Cronos Group Inc.

Previous wording

•expectations related to the German, Australian and United Kingdom (“UK”) markets, including our strategic partnerships with Cansativa GmbH (“Cansativa”), Vitura Health Limited (“Vitura”), and other distributors, respectively, and our ability to successfully distribute the PEACE NATURALS® brand in Germany and the UK;

Current wording

•expectations related to the German, Australian, United Kingdom (“UK”), Swiss, and Malta markets and our ability to successfully distribute the PEACE NATURALS® brand in our overseas markets;

Previous wording

•expectations related to our announcement of cost-cutting measures, including our decision to wind down operations at our Winnipeg, Manitoba facility and list the facility for sale, the expected costs and benefits from the wind-down of production activities at the facility, challenges and effects related thereto as well as changes in strategy, metrics, investments, costs, operating expenses, employee turnover and other changes with respect thereto;

Current wording

•expectations related to our announcement of cost-cutting measures, including our decision to wind down operations at our Winnipeg, Manitoba facility and list the facility for sale, the expected costs and benefits from the wind-down of production activities at the facility, as well as changes in strategy, metrics, investments, costs, operating expenses, employee turnover and other changes with respect thereto;

Previous wording

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

Current wording

•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;

Previous wording

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 Germany with our strategic partner Cansativa and in the UK and our ability to efficiently and effectively distribute products in Australia with our strategic partner Vitura; (iv) our ability to realize the expected cost-savings and other benefits related to the wind-down of our operations at our Winnipeg, Manitoba facility; (v) expectations related to the impact of our decision to exit our U.S. hemp-derived cannabinoid product operations; (vi) 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; (vii) our ability to efficiently and effectively manage our operations at our Peace Naturals Campus; (viii) our ability to efficiently and effectively acquire raw materials on a timely and cost-effective basis from third parties or Cronos GrowCo; (ix) the timely completion of the expansion of Cronos GrowCo’s purpose-built cannabis facility and the ability of Cronos GrowCo to repay the credit facility provided by Cronos; (x) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our business combinations and strategic investments; (xi) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments; (xii) government regulation of our activities and products including, but not limited to, the areas of cannabis taxation and environmental protection; (xiii) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; (xiv) consumer interest in our products; (xv) our ability to differentiate our products, including through the utilization of rare cannabinoids; (xvi) competition; (xvii) anticipated and unanticipated costs; (xviii) our ability to generate cash flow from operations; (xix) our ability to conduct operations in a safe, efficient and effective manner; (xx) our ability to hire and retain qualified staff and acquire equipment and services in a timely and cost-efficient manner; (xxi) our ability to exercise the PharmaCann Option and realize the anticipated benefits of the transaction with PharmaCann; (xxii) our ability to complete planned dispo…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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 our overseas markets; (iv) our ability to realize the expected cost-savings and other benefits related to the wind-down of our operations at our Winnipeg, Manitoba facility; (v) expectations related to the impact of our decision to exit our U.S. hemp-derived cannabinoid product operations; (vi) 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; (vii) our ability to efficiently and effectively manage our operations at our Peace Naturals Campus; (viii) our ability to efficiently and effectively acquire raw materials on a timely and cost-effective basis from third parties or Cronos GrowCo; (ix) our ability to realize the expected benefits related to the expansion of Cronos GrowCo’s purpose-built cannabis facility and the ability of Cronos GrowCo to repay the credit facility provided by Cronos; (x) our ability to realize anticipated benefits, synergies or generate revenue, profits or value from our business combinations and strategic investments; (xi) the production and manufacturing capabilities and output from our facilities and our joint ventures, strategic alliances and equity investments; (xii) government regulation of our activities and products including, but not limited to, the areas of cannabis taxation and environmental protection; (xiii) the timely receipt of any required regulatory authorizations, approvals, consents, permits and/or licenses; (xiv) consumer interest in our products; (xv) our ability to differentiate our products, including through the utilization of rare cannabinoids; (xvi) competition; (xvii) anticipated and unanticipated costs; (xviii) our ability to generate cash flow from operations; (xix) our ability to conduct operations in a safe, efficient and effective manner; (xx) our ability to hire and retain qualified staff and acquire equipment and services in a timely and cost-efficient manner; (xxi) our ability to complete planned dispositions, and, if completed, obtain our anticipated sales price; (xxii) general economic, financial market, regulatory and political conditions in which we operate; (xxiii) management’s perceptions of historical trends, current conditions and expec…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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; that we may not be able to successfully continue to distribute our products in Germany, Australia and the UK or generate material revenue from sales in those markets; that we may not be able to achieve the anticipated benefits of the wind-down of our operations at our Winnipeg, Manitoba facility; that we may be unable to further streamline our operations and reduce 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 Cronos GrowCo may not be able to complete the expansion of its purpose-built cannabis facility within a reasonable time or repay its borrowings under the credit facility provided by Cronos; 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 our products; our inability to manage disruptions in…

Excerpt shortened here; the source contains the full paragraph.

Current wording

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; that we may not be able to successfully continue to distribute our products in Germany, Australia, the UK, Switzerland and Malta or generate material revenue from sales in those markets; that we may not be able to achieve the anticipated benefits of the wind-down of our operations at our Winnipeg, Manitoba facility; that we may be unable to further streamline our operations and reduce 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 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; 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 reven…

Excerpt shortened here; the source contains the full paragraph.

Previous wording

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, 2025, March 31, 2024, and December 31, 2024. 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.

Current wording

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 June 30, 2025, June 30, 2024, and December 31, 2024. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates. The condensed consolidated statements of net 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.

Previous wording

The construction of Cronos GrowCo’s expanded cultivation facilities is on track for completion in Q2 2025, with first harvests and sales beginning in the second half of the year. The Company believes this additional supply will fuel growth internationally and within the domestic Canadian market.

Current wording

The Phase 2 Expansion Area is now complete and we expect sales from the expansion in Fall 2025. The Company believes this additional supply will fuel growth internationally and within the domestic Canadian market.

Previous wording

Following an investigation into allegations of dumping of Canadian medical cannabis imports into Israel—which Cronos firmly disputes—on April 10, Israel’s Minister of Economy approved an anti-dumping duty of up to 165% on Canadian medical cannabis, which would include Cronos’ imports. On April 25, Israel’s Minister of Finance vetoed the proposed duty. Despite the veto, on April 29, the Minister of Economy issued a memorandum stating that the Ministry of Economy and Industry intends to move forward with the duty process, including seeking final approval from the Knesset’s Finance Committee. Cronos agrees with the conclusions of Israel’s Ministry of Finance, Ministry of Health, and Competition Authority that the proposed duty is inappropriate and would adversely impact the Israeli medical cannabis market by significantly raising prices and reducing product choice for patients. The Company intends to continue to advocate for a fair and equitable medical cannabis market in Israel.

Current wording

On July 3, 2025, the Israel Ministry of Justice announced that it had concluded that the Minister of Finance’s veto of the proposed anti-dumping duty was valid. The Minister of Economy had sought to impose an anti-dumping duty of 165% on the Company’s medical cannabis imports into Israel, which the Minister of Finance subsequently vetoed. This matter stems from an investigation launched in January 2024 into allegations of dumping of Canadian medical cannabis into Israel. The Company strongly refuted the allegations and is pleased with the decision to veto the proposed anti-dumping duty. Cronos will continue to advocate for a fair and equitable market structure that benefits Israel’s medical cannabis patients.

Previous wording

For the three months ended March 31, 2025, we reported consolidated net revenue of $32.3 million, representing an increase of $7.0 million from the three months ended March 31, 2024. The increase was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, and higher cannabis extract sales in the Canadian market. Due to the consolidation of Cronos GrowCo’s results of operations in our financial statements beginning July 1, 2024, Cronos GrowCo contributed $2.9 million of cannabis flower sales in the three months ended March 31, 2025. No such sales were recognized for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, we reported consolidated net revenue of $33.5 million, representing an increase of $5.7 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, we reported consolidated net revenue of $65.7 million, representing an increase of $12.7 million from the six months ended June 30, 2024. For both the three and six month comparative periods, the increase was primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the consolidation of Cronos GrowCo, and higher cannabis extract sales in the Canadian market. Due to the consolidation of Cronos GrowCo’s results of operations in our financial statements beginning July 1, 2024, Cronos GrowCo contributed $2.2 million and $5.1 million, respectively, of cannabis flower sales in the three and six months ended June 30, 2025. No such sales were recognized for both the three and six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, we reported consolidated cost of sales of $18.5 million, representing a decrease of $2.3 million from the three months ended March 31, 2024. The decrease was primarily due to lower direct costs and production efficiencies, partially offset by higher sales volumes and the impact of the inventory step-up from the Cronos GrowCo Transaction. 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, 2024.

Current wording

For the three months ended June 30, 2025, we reported consolidated cost of sales of $18.9 million, representing a decrease of $2.2 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, we reported consolidated cost of sales of $37.4 million, representing a decrease of $4.5 million from the six months ended June 30, 2024. For both the three and six month comparative periods, the decrease was primarily due to the consolidation of Cronos GrowCo and production efficiencies, partially offset by higher sales volumes. For the six months ended June 30, 2025, we recognized $0.5 million of inventory step-up from the Cronos GrowCo Transaction into cost of sales. No such costs were recognized for the three months ended June 30, 2025 or the three and six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, we reported gross profit of $13.7 million, representing an increase of $9.3 million from the three months ended March 31, 2024. The increase was primarily due to higher sales volumes and average sales prices, lower direct costs, and production efficiencies, partially offset by the impact on cost of sales from the inventory step-up from the Cronos GrowCo Transaction. 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, 2024.

Current wording

For the three months ended June 30, 2025, we reported gross profit of $14.5 million, representing an increase of $8.2 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, we reported gross profit of $28.2 million, representing an increase of $17.5 million from the six months ended June 30, 2024. For both the three and six month comparative periods, the increase was primarily due to 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 the six months ended June 30, 2025, gross profit was reduced by $0.5 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales. No such costs were recognized for the three months ended June 30, 2025 or the three and six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, research and development expenses were $0.8 million, representing a decrease of $0.2 million compared to the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, research and development expenses were flat at $0.9 million compared to the three months ended June 30, 2024. For the six months ended June 30, 2025, research and development expenses were $1.7 million, representing a decrease of $0.2 million from the six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, general and administrative expenses were $9.3 million, representing an increase of $0.4 million from the three months ended March 31, 2024. The increase was primarily due to higher legal fees and the impact of the Cronos GrowCo Transaction, partially offset by lower salaries and benefits. The impact of the Cronos GrowCo Transaction increased general and administrative expenses by $0.8 million. No such costs were incurred in the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, general and administrative expenses were $10.5 million, representing a decrease of $2.2 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, general and administrative expenses were $19.8 million, representing a decrease of $1.8 million from the six months ended June 30, 2024. For both the three and six month comparative periods, the decrease was primarily due to lower salaries and benefits and higher expected credit loss allowance on loans receivable recorded in the prior period, partially offset by the consolidation of Cronos GrowCo. For the three and six months ended June 30, 2025, the impact of the consolidation of Cronos GrowCo increased general and administrative expenses by $0.9 million and $1.7 million, respectively. No such costs were recorded in the three or six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, restructuring costs were $0.6 million, representing an increase of $0.5 million from the three months ended March 31, 2024. For further information, see Note 8 “Restructuring” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Current wording

For the three months ended June 30, 2025, restructuring costs were $0.8 million, representing an increase of $0.2 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, restructuring costs were $1.3 million, representing an increase of $0.7 million from the six months ended June 30, 2024. For further information, see Note 8 “Restructuring” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Previous wording

For the three months ended March 31, 2025, share-based compensation expense was $2.1 million, representing an increase of $0.1 million from the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, share-based compensation expense was $1.4 million, representing a decrease of $0.9 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, share-based compensation expense was $3.5 million, representing a decrease of $0.8 million from the six months ended June 30, 2024. For both the three and six month comparative periods, the decrease was primarily due to lower amounts of share-based compensation awards outstanding.

Previous wording

For the three months ended March 31, 2025, depreciation and amortization expenses were $0.5 million, representing a decrease of $0.6 million from the three months ended March 31, 2024. The decrease was primarily due to lower amortization on intangible assets.

Current wording

For the three months ended June 30, 2025, depreciation and amortization expenses were $0.9 million, representing a decrease of $0.1 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, depreciation and amortization expenses were $1.4 million, representing a decrease of $0.8 million from the six months ended June 30, 2024. For the six month comparative period, the decrease was primarily due to lower amortization on intangible assets.

Previous wording

For the three months ended March 31, 2024, impairment loss on long-lived assets was $2.0 million and was primarily due to the cessation of operations at Cronos Fermentation during the first quarter of 2024. For the three months ended March 31, 2025, there were no such impairment losses. For further information, see Note 8 “Restructuring” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Current wording

For the six months ended June 30, 2024, impairment loss on long-lived assets was $2.0 million and was primarily due to the cessation of operations at Cronos Fermentation during the first quarter of 2024. There were no such impairment losses for the three and six months ended June 30, 2025, or the three months ended June 30, 2024. For further information, see Note 8 “Restructuring” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Previous wording

For the three months ended March 31, 2025, interest income, net was $9.7 million, representing a decrease of $4.6 million from the three months ended March 31, 2024. The decrease in net interest income was 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.

Current wording

For the three months ended June 30, 2025, interest income, net was $9.0 million, representing a decrease of $4.5 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, interest income, net was $18.7 million, representing a decrease of $9.0 million from the six months ended June 30, 2024. For both the three and six month comparative periods, the decrease in net interest income was 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.

Previous wording

For the three months ended March 31, 2025, we had no income from equity method investments, compared to $1.4 million for the three months ended March 31, 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. For further information, see Note 4 “Investments” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Current wording

For the three months ended June 30, 2025, we had no income from equity method investments, compared to $0.9 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, we had no income from equity method investments, compared to $2.4 million for the six months ended June 30, 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. For further information, see Note 4 “Investments” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Previous wording

Gain (loss) on revaluation of financial instruments

Current wording

Loss on revaluation of financial instruments

Previous wording

For the three months ended March 31, 2025, the income on revaluation of financial instruments was $49 thousand, representing an improvement of $2.7 million from the three months ended March 31, 2024. The change was primarily related to the change in fair value of our investment in Vitura. For further information, see Note 4 “Investments” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Current wording

For the three months ended June 30, 2025, the loss on revaluation of financial instruments was $0.6 million, representing an improvement of $3.0 million from the three months ended June 30, 2024. For the six months ended June 30, 2025, the loss on revaluation of financial instruments was $0.6 million, representing an improvement of $5.7 million from the six months ended June 30, 2024. For both the three and six month comparative periods, the change was primarily related to the change in fair value of our investment in Vitura. For further information, see Note 4 “Investments” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Previous wording

For the three months ended March 31, 2024, we recognized $12.7 million of impairment loss on other investments, driven by an impairment charge recorded on our PharmaCann Option for the difference between its estimated fair value and its carrying amount. There was no such impairment loss on other investments for the three months ended March 31, 2025. For further information, see Note 4 “Investments” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Current wording

For the three and six months ended June 30, 2024, we recognized $12.9 million and $25.7 million, respectively, of impairment loss on other investments, driven by impairment charges recorded on our PharmaCann Option for the difference between its estimated fair value and its carrying amount. There was no such impairment loss on other investments for the three and six months ended June 30, 2025. For further information, see Note 4 “Investments” to the condensed consolidated interim financial statements under Item 1 of this Quarterly Report.

Previous wording

For the three months ended March 31, 2025, income tax benefit was $0.5 million, compared to a benefit of $0.6 million for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, income tax benefit was $0.5 million, compared to a benefit of $2.2 million for the three months ended June 30, 2024. For the six months ended June 30, 2025, income tax benefit was $1.0 million, compared to a benefit of $2.7 million for the six months ended June 30, 2024. For both the three and six month comparative periods, the decrease in benefit was mainly driven by deferred tax expense that was recorded in connection with the utilization of the loss carryforward balances.

Previous wording

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; restructuring costs; inventory write-downs resulting from restructuring actions; share-based compensation; costs related to the Israel Ministry of Economy and Industry dumping inquiry; purchase accounting adjustment-related inventory step-up adjustments recorded through cost of sales; and financial statement review costs and reserves related to the restatements of our 2019 and 2021 interim financial statements (the “Restatements”), including the costs related to the settlement of the SEC’s and the OSC’s investigations of the Restatements and legal costs of defending shareholder class action complaints brought against us as a result of the 2019 restatement (see Part II, Item 1 “Legal Proceedings” 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.

Current wording

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 (gain) loss; other, net; restructuring costs; share-based compensation; costs related to the Israel Ministry of Economy and Industry dumping inquiry; purchase accounting adjustment-related inventory step-up adjustments recorded through cost of sales; and financial statement review costs related to the restatements of our 2019 and 2021 interim financial statements (the “Restatements”), including legal costs of defending shareholder class action complaints brought against us as a result of the 2019 restatement. Results are reported as total consolidated results, reflecting our reporting structure of one reportable segment.

Previous wording

The following tables set forth a reconciliation of Net income (loss) as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated:

Current wording

The following tables set forth a reconciliation of Net loss as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated:

Previous wording

(i)For the three months ended March 31, 2024, impairment loss on long-lived assets was primarily the result of the cessation of operations at Cronos Fermentation during the quarter.

Current wording

(i)For the six months ended June 30, 2024, impairment loss on long-lived assets related to the winding down of operations at Cronos Fermentation.

Previous wording

(ii)For the three months ended March 31, 2025 and 2024, the (gain) loss on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura.

Current wording

(ii)For the three and six months ended June 30, 2025 and 2024, the loss on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura.

Previous wording

(iii)For the three months ended March 31, 2024, impairment loss on other investments represents the fair value change on the PharmaCann Option.

Current wording

(iii)For the three and six months ended June 30, 2024, impairment loss on other investments represents the fair value change on the PharmaCann Option.

Previous wording

(iv)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 statement of net income (loss) and comprehensive income (loss).

Current wording

(iv)For the three and six months ended June 30, 2025 and 2024, 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 statement of net loss and comprehensive income (loss).

Previous wording

(v)For the three months ended March 31, 2025 and 2024, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.

Current wording

(vi)For the three and six months ended June 30, 2025, other, net related to (gain) loss on revaluation of derivative liabilities. For the three and six months ended June 30, 2024, other, net related to (gain) loss on disposal of assets and (gain) loss on revaluation of derivative liabilities.

Previous wording

(vi)For the three months ended March 31, 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 8 “Restructuring.” For the three months ended March 31, 2024, restructuring costs related to employee-related severance costs and other restructuring costs associated with the Realignment, as described in Note 8 “Restructuring.”

Current wording

(vii)For the three and six months ended June 30, 2025, restructuring costs related to employee-related severance costs and IT infrastructure and finance transformation costs associated with the Realignment, as described in Note 8 “Restructuring.” For the three months ended June 30, 2024, restructuring costs related to employee-related severance costs and other restructuring costs associated with the Realignment, as described in Note 8 “Restructuring.”

Previous wording

(vii)For the three months ended March 31, 2025 and 2024, share-based compensation related to the non-cash expenses of share-based compensation awarded to employees under the Company’s share-based award plans as described in Note 9 “Share-based Compensation.”

Current wording

(viii)For the three and six months ended June 30, 2025 and 2024, share-based compensation related to the non-cash expenses of share-based compensation awarded to employees under the Company’s share-based award plans as described in Note 9 “Share-based Compensation.”

Previous wording

(viii)For the three months ended March 31, 2025 and 2024, financial statement review costs include costs and reserves taken related to the Restatements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to the Restatements and legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement.

Current wording

(ix)For the three and six months ended June 30, 2025 and 2024, financial statement review costs included legal costs incurred defending shareholder class action complaints brought against the Company as a result of the 2019 restatement.

Previous wording

(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).

Current wording

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

Previous wording

(x)For the three months ended March 31, 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.

Current wording

(xi)For the three and six months ended June 30, 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.

Previous wording

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, 2025, as well as cash and cash equivalents and short-term investment balances as of March 31, 2025 compared to December 31, 2024, 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 2024 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 2024. 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.”

Current wording

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 and six months ended June 30, 2025, as well as cash and cash equivalents and short-term investment balances as of June 30, 2025 compared to December 31, 2024, 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 and six month comparative periods in 2024 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 2024. 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.”

Previous wording

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, 2025 compared to the three months ended March 31, 2024 as well as cash and cash equivalents and short-term investments as of March 31, 2025 and December 31, 2024, both on an as-reported and constant currency basis (in thousands):

Current wording

The table below sets forth certain measures of consolidated results from continuing operations on a constant currency basis for the three and six months ended June 30, 2025 compared to the three and six months ended June 30, 2024 as well as cash and cash equivalents and short-term investments as of June 30, 2025 and December 31, 2024, both on an as-reported and constant currency basis (in thousands):

Previous wording

For the three months ended March 31, 2025, net revenue on a constant currency basis was $33.6 million, representing a 33% increase from the three months ended March 31, 2024. On a constant currency basis, net revenue increased for the three months ended March 31, 2025, primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, and higher cannabis extract sales in the Canadian market. On a constant currency basis, the Cronos GrowCo Transaction contributed $3.1 million of cannabis flower sales in the three months ended March 31, 2025. No such sales were recognized for the three months ended March 31, 2024.

Current wording

For the three months ended June 30, 2025, net revenue on a constant currency basis was $33.3 million, representing a 20% increase from the three months ended June 30, 2024. For the six months ended June 30, 2025, net revenue on a constant currency basis was $67.0 million, representing a 26% increase from the six months ended June 30, 2024. On a constant currency basis, net revenue increased for the three and six months ended June 30, 2025, primarily due to higher cannabis flower sales in Israel and other countries, which carry no excise taxes, the consolidation of Cronos GrowCo, and higher cannabis extract sales in the Canadian market. On a constant currency basis, the consolidation of Cronos GrowCo as a result of the Cronos GrowCo Transaction contributed $2.2 million and $5.3 million, respectively, of cannabis flower sales in the three and six months ended June 30, 2025. No such sales were recognized for the three and six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, gross profit on a constant currency basis was $14.2 million, representing a 217% increase from the three months ended March 31, 2024. On a constant currency basis, gross profit increased for the three months ended March 31, 2025, primarily due to higher sales volumes and average sales prices, lower direct costs, and production efficiencies, partially offset by the impact on cost of sales from the inventory step-up from the Cronos GrowCo Transaction. On a constant currency basis, for the three months ended March 31, 2025, we recognized $0.6 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, 2024.

Current wording

For the three months ended June 30, 2025, gross profit on a constant currency basis was $14.4 million, representing a 129% increase from the three months ended June 30, 2024. For the six months ended June 30, 2025, gross profit on a constant currency basis was $28.6 million, representing a 166% increase from the six months ended June 30, 2024. On a constant currency basis, gross profit increased for the three and six months ended June 30, 2025, primarily due to 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. On a constant currency basis, for the six months ended June 30, 2025, we recognized $0.6 million of inventory step-up from the Cronos GrowCo Transaction in cost of sales. No such costs were recognized for the three months ended June 30, 2025, or the three and six months ended June 30, 2024.

Previous wording

For the three months ended March 31, 2025, operating expenses on a constant currency basis were $18.5 million, representing a 10% decrease from the three months ended March 31, 2024. On a constant currency basis, operating expenses decreased for the three months ended March 31, 2025, primarily due to lower impairment loss on long-lived assets, lower salaries and benefits, and lower amortization on intangible assets, partially offset by higher restructuring costs.

Current wording

For the three months ended June 30, 2025, operating expenses on a constant currency basis were $19.8 million, representing a 9% decrease from the three months ended June 30, 2024. For the six months ended June 30, 2025, operating expenses on a constant currency basis were $38.3 million, representing a 9% decrease from the six months ended June 30, 2024. On a constant currency basis, operating expenses decreased for the three and six months ended June 30, 2025, primarily due to lower salaries and benefits, higher expected credit loss allowance on loans receivable recorded in the prior period, and lower share-based compensation expense, partially offset by higher sales and marketing expenses and restructuring costs and the consolidation of Cronos GrowCo. On a constant currency basis, for the three and six months ended June 30, 2025, the consolidation of Cronos GrowCo increased operating expenses by $1.0 million and $1.9 million, respectively. No such costs were recorded in the three or six months ended June 30, 2024. Operating expenses on a constant currency basis also declined for the six months ended June 30, 2025 due to lower impairment loss on long-lived assets.