investments. For 2024, we recognized $25.7 million of impairment loss on other investments, driven by impairment charges recorded on our PharmaCann Option for the difference between its estimated fair value and its carrying amount. See Note 5 “Investments” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Foreign currency transaction gain (loss)

For 2025, foreign currency transaction loss was $28.6 million, representing a change of $86.4 million from 2024. The change was primarily due to the weakening 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.

Loss on held-for-sale assets

For 2025, we recognized $5.5 million of loss on held-for-sale assets. For 2024, we recognized $11.2 million of loss on held-for-sale assets. The losses in both 2025 and 2024 relate to decreases in the fair value of the Cronos Fermentation Facility held-for-sale assets. See Note 18 “Restructuring” to the consolidated financial statements in Item 8 of this Annual Report for additional information.

Change in allowance for credit loss on non-operating loan

For 2025, change in allowance for credit loss on non-operating loan was $4.9 million. The expense relates to the change in the allowance for credit loss on the junior secured convertible debt (the “High Tide Loan”) from High Tide. For further information, see Note 6 “Loans Receivable, net.”

Other, net

Other, net primarily includes gains and losses on the disposal of assets.

Income tax benefit

For 2025, we reported an income tax benefit of $14.2 million, compared to an income tax benefit of $3.4 million in 2024. The change was primarily driven by tax benefits realized on the termination of the Ginkgo Collaboration Agreement and the disposition of the Cronos Fermentation Facility assets in 2025.

Net income (loss)

For the year ended December 31, 2025, net loss was $2.9 million, compared to net income of $40.0 million for the year ended December 31, 2024. The change was mainly driven by foreign currency transaction loss, partially offset by higher gross profit and lower operating expenses.