Cronos to enter the Netherlands with acquisition of Europe's largest adult-use cannabis company

Core Viewpoint - Cronos Group Inc. is acquiring CanAdelaar B.V. for an up-front cash consideration of US$67.0 million, plus additional cash earnouts based on normalized EBITDA for 2026 and 2027, positioning Cronos as the market leader in the Netherlands' adult-use cannabis market [1][2]. Transaction Overview - The acquisition involves an up-front payment of €57.5 million (US$67.0 million), representing approximately 1.4 times CanAdelaar's last twelve months (LTM) revenue and 2.4 times LTM EBITDA [1][8]. - The transaction is expected to close in early 2026, pending regulatory approvals in the Netherlands [9]. Strategic Rationale - The acquisition is seen as financially compelling and strategically important for establishing a footprint in Europe and leveraging investments in borderless products [2][12]. - CanAdelaar is the largest cannabis company in the Netherlands' adult-use cannabis pilot program, known as the Wietexperiment, which is designed to create a regulated cannabis supply chain [3][4]. Market Context - The Wietexperiment was enacted in 2020 and officially launched in April 2025, allowing for the sale of cannabis in ten municipalities, with the potential for expansion [3][12]. - CanAdelaar has a current cultivation yield of approximately 20,000 kg of dried flower annually and is the only industrial-scale greenhouse cultivator in the Wietexperiment [6][12]. Financial Performance - CanAdelaar's revenue is projected to grow from US$17.7 million in 2024 to US$47.3 million for the twelve months ending September 30, 2025 [6]. - EBITDA is expected to increase from US$8.0 million in 2024 to US$28.2 million for the twelve months ending September 30, 2025 [7]. Competitive Positioning - CanAdelaar holds the leading market share within the Wietexperiment, with active sales to nearly all 72 coffee shops involved in the program [5][12]. - The regulatory framework of the Wietexperiment is designed to promote responsible adult use, potentially serving as a model for other countries [12].