Cronos Group Inc.

We believe that our existing cash and cash equivalents and short-term investments will be sufficient to fund our business operations and capital expenditures over the next twelve months, including continuing to fund the expansion of Cronos GrowCo’s cultivation and processing facilities (the “Cronos GrowCo Phase 2 Expansion”). Our primary need for liquidity is to fund operations and capital expenditures. Our ability to fund operations and capital expenditures depends on, among other things, future operating performance and cash flows that are subject to general economic conditions and financial and other factors, including factors beyond our control. Since 2019, we have been funded by the C$2.4 billion (approximately $1.7 billion) Altria investment in us as further discussed under “Business—Altria Strategic Investment” in Part I, Item 1 of this Annual Report. As of December 31, 2025, we had $791.8 million in cash and cash equivalents and $40.0 million in short-term investments, compared to $858.8 million in cash and cash equivalents and no short-term investments as of December 31, 2024. As of both December 31, 2025 and December 31, 2024, we had no external debt financing.

Cash flows

2025 cash flows vs. 2024 cash flows

Operating activities

During 2025, we generated $25.9 million of cash from operating activities, compared to cash generated of $18.8 million in 2024, representing an increase in cash generated of $7.0 million. This change is primarily driven by a $41.1 million increase in net income adjusted for non-cash items as well as higher accounts payable and lower interest receivable, partially offset by higher inventory, accounts receivable and other receivables.

Investing activities

During 2025, we used $76.6 million of cash in investing activities, compared to cash provided by investing activities of $175.1 million during 2024, representing a change of $251.7 million in net cash used. This change is primarily driven by the maturity of certain short-term investments, which were reinvested as cash equivalents upon maturity in 2024 that did not recur in 2025, as well as the purchase of short-term investments, higher purchases of property plant, and equipment, higher advances on loans receivable, the purchase of the High Tide Warrant in 2025 and cash obtained from the Cronos GrowCo Transaction in 2024.

Financing activities

During 2025, cash used in financing activities was $19.9 million, as compared to $1.2 million in 2024, representing an increase in net cash used of $18.7 million. This change is primarily driven by share repurchases and dividends paid to non-controlling interests in 2025 and an increase in withholding taxes paid on share-based awards.

Cash requirements

In the near term, we expect to use our available cash and investments to operate our core business and develop new ways to serve our customers as well as invest in our various strategic partnerships and in our investees. We believe we have adequate liquidity to meet working capital requirements.

Our material cash requirements include the following contractual and other obligations as of December 31, 2025:

Pending acquisition

On December 9, 2025, the Company announced a definitive share sale and purchase agreement (the “Purchase Agreement”) to acquire all of the outstanding shares of CanAdelaar, one of ten licensed cannabis producers operating within the Netherlands’ adult-use cannabis pilot program. Under the terms of the Purchase Agreement, all of the issued and outstanding share capital of CanAdelaar will be acquired for up-front consideration of €57.5 million, or approximately $67.5 million, subject to certain customary adjustments, with additional contingent consideration payable in cash based on 0.5x of CanAdelaar’s normalized EBITDA in 2026 and 2027. As of December 31, 2025, the transaction has not closed and is subject to certain closing conditions, including obtaining required regulatory clearances in the Netherlands, receipt of confirmations relating to CanAdelaar’s licenses and Bibob review (a background check conducted by Dutch authorities), the accuracy of representations and warranties, and the absence of certain regulatory orders. The up-front cash consideration is expected to be paid in the first half of 2026 and will be funded by available cash on hand.

Leases

We have operating leases for land, buildings and office and research space. As of December 31, 2025, the future minimum payments required under these leases totaled $1.9 million, with $0.5 million payable within 12 months. See Note 9 “Leases” to the consolidated financial statements in Item 8 of this Annual Report for further information.

Loans receivable with related parties

We have entered into two loan agreements with affiliates. The Mucci Promissory Note and Cannasoul Collaboration Loan (each as defined below) have been fully drawn. See Note 6 “Loans Receivable, net” to the consolidated financial statements in Item 8 of this Annual Report for further information.

Purchase obligations

Our purchase obligations primarily consist of contractual obligations for capital expenditures, computer software, agricultural supply services and data analytics and to maintain the ordinary course of business through information technology. As of December 31, 2025, the Company had purchase obligations of $40.0 million, with $27.6 million payable within 12 months. Other purchase obligations consist of noncancellable obligations related to maintenance, internet, and telecommunication service. As of December 31, 2025, we had other purchase obligations of $2.1 million, with $1.2 million payable within 12 months.

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 twelve months ended December 31, 2025, Cronos GrowCo repaid an aggregate C$17.7 million ($12.8 million) and C$7.9 million ($5.7 million) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.

As of December 31, 2025, Cronos GrowCo had repaid an aggregate C$35.8 million ($26.0 million) and C$36.4 million ($26.5 million) in principal and interest, respectively, under the terms of the GrowCo Credit Facility.

As of December 31, 2025, the closing balance of the GrowCo Credit Facility was C$131.2 million ($95.8 million).