Net revenue in Q4 2024 increased by 27% year-over-year to $30.3 million; Net revenue in FY 2024 increased by 35% year-over-year to $117.6 million
Spinach® Ends 2024 as the Number One Cannabis Brand in Canada1
PEACE NATURALS® Ends 2024 as the Number One Cannabis Brand in Israel 2
Industry leading balance sheet with $859 million in cash and cash equivalents
TORONTO, Feb. 27, 2025 (GLOBE NEWSWIRE) — Cronos Group Inc. (NASDAQ: CRON) (TSX: CRON) (“Cronos” or the “Company”), today announced its 2024 fourth quarter and full-year business results.
“We set ambitious goals to deliver robust growth, improve margins, and achieve operational excellence. Today, I am proud to say that Cronos has not only met but exceeded these objectives, as evidenced by our strong 2024 results. Our unwavering commitment to innovation, quality, and disciplined cost management has solidified our leadership in the global cannabis industry,” said Mike Gorenstein, Chairman, President and CEO of Cronos.
“From Spinach® becoming the number one cannabis brand in Canada and PEACE NATURALS® achieving a number one position in Israel, to our groundbreaking advancements in cannabis genetics, to international expansion, Cronos is well-positioned to capitalize on future opportunities and drive long-term value for our shareholders. As we look ahead to 2025, we remain focused on sustaining this momentum, strengthening our market leadership, and delivering innovative products that resonate with consumers worldwide,” continued Mr. Gorenstein. “Our strategic investments, such as Cronos GrowCo, have enhanced our cultivation capabilities, ensuring a consistent supply of high-quality cannabis at scale with an improved gross margin profile, while our R&D breakthroughs have set new industry standards. Internationally, we’ve made significant strides, with PEACE NATURALS® leading in Israel and gaining traction in Germany and the UK. Combined with a robust balance sheet and a portfolio of best-selling, borderless brands, Cronos is not just leading today, we’re building the foundation for long-term excellence in the global cannabis industry. Looking to 2025, we’re excited about the opportunities ahead as we continue to innovate, expand, and deliver for our consumers and shareholders.”
Consolidated Financial Results
On June 20, 2024 the Company made an additional investment in Cronos Growing Company (“Cronos GrowCo”) to fund the expansion of cultivation operations. Cronos also obtained majority control of the board of directors of Cronos GrowCo and began consolidating Cronos GrowCo’s results from July 1, 2024. Prior to this date, the Company’s investment in Cronos GrowCo consisted of an investment accounted for under the equity method and loans receivable from Cronos GrowCo.
In the second quarter of 2023, the Company exited its United States (“U.S.”) hemp-derived CBD operations. The exit of the U.S. operations represented a strategic shift, and as such, qualifies for reporting as discontinued operations in our condensed consolidated statements of net income (loss) and comprehensive income (loss). Prior period amounts have been reclassified to reflect the discontinued operations classification of the U.S. operations.
The tables below set forth our condensed consolidated results of continuing operations, expressed in thousands of U.S. dollars for the periods presented. Our condensed consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that we will achieve in future periods.
(in thousands of USD) Three Months Ended December 31, Change Year ended December 31, Change 2024 2023 $ % 2024 2023 $ %Cronos net revenue, excluding Cronos GrowCo net revenue(i) $28,195 $23,915 $4,280 18% $111,241 $87,241 $24,000 28%Cronos GrowCo net revenue(ii) 2,106 — 2,106 N/A 6,374 — 6,374 N/A Net Revenue $30,301 $23,915 $6,386 27% $117,615 $87,241 $30,374 35% Cost of sales 19,494 21,913 (2,419) (11)% 91,710 74,527 17,183 23%Inventory write-down — 89 (89) N/A 707 805 (98) (12)%Gross profit $10,807 $1,913 $8,894 465% $25,198 $11,909 $13,289 112%Gross margin(iii) 36% 8% N/A 28pp 21% 14% N/A 7pp Inventory step-up recorded to cost of sales (1,832) — (1,832) N/A 5,284 — 5,284 N/A Adjusted Gross Profit(iv) $8,975 $1,913 $7,062 369% $30,482 $11,909 $18,573 156%Adjusted Gross Margin(v) 30% 8% N/A 22pp 26% 14% N/A 12pp Net income (loss) $43,941 $(45,151) $89,092 197% $40,022 $(70,439) $110,461 N/M Adjusted EBITDA(iv) $(7,203) $(14,790) $7,587 51% $(34,942) $(61,564) $26,622 43% Other Data Cash and cash equivalents(vi) $858,805 $669,291 $189,514 28% Short-term investments(vi) — 192,237 (192,237) (100)% Capital expenditures(vii) 3,708 1,792 1,916 107% 13,154 3,423 9,731 284%
(i) Cronos net revenue, excluding Cronos GrowCo net revenue is net revenue less Cronos GrowCo net revenue and is after intercompany eliminations.
(ii) Cronos GrowCo net revenue is Cronos GrowCo’s net revenue after intercompany eliminations.
(iii) Gross margin is defined as gross profit divided by net revenue.
(iv) See “Non-GAAP Measures” for more information, including a reconciliation of adjusted earnings (loss) before interest, taxes, depreciation and amortization (“Adjusted EBITDA”) to net income (loss) and a reconciliation of Adjusted Gross Profit to gross profit.
(v) Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net revenue. See “Non-GAAP Measures” for more information.
(vi) Dollar amounts are as of the last day of the period indicated.
(vii) Capital expenditures represent component information of investing activities and is defined as the sum of purchase of property, plant and equipment, and purchase of intangible assets.
Fourth Quarter 2024
Net revenue of $30.3 million in Q4 2024 increased by $6.4 million from Q4 2023. The increase year-over-year was primarily driven by higher cannabis flower and extract sales in the Canadian market and higher cannabis flower sales in Israel and other countries. Cronos GrowCo contributed $2.1 million of cannabis flower sales in Q4 2024. No such sales were recognized in Q4 2023.Gross profit of $10.8 million in Q4 2024 increased by $8.9 million from Q4 2023. The increase year-over-year was primarily due to higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel and other countries, and production cost improvements. Gross profit was positively impacted by $1.8 million in the quarter in connection with the finalization of the purchase accounting for the Cronos GrowCo Transaction, which resulted in a reduction of the fair value of inventory acquired from Cronos GrowCo and the corresponding inventory step-up previously recorded into cost of sales in Q3 2024. No such impact was recognized for 2023.Adjusted gross profit of $9.0 million in Q4 2024 improved by $7.1 million from Q4 2023. The improvement year-over-year was primarily driven by higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel, and production cost improvements.Adjusted EBITDA of $(7.2) million in Q4 2024 improved by $7.6 million from Q4 2023. The improvement year-over-year was primarily driven by higher adjusted gross profit.
Full-Year 2024
Net revenue of $117.6 million in full-year 2024 increased by $30.4 million from full-year 2023. The increase year-over-year was primarily due to higher cannabis flower and extract sales in the Canadian market and higher cannabis flower sales in Israel and other countries. Cronos GrowCo contributed $6.4 million of cannabis flower sales in the year ended December 31, 2024. No such sales were recognized for the year ended December 31, 2023.Gross profit of $25.2 million in full-year 2024 increased by $13.3 million from full-year 2023. The increase year-over-year was primarily due to higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel and other countries, and production cost improvements. This increase was partially offset by the impact on cost of sales from the inventory step-up from the Cronos GrowCo Transaction. For 2024, gross profit was reduced $5.3 million as a result of the impact of the inventory step-up from the Cronos GrowCo Transaction that was recorded into cost of sales since July 1, 2024. No such costs were recognized for 2023.Adjusted gross profit of $30.5 million in full-year 2024 increased by $18.6 million from full-year 2023. The increase year-over-year was primarily due to higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel and other countries, and production cost improvements.Adjusted EBITDA of $(34.9) million in full-year 2024 improved by $26.6 million from full-year 2023. The improvement year-over-year was primarily driven by higher adjusted gross profit and lower sales and marketing, research and development, and general administrative expenses.
Business Updates
Brand and Product Portfolio
Spinach®3
In 2024, the SOURZ by Spinach® brand expanded its edible lineup with several innovative launches. Our industry-leading SOURZ by Spinach® products are the best-selling gummies in the Canadian market and have captured an impressive 23% market share in Q4 2024, with five of the top ten best-selling edibles in Canada coming from the SOURZ lineup. A key addition to our gummy portfolio has been the 1-piece, 10mg THC Fully Blasted SOURZ by Spinach® product, which launched in 2024. In Q4 2024 we launched two new Fully Blasted flavors, Peach Orange and Strawberry Mango. We also launched a new CBD multi-pack, SOURZ by Spinach® CBD Berry Variety Pack.
In 2024 our proprietary genetics breeding program continued to provide our portfolio with winning cultivars that allow us to launch differentiated products across markets and maintain a number one position in the flower category. In 2024, we introduced Spinach Grindz™, a milled flower offering utilizing our Citrus Crush and Cookie Dough strains, designed for convenient use in joints or vaporizers. In Q4 2024, the Spinach® brand maintained its position as the number one flower brand in Canada, with 5.7% market share.
In 2024, we introduced two new Spinach® all-in-one vapes, Pineapple Paradise and Blueberry Dynamite that are performing well and helping to drive market share gains. The brand’s 0.5g all-in-one Spinach HITZ™ vapes introduced new Pink Lemonade and Rocket Icicle flavors, alongside line extensions in Spinach® 1.2g vapes. Spinach® vapes were the number four vape brand in Q4 2024, holding 5.9% market share. Vape production was brought in-house in the second half of 2024 in an effort to streamline manufacturing and enhance production efficiency in this category.
In 2024, we launched Spinach® Fully Charged pre-rolls and infused pre-rolls as well as the Spinach® Fully Charged Party Pack and the Spinach® Fully Charged Tropical Pack. These launches were the culmination of our product development efforts and portfolio refresh. The infused pre-roll category is continuing to grow, and we expect this category to be key to future growth for both Cronos and the industry, which is why we are committed to the evolution and innovation of our pre-roll portfolio. In Q4 2024, Spinach® was ranked seventh in the pre-roll category with 2.5% market share.
Lord Jones®3
In Q4 2024, Lord Jones® Chocolates Fusions™ had 9.6% market share and ended the year as the third best-selling chocolate brand in Canada. In January 2025, the brand launched a Lord Jones® Chocolate Fusions™ fudge brownie flavor, which features a 1:1:1 ratio of CBN, CBD and THC. Lord Jones® Chocolate Fusions™ edibles highlight the brand’s commitment to innovation and craftsmanship, offering four flavors: cookies and cream, dazzle-berry pop, salted caramel crunch and fudge brownie.
In 2024, we also launched Lord Jones® live resin vapes featuring meticulously curated cultivars, delivering a rich, full-spectrum experience that combines pure live resin with sleek, high-quality hardware. In the second half of 2023, we launched Ice Water Hash Fusions pre-rolls, which feature flower and terpene-rich ice water hash and are fitted with a branded ceramic tip. The Ice Water Hash Fusions pre-rolls continued performing throughout 2024, rising to the number one position in the hash pre-roll category. Together, these launches underscore the brand’s dedication to excellence and its focus on creating exceptional, high-quality cannabis-infused products.
PEACE NATURALS®2
In 2024, Cronos Israel revamped and repositioned its flower portfolio, optimizing pricing, potency and bringing new, exciting strains to market to meet patient needs. The PEACE NATURALS® brand launched new strains including GG4, Key Limez Punch, Pink Sherb, Tangie Kush, Citra Diesel, Tahoe OG Kush and GMO Lite, providing consumers with additional variety and choice. In Q4 2024, PEACE NATURALS® was the number one flower brand in Israel with 24% market share and PEACE NATURALS® cannabis oils are the fourth most popular brand in Israel with 9% market share.
In 2024, Cronos expanded into the United Kingdom (the “UK”) by shipping its first batch of PEACE NATURALS® medical cannabis flower to this emerging market, through a partnership with a third-party distributor of prescribed cannabis products.
Throughout 2024, the Company continued its sales to the German market through the PEACE NATURALS® brand. Cronos sells the PEACE NATURALS® brand through its distribution partner, Cansativa GmbH (“Cansativa”), one of the leading distributors of medical cannabis in Germany and supplies flower for its private-label brand. Cronos has seen strong demand for its proprietary genetics, such as GMO and Wedding Cake, in both Germany and the UK under the PEACE NATURALS® brand.
Global Supply Chain and Operations
The expansion efforts at Cronos GrowCo’s facility are well underway. In Q4 2024, Health Canada approved amendments to the site’s perimeter. Cronos GrowCo expects to finish construction of the expanded cultivation and processing facilities in Q2 2025, with first harvests and sales from the area commencing in the second half of 2025. Prior to the commencement of sales from the expanded facility, Cronos has the option to purchase up to 80% of Cronos GrowCo’s total production. Once sales from the expanded area begin, Cronos will have the option to purchase up to 70% of the total production from the expanded facility. The expansion of Cronos GrowCo positions the Company to capitalize on domestic demand and meet international growth opportunities in the global cannabis market.
On November 26, 2023, the Company announced that Peace Naturals Project Inc. had entered into an agreement to sell and lease back its facility in Stayner, Ontario (the “Peace Naturals Campus”). However, the agreement was terminated in the Q2 of 2024 pursuant to its terms, and the Company has decided to continue and expand its operations at the site.
As part of the expanding operations at the Peace Naturals Campus, in the second-half of 2024, the Company invested in machinery, automation and process improvement to drive cost efficiency within the facility. This also included investment in warehousing and vault expansion as well as R&D equipment and laboratory enhancements.
Guidance
The Company achieved $8.7 million in operating expense savings in 2024 on a standalone basis, meeting its previously announced operating expense savings target of $5 to $10 million. The savings were primarily driven by lower expenses in general and administrative, research and development and sales and marketing. The operating expense savings exclude the impact of the consolidation of Cronos GrowCo’s results into the Company’s financial statements.
Conference Call
The Company will host a conference call and live audio webcast on Thursday, February 27, 2025, at 8:30 a.m. ET to discuss 2024 Fourth Quarter and Full-Year business results. An audio replay of the call will be archived on the Company’s website for replay. Instructions for the live audio webcast are provided on the Company’s website at: https://ir.thecronosgroup.com/events-presentations.
About Cronos
Cronos is an innovative global cannabinoid company committed to building disruptive intellectual property by advancing cannabis research, technology and product development. With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach®, PEACE NATURALS® and Lord Jones®. For more information about Cronos and its brands, please visit: thecronosgroup.com.
Forward-Looking Statements
This press release contains information that constitutes forward-looking information and forward-looking statements within the meaning of applicable securities laws and court decisions (collectively, “Forward-Looking Statements”), which are based upon our current internal expectations, estimates, projections, assumptions and beliefs. All information that is not clearly historical in nature may constitute Forward-Looking Statements. In some cases, Forward-Looking Statements can be identified by the use of forward-looking terminology such as “expect”, “likely”, “may”, “will”, “should”, “intend”, “anticipate”, “potential”, “proposed”, “estimate” and other similar words, expressions and phrases, including negative and grammatical variations thereof, or statements that certain events or conditions “may” or “will” happen, or by discussion of strategy. Forward-Looking Statements include estimates, plans, expectations, opinions, forecasts, projections, targets, guidance or other statements that are not statements of historical fact.
Forward-Looking Statements include, but are not limited to, statements with respect to:
the ongoing impact of the public investigation into Canadian licensed producers of alleged dumping of medical cannabis imports from Canada into Israel by the Trade Levies Commissioner of the Israel Ministry of Economy and Industry (the “Anti-Dumping Investigation”) and the proposed anti-dumping duty to which the Company’s imports would be subject;expectations related to the conflict involving Israel, Hamas, Hezbollah, Houthis, Iran, Iran’s proxies and other stakeholders in the region (the “Middle East Conflict”) and its impact on our operations in Israel, the supply of product in the market and the demand for product by medical patients in Israel, as well as any regional or global escalations and their impact to global commerce and stability;expectations related to the German, Australian and UK markets, including our strategic partnerships with Cansativa, Vitura Health Limited (“Vitura”), and other distributors, respectively, and our ability to successfully distribute the PEACE NATURALS® brand in Germany and the UK;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;expectations related to the impact of our decision to exit our U.S. hemp-derived cannabinoid product operations;the ongoing impact of our announced realignment (the “Realignment”) and any progress, challenges and effects related thereto as well as changes in strategy, metrics, investments, reporting structure, costs, operating expenses, employee turnover and other changes with respect thereto;our expectations as to the use of the Peace Naturals Campus;our ability to acquire raw materials from suppliers, including Cronos GrowCo, and the costs and timing associated therewith;expectations regarding the potential success of, and the costs and benefits associated with, our joint ventures, strategic alliances and equity investments;expectations related to the transaction by which we obtained majority control of the board of directors of Cronos GrowCo, which qualified as a business combination under Accounting Standards Codification 805, and the expansion of Cronos GrowCo’s purpose-built cultivation and processing facilities;our ability or plans to identify, develop, commercialize or expand our technology and R&D initiatives in cannabinoids, or the success thereof;expectations regarding revenues, expenses, gross margins and capital expenditures;expectations regarding our future production and manufacturing strategy and operations, the costs and timing associated therewith and the receipt of applicable production and sale licenses;the ongoing impact of the legalization of additional cannabis product types and forms for adult-use in Canada, including federal, provincial, territorial and municipal regulations pertaining thereto, the related timing and impact thereof and our intentions to participate in such markets;the legalization of the use of cannabis for medical or adult-use in jurisdictions outside of Canada, including the United States and Germany, the related timing and impact thereof and our intentions to participate in such markets, if and when such use is legalized;the grant, renewal, withdrawal, suspension, delay and impact of any license or supplemental license to conduct activities with cannabis or any amendments thereof;our ability to successfully create and launch brands and cannabis products;expectations related to the differentiation of our products, including through the utilization of rare cannabinoids;the benefits, viability, safety, efficacy, dosing and social acceptance of cannabis, including CBD and other cannabinoids;laws and regulations and any amendments thereto applicable to our business and the impact thereof, including uncertainty regarding the application of U.S. state and federal law to cannabis and U.S. hemp (including CBD and other U.S. hemp-derived cannabinoids) products and the scope of any regulations by the U.S. Food and Drug Administration, the U.S. Drug Enforcement Administration, the U.S. Federal Trade Commission, the U.S. Patent and Trademark Office and any state equivalent regulatory agencies over cannabis and U.S. hemp (including CBD and other U.S. hemp-derived cannabinoids) products, including the possibility marijuana is moved from Schedule I to Schedule III under the U.S. Controlled Substances Act;the anticipated benefits and impact of Altria Group Inc.’s investment in the Company (the “Altria Investment”), pursuant to a subscription agreement dated December 7, 2018;uncertainties as to our ability to exercise our option (the “PharmaCann Option”) in PharmaCann Inc. (“PharmaCann”), in the near term or the future, in full or in part, including the uncertainties as to the status and future development of federal legalization of cannabis in the U.S. and our ability to realize the anticipated benefits of the transaction with PharmaCann;expectations regarding the implementation and effectiveness of key personnel changes;expectations regarding business combinations and dispositions and the anticipated benefits therefrom;expectations of the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;the impact of the ongoing military conflict between Russia and Ukraine (and resulting sanctions) on our business, financial condition and results of operations or cash flows;our compliance with the terms of the settlement (the “Settlement Order”) with the SEC and the settlement agreement with the Ontario Securities Commission (the “Settlement Agreement”); andthe impact of the loss of our ability to rely on private offering exemptions under Regulation D of the Securities Act of 1933, as amended, and the loss of our status as a well-known seasoned issuer, each as a result of the Settlement Order.
Certain of the Forward-Looking Statements contained herein concerning the industries in which we conduct our business are based on estimates prepared by us using data from publicly available governmental sources, market research, industry analysis and on assumptions based on data and knowledge of these industries, which we believe to be reasonable. However, although generally indicative of relative market positions, market shares and performance characteristics, such data is inherently imprecise. The industries in which we conduct our business involve risks and uncertainties that are subject to change based on various factors, which are described further below.
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 with our strategic distribution partner 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 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 dispositions, and, if completed, obtain our anticipated sales price; (xxiii) general economic, financial market, regulatory and political conditions in which we operate; (xxiv) management’s perceptions of historical trends, current conditions and expected future developments; and (xxv) other considerations that management believes to be appropriate in the circumstances. While our management considers these assumptions to be reasonable based on information currently available to management, there is no assurance that such expectations will prove to be correct.
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 press release 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; that 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 credit markets; unanticipated future levels of capital, environmental or maintenance expenditures, general and administrative and other expenses; failure to realize expected growth opportunities; the lack of cash flow necessary to execute our business plan (either within the expected timeframe or at all); difficulty raising capital; the potential adverse effects of judicial, regulatory or other proceedings, or threatened litigation or proceedings, on our business, financial condition, results of operations and cash flows; volatility in and/or degradation of general economic, market, industry or business conditions; compliance with applicable environmental, economic, health and safety, energy and other policies and regulations and in particular health concerns with respect to vaping and the use of cannabis and U.S. hemp products in vaping devices; the unexpected effects of actions of third parties such as competitors, activist investors or federal (including U.S. federal), state, provincial, territorial or local regulatory authorities or self-regulatory organizations; adverse changes in regulatory requirements in relation to our business and products; legal or regulatory obstacles that could prevent us from being able to exercise the PharmaCann Option and thereby realize the anticipated benefits of the transaction with PharmaCann; dilution of our fully-diluted ownership of PharmaCann and the loss of our rights as a result of that dilution; our failure to improve our internal control environment and our systems, processes and procedures; and the factors discussed under Part I, Item 1A “Risk Factors” in our Annual Report on Form 10-K for the year ended December 31, 2024. Readers are cautioned to consider these and other factors, uncertainties and potential events carefully and not to put undue reliance on Forward-Looking Statements.
Forward-Looking Statements are provided for the purposes of assisting the reader in understanding our financial performance, financial position and cash flows as of and for periods ended on certain dates and to present information about management’s current expectations and plans relating to the future, and the reader is cautioned not to place undue reliance on these Forward-Looking Statements because of their inherent uncertainty and to appreciate the limited purposes for which they are being used by management. While we believe that the assumptions and expectations reflected in the Forward-Looking Statements are reasonable based on information currently available to management, there is no assurance that such assumptions and expectations will prove to have been correct. Forward-Looking Statements are made as of the date they are made and are based on the beliefs, estimates, expectations and opinions of management on that date. We undertake no obligation to update or revise any Forward-Looking Statements, whether as a result of new information, estimates or opinions, future events or results or otherwise or to explain any material difference between subsequent actual events and such Forward-Looking Statements. The Forward-Looking Statements contained in this press release 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 are expressly qualified in their entirety by these cautionary statements.
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1 Hifyre Retail Analytics – National Retail Dollar by Brand in Canada – December 2024.
2 Market share and ranking information from pharmacy data collected by Cronos – December 2024.
3 All market share and ranking information from Hifyre Retail Analytics – National Retail Dollar by Brand in Canada – December 2024, unless otherwise specified.
Cronos Group Inc.
Consolidated Balance Sheets
(In thousands of U.S. dollars) As of December 31, 2024 2023 Assets Current assets Cash and cash equivalents$858,805 $669,291 Short-term investments — 192,237 Accounts receivable, net 15,462 13,984 Interest receivable 8,690 10,012 Other receivables 5,000 6,341 Current portion of loans receivable, net 618 5,541 Inventory, net 33,149 30,495 Prepaids and other current assets 6,277 5,405 Held-for-sale assets 8,112 — Total current assets 936,113 933,306 Equity method investments, net — 19,488 Other investments 2,813 35,251 Non-current portion of loans receivable, net 15,526 69,036 Property, plant and equipment, net 133,189 59,468 Right-of-use assets 1,390 1,356 Goodwill 63,453 1,057 Intangible assets, net 11,257 21,078 Deferred tax assets 2,571 226 Total assets$1,166,312 $1,140,266 Liabilities Current liabilities Accounts payable$16,973 $12,130 Income taxes payable 9 64 Accrued liabilities 31,653 27,736 Current portion of lease obligation 1,025 994 Derivative liabilities 40 102 Current portion due to non-controlling interests — 373 Total current liabilities 49,700 41,399 Non-current portion due to non-controlling interests 1,073 1,003 Non-current portion of lease obligation 993 1,559 Deferred tax liabilities 3,564 181 Total liabilities 55,330 44,142 Shareholders’ equity Share capital and additional paid-in capital 669,879 662,174 Retained earnings 457,709 416,719 Accumulated other comprehensive income (loss) (63,525) 20,678 Total equity attributable to shareholders of Cronos Group 1,064,063 1,099,571 Non-controlling interests 46,919 (3,447)Total shareholders’ equity 1,110,982 1,096,124 Total liabilities and shareholders’ equity$1,166,312 $1,140,266 Cronos Group Inc.
Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss)
(In thousands of U.S. dollars, except share and per share amounts) Year ended December 31, 2024 2023 2022 Net revenue, before excise taxes$161,821 $120,270 $109,301 Excise taxes (44,206) (33,029) (22,552)Net revenue 117,615 87,241 86,749 Cost of sales 91,710 74,527 71,313 Inventory write-down 707 805 — Gross profit 25,198 11,909 15,436 Operating expenses Sales and marketing 21,603 22,701 18,046 Research and development 4,229 5,843 13,131 General and administrative 46,514 49,475 67,674 Restructuring costs 630 1,524 3,545 Share-based compensation 8,700 8,756 15,008 Depreciation and amortization 3,701 5,044 5,967 Impairment loss on long-lived assets 16,350 3,366 3,493 Total operating expenses 101,727 96,709 126,864 Operating loss (76,529) (84,800) (111,428)Other income (expense) Interest income, net 52,019 51,235 22,514 Gain (loss) on revaluation of derivative liabilities 49 (85) 14,060 Share of income from equity method investments 2,365 1,583 3,114 Gain on revaluation of loan receivable 11,804 — — Gain on revaluation of equity method investment 32,469 — — Gain (loss) on revaluation of financial instruments (6,248) (12,042) 14,739 Impairment loss on other investments (25,650) (23,350) (61,392)Foreign currency transaction gain (loss) 57,859 (7,324) (2,286)Loss on held-for-sale assets (11,202) — — Other, net (350) 1,114 (324)Total other income (expense) 113,115 11,131 (9,575)Income (loss) before income taxes 36,586 (73,669) (121,003)Income tax expense (benefit) (3,436) (3,230) 34,175 Income (loss) from continuing operations 40,022 (70,439) (155,178)Loss from discontinued operations — (4,114) (13,556)Net income (loss) 40,022 (74,553) (168,734)Net income (loss) attributable to non-controlling interest (1,058) (590) — Net income (loss) attributable to Cronos Group$41,080 $(73,963) $(168,734) Comprehensive income (loss) Net income (loss)$40,022 $(74,553) $(168,734)Other comprehensive income (loss) Foreign exchange gain (loss) on translation (86,321) 21,539 (50,616)Comprehensive income (loss) (46,299) (53,014) (219,350)Comprehensive income (loss) attributable to non-controlling interest (3,176) (526) 46 Comprehensive income (loss) attributable to Cronos Group$(43,123) $(52,488) $(219,396) Net income (loss) per share Basic – continuing operations$0.11 $(0.18) $(0.41)Basic – discontinued operations$— $(0.01) $(0.04)Basic net income (loss) per share attributable to Cronos Group$0.11 $(0.19) $(0.45) Diluted – continuing operations$0.11 $(0.18) $(0.41)Diluted – discontinued operations$— $(0.01) $(0.04)Diluted net income (loss) per share attributable to Cronos Group$0.11 $(0.19) $(0.45)Weighted average number of outstanding shares Basic 382,058,056 380,964,739 376,961,797 Diluted 385,557,002 380,964,739 376,961,797 Three months ended December 31, 2024 2023 Net revenue, before excise taxes$41,182 $34,006 Excise taxes (10,881) (10,091)Net revenue 30,301 23,915 Cost of sales 19,494 21,913 Inventory write-down — 89 Gross profit 10,807 1,913 Operating expenses Sales and marketing 6,413 6,367 Research and development 1,028 1,451 General and administrative 12,080 9,802 Restructuring costs — 101 Share-based compensation 2,187 1,933 Depreciation and amortization 464 529 Impairment loss on long-lived assets — 3,366 Total operating expenses 22,172 23,549 Operating loss (11,365) (21,636)Other income (expense) Interest income, net 11,863 14,214 Gain (loss) on revaluation of derivative liabilities 142 (71)Share of income from equity method investments — 752 Gain (loss) on revaluation of financial instruments 302 (4,186)Impairment loss on other investments — (23,350)Foreign currency transaction gain (loss) 45,489 (11,323)Loss on held-for-sale assets (780) — Other, net 294 89 Total other income (expense) 57,310 (23,875)Income (loss) before income taxes 45,945 (45,511)Income tax expense (benefit) 2,004 (360)Income (loss) from continuing operations 43,941 (45,151)Loss from discontinued operations — 124 Net income (loss) 43,941 (45,027)Net loss attributable to non-controlling interest 212 (237)Net income (loss) attributable to Cronos Group$43,729 $(44,790)Comprehensive loss Net income (loss)$43,941 $(45,027)Other comprehensive income (loss) Foreign exchange gain (loss) on translation (66,208) 22,635 Comprehensive loss (22,267) (22,392)Comprehensive loss attributable to non-controlling interest (2,832) (390)Comprehensive loss attributable to Cronos Group$(19,435) $(22,002) Net income (loss) per share Basic – continuing operations$0.11 $(0.12)Basic – discontinued operations$— $— Basic net income (loss) per share attributable to Cronos Group$0.11 $(0.12) Diluted – continuing operations$0.11 $(0.12)Diluted – discontinued operations$— $— Diluted net income (loss) per share attributable to Cronos Group$0.11 $(0.12)Weighted average number of outstanding shares Basic 382,340,893 381,155,824 Diluted 386,525,110 381,155,824 Cronos Group Inc.
Consolidated Statements of Cash Flows
(In thousands of U.S. dollars) Year ended December 31, 2024 2023 2022 Operating activities Net income (loss)$40,022 $(74,553) $(168,734)Adjustments to reconcile net income (loss) to net cash provided by (used in) operating activities: Share-based compensation 8,700 8,769 15,115 Depreciation and amortization 9,336 8,110 13,122 Impairment loss on long-lived assets 16,350 3,571 3,493 Impairment loss on other investments 25,650 23,350 61,392 Loss (income) from investments 3,841 10,513 (17,853)Loss (gain) on revaluation of derivative liabilities (49) 85 (14,060)Changes in expected credit losses on long-term financial assets 1,032 (1,528) (662)Revaluation of equity method investment (32,469) — — Revaluation of loan receivable (11,804) — — Loss on held-for-sale assets 11,202 — — Inventory step-up recorded to cost of sales 5,284 — — Foreign currency transaction (gain) loss (57,859) 7,324 2,286 Other non-cash operating activities, net (82) (2,008) 1,294 Changes in operating assets and liabilities: Accounts receivable, net (917) 9,206 (2,711)Interest receivable (3,656) (14,344) (6,985)Other receivables 2,059 (1,449) 1,148 Prepaids and other current assets (512) 1,437 996 Inventory, net 7,417 7,399 (7,217)Accounts payable (7,449) (773) (863)Income taxes payable (93) (33,104) 34,212 Accrued liabilities 2,840 5,160 (2,921)Net cash provided by (used in) operating activities 18,843 (42,835) (88,948) Investing activities Proceeds from short-term investments 185,817 532,838 268,870 Purchase of short-term investments — (608,247) (271,378)Cash acquired in business combination 5,993 — — Dividends received from equity method investee — 1,297 — Dividend proceeds — 345 384 Advances on loans receivable (8,759) — — Repayments on loans receivable 5,252 16,831 5,246 Purchase of property, plant and equipment, net of disposals (12,411) (2,505) (3,451)Purchase of intangible assets, net of disposals (743) (918) (1,581)Other investing activities — 860 68 Net cash provided by (used in) investing activities 175,149 (59,499) (1,842) Year ended December 31, 2024 2023 2022 Financing activities Withholding taxes paid on equity awards (1,231) (1,030) (2,829)Other financing activities, net — — (68)Net cash used in financing activities (1,231) (1,030) (2,897)Effect of foreign currency translation on cash and cash equivalents (3,247) 8,011 (28,642)Net change in cash and cash equivalents 189,514 (95,353) (122,329)Cash and cash equivalents, beginning of period 669,291 764,644 886,973 Cash and cash equivalents, end of period$858,805 $669,291 $764,644 Supplementary cash flow information: Interest paid — — — Interest received 48,399 36,501 15,548 Taxes paid 647 33,013 177
Non-GAAP Measures
Cronos reports its financial results in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”). This press release refers to measures not recognized under U.S. GAAP (“non-GAAP measures”). These non-GAAP measures do not have a standardized meaning prescribed by U.S. GAAP and are therefore unlikely to be comparable to similar measures presented by other companies. Rather, these non-GAAP measures are provided as a supplement to corresponding U.S. GAAP measures to provide additional information regarding the results of operations from management’s perspective. Accordingly, non-GAAP measures should not be considered a substitute for, or superior to, the financial information prepared and presented in accordance with U.S. GAAP. All non-GAAP measures presented in this press release are reconciled to their closest reported U.S. GAAP measure. Reconciliations of historical adjusted financial measures to corresponding U.S. GAAP measures are provided below.
Adjusted EBITDA
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 loss; other, net; loss from discontinued operations; restructuring costs; inventory write-downs resulting from restructuring actions; share-based compensation; costs related to the Anti-Dumping Investigation; 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 Note 12(b) “Contingencies,” to the consolidated financial statements under Item 8 of the Company’s Annual Report on Form 10-K for the year ended December 31, 2024 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.
Management believes that Adjusted EBITDA provides the most useful insight into underlying business trends and results and provides a more meaningful comparison of period-over-period results. Management uses Adjusted EBITDA for planning, forecasting and evaluating business and financial performance, including allocating resources and evaluating results relative to employee compensation targets.
Adjusted EBITDA is reconciled to net income (loss) as follows:
(in thousands of U.S. dollars)For the year ended December 31, 2024 Continuing
Operations Discontinued
Operations TotalNet income$40,022 $— $40,022 Interest income, net (52,019) — (52,019)Income tax expense (benefit) (3,436) — (3,436)Depreciation and amortization 9,336 — 9,336 EBITDA (6,097) — (6,097)Share of income from equity method investments (2,365) — (2,365)Impairment loss on long-lived assets(i) 16,350 — 16,350 Revaluation gain on loan receivable(ii) (11,804) — (11,804)Gain on revaluation of equity method investment(iii) (32,469) — (32,469)Gain on revaluation of derivative liabilities(iv) (49) — (49)Loss on revaluation of financial instruments(v) 6,248 — 6,248 Impairment loss on other investments(vi) 25,650 — 25,650 Foreign currency transaction gain (57,859) — (57,859)Transaction costs(vii) 701 — 701 Loss on held-for-sale assets(viii) 11,202 — 11,202 Other, net(ix) 350 — 350 Restructuring costs(x) 630 — 630 Share-based compensation(xi) 8,700 — 8,700 Financial statement review costs(xii) (1) — (1)Inventory step-up recorded to cost of sales(xiv) 5,284 — 5,284 Israel Ministry of Economy and Industry dumping inquiry(xv) 587 — 587 Adjusted EBITDA$(34,942) $— $(34,942)(in thousands of U.S. dollars)For the year ended December 31, 2023 Continuing
Operations Discontinued
Operations TotalNet loss$ (70,439) $ (4,114) $ (74,553)Interest income, net (51,235) (10) (51,245)Income tax expense (benefit) (3,230) — (3,230)Depreciation and amortization 7,866 244 8,110 EBITDA (117,038) (3,880) (120,918)Share of income from equity method investments (1,583) — (1,583)Impairment loss on long-lived assets(i) 3,366 205 3,571 Loss on revaluation of derivative liabilities(iv) 85 — 85 Loss on revaluation of financial instruments(v) 12,042 — 12,042 Impairment loss on other investments(vi) 23,350 — 23,350 Foreign currency transaction loss 7,324 — 7,324 Other, net(ix) (1,114) 118 (996)Restructuring costs(x) 1,524 523 2,047 Share-based compensation(xi) 8,756 13 8,769 Financial statement review costs(xii) 919 — 919 Inventory write-down(xiii) 805 839 1,644 Adjusted EBITDA$(61,564) $(2,182) $(63,746)(in thousands of U.S. dollars)Three months ended December 31, 2024 Continuing
Operations Discontinued
Operations TotalNet income$43,941 $— $43,941 Interest income, net (11,863) — (11,863)Income tax expense (benefit) 2,004 — 2,004 Depreciation and amortization 2,525 — 2,525 EBITDA 36,607 — 36,607 Gain on revaluation of derivative liabilities(iv) (142) — (142)Gain on revaluation of financial instruments(v) (302) — (302)Foreign currency transaction gain (45,489) — (45,489)Transaction costs(vii) 171 — 171 Loss on held-for-sale assets(viii) 780 — 780 Other, net(ix) (294) — (294)Share-based compensation(xi) 2,187 — 2,187 Financial statement review costs(xii) 524 — 524 Inventory step-up recorded to cost of sales(xiv) (1,832) — (1,832)Israel Ministry of Economy and Industry dumping inquiry(xv) 587 — 587 Adjusted EBITDA$(7,203) $— $(7,203)(in thousands of U.S. dollars)Three months ended December 31, 2023 Continuing
Operations Discontinued
Operations TotalNet loss$(45,151) $124 $(45,027)Interest income, net (14,214) (1) (14,215)Income tax expense (benefit) (360) — (360)Depreciation and amortization 1,177 — 1,177 EBITDA (58,548) 123 (58,425)Share of income from equity method investments (752) — (752)Impairment loss on long-lived assets(i) 3,366 — 3,366 Loss on revaluation of derivative liabilities(iv) 71 — 71 Loss on revaluation of financial instruments(v) 4,186 — 4,186 Impairment loss on other investments(vi) 23,350 — 23,350 Foreign currency transaction loss 11,323 — 11,323 Other, net(ix) (89) (14) (103)Restructuring costs(x) 101 (39) 62 Share-based compensation(xi) 1,933 (4) 1,929 Financial statement review costs(xii) 180 — 180 Inventory write-down(xiii) 89 — 89 Adjusted EBITDA$(14,790) $66 $(14,724)
(i) For the year ended December 31, 2024, impairment loss on long-lived assets included $14,258 related to the write-down of our Ginkgo Exclusive Licenses and $1,631 related to the cessation of operations of Thanos Holdings Ltd., known as Cronos Fermentation (“Cronos Fermentation”). For the year ended December 31, 2023, impairment loss on long-lived assets related to certain leased properties associated with the Company’s former U.S. operations and impairment of the Company’s CBCVA exclusive license under the collaboration and license agreement between Ginkgo and the Company.
(ii) For the year ended December 31, 2024, a revaluation gain on loan receivable was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024.
(iii) For the year ended December 31, 2024, a gain on revaluation of equity method investment was recognized as a result of the Cronos GrowCo Transaction on July 1, 2024.
(iv) For the three months and years ended December 31, 2024 and 2023, the (gain) loss on revaluation of derivative liabilities represented the fair value changes on the derivative liabilities.
(v) For the three months and years ended December 31, 2024 and 2023, (gain) loss on revaluation of financial instruments related primarily to our unrealized holding (gain) or loss (as applicable) on our mark-to-market investment in Vitura as well as revaluations of financial liabilities resulting from deferred share units granted to directors.
(vi) For the years ended December 31, 2024 and 2023 and the three months ended December 31, 2023, impairment loss on other investments related to the PharmaCann Option for the difference between its fair value and carrying amount.
(vii) For the year and three months ended December 31, 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 consolidated statements of net income (loss) and comprehensive income (loss).
(viii) For the year ended December 31, 2024, a loss on held-for-sale assets was recognized as a result of the change in the Company’s sales strategy for the Cronos Fermentation assets to market the assets to a broader buyer pool. For the quarter ended December 31, 2024, a loss on held-for-sale assets was recognized to adjust the net book value of Cronos Fermentation to fair value.
(ix) For the three months and years ended December 31, 2024 and 2023, other, net primarily related to (gain) loss on disposal of assets.
(x) For the year ended December 31, 2024, restructuring costs from continuing operations related to shutdown costs at the Cronos Fermentation Facility, as well as employee-related severance costs associated with the Realignment. For the year and three months ended December 31, 2023, restructuring costs related to the employee-related severance costs and other restructuring costs associated with the Realignment.
(xi) For the three months and years ended December 31, 2024 and 2023, share-based compensation related to the vesting expenses of share-based compensation awarded to employees under our share-based award plans.
(xii) For the three months and years ended December 31, 2024 and 2023, financial statement review costs included costs related to the Restatements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to the Restatements, the costs related to the Settlement Order and Settlement Agreement and legal costs defending shareholder class action complaints brought against the Company as a result of the 2019 restatement, as well as related insurance reimbursements.
(xiii) For the three months and year ended December 31, 2023, inventory write-downs from discontinued operations relate to product destruction and obsolescence associated with the exit of our U.S. operations and inventory write-downs from continuing operations relate to product destruction and obsolescence associated with the planned exit of Cronos Fermentation.
(xiv) For the three months and year ended December 31, 2024, inventory step-up recorded to cost of sales represented the portion of the inventory step-up from the Cronos GrowCo Transaction that was recorded through the consolidated statements of income (loss) and comprehensive income (loss).
(xv) For the three months and year ended December 31, 2024, 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.
Adjusted Gross Profit and Adjusted Gross Margin
To supplement the consolidated financial statements presented in accordance with U.S. GAAP, we have presented Adjusted Gross Profit and Adjusted Gross Margin, non-GAAP measures that exclude the impacts of inventory-related purchase accounting adjustments from the calculations of gross profit and gross margin, which resulted from the Cronos GrowCo Transaction. Results are reported as total consolidated results, reflecting our reporting structure of one reportable segment.
Management believes that Adjusted Gross Profit and Adjusted Gross Margin provide useful insight into underlying business trends to facilitate comparisons of period-over-period results by removing the impacts of inventory-related purchase accounting adjustments resulting from the Cronos GrowCo Transaction, which reflect a one-time event and do not reflect management’s assessment of ongoing business performance.
(in thousands of U.S. dollars)Three months ended
December 31, Change Year ended
December 31, Change 2024 2023 $ % 2024 2023 $ %Net revenue$30,301 $23,915 $6,386 27% $117,615 $87,241 $30,374 35% Gross profit$10,807 $1,913 $8,894 465% $25,198 $11,909 $13,289 112%Inventory step-up recorded to cost of sales (1,832) — (1,832) N/M 5,284 — 5,284 N/M Adjusted Gross Profit$8,975 $1,913 $7,062 369% $30,482 $11,909 $18,573 156% Gross margin(i) 36% 8% N/A 28pp 21% 14% N/A 7ppAdjusted Gross Margin(ii) 30% 8% N/A 22pp 26% 14% N/A 12pp
(i) Gross margin is defined as gross profit divided by net revenue.
(ii) Adjusted Gross Margin is defined as Adjusted Gross Profit divided by net revenue.
Constant Currency
To supplement the consolidated financial statements presented in accordance with U.S. GAAP, we have presented constant currency adjusted financial measures for net revenues, gross profit, gross profit margin, operating expenses, net income (loss) and Adjusted EBITDA for 2024, as well as cash and cash equivalents and short-term investment balances as of December 31, 2024 compared to December 31, 2023, 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 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 comparative period in 2023 rather than the actual average exchange rates in effect during 2024; constant currency current period balance sheet information is translated at the prior year-end spot rate rather than the current year-end spot rate. All growth comparisons relate to the corresponding period in 2023. We have provided this non-GAAP financial information to aid investors in better understanding the performance of our business. The non-GAAP financial measures presented in this press release should not be considered as a substitute for, or superior to, the measures of financial performance prepared in accordance with U.S. GAAP.
The table below sets forth certain measures of consolidated results from continuing operations on an as-reported and constant currency basis for 2024 compared to 2023, as well as cash and cash equivalents and short-term investments as of December 31, 2024, compared to December 31, 2023, on an as-reported and constant currency basis (in thousands):
As Reported As Adjusted for Constant Currency Three months ended December 31, As Reported
Change Three months ended
December 31, Constant Currency
Change 2024 2023 $ % 2024 $ %Net revenue$30,301 $23,915 $6,386 27% $30,527 $6,612 28%Gross profit 10,807 1,913 8,894 465% 10,914 9,001 471%Gross margin 36% 8% N/A 28pp 36% N/A 28pp Operating expenses 22,172 23,549 (1,377) (6)% 22,557 (992) (4)%Net income (loss) from continuing operations 43,941 (45,151) 89,092 N/M 44,431 89,582 N/M Adjusted EBITDA (7,203) (14,790) 7,587 51% (7,869) 6,921 47% As Reported As Adjusted for Constant Currency Year ended
December 31, As Reported
Change Year ended
December 31, Constant Currency
Change 2024 2023 $ % 2024 $ %Net revenue$117,615 $87,241 $30,374 35% $118,983 $31,742 36%Gross profit 25,198 11,909 13,289 112% 25,505 13,596 114%Gross margin 21% 14% N/A 7pp 21% N/A 7pp Operating expenses 101,727 96,709 5,018 5% 102,972 6,263 6%Net income (loss) from continuing operations 40,022 (70,439) 110,461 N/M 42,007 112,446 N/M Adjusted EBITDA (34,942) (61,564) 26,622 43% (35,891) 25,673 42% As of
December 31, As Reported
Change As of December 31, Constant Currency
Change 2024 2023 $ % 2024 $ %Cash and cash equivalents$858,805 $669,291 $189,514 28% $869,761 $200,470 30%Short-term investments — 192,237 (192,237) (100)% — (192,237) (100)%Total cash and cash equivalents and short-term investments$858,805 $861,528 $(2,723) —% $869,761 $8,233 1%
Net revenue
As Reported As Adjusted for Constant Currency Three months ended
December 31, As Reported
Change Three months ended
December 31, Constant Currency
Change 2024 2023 $ % 2024 $ %Cannabis flower$23,398 $17,515 $5,883 34% $23,491 $5,976 34%Cannabis extracts 6,588 6,074 514 8% 6,729 655 11%Other 315 326 (11) (3)% 307 (19) (6)%Net revenue$30,301 $23,915 $6,386 27% $30,527 $6,612 28% As Reported As Adjusted for Constant Currency Year ended
December 31, As Reported
Change Year ended
December 31, Constant Currency
Change 2024 2023 $ % 2024 $ %Cannabis flower$87,912 $62,070 $25,842 42% $88,904 $26,834 43%Cannabis extracts 29,168 24,569 4,599 19% 29,552 4,983 20%Other 535 602 (67) (11)% 527 (75) (12)%Net revenue$117,615 $87,241 $30,374 35% $118,983 $31,742 36% As Reported As Adjusted for Constant Currency Three months ended
December 31, As Reported
Change Three months ended
December 31, Constant Currency
Change 2024 2023 $ % 2024 $ %Canada$19,656 $17,935 $1,721 10% $20,156 $2,221 12%Israel 7,803 4,974 2,829 57% 7,546 2,572 52%Other countries 2,842 1,006 1,836 183% 2,825 1,819 181%Net revenue$30,301 $23,915 $6,386 27% $30,527 $6,612 28% As Reported As Adjusted for Constant Currency Year ended
December 31, As Reported
Change Year ended
December 31, Constant Currency
Change 2024 2023 $ % 2024 $ %Canada$82,437 $64,702 $17,735 27% $83,709 $19,007 29%Israel 28,368 21,134 7,234 34% 28,454 7,320 35%Other countries 6,810 1,405 5,405 385% 6,820 5,415 385%Net revenue$117,615 $87,241 $30,374 35% $118,983 $31,742 36%
For 2024, net revenue on a constant currency basis was $119.0 million, representing a 36% increase from 2023. Net revenue increased on a constant currency basis primarily due to higher cannabis flower and extract sales in the Canadian market and higher cannabis flower sales in Israel and other countries. The Cronos GrowCo Transaction contributed $6.5 million of cannabis flower sales in the year ended December 31, 2024 on a constant currency basis. No such sales were recognized for the year ended December 31, 2023.
Gross profit
For 2024, gross profit on a constant currency basis was $25.5 million, representing a 114% increase from 2023. Gross profit increased on a constant currency basis primarily due to higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel and other countries, and production cost improvements, partially offset by the impact on cost of sales from the inventory step-up from the Cronos GrowCo Transaction. For 2024, gross profit on a constant currency basis was reduced $5.1 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 2023.
Operating expenses
For 2024, operating expenses on a constant currency basis were $103.0 million, representing a 6% increase from 2023. Operating expenses increased on a constant currency basis primarily due to the impairment of the Ginkgo Exclusive Licenses, partially offset by lower salaries and benefits, professional fees and restructuring costs.
Net income (loss) from continuing operations
For 2024, net income (loss) from continuing operations on a constant currency basis was $42.0 million, compared to a loss of $70.4 million for 2023.
Adjusted EBITDA
For 2024, Adjusted EBITDA on a constant currency basis was $(35.9) million, representing a 42% improvement from 2023. Adjusted EBITDA improved on a constant currency basis primarily due to higher cannabis flower and extract sales in the Canadian market, higher cannabis flower sales in Israel and other countries, production cost improvements, and decreases in general and administrative, sales and marketing and research and development expenses.
Cash and cash equivalents & short-term investments
Cash and cash equivalents and short-term investments on a constant currency basis increased 1% to $869.8 million as of December 31, 2024 from $861.5 million as of December 31, 2023. The increase in cash and cash equivalents and short-term investments is primarily due to cash flows provided by operating activities in 2024.
Foreign currency exchange rates
All currency amounts in this press release are stated in U.S. dollars, which is our reporting currency, unless otherwise noted. All references to “dollars” or “$” 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 December 31, 2024 and December 31, 2023, as reported on Bloomberg. Transactions affecting the shareholders’ equity (deficit) are translated at historical foreign exchange rates. The consolidated statements of net income (loss) and comprehensive income (loss) and consolidated statements of cash flows of our foreign operations are translated into dollars by applying the average foreign exchange rate in effect for the years ended December 31, 2024, December 31, 2023, and December 31, 2022, as reported on Bloomberg.
The exchange rates used to translate from Canadian dollars (“C$”) to dollars are shown below:
(Exchange rates are shown as C$ per $)Year ended December 31, 2024 2023 2022Average rate1.3700 1.3494 1.3017Spot rate1.4351 1.3243 1.3554
The exchange rates used to translate from New Israeli Shekels (“ILS”) to dollars are shown below:
(Exchange rates are shown as ILS per $)Year ended December 31, 2024 2023 2022Average rate3.6997 3.6819 3.3566Spot rate3.6526 3.6163 3.5178
For further information, please contact:
Anna Shlimak
Investor Relations
Tel: (416) 504-0004
investor.relations@thecronosgroup.com
Net revenue in Q4 2024 increased by 27% year-over-year to $30.3 million; Net revenue in FY 2024 increased by 35% year-over-year to $117.6 million … Read More
