Group 1: Cannabis Industry Impact - Cannabis stocks experienced a significant rally following President Trump's endorsement of cannabidiol (CBD) for senior healthcare, suggesting a potential shift in public perception and market dynamics [3][4] - Leading cannabis companies such as Tilray Brands, Canopy Growth, Cronos Group, and Aurora Cannabis saw substantial stock price increases, with Tilray Brands rising as much as 60% and Canopy Growth gaining approximately 17% [4][5] - The video posted by Trump emphasized CBD's benefits, including pain relief and improved sleep, and highlighted potential cost savings of $64 billion annually if cannabis is fully integrated into the healthcare system [6] Group 2: McDonald's Loyalty Program - McDonald's is reintroducing its popular Monopoly game to attract customers to its loyalty program, which currently accounts for about 25% of its U.S. business [10][12] - The new game format allows customers to scan game pieces from food packages into an app, offering prizes such as airline miles and cash, aiming to increase global active loyalty members to 250 million by the end of 2027 [11][12]

Core Viewpoint - Cannabis stocks experienced significant gains following President Donald Trump's promotion of a video advocating for the inclusion of cannabidiol (CBD) under Medicare coverage [1][6]. Group 1: Stock Performance - Tilray Brands surged nearly 20% and was up 36% after market open [1]. - Canopy Growth jumped about 20%, while Cronos Group rose 13% [1]. - Aurora Cannabis climbed 13.3%, and Trulieve Cannabis spiked almost 20% [1]. - Green Thumb Industries, Curaleaf Holdings, and Innovative Industrial Properties also saw considerable share price increases [3]. Group 2: Video Promotion and Content - The video produced by The Commonwealth Project features Trump and a narrator advocating for wider access to CBD for seniors [6][9]. - The narrator claims that hemp-derived CBD can significantly improve the quality of life for older adults [7][10]. - The video suggests that CBD can help restore the endocannabinoid system and assist with pain, sleep, and stress [10]. Group 3: Regulatory Context - Trump previously indicated he was considering reclassifying marijuana as a less dangerous substance, although no action has been taken yet [8]. - The timing of the video promotion coincides with Congress deliberating on tightening hemp regulations, with some Republicans advocating for stricter limits on CBD products containing trace amounts of THC [8].

Core Viewpoint - President Donald Trump's recent video on Truth Social has reignited interest in cannabis, particularly its potential health benefits and the possibility of changes in federal drug policy [1][2]. Group 1: Health Benefits of Cannabis - The video, produced by The Commonwealth Project, advocates for CBD to be covered under Medicare, labeling it as "the most important senior health initiative of the century" [2]. - It claims that CBD could slow disease progression and serve as an alternative to many prescription drugs for older adults, potentially saving the healthcare system $64 billion annually if cannabis is fully integrated [2]. Group 2: Federal Policy Implications - Trump's video follows earlier comments indicating that his administration is considering reclassifying cannabis at the federal level, which could lead to reduced criminal penalties and eased operational restrictions for cannabis businesses [2]. Group 3: Market Reaction - The announcement led to a significant rally in cannabis stocks, with Canopy Growth Corp. rising 15% and Tilray Brands, Inc. surging 35% [3]. - Other companies such as Cronos Group, Inc., SNDL Inc., and Aurora Cannabis, Inc. also saw increases of over 20% [3]. - The AdvisorShares Pure US Cannabis ETF experienced a nearly 20% increase, reflecting the overall positive market sentiment towards the cannabis sector [4].

Industry Overview - The Canadian cannabis sector is a focal point for investors as it continues to evolve with expanding operations and long-term growth strategies [1][3] - The U.S. cannabis industry has surpassed $33 billion in annual sales, with projections exceeding $50 billion by 2030, indicating significant global opportunities for Canadian companies [1] - Recent developments in U.S. legalization discussions, including potential federal rescheduling of cannabis, could enhance banking access and reduce tax burdens, fostering optimism for both U.S. and Canadian firms [1][2] Company Summaries Cronos Group (CRON) - Cronos Group focuses on research, development, and global distribution, emphasizing branded products and international medical cannabis opportunities rather than a large U.S. dispensary network [4][7] - The company reported revenue of approximately CAD $33.5 million, a 20% year-over-year increase, but also a net loss of about CAD $38.5 million due to foreign-exchange headwinds and investment costs [7] - Cronos has improved gross margins and maintains a strong liquidity position, allowing for strategic flexibility and potential growth in global medical markets [7] SNDL Inc. (SNDL) - SNDL has established one of the largest retail footprints in Canada, operating over 180 retail locations under various banners, while also pursuing investments in the U.S. market [8][10] - The company reported net revenue of approximately CAD $244.8 million, with a gross profit increase of over 16% and positive operating income of around CAD $5 million for the first time in several years [10] - SNDL's strong cash position of over CAD $200 million and no debt on its balance sheet provide financial stability, while its strategy focuses on expanding its retail network and preparing for cross-border opportunities [10] Aurora Cannabis (ACB) - Aurora Cannabis emphasizes medical cannabis exports and global distribution, serving regulated medical markets in Europe and Australia, while shifting away from low-margin recreational cannabis [11][13] - The company reported total net revenue of about CAD $81 million, reflecting nearly 30% growth year-over-year, with medical cannabis sales increasing over 40% to more than CAD $61 million [13] - Aurora's adjusted gross margins improved to roughly 54%, showcasing higher profitability from its medical and international operations, despite challenges from regulatory shifts and competition [13] Investment Considerations - Investors should monitor the financial performance, operational strategies, and regulatory changes affecting Cronos Group, SNDL, and Aurora Cannabis, as each company presents unique opportunities and risks in the evolving cannabis landscape [14]

Core Insights - Cronos Group Inc. reported $33.5 million in net revenue for Q2 2025, marking a 21% increase year over year driven by strong cannabis flower sales in Israel and international markets, consolidation of Cronos GrowCo, and improved Canadian extract sales [1][3] - Gross profit rose from $8.2 million in Q2 2024 to $14.5 million, while adjusted EBITDA increased by $12.7 million to $1.7 million [1] - Despite revenue growth, Cronos reported a net loss of $38.5 million [1] Financial Performance - Net revenue for Q2 2025: $33.5 million, a 21% increase year over year [1] - Gross profit increased from $8.2 million to $14.5 million [1] - Adjusted EBITDA climbed to $1.7 million from the previous year's figure [1] - Net loss reported at $38.5 million [1] Market Position and Strategy - PEACE NATURALS® remains Israel's leading cannabis brand, contributing to record sales [3] - Planned growth in flower capacity and strong global momentum are expected to address supply limitations in Canada [3] - Flower sales generated approximately $2.2 million for Cronos GrowCo [3] - The company maintains a robust balance sheet with $834 million in cash and no debt, supporting international growth and brand innovation [3]

Core Insights - Cronos Group's stock reached $2.50, nearing its 52-week high of $2.77, driven by hopes of U.S. federal reforms and strong international sales growth [1] - The stock has outperformed the industry, rising 17% over the past year compared to the industry's 4% growth [2] Financial Performance - In Q2 2025, Cronos' total revenues increased by 21% year-over-year to $33.5 million, primarily due to strong international sales in Germany and Israel [5] - Gross margin improved to 43%, nearly doubling from 23% a year ago, while operating expenses decreased by 9% to $19.8 million [7] - Despite revenue growth, the company reported a net loss of $40 million, significantly wider than the $8.8 million loss from the previous year, largely due to unfavorable currency movements and regulatory costs [8][11] Market Position - Cronos holds strong positions in the Canadian market, with the Spinach brand at 2 with a 4.7% market share and Lord Jones leading the hash-infused pre-roll segment with a 28.5% market share [6] - The company has a robust cash balance of $834 million and no debt, allowing for investments in adjacent opportunities, such as an $18.5 million investment in High Tide [9] Competitive Landscape - Cronos faces stiff competition from peers like Curaleaf Holdings and Tilray Brands, both pursuing international expansion and cost optimization [13] - The competitive landscape remains challenging, potentially limiting Cronos' ability to sustain market share gains [14] Analyst Outlook - Loss estimates for 2025 have widened significantly over the past 60 days, despite the recent share price rally [15] - The stock currently carries a Zacks Rank 4 (Sell), indicating limited upside and elevated risk for conservative investors [20]

Group 1 - Cronos Group Inc. (NASDAQ: CRON) stock price increased by 15% on news that President Trump’s administration will consider rescheduling cannabis in the coming weeks [1] - The announcement has implications for Canadian cannabis licensed producers (LPs) and U.S. cannabis Multi-State Operators [1] Group 2 - The article is part of a monthly report on the cannabis industry, highlighting the author's expertise in technical stock analysis, option strategies, small cap strategies, and emerging markets [1]

Core Viewpoint - Cannabis stocks surged on Monday, with Canopy Growth (CGC.US) and Tilray Brands (TLRY.US) rising nearly 20%, Aurora Cannabis (ACB.US) up nearly 13%, and Cronos Group (CRON.US) increasing by nearly 12% due to reports that Trump is considering reclassifying cannabis as a lower-risk substance [1] Group 1 - Canopy Growth (CGC.US) experienced a significant price increase of nearly 20% [1] - Tilray Brands (TLRY.US) also saw a rise of nearly 20% [1] - Aurora Cannabis (ACB.US) rose nearly 13% [1] - Cronos Group (CRON.US) increased by nearly 12% [1] Group 2 - The surge in cannabis stocks is linked to a report from The Wall Street Journal regarding Trump's potential reclassification of cannabis [1]

Financial Data and Key Metrics Changes - The company reported consolidated net revenue of $33.5 million, a 21% increase year over year, with net revenue excluding Groco at $31.2 million, representing a 13% growth year over year [15][16] - Gross profit for Q2 was $14.5 million, equating to a 43% gross margin, significantly improved from 23% in Q2 2024 [16] - Adjusted EBITDA was $1.7 million, an improvement of $12.7 million year over year, driven by revenue growth and margin enhancement [17] Business Line Data and Key Metrics Changes - The Spinach brand ranked as the number two cannabis brand in Canada with a 4.7% market share across formats and number three in the flower category with a 4.9% market share [6] - In the vape category, Spinach achieved the number four position overall with a 6.5% market share and number two in the vape cartridge category with an 8.4% share [7] - The Lord Jones brand maintained a 28.5% market share in the hash-infused pre-roll segment, remaining the category leader [10] Market Data and Key Metrics Changes - Cronos Israel posted a record quarter with a 36% year-over-year revenue growth, becoming the number one flower brand in Israel with over 20% market share [10][12] - The company expanded its international presence, with Peace Naturals now available in seven key global markets, including Canada, Israel, Germany, the UK, Australia, Switzerland, and Malta [13] Company Strategy and Development Direction - The company aims to expand cultivation capacity at Groco and improve market share in Canada while focusing on higher-margin international markets [6] - Continued investment in innovative product launches, particularly in the vape and edibles categories, is a key strategic focus [9] Management's Comments on Operating Environment and Future Outlook - Management expressed confidence in the core business's strength and resilience, highlighting robust demand across key markets and product categories [5][21] - The company anticipates that the expansion at Groco will alleviate supply constraints and drive further growth [19] Other Important Information - The company maintains a strong balance sheet with no debt and cash equivalents and short-term investments totaling $834 million [13] - An investment of $18.5 million in High Tide through a convertible loan was made, with potential for equity conversion [19] Q&A Session Summary Question: No questions were raised during the session - The call concluded without any questions from participants [22]

[Executive Summary & Highlights](index=1&type=section&id=Executive%20Summary%20%26%20Highlights) This section provides an overview of Cronos Group's strong Q2 2025 financial and operational performance, highlighting key achievements and strategic developments [Q2 2025 Performance Highlights](index=1&type=section&id=Q2%202025%20Performance%20Highlights) Cronos Group reported strong Q2 2025 performance with **21% net revenue growth**, record international sales, and a robust balance sheet supporting global expansion - Net revenue increased by **21%** in Q2 2025[1](index=1&type=chunk) - PEACE NATURALS® maintained its **number one position** in Israel, achieving record international and Israeli market revenues[1](index=1&type=chunk)[2](index=2&type=chunk) - The balance sheet remained strong with **$834 million** in cash and short-term investments[1](index=1&type=chunk)[3](index=3&type=chunk) - In the Canadian market, Spinach® ranked **second overall** (4.7% market share) and **third in flower brands** (4.9% market share), with its gummies among the top ten edibles (19.9% market share) and vapes ranking **fourth** (6.5% market share), including the **second-ranked** 1.2g vape cartridge (8.4% market share)[10](index=10&type=chunk) - Lord Jones® Chocolate Fusions™ held a **10.2% market share**, making it the **third best-selling** chocolate cannabis edible brand in Canada, and ranked **first** in the hash-infused pre-roll segment with a **28.5% market share**[11](index=11&type=chunk) - The Cronos GrowCo expansion is complete, with sales expected to commence in **Fall 2025**, driving growth in both international and Canadian domestic markets[3](index=3&type=chunk)[14](index=14&type=chunk) [Consolidated Financial Results](index=2&type=section&id=Consolidated%20Financial%20Results) This section details Cronos Group's Q2 2025 consolidated financial performance, including net revenue, gross profit, net loss, and adjusted EBITDA [Overview of Q2 2025 Financial Performance](index=2&type=section&id=Overview%20of%20Q2%202025%20Financial%20Performance) Cronos Group's Q2 2025 consolidated net revenue grew **21% to $33.5 million**, with gross profit surging **130% to $14.5 million**, despite a net loss increase to **$38.5 million** due to unrealized foreign exchange losses - The company obtained majority control of Cronos GrowCo and began consolidating its results effective **July 1, 2024**[4](index=4&type=chunk) Key Financial Data for Q2 2025 (Compared to Q2 2024) | Metric | Q2 2025 (Thousand Dollars) | Q2 2024 (Thousand Dollars) | Change ($) | Change (%) | | :-------------------------------- | :---------------------- | :---------------------- | :--------- | :--------- | | Net Revenue (Total) | 33,455 | 27,762 | 5,693 | 21 % | | Cronos GrowCo Net Revenue Contribution | 2,211 | — | 2,211 | N/A | | Cost of Sales | 18,865 | 21,070 | (2,205) | (10) % | | Inventory Write-downs | 86 | 395 | (309) | (78) % | | Gross Profit | 14,504 | 6,297 | 8,207 | 130 % | | Gross Margin | 43 % | 23 % | N/A | 20 pp | | Adjusted Gross Profit | 14,504 | 6,297 | 8,207 | 130 % | | Adjusted Gross Margin | 43 % | 23 % | N/A | 20 pp | | Net Loss | (38,482) | (8,759) | (29,723) | (339) % | | Adjusted EBITDA | 1,688 | (11,051) | 12,739 | N/M | | Cash and Cash Equivalents (End of Period) | 794,416 | 848,189 | (53,773) | (6) % | | Short-term Investments (End of Period) | 40,000 | — | 40,000 | N/A | | Capital Expenditures | 3,838 | 916 | 2,922 | 319 % | - Net revenue growth was primarily driven by increased cannabis flower sales in Israel and other international markets (excise tax-free), the consolidation of Cronos GrowCo (contributing **$2.2 million**), and higher cannabis extract sales in the Canadian market[9](index=9&type=chunk) - Gross profit growth was mainly attributed to the consolidation of Cronos GrowCo, higher average selling prices from a shift in sales mix towards Israel and other international markets, increased sales volume, and improved production efficiencies[9](index=9&type=chunk) - The increase in net loss was primarily due to unrealized foreign exchange losses on U.S. dollar-denominated cash and short-term investments held in Canada (impacted by a stronger Canadian dollar against the U.S. dollar), partially offset by higher gross profit and lower operating expenses[13](index=13&type=chunk) - Adjusted EBITDA improved mainly due to increased revenue, lower cost of sales (due to Cronos GrowCo consolidation), and reduced operating expenses (driven by lower general and administrative expenses)[13](index=13&type=chunk) [Business Updates](index=3&type=section&id=Business%20Updates) This section provides updates on Cronos Group's brand and product portfolio performance, as well as the progress of the Cronos GrowCo expansion [Brand and Product Portfolio](index=3&type=section&id=Brand%20and%20Product%20Portfolio) Cronos Group's brand portfolio performed strongly in Q2 2025, with Spinach® maintaining leadership in Canada, Lord Jones® excelling in premium segments, and PEACE NATURALS® achieving record international sales [Spinach®](index=3&type=section&id=Spinach) Spinach® maintained its strong position in the Canadian market in Q2 2025, ranking **second overall** (4.7% market share) and **third in flower brands** (4.9% market share) despite flower supply constraints Spinach® Brand Canadian Market Share and Ranking (Q2 2025) | Brand/Category | Market Share | Ranking | | :------------- | :----------- | :------ | | Spinach® (Overall) | 4.7% | 2 | | Spinach® (Flower) | 4.9% | 3 | | Spinach® Gummies (Edibles) | 19.9% | 5 products in top 10 | | Spinach® (Vape Category) | 6.5% | 4 | | Spinach® Vape Cartridges | 8.4% | 2 | | Spinach® Pink Lemonade 1.2g Vape Cartridge | N/A | Best-selling 1.2g vape cartridge | - The team is strategically allocating inventory and preparing to unlock significant additional capacity through the Cronos GrowCo expansion in **Fall 2025**[10](index=10&type=chunk) [Lord Jones®](index=3&type=section&id=Lord%20Jones) Lord Jones® Chocolate Fusions™ was the **third best-selling** chocolate cannabis edible brand in Canada in Q2 2025 with a **10.2% market share**, and the brand ranked **first** in the hash-infused pre-roll segment with a **28.5% market share** Lord Jones® Brand Canadian Market Share and Ranking (Q2 2025) | Brand/Category | Market Share | Ranking | | :-------------------------- | :----------- | :------ | | Lord Jones® Chocolate Fusions™ | 10.2% | 3 Best-selling Chocolate Edible Brand | | Lord Jones® (Hash-infused Pre-rolls) | 28.5% | 1 | - Launched Lord Jones® Live Resin Caviar, featuring prominent strains like Gorilla Grape and Orange Velvet, reinforcing its premium positioning in the extract category[11](index=11&type=chunk) [PEACE NATURALS®](index=3&type=section&id=PEACE%20NATURALS) PEACE NATURALS® continued its strong performance in Israel in Q2 2025, achieving record revenue and sales volume, and successfully expanded into new international medical cannabis markets - In Israel, PEACE NATURALS® was the best-performing brand, achieving record revenue and sales volume in Q2 2025[12](index=12&type=chunk) - The PEACE NATURALS® brand launched in the Australian and Maltese medical cannabis markets in Q2 2025, and entered the Swiss medical market subsequent to the quarter end[14](index=14&type=chunk) - The company's medical brands have expanded to **seven global markets**, including Canada, Israel, Germany, the U.K., Australia, Switzerland, and Malta[14](index=14&type=chunk) [Cronos GrowCo Expansion](index=4&type=section&id=Cronos%20GrowCo%20Expansion) Cronos GrowCo's expansion project is complete, with sales anticipated to commence in Fall 2025, providing additional supply for international and Canadian domestic market growth - The Cronos GrowCo expansion is complete[14](index=14&type=chunk) - Sales are expected to commence in **Fall 2025**, driving growth in both international and Canadian domestic markets[14](index=14&type=chunk) [Corporate Developments](index=4&type=section&id=Corporate%20Developments) This section outlines recent corporate developments, including updates on the Israeli anti-dumping duty proposal, strategic investments, and key appointments [Proposed Anti-Dumping Duty in Israel: Update](index=4&type=section&id=Proposed%20Anti-Dumping%20Duty%20in%20Israel%3A%20Update) Israel's Ministry of Justice confirmed the Finance Minister's rejection of a 165% anti-dumping duty proposal on Canadian medical cannabis imports, a decision welcomed by Cronos Group - Israel's Ministry of Justice announced on **July 3, 2025**, that the Finance Minister's rejection of the proposed **165% anti-dumping duty** on the company's medical cannabis imports was effective[15](index=15&type=chunk) - The company strongly refuted the allegations and expressed satisfaction with the decision to reject the anti-dumping duty proposal[15](index=15&type=chunk) [Investments](index=4&type=section&id=Investments) In July 2025, Cronos invested CAD **$25.2 million** (approximately USD **$18.5 million**) in High Tide Inc. via a five-year subordinated secured convertible loan to maintain market competitiveness - In **July 2025**, Cronos invested CAD **$25.2 million** (approximately USD **$18.5 million**) in High Tide Inc., operator of Canna Cabana, Canada's largest cannabis retailer[16](index=16&type=chunk) - The investment is structured as a five-year subordinated secured convertible loan with a face value of CAD **$30 million** (approximately USD **$22.1 million**), including a **16% original issue discount**, bearing an annual interest rate of **4%** (paid quarterly in cash), convertible into High Tide common shares (at a conversion price of CAD **$4.20 per share**, subject to mutual agreement)[16](index=16&type=chunk) - Concurrently, the company received a five-year common share purchase warrant exercisable for up to **3,836,317** High Tide common shares at an exercise price of CAD **$3.91 per share**[16](index=16&type=chunk) - This investment helps maintain competition in the cannabis market and ensures Cronos brands remain competitive in Canada[16](index=16&type=chunk) [Appointments](index=4&type=section&id=Appointments) Lloyd Wilson was appointed Chief Accounting Officer of Cronos Group on August 7, 2025, bringing over two decades of financial reporting and operational finance experience - Lloyd Wilson was appointed as the company's Chief Accounting Officer effective **August 7, 2025**[17](index=17&type=chunk) - Lloyd Wilson is a Chartered Professional Accountant with over **20 years** of experience in financial reporting, internal audit, plant control, and operational finance, with a strong background in the consumer packaged goods industry[17](index=17&type=chunk) [Conference Call](index=4&type=section&id=Conference%20Call) Cronos Group held a conference call and live webcast on August 7, 2025, to discuss its Q2 2025 business results, with an archived replay available on the company's website - The company held a conference call and live audio webcast on **August 7, 2025**, at **8:30 a.m. EDT**, to discuss its Q2 2025 business results[18](index=18&type=chunk) - An audio replay of the conference call has been archived on the company's website[18](index=18&type=chunk) [Company Overview](index=5&type=section&id=Company%20Overview) This section provides a brief overview of Cronos Group, highlighting its mission as an innovative global cannabinoid company focused on research, technology, and brand development [About Cronos Group](index=5&type=section&id=About%20Cronos%20Group) Cronos Group is an innovative global cannabinoid company focused on building disruptive intellectual property through cannabis research, technology, and product development - Cronos is an innovative global cannabinoid company dedicated to building disruptive intellectual property through advancing cannabis research, technology, and product development[20](index=20&type=chunk) - The company aims to responsibly elevate consumer experiences and is building an iconic brand portfolio[20](index=20&type=chunk) - Cronos' international brand portfolio includes Spinach®, PEACE NATURALS®, and Lord Jones®[20](index=20&type=chunk) [Forward-Looking Statements](index=5&type=section&id=Forward-Looking%20Statements) This section outlines the nature and scope of forward-looking statements, which are based on current expectations and involve inherent risks and uncertainties that may cause actual results to differ materially [Nature and Scope of Forward-Looking Statements](index=5&type=section&id=Nature%20and%20Scope%20of%20Forward-Looking%20Statements) This section clarifies the nature of forward-looking statements, which are based on current internal expectations, estimates, forecasts, assumptions, and beliefs, and are not historical facts - Forward-looking statements are based on the company's current internal expectations, estimates, forecasts, assumptions, and beliefs, and are not historical facts[21](index=21&type=chunk) - Topics covered by forward-looking statements include: the impact of the Israeli anti-dumping investigation, the Middle East conflict's effect on Israeli operations, expectations for the PEACE NATURALS® brand in Germany, Australia, the U.K., Switzerland, and Malta, cost reduction initiatives (including the cessation of operations at the Winnipeg facility), future plans following the exit from the U.S. hemp-derived cannabinoid product business, the Cronos GrowCo transaction and facility expansion, and expectations for revenue, expenses, gross margin, and capital expenditures[22](index=22&type=chunk)[25](index=25&type=chunk) - Forward-looking statements are based on certain material assumptions management believes are reasonable, but there is no guarantee that these expectations will be achieved[24](index=24&type=chunk)[26](index=26&type=chunk) - Forward-looking statements involve inherent risks and uncertainties that could cause actual results to differ materially from those stated, with risk factors discussed in the company's reports filed with the SEC and other regulatory authorities[27](index=27&type=chunk)[28](index=28&type=chunk) - Readers should carefully consider these factors and not place undue reliance on forward-looking statements, as the company undertakes no obligation to update or revise any such statements[29](index=29&type=chunk) [Condensed Consolidated Financial Statements](index=9&type=section&id=Condensed%20Consolidated%20Financial%20Statements) This section presents Cronos Group's condensed consolidated financial statements, including balance sheets, statements of net loss and comprehensive income (loss), and cash flow statements [Condensed Consolidated Balance Sheets](index=9&type=section&id=Condensed%20Consolidated%20Balance%20Sheets) As of June 30, 2025, total assets slightly increased to **$1.175 billion**, total liabilities decreased to **$45 million**, and total shareholders' equity rose to **$1.130 billion** Condensed Consolidated Balance Sheet Highlights (Thousand Dollars) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change ($) | Change (%) | | :-------------------------- | :------------------ | :----------------- | :--------- | :--------- | | Total Assets | 1,175,227 | 1,166,312 | 8,915 | 0.8 % | | Cash and Cash Equivalents | 794,416 | 858,805 | (64,389) | (7.5) % | | Short-term Investments | 40,000 | — | 40,000 | N/A | | Accounts Receivable, Net | 26,619 | 15,462 | 11,157 | 72.1 % | | Inventory, Net | 42,142 | 33,149 | 8,993 | 27.1 % | | Total Current Assets | 927,147 | 936,113 | (8,966) | (1.0) % | | Total Liabilities | 45,021 | 55,330 | (10,309) | (18.6) % | | Total Shareholders' Equity | 1,130,206 | 1,110,982 | 19,224 | 1.7 % | [Condensed Consolidated Statements of Net Loss and Comprehensive Income (Loss)](index=10&type=section&id=Condensed%20Consolidated%20Statements%20of%20Net%20Loss%20and%20Comprehensive%20Income%20(Loss)) In Q2 2025, net revenue grew **21% to $33.5 million**, and gross profit surged **130% to $14.5 million**, despite a net loss of **$38.5 million** primarily due to significant foreign exchange losses Condensed Consolidated Statements of Net Loss and Comprehensive Income (Loss) Highlights (Thousand Dollars) | Metric | Three Months Ended June 30, 2025 | Three Months Ended June 30, 2024 | Change ($) | Change (%) | | :----------------------------------- | :------------------------------- | :------------------------------- | :--------- | :--------- | | Net Revenue | 33,455 | 27,762 | 5,693 | 21 % | | Cost of Sales | 18,865 | 21,070 | (2,205) | (10) % | | Gross Profit | 14,504 | 6,297 | 8,207 | 130 % | | Total Operating Expenses | 19,828 | 21,858 | (2,030) | (9) % | | Operating Loss | (5,324) | (15,561) | 10,237 | 65.8 % | | Foreign Currency Gain (Loss) | (39,538) | 6,543 | (46,081) | (704) % | | Net Loss | (38,482) | (8,759) | (29,723) | (339) % | | Basic Net Loss Attributable to Cronos Group | (0.10) | (0.02) | (0.08) | (400) % | [Condensed Consolidated Cash Flow Statements](index=11&type=section&id=Condensed%20Consolidated%20Cash%20Flow%20Statements) For the six months ended June 30, 2025, net cash from operating activities improved to **$0.722 million**, with investing activities resulting in a **$56.3 million** net outflow and financing activities using **$10.6 million** Condensed Consolidated Cash Flow Statement Highlights (Six Months Ended June 30, 2025, Thousand Dollars) | Metric | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------------- | :----- | :----- | :--------- | :--------- | | Net Cash Provided by (Used in) Operating Activities | 722 | (460) | 1,182 | N/M | | Net Cash Provided by (Used in) Investing Activities | (56,339) | 180,999 | (237,338) | (131) % | | Net Cash Used in Financing Activities | (10,616) | (905) | (9,711) | (1073) % | | Net Change in Cash and Cash Equivalents | (64,389) | 178,898 | (243,287) | (136) % | | Cash and Cash Equivalents, End of Period | 794,416 | 848,189 | (53,773) | (6) % | - Major cash outflows from investing activities included the purchase of short-term investments (**$40 million**) and property, plant, and equipment (**$19.1 million**)[33](index=33&type=chunk) - Major cash outflows from financing activities included the repurchase of common shares (**$3.6 million**) and dividends paid to non-controlling interests (**$3.9 million**)[33](index=33&type=chunk) [Non-GAAP Financial Measures](index=12&type=section&id=Non-GAAP%20Financial%20Measures) This section explains Cronos Group's use of non-GAAP financial measures, such as Adjusted EBITDA and Adjusted Gross Profit, to provide additional insights into operational performance [Overview of Non-GAAP Measures](index=12&type=section&id=Overview%20of%20Non-GAAP%20Measures) Cronos Group utilizes non-GAAP measures like Adjusted EBITDA and Adjusted Gross Profit to provide additional insights into operational performance by excluding non-cash and non-recurring items - Non-GAAP measures are intended to supplement U.S. GAAP measures, providing management with additional information on operating results and a better understanding of underlying business trends and results[34](index=34&type=chunk)[36](index=36&type=chunk)[43](index=43&type=chunk) - All non-GAAP measures have been reconciled to their most directly comparable U.S. GAAP measures[34](index=34&type=chunk) [Adjusted EBITDA](index=12&type=section&id=Adjusted%20EBITDA) Adjusted EBITDA significantly improved to **$1.7 million** in Q2 2025 and **$4.0 million** for the six months ended June 30, 2025, driven by increased revenue and reduced operating expenses - Adjusted EBITDA is defined as net income (loss) excluding interest, taxes (benefit), depreciation, and amortization, adjusted for non-cash items and items not reflective of management's assessment of ongoing business performance[35](index=35&type=chunk) Adjusted EBITDA Performance (Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 1,688 | (11,051) | 12,739 | N/M | | Six Months Ended June 30 | 3,977 | (21,720) | 25,697 | N/M | - The improvement in Adjusted EBITDA is primarily attributed to increased revenue, lower cost of sales (due to Cronos GrowCo consolidation), and reduced operating expenses (driven by lower general and administrative expenses)[13](index=13&type=chunk)[40](index=40&type=chunk) [Adjusted Gross Profit and Adjusted Gross Margin](index=16&type=section&id=Adjusted%20Gross%20Profit%20and%20Adjusted%20Gross%20Margin) Adjusted gross profit surged **130% to $14.5 million** in Q2 2025 and **167% to $28.8 million** for the six months ended June 30, 2025, primarily due to Cronos GrowCo consolidation, improved sales mix, and production efficiencies - Adjusted gross profit and adjusted gross margin are non-GAAP measures that exclude the impact of inventory-related purchase accounting adjustments resulting from the Cronos GrowCo transaction[42](index=42&type=chunk) Adjusted Gross Profit Performance (Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 14,504 | 6,297 | 8,207 | 130 % | | Six Months Ended June 30 | 28,755 | 10,780 | 17,975 | 167 % | Adjusted Gross Margin Performance | Period | 2025 | 2024 | Change (pp) | | :-------------------------------- | :----- | :----- | :---------- | | Three Months Ended June 30 | 43 % | 23 % | 20 pp | | Six Months Ended June 30 | 44 % | 20 % | 24 pp | - Growth is primarily attributed to the consolidation of Cronos GrowCo, higher average selling prices from a shift in sales mix towards Israel and other international markets, increased sales volume, and improved production efficiencies[9](index=9&type=chunk)[44](index=44&type=chunk) [Constant Currency Analysis](index=16&type=section&id=Constant%20Currency%20Analysis) This section provides an analysis of Cronos Group's financial performance on a constant currency basis, isolating the impact of foreign exchange fluctuations [Overview of Constant Currency Measures](index=16&type=section&id=Overview%20of%20Constant%20Currency%20Measures) Cronos Group provides constant currency adjusted financial metrics to eliminate the impact of foreign exchange fluctuations on performance, thereby assessing the company's underlying operational performance - Constant currency information is provided to offer a framework for assessing the company's underlying operating performance by excluding the impact of foreign exchange rate fluctuations[45](index=45&type=chunk) - Income statement results are translated using the average exchange rates from the comparative period (2024); balance sheet information is translated using the spot exchange rates at the end of the prior year[45](index=45&type=chunk) [Net Revenue (Constant Currency)](index=17&type=section&id=Net%20Revenue%20(Constant%20Currency)) On a constant currency basis, Q2 2025 net revenue grew **20% to $33.3 million**, and for the six months ended June 30, 2025, it increased **26% to $67.0 million**, primarily due to increased international cannabis flower sales and Cronos GrowCo consolidation Net Revenue (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 33,334 | 27,762 | 5,572 | 20 % | | Six Months Ended June 30 | 66,956 | 53,050 | 13,906 | 26 % | Net Revenue by Product Type (Constant Currency, Q2 2025 vs Q2 2024, Thousand Dollars) | Product Type | 2025 (Thousand Dollars) | 2024 (Thousand Dollars) | Change ($) | Change (%) | | :------------- | :------------------- | :------------------- | :--------- | :--------- | | Cannabis Flower | 24,820 | 20,661 | 4,159 | 20 % | | Cannabis Extracts | 8,446 | 7,064 | 1,382 | 20 % | Net Revenue by Geography (Constant Currency, Q2 2025 vs Q2 2024, Thousand Dollars) | Region | 2025 (Thousand Dollars) | 2024 (Thousand Dollars) | Change ($) | Change (%) | | :------------- | :------------------- | :------------------- | :--------- | :--------- | | Canada | 19,633 | 19,844 | (211) | (1) % | | Israel | 9,001 | 6,889 | 2,112 | 31 % | | Other International | 4,700 | 1,029 | 3,671 | 357 % | - Net revenue growth is primarily attributed to increased cannabis flower sales in Israel and other international markets, the consolidation of Cronos GrowCo (contributing **$2.2 million** in Q2 2025 and **$5.3 million** for the six months), and higher cannabis extract sales in the Canadian market[49](index=49&type=chunk) [Gross Profit (Constant Currency)](index=17&type=section&id=Gross%20Profit%20(Constant%20Currency)) On a constant currency basis, Q2 2025 gross profit increased **129% to $14.4 million**, and for the six months ended June 30, 2025, it rose **166% to $28.6 million**, driven by Cronos GrowCo consolidation and improved sales mix Gross Profit (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 14,421 | 6,297 | 8,124 | 129 % | | Six Months Ended June 30 | 28,645 | 10,780 | 17,865 | 166 % | - Gross profit growth is primarily attributed to the consolidation of Cronos GrowCo, higher average selling prices from a shift in sales mix towards Israel and other international markets, increased sales volume, and improved production efficiencies[50](index=50&type=chunk) [Operating Expenses (Constant Currency)](index=17&type=section&id=Operating%20Expenses%20(Constant%20Currency)) On a constant currency basis, Q2 2025 operating expenses decreased **9% to $19.8 million**, and for the six months ended June 30, 2025, they fell **9% to $38.3 million**, primarily due to reduced compensation and equity-based compensation Operating Expenses (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 19,843 | 21,858 | (2,015) | (9) % | | Six Months Ended June 30 | 38,319 | 42,289 | (3,970) | (9) % | - The decrease in operating expenses is primarily due to lower compensation and benefits, an increase in the prior period expected credit loss provision, and lower equity-based compensation expense[51](index=51&type=chunk) - This was partially offset by increased sales and marketing expenses, restructuring costs, and the consolidation of Cronos GrowCo (adding **$1.0 million** in Q2 2025 and **$1.9 million** for the six months)[51](index=51&type=chunk) [Net Loss (Constant Currency)](index=17&type=section&id=Net%20Loss%20(Constant%20Currency)) On a constant currency basis, Q2 2025 net loss increased to **$39.8 million**, and for the six months ended June 30, 2025, it rose to **$32.5 million**, mainly due to unrealized foreign exchange losses Net Loss (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | (39,798) | (8,759) | (31,039) | (354) % | | Six Months Ended June 30 | (32,477) | (11,243) | (21,234) | (189) % | - The increase in net loss is primarily due to unrealized foreign exchange losses on U.S. dollar-denominated cash and short-term investments held in Canada (impacted by a stronger Canadian dollar against the U.S. dollar), partially offset by higher gross profit and lower operating expenses[52](index=52&type=chunk) [Adjusted EBITDA (Constant Currency)](index=17&type=section&id=Adjusted%20EBITDA%20(Constant%20Currency)) On a constant currency basis, Q2 2025 Adjusted EBITDA improved to **$1.6 million**, and for the six months ended June 30, 2025, it improved to **$3.9 million**, driven by higher gross profit and lower operating expenses Adjusted EBITDA (Constant Currency, Thousand Dollars) | Period | 2025 | 2024 | Change ($) | Change (%) | | :-------------------------------- | :----- | :----- | :--------- | :--------- | | Three Months Ended June 30 | 1,587 | (11,051) | 12,638 | N/M | | Six Months Ended June 30 | 3,920 | (21,720) | 25,640 | N/M | - The improvement in Adjusted EBITDA is primarily attributed to higher gross profit and lower operating expenses (particularly reduced general and administrative expenses)[53](index=53&type=chunk) [Cash and Cash Equivalents & Short-term Investments (Constant Currency)](index=17&type=section&id=Cash%20and%20Cash%20Equivalents%20%26%20Short-term%20Investments%20(Constant%20Currency)) On a constant currency basis, total cash and short-term investments decreased **3% to $832.6 million** as of June 30, 2025, primarily due to capital expenditures, share repurchases, and dividend payments Total Cash and Cash Equivalents and Short-term Investments (Constant Currency, Thousand Dollars) | Metric | As of June 30, 2025 | As of December 31, 2024 | Change ($) | Change (%) | | :------------------------------------------------ | :------------------ | :----------------- | :--------- | :--------- | | Total Cash and Cash Equivalents and Short-term Investments | 832,622 | 858,805 | (26,183) | (3) % | - The decrease is primarily due to purchases of property, plant, and equipment, repurchases of common shares, dividends paid to non-controlling interests, and tax withholdings related to equity-based compensation[54](index=54&type=chunk) [Foreign Currency Exchange Rates](index=19&type=section&id=Foreign%20Currency%20Exchange%20Rates) This section provides spot and average foreign currency exchange rates for USD against CAD and ILS, highlighting the strengthening of the Canadian dollar against the US dollar USD to CAD Exchange Rates (C$ per $) | Exchange Rate Type | June 30, 2025 | June 30, 2024 | December 31, 2024 | | :-------- | :------------ | :------------ | :---------------- | | Spot Rate | 1.3608 | 1.3674 | 1.4351 | | Average Rate | 1.4094 | 1.3581 | N/A | USD to Israeli New Shekel Exchange Rates (ILS per $) | Exchange Rate Type | June 30, 2025 | June 30, 2024 | December 31, 2023 | | :-------- | :------------ | :------------ | :---------------- | | Spot Rate | 3.3683 | 3.7742 | 3.6526 | | Average Rate | 3.5954 | 3.6950 | N/A | [Investor Relations Contact](index=19&type=section&id=Investor%20Relations%20Contact) This section provides the contact information for Cronos Group's investor relations, including the contact person's name, email, and phone number [Contact Information](index=19&type=section&id=Contact%20Information) This section provides the contact information for Cronos Group's investor relations, including the contact person's name, phone, and email address - Investor Relations Contact: Harrison Aaron[56](index=56&type=chunk) - Email: investor.relations@thecronosgroup.com[56](index=56&type=chunk)