Cover Page
Cover Page - shares | 6 Months Ended | |
Jun. 30, 2020 | Aug. 05, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Jun. 30, 2020 | |
Document Transition Report | false | |
Entity File Number | 001-38403 | |
Entity Registrant Name | CRONOS GROUP INC. | |
Entity Incorporation, State or Country Code | Z4 | |
Entity Address, Address Line One | 111 Peter St. Suite 300 | |
Entity Address, City or Town | Toronto | |
Entity Address, State or Province | ON | |
Entity Address, Postal Zip Code | M5V 2G9 | |
City Area Code | 416 | |
Local Phone Number | 504-0004 | |
Title of 12(b) Security | Common Shares, no par value | |
Trading Symbol | CRON | |
Security Exchange Name | NASDAQ | |
Entity Current Reporting Status | Yes | |
Entity Interactive Data Current | Yes | |
Entity Filer Category | Large Accelerated Filer | |
Entity Small Business | false | |
Entity Emerging Growth Company | false | |
Entity Shell Company | false | |
Entity Common Stock, Shares Outstanding (in shares) | 349,886,402 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q2 | |
Entity Central Index Key | 0001656472 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) | Jun. 30, 2020 | Dec. 31, 2019 | |
Current assets | |||
Cash and cash equivalents | $ 1,109,700,000 | $ 1,199,693,000 | |
Short-term investments | 213,614,000 | 306,347,000 | |
Accounts receivable | [1] | 3,477,000 | 4,638,000 |
Other receivables | 9,568,000 | 7,232,000 | |
Current portion of loans receivable | 4,458,000 | 4,664,000 | |
Prepaids and other assets | 7,827,000 | 9,395,000 | |
Inventory | 53,216,000 | 38,043,000 | |
Total current assets | 1,401,860,000 | 1,570,012,000 | |
Investments in equity accounted investees | 933,000 | 557,000 | |
Advances to joint ventures | 18,598,000 | 19,437,000 | |
Loan receivable, net | 65,371,000 | 44,967,000 | |
Property, plant and equipment | 164,290,000 | 161,809,000 | |
Right-of-use assets | 10,100,000 | 6,546,000 | |
Intangible assets | 69,399,000 | 72,320,000 | |
Goodwill | 179,736,000 | 214,794,000 | |
Total assets | 1,910,287,000 | 2,090,442,000 | |
Current liabilities | |||
Accounts payable and other liabilities | 28,316,000 | 35,301,000 | |
Current portion of lease obligation | 1,206,000 | 427,000 | |
Derivative liabilities | 205,714,000 | 297,160,000 | |
Total current liabilities | 235,236,000 | 332,888,000 | |
Due to non-controlling interests | 3,048,000 | 1,844,000 | |
Lease obligation | 8,958,000 | 6,680,000 | |
Total liabilities | 247,242,000 | 341,412,000 | |
Commitments and contingencies | [2] | ||
Shareholders’ equity | |||
Share capital | [3],[4] | 565,211,000 | 561,165,000 |
Additional paid-in capital | 27,046,000 | 23,234,000 | |
Retained earnings | 1,106,709,000 | 1,137,646,000 | |
Accumulated other comprehensive income (loss) | (33,970,000) | 27,838,000 | |
Total equity attributable to shareholders of Cronos Group | 1,664,996,000 | 1,749,883,000 | |
Non-controlling interests | (1,951,000) | (853,000) | |
Total shareholders’ equity | 1,663,045,000 | 1,749,030,000 | |
Total liabilities and shareholders’ equity | $ 1,910,287,000 | $ 2,090,442,000 | |
[1] | Net of current expected credit loss allowance of $80 as of June 30, 2020 (December 31, 2019 – $136) | ||
[2] | Refer to Note 19 and Note 20 in the notes to condensed consolidated financial statements. | ||
[3] | Authorized for issuance as of June 30, 2020: unlimited (December 31, 2019 – unlimited). | ||
[4] | Shares issued as of June 30, 2020: 349,886,402 (as of December 31, 2019: 348,817,472) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Current expected credit loss | $ 80 | $ 136 |
Common stock, shares issued (in shares) | 349,886,402 | 348,817,472 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Net Income and Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Income Statement [Abstract] | |||||
Net revenue, before excise taxes | $ 11,432,000 | $ 8,064,000 | $ 20,776,000 | $ 11,455,000 | |
Excise taxes | (1,549,000) | (411,000) | (2,461,000) | (798,000) | |
Net revenue | 9,883,000 | 7,653,000 | 18,315,000 | 10,657,000 | |
Cost of sales | 9,774,000 | 3,560,000 | 16,720,000 | 5,009,000 | |
Inventory write-down | 3,062,000 | 0 | 11,024,000 | 0 | |
Gross profit (loss) | (2,953,000) | 4,093,000 | (9,429,000) | 5,648,000 | |
Operating expenses | |||||
Sales and marketing | 6,504,000 | 4,005,000 | 13,616,000 | 5,133,000 | |
Research and development (“R&D”) | 3,631,000 | 2,300,000 | 8,221,000 | 3,471,000 | |
General and administrative | 18,437,000 | 11,488,000 | 42,196,000 | 18,781,000 | |
Share-based payments | 2,546,000 | 2,647,000 | 4,982,000 | 4,418,000 | |
Depreciation and amortization | 684,000 | 408,000 | 1,371,000 | 726,000 | |
Total operating expenses | 31,802,000 | 20,848,000 | 70,386,000 | 32,529,000 | |
Operating loss | (34,755,000) | (16,755,000) | (79,815,000) | (26,881,000) | |
Other income (expense) | |||||
Interest income, net | 3,734,000 | 9,442,000 | 11,485,000 | 11,528,000 | |
Share of loss from investments in equity accounted investees | (794,000) | (741,000) | (1,966,000) | (939,000) | |
Gain (loss) on revaluation of derivative liabilities | (35,880,000) | 197,310,000 | 77,488,000 | 525,526,000 | |
Impairment loss on goodwill and intangible assets | (40,000,000) | 0 | (40,000,000) | 0 | |
Financing and transaction costs | 0 | (3,368,000) | 0 | (25,601,000) | |
Other income (loss) | (8,000) | 0 | 786,000 | 16,243,000 | |
Total other income (loss) | (72,948,000) | 202,643,000 | 47,793,000 | 526,757,000 | |
Income (loss) before income taxes | (107,703,000) | 185,888,000 | (32,022,000) | 499,876,000 | |
Income tax expense | 0 | 0 | 0 | 0 | |
Net income (loss) | (107,703,000) | 185,888,000 | (32,022,000) | 499,876,000 | |
Net income (loss) attributable to: | |||||
Cronos Group | (106,977,000) | 185,999,000 | (30,937,000) | 500,090,000 | |
Non-controlling interests | (726,000) | (111,000) | (1,085,000) | (214,000) | |
Net income (loss) | (107,703,000) | 185,888,000 | (32,022,000) | 499,876,000 | |
Other comprehensive income (loss) | |||||
Foreign exchange gain (loss) on translation | 51,871,000 | 17,947,000 | (61,821,000) | 21,845,000 | |
Total other comprehensive income (loss) | 51,871,000 | 17,947,000 | (61,821,000) | 21,845,000 | |
Comprehensive income (loss) | (55,832,000) | 203,835,000 | (93,843,000) | 521,721,000 | |
Comprehensive income (loss) attributable to: | |||||
Cronos Group | (55,070,000) | 203,947,000 | (92,745,000) | 521,932,000 | |
Non-controlling interests | (762,000) | (112,000) | (1,098,000) | (211,000) | |
Comprehensive income (loss) | $ (55,832,000) | $ 203,835,000 | $ (93,843,000) | $ 521,721,000 | |
Net income (loss) per share | |||||
Basic (in dollars per share) | $ (0.31) | $ 0.56 | $ (0.09) | $ 1.57 | |
Diluted (in dollars per share) | $ (0.31) | $ 0.16 | $ (0.09) | $ 0.41 | |
Weighted average number of outstanding shares | |||||
Basic (in shares) | 349,075,408 | 334,665,873 | 348,946,439 | 317,940,749 | |
Diluted (in shares) | [1] | 349,075,408 | 374,676,595 | 348,946,439 | 364,872,093 |
[1] | In computing diluted earnings per share, incremental common shares are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity (Deficit) - USD ($) $ in Thousands | Total | Share capital | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Non-controlling interests |
Beginning balance (in shares) at Dec. 31, 2018 | 178,720,022 | |||||
Beginning balance at Dec. 31, 2018 | $ 148,549 | $ 175,001 | $ 11,263 | $ (27,945) | $ (9,870) | $ 100 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued (in shares) | 149,831,154 | |||||
Shares issued | 248,302 | $ 248,302 | ||||
Share issuance costs | (3,718) | $ (3,718) | ||||
Warrants exercised (in shares) | 7,390,961 | |||||
Warrants exercised | 1,438 | $ 2,034 | (596) | |||
Vesting of options | $ 4,418 | 4,418 | ||||
Options exercised (in shares) | 227,342 | 151,468 | ||||
Options exercised | $ (823) | $ 318 | (306) | (835) | ||
Top-up rights exercised (in shares) | 50,938 | |||||
Top-up rights exercised | 1,171 | $ 1,171 | ||||
Net (loss) income | 499,876 | 500,090 | (214) | |||
Other comprehensive income (loss) | 21,845 | 21,843 | 2 | |||
Ending balance (in shares) at Jun. 30, 2019 | 336,144,543 | |||||
Ending balance at Jun. 30, 2019 | 921,058 | $ 423,108 | 14,779 | 471,310 | 11,973 | (112) |
Beginning balance (in shares) at Mar. 31, 2019 | 333,020,377 | |||||
Beginning balance at Mar. 31, 2019 | 713,345 | $ 421,340 | 12,244 | 285,736 | (5,975) | 0 |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Share issuance costs | (76) | $ (76) | ||||
Warrants exercised (in shares) | 3,000,000 | |||||
Warrants exercised | 550 | $ 617 | (67) | |||
Vesting of options | 2,647 | 2,647 | ||||
Options exercised (in shares) | 73,228 | |||||
Options exercised | (414) | $ 56 | (45) | (425) | ||
Top-up rights exercised (in shares) | 50,938 | |||||
Top-up rights exercised | 1,171 | $ 1,171 | ||||
Net (loss) income | 185,888 | 185,999 | (111) | |||
Other comprehensive income (loss) | 17,947 | 17,948 | (1) | |||
Ending balance (in shares) at Jun. 30, 2019 | 336,144,543 | |||||
Ending balance at Jun. 30, 2019 | 921,058 | $ 423,108 | 14,779 | 471,310 | 11,973 | (112) |
Beginning balance (in shares) at Dec. 31, 2019 | 348,817,472 | |||||
Beginning balance at Dec. 31, 2019 | 1,749,030 | $ 561,165 | 23,234 | 1,137,646 | 27,838 | (853) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Vesting of options | $ 3,500 | 3,500 | ||||
Options exercised (in shares) | 1,807,909 | 1,068,930 | ||||
Options exercised | $ 1 | $ 1,329 | (1,328) | |||
Vesting of restricted share units | 1,482 | 1,482 | ||||
Top-up rights exercised | 717 | 717 | ||||
Vesting of common shares issued in connection with the use of certain publicity rights in brand development | 2,158 | $ 2,000 | 158 | |||
Net (loss) income | (32,022) | (30,937) | (1,085) | |||
Other comprehensive income (loss) | (61,821) | (61,808) | (13) | |||
Ending balance (in shares) at Jun. 30, 2020 | 349,886,402 | |||||
Ending balance at Jun. 30, 2020 | 1,663,045 | $ 565,211 | 27,046 | 1,106,709 | (33,970) | (1,951) |
Beginning balance (in shares) at Mar. 31, 2020 | 348,817,472 | |||||
Beginning balance at Mar. 31, 2020 | 1,715,268 | $ 563,165 | 25,483 | 1,213,686 | (85,877) | (1,189) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Vesting of options | 1,770 | 1,770 | ||||
Options exercised (in shares) | 1,068,930 | |||||
Options exercised | 1 | $ 1,329 | (1,328) | |||
Vesting of restricted share units | 776 | 776 | ||||
Top-up rights exercised | 717 | $ 717 | ||||
Vesting of common shares issued in connection with the use of certain publicity rights in brand development | 345 | 345 | ||||
Net (loss) income | (107,703) | (106,977) | (726) | |||
Other comprehensive income (loss) | 51,871 | 51,907 | (36) | |||
Ending balance (in shares) at Jun. 30, 2020 | 349,886,402 | |||||
Ending balance at Jun. 30, 2020 | $ 1,663,045 | $ 565,211 | $ 27,046 | $ 1,106,709 | $ (33,970) | $ (1,951) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Operating activities | ||
Net (loss) income | $ (32,022,000) | $ 499,876,000 |
Items not affecting cash: | ||
Inventory write-down | 11,024,000 | 0 |
Share-based payments | 4,982,000 | 4,418,000 |
Depreciation and amortization | 2,879,000 | 1,174,000 |
Share of loss from investments in equity accounted investees | 1,966,000 | 939,000 |
Gain on revaluation of derivative liabilities | (77,488,000) | (525,526,000) |
Gain on disposal of other investments | (769,000) | (15,498,000) |
Impairment loss on goodwill and intangible assets | 40,000,000 | 0 |
Loss (gain) on unrealized foreign exchange | (1,097,000) | 184,000 |
Provision for doubtful accounts | 1,437,000 | 0 |
Non-cash sales and marketing | 2,158,000 | 0 |
Other, net | 307,000 | (745,000) |
Net changes in non-cash working capital | (30,570,000) | (21,591,000) |
Cash flows used in operating activities | (77,193,000) | (56,769,000) |
Investing activities | ||
Purchase of short-term investments | (124,576,000) | (556,876,000) |
Proceeds from disposal of short-term investments | 203,678,000 | 0 |
Investments in equity accounted investees | 0 | (1,658,000) |
Proceeds from sale of other investments | 769,000 | 19,614,000 |
Advances to joint ventures | 0 | (15,990,000) |
Purchase of property, plant and equipment | (13,344,000) | (20,918,000) |
Payment of accrued interest on construction loan payable | 0 | (89,000) |
Purchase of intangible assets | (2,754,000) | (470,000) |
Advances on loans receivable | (23,974,000) | (12,222,000) |
Cash flows provided (used) in investing activities | 39,799,000 | (588,609,000) |
Financing activities | ||
Advance from non-controlling interests | 0 | 85,000 |
Repayment of lease obligations | (1,184,000) | (160,000) |
Proceeds from Altria Investment | 0 | 1,809,556,000 |
Proceeds from exercise of Top-up Rights | 0 | 619,000 |
Proceeds from exercise of warrants and options | 1,000 | 1,450,000 |
Withholding taxes paid on options | 0 | (836,000) |
Share issuance costs | 0 | (3,718,000) |
Advance of loans payable | 0 | 48,715,000 |
Repayment of loans payable | 0 | (48,309,000) |
Transaction costs paid on construction loan payable | 0 | (15,971,000) |
Cash flows provided (used) in financing activities | (1,183,000) | 1,791,431,000 |
Effect of foreign currency translation on cash and cash equivalents | (51,416,000) | 36,079,000 |
Increase (decrease) in cash and cash equivalents | (89,993,000) | 1,182,132,000 |
Cash and cash equivalents, beginning of period | 1,199,693,000 | 23,927,000 |
Cash and cash equivalents, end of period | 1,109,700,000 | 1,206,059,000 |
Supplemental cash flow information | ||
Interest paid | 90,000 | 589,000 |
Interest received | $ 11,575,000 | $ 7,871,000 |
Background
Background | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background | Background Cronos Group Inc. (“Cronos Group” or the “Company”) was incorporated on August 21, 2012 under the Business Corporations Act (Ontario). Effective July 9, 2020, the Company’s legal existence was continued to the Province of British Columbia and under the British Columbia Business Corporations Act. The Company’s common shares are currently listed on the Toronto Stock Exchange (“TSX”) and Nasdaq Global Market (“Nasdaq”) under the ticker symbol “CRON.” Cronos Group is an innovative global cannabinoid company, with international production and distribution across five continents. The Company is committed to building disruptive intellectual property by advancing cannabis research, technology and product development and is building an iconic brand portfolio. Cronos Group’s brand portfolio includes PEACE NATURALS ™ , a global wellness platform; two adult-use brands, COVE ™ and Spinach ™ ; and two U.S. hemp-derived consumer products brands, Lord Jones ™ and PEACE+ ™ . Cronos Group has established four strategic joint ventures in Canada, Israel, and Colombia. One of these strategic joint ventures, Cronos Israel (as defined herein) is consolidated for financial reporting purposes. The Company also holds approximately 31% of the issued capital of Cronos Australia Limited (“Cronos Australia”) and accounts for its investment in Cronos Australia under the equity method of accounting. For additional discussion regarding the joint ventures and strategic investment, see Note 6. |
Summary of Significant Accounti
Summary of Significant Accounting Policies | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies | Summary of Significant Accounting Policies (a) Basis of Presentation The interim condensed consolidated financial statements of Cronos Group are unaudited. They have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and with applicable rules and regulations of the U.S. Securities and Exchange Commission relating to interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any other reporting period. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes included in its Annual Report on Form 10-K/A for the year ended December 31, 2019 (the “Annual Financial Statements”). (b) Basis of Consolidation The accompanying condensed consolidated financial statements include the accounts of the Company, and all entities in which the Company has a controlling voting interest and/or is the primary beneficiary of a variable interest as of and for the period presented. The Company consolidates the financial results of the following entities, which the Company controls: Subsidiaries Jurisdiction of Incorporation Incorporation Date Ownership Interest (ii) Cronos Israel G.S. Cultivations Ltd. (i) Israel February 4, 2018 70% Cronos Israel G.S. Manufacturing Ltd. (i) Israel September 4, 2018 90% Cronos Israel G.S. Store Ltd. (i) Israel June 28, 2018 90% Cronos Israel G.S. Pharmacies Ltd. (i) Israel February 15, 2018 90% (i) These Israeli entities are collectively referred to as “Cronos Israel.” (ii) “Ownership interest” is defined as the proportionate share of net income to which the Company is entitled; equity interest may differ from ownership interest. In the condensed consolidated statements of net income (loss) and comprehensive income (loss), the net income (loss) and comprehensive income (loss) are attributed to the equity holders of the Company and to the non-controlling interests. Non-controlling interests in the equity of Cronos Israel are presented separately in the shareholders’ equity (deficit) section of the condensed consolidated balance sheets and condensed consolidated statements of changes in equity (deficit). All intercompany transactions and balances are eliminated upon consolidation. (c) Goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs an impairment test annually in the fourth quarter, by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has two reporting units: the U.S. reporting unit and the Rest of World reporting unit. During the three months ended June 30, 2020, the Company concluded that the projected impact of the COVID-19 pandemic on its sales and revenues in the near term, together with the volatility in the market conditions during the quarter represented potential indicators of impairment for the U.S. reporting unit. Accordingly, the Company performed an interim impairment analysis during the second quarter of 2020. See Note 13 for more information regarding intangibles assets and goodwill. |
New Accounting Pronouncements
New Accounting Pronouncements | 6 Months Ended |
Jun. 30, 2020 | |
New Accounting Pronouncements and Changes in Accounting Principles [Abstract] | |
New Accounting Pronouncements | New Accounting Pronouncements (a) Adoption of new accounting pronouncements On January 1, 2020, the Company adopted ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) (“ASU No. 2018-13”). ASU No. 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. The adoption of this standard was applied prospectively and did not have a material impact on the Company’s condensed consolidated financial statements. On January 1, 2020, the Company adopted ASU No. 2018-15, Intangibles – Goodwill and Other Internal-use-software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU No. 2018-15”). ASU No. 2018-15 amends current guidance to align the accounting for costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs associated with developing or obtaining internal-use software. The guidance in ASU No. 2018-15 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The adoption of this standard was applied prospectively and did not have a material impact on the Company’s condensed consolidated financial statements. On January 1, 2020, the Company adopted ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment (“ASU No. 2017-04”). ASU No. 2017-04 eliminates step 2 from the goodwill impairment test and instead requires an entity to measure the impairment of goodwill assigned to a reporting unit if the carrying value of assets and liabilities assigned to the reporting unit, including goodwill, exceeds the reporting unit’s fair value. The guidance in ASU No. 2017-04 is effective for annual and interim goodwill tests completed by the Company beginning on January 1, 2020. The adoption of this standard was applied prospectively and the Company follows a one-step model for goodwill impairment. (b) New accounting pronouncements not yet adopted In January 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU No. 2020-01”). ASU No. 2020-01 clarifies the interaction of accounting for the transition into and out of the equity method. The new standard also clarifies the accounting for measuring certain purchased options and forward contracts to acquire investments. The guidance in ASU No. 2020-01 is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the effect of the adoption of ASU No. 2020-01, but anticipates that the adoption will not have a material impact on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”). ASU No. 2019-12 eliminates certain exceptions and simplifies the application of U.S. GAAP-related changes in enacted tax laws or rates and employee stock option plans. ASU No. 2019-12 is effective for annual and interim periods beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the effect of the adoption of ASU No. 2019-12, but anticipates that the adoption will not have a material impact on its condensed consolidated financial statements. |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 6 Months Ended |
Jun. 30, 2020 | |
Revenue from Contract with Customer [Abstract] | |
Revenues from Contracts with Customers | Revenues from Contracts with Customers Cronos Group disaggregates net revenues based on product type. For further discussion, see Note 18. Receivables were $3,477 as of June 30, 2020 (December 31, 2019 – $4,638). The Company recorded a current expected credit loss allowance on receivables of $80 as of June 30, 2020 (December 31, 2019 – $136). The Company offers discounts to customers for prompt payment and calculates cash discounts as a percentage of the list price based on historical experience and agreed-upon payment terms. The Company records an allowance for cash discounts, which is included as a contra-asset against receivables on the Company’s condensed consolidated balance sheets. Revenue is measured net of returns. As a result, the Company is required to estimate the amount of returns based on the historical data by customer and product type, adjusted for forward-looking information. This is recorded as a provision against accounts receivable on the Company’s consolidated balance sheets. The Company estimates sales returns based principally on historical volume and return rates, as a reduction to revenues. The difference between actual sales and estimated sales returns is recorded in the period in which the actual amounts become known. These differences, if any, have not had a material impact on the Company’s condensed consolidated financial statements. |
Inventory
Inventory | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory | Inventory Inventory is comprised of the following items: As of June 30, 2020 December 31, 2019 Raw materials $ 5,488 $ 2,469 Work-in-progress – dry cannabis 21,772 11,538 Work-in-progress – cannabis extracts 19,210 17,975 Finished goods – dry cannabis 4,505 1,798 Finished goods – cannabis extracts 1,716 2,624 Supplies and consumables 525 1,639 Total $ 53,216 $ 38,043 Inventory is written down for any obsolescence such as slow-moving or non-marketable products, or when the net realizable value of inventory is less than the carrying value. For the three and six months ended June 30, 2020, the Company recorded write-downs related to inventory of $3,062 and $11,024, respectively. There were no inventory write-downs for the six months ended June 30, 2019. |
Investments and Advances to Joi
Investments and Advances to Joint Ventures | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments and Advances to Joint Ventures | Investments and Advances to Joint Ventures Variable Interest Entities The Company holds variable interests in Cronos Growing Company Inc. (“Cronos GrowCo”), Natuera S.à.r.l (“Natuera”), MedMen Canada Inc. (“MedMen Canada”) and Cannasoul Lab Services Ltd. (“CLS”). Cronos GrowCo is a joint venture incorporated under the Canada Business Corporations Act (“CBCA”) on June 14, 2018 with the objective of building a cannabis production greenhouse, applying for cannabis licenses under the Cannabis Act (Canada), and growing, cultivating, extracting, producing and selling cannabis in accordance with such licenses. Cronos Group holds variable interests in Cronos GrowCo through its ownership of 50% of Cronos GrowCo’s common shares and senior secured debt in Cronos GrowCo. The Company has also agreed to purchase a minimum amount of Cronos GrowCo’s cannabis product annually, subject to Cronos GrowCo’s receipt of all applicable licenses and permits. Cronos GrowCo’s economic performance is driven by the quantity and strains of cannabis grown. The joint venture partners mutually determine the quantity and strains of cannabis grown. Natuera is a joint venture registered in Luxembourg with the objective of cultivating and commercializing medical cannabis to serve the export market. Cronos holds variable interests in Natuera through its ownership of 50% of Natuera’s common shares and other debt in the entity. Natuera’s economic performance is driven by the quantity and strains of cannabis to be grown. The joint venture partners mutually determine the quantity and strains of cannabis grown. MedMen Canada is a joint venture incorporated under the CBCA on March 13, 2018, with the objective of the retail sale and marketing of cannabis products in Canada. MedMen Canada holds the exclusive license to the MedMen brand in Canada for a minimum term of 20 years. Cronos holds variable interests in MedMen Canada through its ownership of 50% of MedMen Canada’s common shares and other subordinated debt in the entity. MedMen Canada’s economic performance is driven by the quantity and strains of cannabis sold. Subject to applicable law, the joint venture partners mutually determine the quantity and strains of cannabis to be sold in MedMen Canada’s retail stores, if and when stores are opened. The Company’s investments in Cronos GrowCo, Natuera and MedMen Canada are exposed to economic variability from each entity’s performance, however the Company does not consolidate the entities as it does not have the power to direct the activities that most significantly impact the joint ventures’ economic performance. Thus, Cronos Group is not considered the primary beneficiary of the entity. These investments are accounted for as equity method investments classified as “Investments in equity accounted investees” in the consolidated balance sheets. CLS is a wholly owned subsidiary of Cannasoul Analytics Ltd., incorporated with the purpose of establishing a commercial cannabis analytical testing laboratory located on the premises of Cronos Israel (the “Cannasoul Collaboration”). Cronos Israel will advance ILS 8,297 (approximately $2,446) by a non-recourse loan to CLS over a period of two years from April 1, 2020 for the capital and operating expenditures of the laboratory. The loan will bear interest at 3.5% annually. Cronos Israel will receive 70% of the profits of the laboratory until such time as it has recovered 150% of the amounts advanced to CLS, after which time it will receive 50% of the laboratory profits. As a result, the Company is exposed to economic variability from CLS’s performance. The Company does not consolidate CLS as it does not have the power to direct the activities that most significantly impact the entity’s economic performance; thus, the Company is not considered the primary beneficiary of the entity. The carrying amount of the non-recourse loan is recorded under loans receivable and the full loan amount, ILS 8,297, represents the Company’s maximum potential exposure to losses through the Cannasoul Collaboration. See Note 10 for further information regarding loans receivable. (a) Net investment in equity accounted investees A reconciliation of the carrying amount of the investments in associates and joint ventures is as follows: Carrying Amount Ownership % June 30, 2020 December 31, 2019 Cronos Australia (i) 31% $ — $ (346) Cronos GrowCo 50% 933 1,501 MedMen Canada 50% — — Natuera 50% — (598) $ 933 $ 557 (i) On October 25, 2019, Cronos Australia issued 40 million new shares in an initial public offering at an offering price of A$0.50 per share. The Company’s ownership in Cronos Australia decreased from 50% to 31% on November 7, 2019 when Cronos Australia began trading on the Australian Securities Exchange. This resulted in a reconsideration event, which required the reassessment of the Company’s VIE conclusion. Upon reconsideration, the Company determined that the entity was no longer a VIE as of December 31, 2019 and is now reported under the equity method. The Company’s share of net earnings (losses) from equity investments accounted for under the equity method of accounting: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 Whistler Medicinal Marijuana Company (“Whistler”) $ — $ — $ — $ 29 Cronos Australia (i) (235) (397) (235) (641) Cronos GrowCo (190) (38) (501) (27) MedMen Canada — (2) — 4 Natuera (ii) (369) (304) (1,230) (304) $ (794) $ (741) $ (1,966) $ (939) (i) The Company’s share of accumulated net losses in excess of its equity investment and advances in Cronos Australia was $512 for the six months ended June 30, 2020 (June 30, 2019 – $nil). (ii) The Company’s share of accumulated net losses in excess of its equity investment in Natuera has been applied as a loss allowance on the loan receivable. See Note 6(b) and Note 10. (b) Advances to Joint Venture MedMen Canada (i) Cronos GrowCo Cronos Australia (ii) Natuera Total As of January 1, 2020 $ 471 $ 18,966 $ — $ — $ 19,437 Credit loss allowance (iii) — — — — — Effect from foreign exchange (20) (819) — — (839) As of June 30, 2020 $ 451 $ 18,147 $ — $ — $ 18,598 As of January 1, 2019 $ 1,244 $ 2,970 $ 475 $ — $ 4,689 Advances (repayment) (852) 15,494 274 219 15,135 Advances to joint ventures recovered from (applied to) carrying amount of investments 35 22 (779) (224) (946) Effect from foreign exchange 44 480 30 5 559 As of December 31, 2019 $ 471 $ 18,966 $ — $ — $ 19,437 (i) Advance is unsecured, non-interest bearing, and there are no terms of repayment. (ii) A$1,500 is governed by an unsecured loan bearing interest at a rate of 12% per annum, calculated and compounded daily, in arrears, on the amounts advanced from the date of each advance. The loan is due on January 1, 2022. If the loan is overdue, the outstanding amount bears interest at an additional 2% per annum. (iii) For the three months ended June 30, 2020, a reversal of $917 related to the credit loss allowance for Cronos GrowCo was recorded as the Company assessed its recoverability. As of June 30, 2020, total credit losses were $nil. |
Other Investments
Other Investments | 6 Months Ended |
Jun. 30, 2020 | |
Investments, Debt and Equity Securities [Abstract] | |
Other Investments | Other Investments Other investments consist of investments in common shares and warrants of several companies in the cannabis industry. As of June 30, 2020, the Company did not hold any other investments. During the six months ended June 30, 2020, in connection with the achievement of a milestone related to the Whistler transaction described below, the Company received 578,101 shares of Aurora Cannabis Inc. (“Aurora”). The Company sold all of the Aurora shares on March 6, 2020 for gross proceeds of $769 recorded as an other item in other income (expenses). The Company expects to further receive Aurora common shares upon the satisfaction of one milestone remaining, which has not been recognized in these condensed consolidated financial statements. The exact number of Aurora common shares to be issued to the Company following the satisfaction of such milestone will be determined in reference to the five-day volume weighted average price of Aurora common shares immediately prior to the achievement of the applicable milestone. No transactions occurred during the three months ended June 30, 2020. On March 4, 2019, the Company sold all 2,563 shares of Whistler, representing approximately 19.0% of Whistler’s issued and outstanding common shares, to Aurora, in connection with Aurora's acquisition of Whistler (the “Whistler Transaction”). As a result of the closing of the Whistler Transaction, the Company received 2,524,341 Aurora common shares. During the six months ended June 30, 2019, the Company sold all 2,524,341 common shares of Aurora, for gross proceeds of $19,259 recorded as an other item in other income (expenses). No transactions occurred during the three months ended June 30, 2019. During the six months ended June 30, 2019, the Company sold all remaining 11,062 common shares of Canopy Growth Corporation (“Canopy”) for gross proceeds of $355. The gains and losses on the Canopy investment were classified as fair value through net income. No transactions occurred during the three months ended June 30, 2019. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Accumulated Other Comprehensive Income (Loss) | Accumulated Other Comprehensive Income (Loss) The following are continuity schedules of accumulated other comprehensive income (loss): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Net unrealized gain (loss) on revaluation and disposal of other investments Balance beginning of period 5 5 5 5 Cumulative effect from adoption of ASU 2016-01 — — — — Balance as of June 30 5 5 5 5 Net foreign exchange gain (loss) on translation Balance beginning of period (85,882) (5,980) 27,833 (9,875) Net unrealized (loss) gain 51,907 17,948 (61,808) 21,843 Balance as of June 30 (33,975) 11,968 (33,975) 11,968 Total accumulated other comprehensive income (loss) $ (33,970) $ 11,973 $ (33,970) $ 11,973 |
Leases
Leases | 6 Months Ended |
Jun. 30, 2020 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into leases primarily for land-use rights, office premises and equipment used in the production of cannabis and related products. The Company’s leases have terms which range from three years to six years, excluding land use rights, which generally extend to 15 years. These leases often include options to extend the term of the lease for up to 10 years. When it is reasonably certain that the option will be exercised, the impact of the option is included in the lease term for purposes of determining total future lease payments. Operating leases greater than one year are included in right-of-use assets and operating lease liabilities. Finance leases are included in property, plant and equipment on the Company’s consolidated balance sheet. During the six months ended June 30, 2020, the Company recognized two new operating leases for office premises which are included within the lease obligation and right-of-use lines in the condensed consolidated balance sheet. In June 2020, the Company terminated an operating lease for office premises. The lease was removed from the lease obligation and right-of-use balances in the condensed consolidated balance sheet. The Company’s finance leases were not material as of June 30, 2020 and December 31, 2019. |
Loans Receivable, net
Loans Receivable, net | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Loans Receivable, net | Loans Receivable, net As of June 30, 2020 December 31, 2019 Current portion Natuera Series A loan (i) $ 2,984 $ 4,575 Cronos GrowCo Credit Facility (ii) 1,474 — Add: Accrued interest — 89 Total current portion of loans receivable 4,458 4,664 Long term portion Cronos GrowCo Credit Facility (ii) 50,582 31,678 2645485 Ontario Inc. ( “ Mucci ” ) Promissory Note (iii) 11,793 12,587 Cannasoul Collaboration Loan (iv) 1,174 — Add: Accrued interest 1,822 702 Total long-term portion of loans receivable 65,371 44,967 Total loans receivable $ 69,829 $ 49,631 (i) On September 27, 2019, the Company entered into a master loan agreement (the “Series A Loan”) for $4,575 with Natuera with effect as of August 29, 2019. The total aggregate principal amount of the Series A Loan is $9,150, of which the Company has committed to fund 50% and its joint venture partner has committed to fund the remaining 50%. Outstanding principal amounts bear interest at a fixed annual rate of 5.67% with a maturity date of August 29, 2020. As of June 30, 2020, accrued interest is recorded in other receivables. Subsequent to June 30, 2020, an amendement to the agreement was executed. Refer to Note 25. For the six months ended June 30, 2020, a loss allowance of $1,591 was recorded against the Natuera Series A Loan related to the Company’s share of net loss from Natuera in excess of the carrying value of the equity method investment. Refer to Note 6. (ii) On August 23, 2019, the Company entered into a credit agreement with Cronos GrowCo in respect of a C$100,000 ($73,660) secured non-revolving term loan credit facility (the “GrowCo Credit Facility”). The GrowCo Credit Facility will mature on March 31, 2031 and will bear interest at varying rates based on the Canadian prime rate as announced by the Bank of Montreal. Interest began to accrue as of the closing date of the GrowCo Credit Facility and is payable on a quarterly basis until maturity, except that any interest accrued prior to March 31, 2021 will be payable no later than December 31, 2021. Repayment of principal will be made on a quarterly basis commencing on March 31, 2021. The credit facility is secured by substantially all present and after acquired property of Cronos GrowCo and its subsidiaries. Mucci, the other 50% shareholder of Cronos GrowCo, has provided a limited recourse guarantee in favor of Cronos GrowCo, secured by Mucci’s shares in Cronos GrowCo. As of June 30, 2020, Cronos GrowCo had drawn C$72,150 ($53,145) from the Cronos GrowCo Credit Facility. For the six months ended June 30, 2020, a current expected credit loss allowance of $1,089 was recorded against the GrowCo Facility. (iii) On June 28, 2019, the Company entered into a promissory note receivable agreement (the “Mucci Promissory Note”) for C$16,350 ($12,043) with Mucci. The outstanding principal amount of the Mucci Promissory Note bears interest at 3.95% annually and is due within 90 days of demand. The Company does not intend to demand the loan within 12 months. Interest accrued under the Mucci Promissory Note until July 1, 2021 is payable by way of capitalization on the principal amount and interest thereafter must be paid in cash on a quarterly basis. The Mucci Promissory Note is secured by a general security agreement covering all the assets of Mucci. For the six months ended June 30, 2020, a current expected credit loss allowance of $250 has been recorded against the Mucci loan. (iv) On April 1, 2020, Cronos Israel entered into the Cannasoul Collaboration. Cronos Israel has agreed to advance approximately ILS 8,297 (approximately $2,446) by a non-recourse loan to CLS over a period of two years for the capital and operating expenditures of the laboratory. The outstanding principal on the loan bears interest at 3.5% annually and will be repaid through the profits generated from the Cannasoul Collaboration. As of June 30, 2020, CLS has received the first installment of ILS 4,149 (approximately $1,198). For the six months ended June 30, 2020, a current expected credit loss allowance of $24 has been recorded against the Cannasoul Collaboration loan. |
Derivative Liabilities
Derivative Liabilities | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | Derivative Liabilities On March 8, 2019, the Company closed the previously announced investment in the Company (the “Altria Investment”) by Altria Group, Inc. (“Altria”), pursuant to a subscription agreement dated December 7, 2018. As of the closing date of the Altria Investment, the Altria Investment consisted of 149,831,154 common shares of the Company as of the closing date, issued to a wholly owned subsidiary of Altria and one warrant of the Company (the “Altria Warrant”), refer to Note 15(a), issued to a wholly owned subsidiary of Altria. As of the closing date of the Altria Investment, Altria beneficially held an approximately 45% ownership interest in the Company (calculated on a non-diluted basis). As summarized in this note, if exercised in full on such date, the exercise of the Altria Warrant would have resulted in Altria holding a total ownership interest in the Company of approximately 55% (calculated on a non-diluted basis). Pursuant to the investor rights agreement between the Company and Altria, entered into in connection with the closing of the Altria Investment (the “Investor Rights Agreement”), the Company granted Altria certain rights, among others, summarized in this note. The summaries below are qualified entirely by the terms and conditions fully set out in the Investor Rights Agreement and the Altria Warrant, as applicable. a. The Altria Warrant entitles the holder, subject to certain qualifications and limitations, to subscribe for and purchase up to an additional 10% of the common shares of Cronos (approximately 77.8 million common shares at June 30, 2020) at a per share exercise price of C$19.00 which expires on March 8, 2023. b. The Company granted to Altria, subject to certain qualifications and limitations, upon the occurrence of certain issuances of common shares of the Company executed by the Company (including issuances pursuant to the R&D partnership with Ginkgo Bioworks Inc. (“Ginkgo”) (the “Ginkgo Strategic Partnership”), which is discussed in Note 19(a)(i) below, the right to purchase up to such number of common shares of the Company in order to maintain their ownership percentage of issued and outstanding common shares of the Company immediately preceding any issuance of shares by the Company (“Pre-emptive Rights”), at the same price per common share of the Company at which the common shares are sold in the relevant issuance. The price per common share of the Company to be paid by Altria pursuant to its exercise of its Pre-emptive Rights related to the Ginkgo Strategic Partnership will be C$16.25 per common share. These rights may not be exercised if Altria’s ownership percentage of the issued and outstanding shares of the Company falls below 20%. c. In addition to (and without duplication of) the Pre-emptive Rights, the Company granted to Altria, subject to certain qualifications and limitations, the right to subscribe for common shares of the Company issuable in connection with the exercise, conversion or exchange of convertible securities of the Company issued prior to March 8, 2019 or thereafter (excluding any convertible securities of the Company owned by Altria or any of its subsidiaries), a share incentive plan of the Company, the exercise of any right granted by the Company pro rata to all shareholders of the Company to purchase additional common shares and/or securities of the Company, bona fide bank debt, equipment financing or non-equity interim financing transactions that contemplate an equity component or bona fide acquisitions (including acquisitions of assets or rights under a license or otherwise), mergers or similar business combination transactions or joint ventures involving the Company in order to maintain their ownership percentage of issued and outstanding common shares of the Company immediately preceding any such transactions (“Top-up Rights”). The price per common share to be paid by Altria pursuant to the exercise of its Top-up Rights will be, subject to certain limited exceptions, the 10-day volume-weighted average price of the common shares of the Company on the TSX for the ten full days preceding such exercise by Altria, provided that the price per common share of the Company to be paid by Altria pursuant to the exercise of its Top-up Rights in connection with the issuance of common shares of the Company pursuant to the exercise of options or warrants that were outstanding as of March 8, 2019 will be C$16.25 per common share without any set off, counterclaim, deduction, or withholding. These rights may not be exercised if Altria’s ownership percentage of the issued and outstanding shares of the Company falls below 20%. The Altria Warrant, Pre-emptive Rights, and fixed price Top-up Rights have been classified as derivative liabilities; related transaction costs of $22,355 were expensed as financing costs during the year ended December 31, 2019. A reconciliation of the carrying amounts of the derivative liability is presented below: April 1, 2020 (Gain) / Loss on revaluation Exercise of Rights Effect from foreign exchange As of June 30, 2020 (a) Altria Warrant $ 132,366 $ 30,052 $ — $ 3,540 $ 165,958 (b) Pre-emptive Rights 13,070 2,610 — 500 16,180 (c) Top-up Rights 20,740 3,218 (727) 1,072 23,576 $ 166,176 $ 35,880 $ (727) $ 5,112 $ 205,714 January 1, 2020 (Gain) / Loss on revaluation Exercise of Rights Effect from foreign exchange As of June 30, 2020 (a) Altria Warrant $ 234,428 $ (58,052) $ — $ (10,418) $ 165,958 (b) Pre-emptive Rights 12,787 3,925 — (532) 16,180 (c) Top-up Rights 49,945 (23,361) (727) (2,281) 23,576 $ 297,160 $ (77,488) $ (727) $ (13,231) $ 205,714 Fluctuations in the Company’s share price are a primary driver for the changes in the derivative valuations during each reporting period. As the share price decreases for each of the related derivative instruments, the liability of the instrument generally decreases. Share price is one of the significant observable inputs used in the fair value measurement of each of the Company’s derivative instruments. During the six months ended June 30, 2020, the Company’s share price decreased from December 31, 2019 resulting in a gain on revaluation of $77,488. The fair values of the derivative liabilities were determined using the Black-Scholes pricing model as of June 30, 2020 and December 31, 2019 applying the following inputs: As of June 30, 2020 As of December 31, 2019 Altria Warrant Pre-emptive Rights Top-up Rights Altria Warrant Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $8.18 $8.18 $8.18 $9.97 $9.97 $9.97 Subscription price (per share in C$) $19.00 $16.25 $16.25 $19.00 $16.25 $16.25 Weighted average risk-free interest rate (i) 0.30% 0.29% 0.26% 1.69% 1.73% 1.71% Weighted average expected life (in years) (ii) 2.68 2.00 1.11 3.18 1.25 1.66 Expected annualized volatility (iii) 91% 91% 91% 82% 82% 82% Expected dividend yield —% —% —% —% —% —% (i) The risk-free interest rate was based on Bank of Canada government treasury bills and bonds with a remaining term equal to the expected life of the derivative liabilities. The risk-free interest rate uses a range of approximate ly 0.21% to 0.61% as of June 30, 2020 (December 31, 2019 – 1.66% to 1.73%) for the Pre-emptive rights and Top-up rights. (ii) The expected life in years represents the period of time that the derivative liabilities are expected to be outstanding. The expected life of the Pre-emptive Rights and Top-up Rights is determined based on the expected term of the underlying options, warrants, and shares, to which the Pre-emptive Rights and Top-up Rights are linked. The expected life uses a range of approximately 0.25 year to 5.5 year s as of June 30, 2020 (December 31, 2019 – 0.25 year to 6 years). (iii) Volatility was based on an equally weighted blended historical volatility level of the underlying equity securities of the Company and peer companies. The following table quantifies each of the significant inputs described above and provides a sensitivity analysis of the impact on the reported values of the derivative liabilities. The sensitivity analysis for each significant input is performed by assuming a 10% decrease in the input while other significant inputs remain constant at management’s best estimate as of the respective dates. A decrease in the inputs noted below would cause a decrease in derivative liability and as of June 30, 2020, there would be an equal but opposite impact on net income (loss). Decrease as of June 30, 2020 Decrease as of December 31, 2019 Altria Warrant Pre-emptive Rights Top-up Rights Altria Warrant Pre-emptive Rights Top-up Rights Share price $ 26,300 $ 2,779 $ 4,939 $ 36,436 $ 2,743 $ 9,577 Weighted average expected life 14,249 1,744 1,272 17,471 2,366 2,178 Expected annualized volatility 27,711 2,652 4,769 33,343 2,180 7,714 These inputs are classified in Level 3 on the fair value hierarchy and are subject to volatility and several factors outside of the Company’s control, which could significantly affect the fair value of these derivative liabilities in future periods. |
Property, Plant and Equipment
Property, Plant and Equipment | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment | Property, Plant and Equipment Property, plant and equipment, net consisted of the following: As of June 30, 2020 December 31, 2019 Cost Land $ 3,618 $ 3,727 Building 146,685 150,324 Furniture and equipment 11,394 10,156 Computer equipment 651 687 Leasehold improvements 3,116 2,789 Construction in progress 12,492 3,569 Less: accumulated depreciation (13,666) (9,443) Total $ 164,290 $ 161,809 Depreciation expense included in cost of sales relating to manufacturing equipment and production facilities for the six months ended June 30, 2020 was $759 (June 30, 2019 – $448). Depreciation expense included in operating expenses related to general office space and equipment for six months ended June 30, 2020 was $1,025 (June 30, 2019 – $425). The remaining depreciation is included in inventory. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Intangible Assets and Goodwill | Intangible Assets and Goodwill The ongoing restrictions and closures experienced by retail stores in the U.S. as a result of the COVID-19 pandemic have negatively impacted sales and demand which has resulted in slower than expected revenue growth in the U.S. reporting unit for the three months ended June 30, 2020. The Company expects the revenue growth and operating results in the U.S. reporting unit to continue to be negatively impacted as the decrease in customer demand and retail closures are expected to continue as a result of the pandemic. The Company performed an interim impairment test during the three months ended June 30, 2020 on the U.S. reporting unit, which holds the Redwood goodwill, as well as the indefinite-lived intangible asset (Lord Jones™ brand) to determine whether the carrying amount of the reporting unit and intangible asset exceeded their respective fair values. The Company reassessed its estimates and forecasts during the second quarter to determine the fair values of the reporting unit and intangible asset. The fair values were determined using a discounted cash flow method on the reporting unit and the relief-from-royalty method on the Lord Jones™ brand. Based on these valuations, the carrying value exceeded the fair value resulting in an impairment on both the reporting unit as well as the Lord Jones™ brand. The Company does not believe the declines in fair values are temporary. The Company recorded $35.0 million of impairment charges on the U.S. reporting unit and $5.0 million on the Lord Jones™ brand for the three and six months ended June 30, 2020. No impairment loss was recorded for either goodwill or intangible assets during the three and six months ended June 30, 2019. (a) Intangible Assets Intangible assets are comprised of the following items: Weighted Average Amortization Period (in years) As of June 30, 2020 Cost Accumulated Amortization Impairment charges Net Software (i) N/A $ 612 $ (298) $ — $ 314 Enterprise Resource Planning (“ERP”) system (ii) 5 2,570 — — 2,570 Health Canada licenses 17 8,255 (1,167) — 7,088 Lord Jones ™ brand N/A 64,000 — (5,000) 59,000 Trademarks N/A 140 — — 140 Israeli Codes (iii) 25 297 (10) — 287 $ 75,874 $ (1,475) $ (5,000) $ 69,399 (i) Software amortizes using a double declining method. (ii) During the six months ended June 30, 2020, the Company capitalized costs for the ERP system. As of June 30, 2020, the system is not yet available for use, resulting in no amortization being recorded against the asset. (iii) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli Codes”) were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities specified above. Weighted Average Amortization Period (in years) As of December 31, 2019 Cost Accumulated Amortization Net Software (i) N/A $ 541 $ (202) $ 339 Health Canada licenses 17 8,627 (976) 7,651 Lord Jones ™ brand N/A 64,000 — 64,000 Trademarks N/A 36 — 36 Israeli Codes (ii) 25 298 (4) 294 $ 73,502 $ (1,182) $ 72,320 (i) Software amortizes using a double declining method. (ii) The Israeli Codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities specified above. The aggregate amortization for the six months ended June 30, 2020 was $ 346 (June 30, 2019 – $301). Intangible asset additions in 2020 included the ERP system for $2,570. There was $37 related to disposals of software during the six months ended June 30, 2020. The amortization expense for the next five years on intangible assets in use is estimated to be as follows: 2021 – $565; 2022 – $553; 2023: $536; 2024 – $520; 2025 – $506. (b) Goodwill As of December 31, 2019 Additions Impairment charges Effect of foreign exchange As of June 30, 2020 OGBC $ 302 $ — $ — $ (13) $ 289 Peace Naturals 1,078 — — (45) 1,033 Redwood 213,414 — (35,000) — 178,414 $ 214,794 $ — $ (35,000) $ (58) $ 179,736 |
General and Administrative Expe
General and Administrative Expenses | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
General and Administrative Expenses | General and Administrative Expenses General and administrative expense are comprised of the following items: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Salaries and wages $ 6,337 $ 3,354 $ 13,803 $ 5,348 Professional and consulting 3,263 5,051 8,849 7,254 Office and general 3,545 2,622 6,620 5,523 Review costs related to restatement of 2019 interim financial statements (i) 3,459 — 7,866 — Other 1,833 461 5,058 656 Total $ 18,437 $ 11,488 $ 42,196 $ 18,781 (i) These financial statement review costs include costs related to the restatement of the Company’s 2019 interim financial statements and costs related to the Company’s responses to request for information from various regulatory authorities relating to such restatement. |
Share-based Payments
Share-based Payments | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Share-based Payments | Share-based Payments (a) Warrants The following is a summary of the changes in warrants during the six months ended June 30, 2020 and 2019: Weighted average exercise price (C$) Number of warrants Balance as of January 1, 2020 $ 0.26 $ 18,066,662 Balance as of June 30, 2020 $ 0.26 $ 18,066,662 Balance as of January 1, 2019 $ 0.26 $ 25,457,623 Exercise of warrants 0.36 (7,390,961) Balance as of June 30, 2019 $ 0.22 $ 18,066,662 As of June 30, 2020, the Company had outstanding warrants as follows. For a description of the Altria Warrant, see Note 11. Grant Date Expiry date Weighted average exercise price (C$) Number of warrants October 8 – 28, 2015 October 8 – 28, 2020 $ 0.31 $ 2,976,610 May 13 – 27, 2016 May 13 – 27, 2021 0.25 15,090,052 As of June 30, 2020 $ 0.26 $ 18,066,662 (b) Stock options (i) Stock option plans The Company adopted an amended and restated stock option plan dated May 26, 2015 (the “2015 Stock Option Plan”) which was approved by shareholders of the Company at the annual general meeting of shareholders held on June 28, 2017. The 2015 Stock Option Plan allowed the Company’s Board of Directors (the “Board”) to award options to purchase shares to directors, officers, key employees and service providers of the Company. As of June 28, 2018, no further awards will be granted under the 2015 Stock Option Plan; however, shares may be purchased via option exercise by the holders of any outstanding options previously issued under the 2015 Stock Option Plan. As of June 30, 2020, options to purchase 10,486,569 Company common shares were outstanding under the 2015 Stock Option Plan. On June 28, 2018, the shareholders of the Company approved a stock option plan (the “2018 Stock Option Plan”), which replaced the 2015 Stock Option Plan. As of June 25, 2020, the date on which the 2020 Omnibus Plan (as defined below) was approved by the shareholders of the Company, no further awards will be granted under the 2018 Stock Option Plan; however, shares may be purchased via option exercise by the holders of any outstanding options previously issued under the 2018 Stock Option Plan. As of June 30, 2020, options to purchase 1,727,979 Company common shares were outstanding under the 2018 Stock Option Plan. On March 29, 2020, the Board adopted a new omnibus equity incentive plan (the “2020 Omnibus Plan”), which was approved by the shareholders of the Company at the annual and special meeting of shareholders held on June 25, 2020. The 2020 Omnibus Plan provides for grants of stock options, share appreciation rights, restricted shares, restricted share units and other share-based or cash-based awards, which are subject to terms as determined by the Compensation Committee of the Board, and awards may be granted to eligible employees, non-employee directors and consultants. As of June 30, 2020, no grants of options have been made under the 2020 Omnibus Plan. For the three and six months ended June 30, 2020, the total stock-based compensation expense associated with the stock option plans was $1,770 (June 30, 2019 – $2,647) and $3,500 (June 30, 2019 – $4,418), respectively. (ii) Summary of changes The following is a summary of the changes during the six months ended June 30, 2020 and 2019: Weighted average exercise price (C$) Number of options Weighted average remaining contractual term (years) Balance as of January 1, 2020 $ 4.84 14,149,502 2.56 Exercise of options 2.05 (1,807,909) Cancellation, forfeiture and expiry of options 15.78 (127,045) Balance as of June 30, 2020 $ 5.13 12,214,548 2.05 Exercisable at June 30, 2020 3.42 8,688,645 1.78 Balance as of January 1, 2019 $ 2.99 12,902,995 3.35 Issuance of options 20.81 1,315,787 Exercise of options 3.76 (227,342) Cancellation, forfeiture and expiry of options 1.63 (2,895) Balance as of June 30, 2019 $ 4.66 13,988,545 3.04 Exercisable as of June 30, 2019 2.40 6,580,238 2.69 (iii) Fair value of options issued The fair value of the options issued was determined using the Black-Scholes option pricing model, using the following inputs: For the six months ended June 30, 2019 Share price at grant date (per share) C$20.65 - C$24.75 Exercise price (per option) C$20.65 - C$24.75 Risk-free interest rate 1.51% - 1.62% Expected life of options (in years) 5 Expected annualized volatility 80% Expected dividend yield —% Weighted average Black-Scholes value at grant date (per option) C$13.29 - C$15.91 Forfeiture rate —% No s tock options were granted under the 2018 Stock Option Plan or the 2020 Omnibus Plan during the six months ended June 30, 2020. During the six months ended June 30, 2019, the weighted average fair value per share at grant date of options was C$13.35. The expected life of the awards represents the period of time stock options are expected to be outstanding and is estimated considering vesting terms and employees’ and non-employees’ historical exercise and post-vesting employment termination behavior. Volatility was estimated by using the historical volatility of the Company, adjusted for the Company’s expectation of volatility going forward. The risk-free interest rate was based on the Bank of Canada government bonds with a remaining term equal to the expected life of the options at the grant date. (c) Restricted share units On May 11, 2020, the Company issued an aggregate of 279,277 restricted stock units (“RSUs”) to certain employees in connection with the 2020 Omnibus Plan. Each RSU entitles the holder to receive upon vesting one common share of the Company. The fair value of these RSUs has been determined based on the quoted market price of the applicable exchange on the date of issuance of C$7.52 per share on TSX or $5.42 per share on NASDAQ. The RSUs vest annually in equal installments over a three-year period following the grant date and have no performance requirements. On September 5, 2019, the Company issued an aggregate of 732,972 RSUs to certain employees in connection with the acquisition of four Redwood Holding Group, LLC subsidiaries (collectively, “Redwood”) and pursuant to Employment Inducement Award Plan. Each RSU entitles the holder to receive upon vesting one common share of the Company. The fair value of these RSUs has been determined based on the quoted market price on the date of issuance of C$15.34 per share. Under the terms of the corresponding RSU agreement, the RSUs vest on the third anniversary following the grant date and have no performance requirements. On July 20, 2020, the Company entered into separation agreements with Robert Rosenheck and another Redwood Wellness, LLC (“Redwood”) employee pursuant to which they resigned from their employment with Redwood. In connection with such separation agreements, the 732972 outstanding and unvested RSUs as of July 20, 2020 to which they were entitled were accelerated and vested as of July 20, 2020. Refer to Note 25 for further information. For the three and six months ended June 30, 2020, the Company recorded $776 and $1,482 (June 30, 2019 – $nil) in share-based compensation expense related to these RSUs, respectively. The following is a summary of the changes in RSUs from January 1, 2020 to June 30, 2020: Number of RSUs Share-based reserve Balance as of January 1, 2020 732,972 $ 889 Issuance of RSUs 279,277 — Vesting of issued RSUs — 1,482 Balance as of June 30, 2020 1,012,249 $ 2,371 No RSUs were granted or outstanding during the six months ended June 30, 2019. (d) Deferred share units On August 10, 2019, the Company established a cash-settled deferred share unit plan (“DSU Plan”) pursuant to which its non-executive directors receive deferred share units (“DSUs”). The DSU Plan is designed to promote a greater alignment of long-term interests between non-executive directors and shareholders. The number of DSUs granted under the DSU Plan (including fractional DSUs) is determined by dividing the amount of remuneration payable by the closing price as reported by the TSX on the trading day immediately preceding the day of grant. DSUs are payable at the time a non-executive director ceases to hold the office of director for any reason and are settled by a lump-sum cash payment, in accordance with the terms of the DSU Plan, based on the fair value of the DSUs at such time. The fair value of the cash payout is determined by multiplying the number of DSUs vested at the payout date by the closing price as reported by the TSX on the trading day immediately preceding the payout date. The fair value of the cash payout is determined at each reporting date based on the fair value of the Company’s common shares at the reporting date and is recorded within other liabilities. The following is a summary of the changes in DSUs from January 1, 2020 to June 30, 2020: Number of DSUs Financial liability Balance as of January 1, 2020 33,397 $ 255 Liabilities settled (8,484) (46) Loss (gain) on revaluation — (56) Balance as of June 30, 2020 24,913 $ 153 |
Earnings (loss) Per Share
Earnings (loss) Per Share | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (loss) Per Share | Earnings (loss) Per Share Basic and diluted earnings (loss) per share are calculated using the following numerators and denominators: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 Basic earnings per share computation Net income (loss) attributable to common shareholders of Cronos Group $ (106,977) $ 185,999 $ (30,937) $ 500,090 Weighted average number of common shares outstanding 349,075,408 334,665,873 348,946,439 317,940,749 Basic earnings per share $ (0.31) $ 0.56 $ (0.09) $ 1.57 Diluted earnings per share computation (i) Net income (loss) used in the computation of basic earnings per share $ (106,977) $ 185,999 $ (30,937) $ 500,090 Adjustment for gain (loss) on revaluation of derivative liabilities (729) (126,032) (729) (350,758) Net income (loss) used in the computation of diluted income per share $ (107,706) $ 59,967 $ (31,666) $ 149,332 Weighted average number of common shares outstanding used in the computation of basic earnings per share 349,075,408 334,665,873 348,946,439 317,940,749 Dilutive effect of warrants (i) — 19,287,262 — 21,239,056 Dilutive effect of stock options (i) — 10,992,464 — 11,291,914 Dilutive effect of restricted share units (i) — — — — Dilutive effect of Altria Warrant (i) — 9,100,465 — 13,633,605 Dilutive effect of Top-up Rights – exercised and exercisable fixed price (i) — 630,531 — 766,769 Weighted average number of common shares for computation of diluted income (loss) per share 349,075,408 374,676,595 348,946.439 364,872,093 Diluted earnings per share $ (0.31) $ 0.16 $ (0.09) $ 0.41 (i) In computing diluted earnings per share, incremental common shares are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. The following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive or because conditions for contingently issuable shares were not satisfied at the end of the reporting periods. Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Ginkgo Equity Milestones 14,674,904 14,674,904 14,674,904 14,674,904 Pre-emptive Rights 12,006,740 12,006,740 12,006,740 12,006,740 Top-up Rights – fixed price 26,686,413 — 26,686,413 — Top-up Rights – market price 1,941,349 25,150,434 1,941,349 25,150,434 Altria Warrant 77,752,533 1,076,553 77,752,533 1,076,553 Stock options 10,495,235 51,830 10,547,256 51,830 Warrants 17,536,558 — 17,521,903 — Restricted share units 1,012,249 — 1,012,249 — Total anti-dilutive securities 162,091,326 52,960,461 162,158,002 52,960,461 |
Related Party Transactions and
Related Party Transactions and Balances | 6 Months Ended |
Jun. 30, 2020 | |
Related Party Transactions [Abstract] | |
Related Party Transactions and Balances | Related Party Transactions and Balances On March 8, 2019, in connection with the Altria Investment, Altria, through certain of its wholly owned subsidiaries, purchased a 45% equity interest in the Company. During the three and six months ended June 30, 2020, the Company incurred $281 and $953 respectively, for consulting services from Altria Pinnacle LLC, a subsidiary of Altria (“Altria Pinnacle”). As of June 30, 2020, the accrual for these consulting services was $281 (December 31, 2019 – $1,152). No consulting services were provided by Altria Pinnacle for the three and six months ended June 30, 2019. During 2019, the Company purchased machinery and equipment amounting to $1,258 from a subsidiary of Altria. Refer to Note 19 for additional information. Refer to Note 11 for further information on the derivative liabilities related to the Altria Investment. There were no other material related party transactions for the six months ended June 30, 2020 or June 30, 2019. |
Segment Information
Segment Information | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information Segment reporting is prepared on the same basis that the Company’s chief operating decision makers (the “CODMs”) manage the business, make operating decisions and assess the Company’s performance. The Company determined that it has the following two reportable segments: United States and Rest of World. The United States operating segment consists of the manufacture and distribution of hemp-derived CBD infused products. The Rest of World operating segment is involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets . These two segments represent the geographic regions in which the Company operates and the different product offerings within each geographic region. The results of each segment are regularly reviewed by the CODMs to assess the performance of the segment and make decisions regarding the allocation of resources. The CODMs review operating income (loss) as the measure of segment profit or loss to evaluate performance of and allocate resources for its reportable segments. Operating income (loss) is defined as net revenue less cost of sales and operating expenses. Reporting by operating segments follows the same accounting policies as those used to prepare the consolidated financial statements. The operating segments are presented in accordance with the same criteria used for internal reporting prepared for the CODMs. Intersegment transactions are recorded at the stated values as agreed to by the segments. Segment data was as follows for the three months ended June 30, 2020: Three months ended June 30, 2020 United States Rest of World Corporate Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 5,674 $ — $ 5,674 Cannabis extracts 2,174 1,917 — 4,091 Other — 118 — 118 Net revenue $ 2,174 $ 7,709 $ — $ 9,883 Share of loss from investments in equity accounted investees $ — $ 794 $ — $ 794 Interest income 8 3,811 (2) 3,817 Interest expense — (83) — (83) Interest income, net $ 8 $ 3,728 $ (2) $ 3,734 Impairment loss on goodwill and intangible assets 40,000 $ — $ — $ 40,000 Depreciation and amortization 36 654 (6) 684 Income tax expense — — — — Net income (loss) (47,762) (52,899) (7,042) (107,703) Segment data was as follows for the six months ended June 30, 2020: Six months ended June 30, 2020 United States Rest of World Corporate Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 8,415 $ — $ 8,415 Cannabis extracts 4,350 5,317 — 9,667 Other — 233 — 233 Net revenue $ 4,350 $ 13,965 $ — $ 18,315 Share of loss from investments in equity accounted investees $ — $ 1,966 $ — $ 1,966 Interest income 13 11,562 — 11,575 Interest expense — (90) — (90) Interest income, net $ 13 $ 11,472 $ — $ 11,485 Impairment loss on goodwill and intangible assets 40,000 $ — $ — $ 40,000 Depreciation and amortization 69 1,302 — 1,371 Income tax expense — — — — Net income (loss) (57,567) 39,257 (13,712) (32,022) Consolidated balance sheets Total assets $ 250,470 $ 348,569 $ 1,311,248 $ 1,910,287 Investments in equity accounted investees — 933 — 933 Goodwill 178,414 1,322 — 179,736 Purchase of property, plant and equipment, net 219 13,125 — 13,344 Sources of net revenue for the three and six months ended June 30, 2020 and 2019 were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Cannabis flower 5,674 6,096 $ 8,415 $ 7,921 Cannabis extracts 4,091 1,535 9,667 2,638 Other 118 22 233 98 Net revenue $ 9,883 $ 7,653 $ 18,315 $ 10,657 Net revenue attributed to a geographic region based on the location of the customer were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Canada 7,416 7,340 $ 13,507 $ 10,323 United States 2,174 — 4,350 — Other countries 293 313 458 334 Total $ 9,883 $ 7,653 $ 18,315 $ 10,657 Property, plant and equipment assets were physically located in the following geographic regions: As of June 30, 2020 As of December 31, 2019 Canada $ 140,357 $ 141,021 United States 2,253 2,103 Other countries 21,680 18,685 Total $ 164,290 $ 161,809 The Company sells products through a limited number of major customers. Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s revenues and greater than 10% of accounts receivable. United States During the three and six months ended June 30, 2020, the U.S. segment had no major customers. As of June 30, 2020, $46 (December 31, 2019 – $12) in expected credit losses has been recognized on receivables from contracts with customers. Rest of World During the three months ended, June 30, 2020, the Rest of World segment earned a total net revenue before excise taxes of $7,040 from four major customers, BC Liquor Distribution Branch, Alberta Gaming, Liquor and Cannabis Commission, Ontario Cannabis Retail Corporation, and Société Québécoise du Cannabis accounting for 26%, 19%, 16% and 12% of the Company’s total revenues, respectively (three months ended June 30, 2019 – $4,118 from one major customer accounting for 54% of the Company’s total revenues). During the six months ended, June 30, 2020, the Rest of World segment earned a total net revenue before excise taxes of $11,819 from the same four major customers as mentioned above, representing 19%, 22%, 13%, and 13% of the Company’s total revenues, respectively (six months ended June 30, 2019 – $5,800 from two major customers, together accounting for 54% of the Company’s total revenues). |
Commitments
Commitments | 6 Months Ended |
Jun. 30, 2020 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments | Commitments (a) R&D Commitments (i) Ginkgo. On September 4, 2018, the Company announced an R&D partnership with Ginkgo to develop scalable and consistent production of eight target cannabinoids, including THC, CBD and a variety of other lesser known and rarer cannabinoids. As part of this partnership, Cronos Group has agreed to issue up to 14,674,903 common shares of the Company (aggregate value of approximately $100,000 as of July 17, 2018 assuming all milestones are met) (collectively the “Ginkgo Equity Milestones”) in tranches and $22,000 in cash subject to Ginkgo’s achievement of certain milestones and to fund certain R&D expenses, including foundry access fees. (ii) Technion. On October 15, 2018, the Company entered into a sponsored research agreement with the Technion Research and Development Foundation of the Technion – Israel Institute of Technology (“Technion”). Research will be focused on the use of cannabinoids and their role in regulating skin health and skin disorders. The Company has committed to $1,784 of research funding over a period of three years. An additional $4,900 of cash payments will be paid to Technion upon the achievement of certain milestones. (b) Altria Consulting Services On February 18, 2019, the Company entered into an agreement with a wholly owned subsidiary of Altria (which agreement was subsequently amended and restated to substitute Altria Pinnacle as a party thereto), to receive strategic advisory and project management services from Altria Pinnacle (the “Services Agreement”). Pursuant to the Services Agreement, the Company will pay Altria Pinnacle a monthly fee equal to the product of one hundred and five percent (105%) and the sum of: (i) all costs directly associated with the services incurred during the monthly period, and (ii) a reasonable and appropriate allocation of indirect costs incurred during the monthly period. The Company will also pay all third-party direct charges incurred during the monthly period in connection with the services, including any reasonable and documented costs, fees and expenses associated with obtaining any consent, license or permit. The Services Agreement will remain in effect until terminated by either party. (c) Use of Publicity Rights in Brand Development On December 23, 2019, the Company issued 856,017 restricted common shares to an accredited investor in a private placement (“Private Placement – 2019”) in reliance on Section 4(a)(2) of the Securities Act of 1933 in connection with the use of certain publicity rights in brand development. One-third of such common shares vested on January 31, 2020 with the remaining shares vesting in two equal installments on June 23, 2021, and December 23, 2022. The issuance did not involve a public offering and was made without general solicitation or advertising. The total fair value of the consideration paid for the issuance of such common shares was approximately $6,000. The fair value of the shares was calculated using the ten-day volume weighted average price per share of the Company’s common shares on Nasdaq. Additional restricted common shares are issued when certain performance milestones are achieved: (i) First Performance Issuance: if, prior to December 23, 2022, the product line generates at least $50,000 in net revenue, additional common shares with an aggregate value of $1,000 will be issued. (ii) Second Performance Issuance: if, prior to December 23, 2022, the product line generates at least $100,000 in net revenue, additional common shares with an aggregate value of $1,000 will be issued (together with the First Performance Issuance noted above). The number of common shares that would be issued upon achieving the foregoing milestones will be determined based on the ten-day volume weighted average price per share of the Company’s common shares on Nasdaq as of the trading day immediately prior to the date of filing with the SEC of the Company’s audited year-end financial statements for the first fiscal year during which such milestones are achieved. (d) Take or Pay Supply Agreement In January 2020, the Company entered into a take or pay supply agreement with a supplier of dried cannabis flower. The Company agreed to purchase a minimum of approximately C$1,734 ($1,290) of dried cannabis flower over 6 months from the date of the agreement and, subject to the supplier’s satisfaction of certain conditions and the availability of additional product, potentially up to a maximum of approximately C$4,284 ($3,188) over 6 months from the date of the agreement. As a t June 30, 2020, the Company is committed to purchase approximately C$1,230 ($906) of dried cannabis flower remaining under this agreement which, due to delays in deliveries from the supplier, are expected to be made during the remainder of 2020. |
Contingencies
Contingencies | 6 Months Ended |
Jun. 30, 2020 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies The Company is subject to various legal proceedings in the ordinary course of business and in connection with its marketing, distribution and sale of its products. Many of these legal proceedings are in the early stages of litigation and seek damages that are unspecified or not quantified. Although the outcome of these matters cannot be predicted with certainty, the Company does not believe these legal proceedings, individually or in the aggregate, will have a material adverse effect on the Company’s financial condition but could be material to the Company’s results of operations for a quarterly period depending, in part, on the results for that quarter. (a) Class Action Complaints Relating to Restatements On March 11 and 12, 2020, two alleged shareholders of the Company separately filed two putative class action complaints in the U.S. District Court for the Eastern District of New York against the Company and its Chief Executive Officer and Chief Financial Officer alleging violations of Section 10(b) of the Securities Exchange Act of 1934 (the “Exchange Act”) and Rule 10b-5 promulgated thereunder against all defendants, and Section 20(a) of the Exchange Act against the individual defendants. The complaints generally allege that certain of the Company’s prior public statements about revenues and internal controls were incorrect based on the Company’s March 2, 2020, disclosure that the Audit Committee of its Board of Directors was conducting a review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel. The complaints do not quantify a damage request. Defendants have not yet responded to the complaints. On June 3, 2020, an alleged shareholder filed a Statement of Claim in the Ontario Superior Court of Justice in Toronto, Ontario, Canada, seeking, among other things, an order certifying the action as a class action on behalf of a putative class of shareholders and damages of an unspecified amount. The Statement of Claim names the Company, its Chief Executive Officer, Chief Financial Officer, former Chief Financial Officer and Chief Commercial Officer, and current and former members of its Board of Directors as defendants and alleges breaches of the Ontario Securities Act, oppression under the Ontario Business Corporations Act and common law misrepresentation. The Statement of Claim generally alleges that certain of the Company’s prior public statements about revenues and internal controls were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of its Board of Directors was conducting a review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel, and the Company’s subsequent restatements. The Statement of Claim does not quantify its damage request. The Company and the other named defendants have not yet filed a response to the Statement of Claim. (b) Regulatory Reviews Relating to Restatements The Company has been responding to requests for information from various regulatory authorities relating to its previously disclosed restatement of its financial statements for the first three quarters of 2019. The Company is responding to all such requests for information and cooperating with all regulatory authorities. The Company cannot predict the outcome of any such regulatory review or investigation and it is possible that additional investigations or one or more formal proceedings may be commenced against the Company and its current and former officers and directors in connection with these regulatory reviews. (c) Litigation Relating to Marketing, Distribution and Sale of Products On June 16, 2020, an alleged consumer filed a Statement of Claim on behalf of a class in the Court of Queen’s Bench of Alberta in Alberta, Canada, against the Company and other Canadian cannabis manufacturers and/or distributors. The Statement of Claim alleges claims related to the defendants’ advertised content of cannabinoids in cannabis products for medicinal use on or after June 16, 2010 and cannabis products for adult use on or after October 17, 2018. The Statement of Claim seeks a total of C$500 million for breach of contract, compensatory damages, and unjust enrichment or such other amount as may be proven in trial and C$5 million in punitive damages against each defendant, including the Company. The Statement of Claim also seeks interest and costs associated with the action. The Company has not responded to the Statement of the Claim. A number of claims, including purported class actions, have been brought in the U.S. against companies engaged in the U.S. hemp business alleging, among other things, violations of state consumer protection, health and advertising laws. On April 8, 2020, a putative class action complaint was filed in the U.S. District Court for the Central District of California against Redwood, alleging violations of California’s Unfair Competition Law, False Advertising Law, Consumers Legal Remedies Act, and breaches of the California Commercial Code for breach of express warranties and implied warranty of merchantability with respect to Redwood’s marketing and sale of U.S. hemp products. The complaint does not quantify a damage request. On April 14, 2020, the class action complaint was dismissed for certain pleading deficiencies and the plaintiff was granted leave until April 24, 2020 to amend the complaint to establish federal subject matter jurisdiction. As of the date of this Quarterly Report, the plaintiff has not refiled the complaint and the complaint has been dismissed without prejudice |
Financial Instruments
Financial Instruments | 6 Months Ended |
Jun. 30, 2020 | |
Risks and Uncertainties [Abstract] | |
Financial Instruments | Financial Instruments The Company’s activities expose it to a variety of financial risks, including credit risk, liquidity risk, and market risk (including interest rate risk) and foreign currency risk. (a) Credit Risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities, primarily accounts receivable and other receivables, and its investing activities, including cash held with banks and financial institutions, short-term investments, loan receivable, and advances to joint ventures. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $1,424,786 as of June 30, 2020 (December 31, 2019 – $1,586,978). (i) Accounts receivable An impairment analysis is performed at each reporting date using a provision matrix to measure expected credit losses. The provision rates are based on the days past due for groupings of various customer segments with similar loss patterns. The calculation reflects the probability-weighted outcome, the time value of money and reasonable and supportable information that is available at the reporting date about past events, current conditions and forecasts of future economic conditions. Accounts receivable are written off when there is no reasonable expectation of recovery. Indicators that there is no reasonable expectation of recovery include, among others, the failure of a debtor to engage in a repayment plan, and a failure to make contractual payments for a period of greater than 120 days past due. For the three months ended June 30, 2020, the Company recorded a current expected credit loss allowance of $80 (December 31, 2019 – $136). The Company has assessed that there is a concentration of credit risk, as 78% of the Company’s accounts receivable were due from four customers as of June 30, 2020 (December 31, 2019 – 56% due from two customers) with an established credit history with the Company. (ii) C ash and cash equivalents, short-term investments, and other receivables The Company held cash and cash equivalents of $1,109,700 as of June 30, 2020 (December 31, 2019 – $1,199,693). The short-term investments and related interest receivable of $213,614 as of June 30, 2020 (December 31, 2019 – $306,347) represents short-term investments with a maturity of less than a year and accrued interest as of period end. The cash and cash equivalents and short-term investments, including guaranteed investment certificates and bankers’ acceptances, are held with central banks and financial institutions that are highly rated. In addition to interest receivable, other receivables include sales taxes receivable from the government. As such, the Company has assessed an insignificant loss allowance on these financial instruments. (iii) Advances to joint ventures The Company has assessed the credit risk of advances to joint ventures based on the financial position of the borrowers, and the regulatory and economic environment of the borrowers. Based on historical information, and adjusted for forward-looking expectations, the Company has assessed an expected credit loss allowance on these advances as of June 30, 2020 of $nil (December 31, 2019 – $nil). (b) Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due and arises principally from the Company’s accounts payable and other liabilities. The Company’s policy is to review liquidity resources and ensure that sufficient funds are available to meet financial obligations as they become due. Further, the Company’s management is responsible for ensuring funds exist and are readily accessible to support business opportunities as they arise. The Company’s funding is primarily provided in the form of capital raised through the issuance of common shares and warrants. As of June 30, 2020, 14% of the Company’s payables were due to one vendor (December 31, 2019 – 42% due to three vendors). (c) Market risk Market risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in market prices. The value of financial instruments can be affected by changes in interest rates, market and economic conditions, and equity and commodity prices. The Company is exposed to market risk in divesting its investments, such that, unfavorable market conditions could result in dispositions of investments at less than their carrying values. Further, the revaluation of securities classified as fair value through net income, could result in significant write-downs of the Company’s investments, which would have an adverse impact on the Company’s financial position, unless these would flow through other comprehensive income. The Company manages market risk by having a portfolio of securities from multiple issuers so that the Company is not materially exposed to any one issuer. (d) Interest rate risk Interest rate risk is the risk that the value or yield of fixed-income investments may decline if interest rates change. Fluctuations in interest rates may impact the level of income and expense recorded on the cash equivalents and short-term investments, and the market value of all interest-earning assets, other than those which possess a short-term to maturity. A 10% change in the interest rate in effect on June 30, 2020 and December 31, 2019, would not have a material effect on (i) fair value of the cash equivalents and short-term investments as the majority of the portfolio has a maturity date of three months or less, or (ii) interest income. Management continues to monitor external interest rates and revise the Company’s investment strategy as a result. During the six months ended June 30, 2020, the Company had net interest income of $11,485 (June 30, 2019 – $11,528). During the three and six months ended June 30, 2020, the Company’s average variable interest rate fell 0.73% and 1.45%, respectively. Had the interest rates been consistent, net interest income would have increased by $2,090 and $7,292, respectively for the three and six months ended June 30, 2020. (e) Currency rate risk Currency rate risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in foreign exchange rates. The Company is exposed to this risk on advances to joint ventures denominated in A$ and C$. The Company is further exposed to this risk through subsidiaries operating in Israel and the U.S. as the Company’s functional currency is in Canadian dollars. The Company does not currently use foreign exchange contracts to hedge its exposure to currency rate risk. As such, the Company’s financial position and financial results may be adversely affected by the unfavorable fluctuations in currency exchange rates. As of June 30, 2020, the Company had foreign currency gain (loss) on translation of $(61,821) (June 30, 2019 – $21,845). A 10% change in the exchange rates for the U.S. dollar would affect the carrying value of net assets by approximately $166,395 as of June 30, 2020 (December 31, 2019 – $174,902). |
Fair Value Measurement
Fair Value Measurement | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Fair Value Measurement | Fair Value Measurement The Company complies with ASC 820, Fair Value Measurements, for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period, and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values are determined by: • Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. • Level 3 inputs are unobservable data points for the asset or liability, and includes situations where there is little, if any, market activity for the asset or liability. The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2020 and December 31 2019, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. June 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,109,700 $ — $ — $ 1,109,700 Short-term investments 213,614 — — 213,614 Derivative liabilities — — 205,714 205,714 December 31, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,199,693 $ — $ — $ 1,199,693 Short-term investments 306,347 — — 306,347 Derivative liabilities — — 297,160 297,160 There were no transfers between categories during the periods presented. |
Supplementary Cash Flow Informa
Supplementary Cash Flow Information | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Supplementary Cash Flow Information | Supplementary Cash Flow Information The net changes in non-cash working capital items are as follows: For the six months ended June 30, 2020 2019 Accounts receivable $ 1,161 $ (3,986) Other receivables (2,336) (7,681) Prepaids and other assets 1,568 (2,564) Inventory (23,913) (15,105) Accounts payable and other liabilities (6,985) 9,877 Cumulative effect from foreign exchange (65) (2,132) Total $ (30,570) $ (21,591) |
Non-monetary Transactions
Non-monetary Transactions | 6 Months Ended |
Jun. 30, 2020 | |
Nonmonetary Transactions [Abstract] | |
Non-monetary Transactions | Non-monetary Transactions During the six months ended June 30, 2020, the Company had no non-monetary transactions. On March 28, 2019, the Company entered into two transactions to simultaneously purchase and sell inventory to a third party. The Company purchased cannabis resin from the third party and in turn sold cannabis dry flower to the third party. The transactions involved the exchange of work in progress inventory and were accounted for at the carrying value of inventory transferred by the Company, which equaled the value of the cannabis resin received. No revenue was recognized as a result of this transaction and no gain or loss was recognized in the condensed consolidated statements of operations and comprehensive income (loss). |
Subsequent Events
Subsequent Events | 6 Months Ended |
Jun. 30, 2020 | |
Subsequent Events [Abstract] | |
Subsequent Events | Subsequent Events (a) On July 24, 2020, the Company entered into an amendment to the Series A Loan with Natuera to increase the principal amount of the Series A Loan by $6,350, to an aggregate principal amount of $15,500, of which the Company has committed to fund 50% and its joint venture partner has committed to fund the remaining 50%. Outstanding principal amounts continue to bear interest at a fixed annual rate of 5.67% and the maturity date of the Series A Loan has been extended to March 1, 2021. As of June 30, 2020, the Company has a loan receivable (net of credit allowance) of $2,984 from Natuera. Refer to Note 10 for details. (b) On July 20, 2020, the Company entered into separation agreements with Robert Rosenheck and another Redwood employee pursuant to which they resigned from their employment with Redwood Wellness, LLC. In connection with such separation agreements, the 732,972 outstanding and unvested RSUs as of July 20, 2020 to which they were entitled were accelerated and vested as of July 20, 2020. A total of $6.2 million of share-based compensation costs will be recognized in the third quarter of 2020. |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies (Policies) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Basis of Presentation | Basis of Presentation The interim condensed consolidated financial statements of Cronos Group are unaudited. They have been prepared in accordance with Generally Accepted Accounting Principles in the United States (“U.S. GAAP”) for interim financial information and with applicable rules and regulations of the U.S. Securities and Exchange Commission relating to interim financial statements. Accordingly, they do not include all of the information and footnotes required by U.S. GAAP for complete financial statements. In the opinion of management, all adjustments (consisting of normal recurring accruals) considered necessary for a fair presentation have been included. Operating results for the three and six months ended June 30, 2020 are not necessarily indicative of the results that may be expected for any other reporting period. These condensed consolidated financial statements should be read in conjunction with the Company’s consolidated financial statements and related notes included in its Annual Report on Form 10-K/A for the year ended December 31, 2019 (the “Annual Financial Statements”). |
Basis of Consolidation | Basis of ConsolidationThe accompanying condensed consolidated financial statements include the accounts of the Company, and all entities in which the Company has a controlling voting interest and/or is the primary beneficiary of a variable interest as of and for the period presented. In the condensed consolidated statements of net income (loss) and comprehensive income (loss), the net income (loss) and comprehensive income (loss) are attributed to the equity holders of the Company and to the non-controlling interests. Non-controlling interests in the equity of Cronos Israel are presented separately in the shareholders’ equity (deficit) section of the condensed consolidated balance sheets and condensed consolidated statements of changes in equity (deficit). All intercompany transactions and balances are eliminated upon consolidation. |
Goodwill and indefinite life intangible assets | Goodwill and indefinite life intangible assets Goodwill and indefinite life intangible assets are reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying value. The Company performs an impairment test annually in the fourth quarter, by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. The Company determined that it has two reporting units: the U.S. reporting unit and the Rest of World reporting unit. During the three months ended June 30, 2020, the Company concluded that the projected impact of the COVID-19 pandemic on its sales and revenues in the near term, together with the volatility in the market conditions during the quarter represented potential indicators of impairment for the U.S. reporting unit. Accordingly, the Company performed an interim impairment analysis during the second quarter of 2020. See Note 13 for more information regarding intangibles assets and goodwill. |
New Accounting Pronouncements | New Accounting Pronouncements (a) Adoption of new accounting pronouncements On January 1, 2020, the Company adopted ASU No. 2018-13, Disclosure Framework – Changes to the Disclosure Requirements for Fair Value Measurement (Topic 820) (“ASU No. 2018-13”). ASU No. 2018-13 adds, modifies, and removes certain fair value measurement disclosure requirements. The adoption of this standard was applied prospectively and did not have a material impact on the Company’s condensed consolidated financial statements. On January 1, 2020, the Company adopted ASU No. 2018-15, Intangibles – Goodwill and Other Internal-use-software (Subtopic 350-40): Customer’s Accounting for Implementation Costs Incurred in a Cloud Computing Arrangement That Is a Service Contract (“ASU No. 2018-15”). ASU No. 2018-15 amends current guidance to align the accounting for costs incurred in a hosting arrangement that is a service contract with the requirements for capitalizing costs associated with developing or obtaining internal-use software. The guidance in ASU No. 2018-15 is effective for annual and interim periods beginning after December 15, 2019, with early adoption permitted. The adoption of this standard was applied prospectively and did not have a material impact on the Company’s condensed consolidated financial statements. On January 1, 2020, the Company adopted ASU No. 2017-04, Intangibles – Goodwill and Other (Topic 350) – Simplifying the Test for Goodwill Impairment (“ASU No. 2017-04”). ASU No. 2017-04 eliminates step 2 from the goodwill impairment test and instead requires an entity to measure the impairment of goodwill assigned to a reporting unit if the carrying value of assets and liabilities assigned to the reporting unit, including goodwill, exceeds the reporting unit’s fair value. The guidance in ASU No. 2017-04 is effective for annual and interim goodwill tests completed by the Company beginning on January 1, 2020. The adoption of this standard was applied prospectively and the Company follows a one-step model for goodwill impairment. (b) New accounting pronouncements not yet adopted In January 2020, the Financial Accounting Standards Board (“FASB”) issued ASU No. 2020-01, Investments-Equity Securities (Topic 321), Investments-Equity Method and Joint Ventures (Topic 323), and Derivatives and Hedging (Topic 815) (“ASU No. 2020-01”). ASU No. 2020-01 clarifies the interaction of accounting for the transition into and out of the equity method. The new standard also clarifies the accounting for measuring certain purchased options and forward contracts to acquire investments. The guidance in ASU No. 2020-01 is effective for annual and interim periods beginning after December 15, 2020, with early adoption permitted. The Company is currently evaluating the effect of the adoption of ASU No. 2020-01, but anticipates that the adoption will not have a material impact on its condensed consolidated financial statements. In December 2019, the FASB issued ASU 2019-12, Income Taxes (Topic 740): Simplifying the Accounting for Income Taxes (“ASU No. 2019-12”). ASU No. 2019-12 eliminates certain exceptions and simplifies the application of U.S. GAAP-related changes in enacted tax laws or rates and employee stock option plans. ASU No. 2019-12 is effective for annual and interim periods beginning after December 15, 2020. Early adoption is permitted. The Company is currently evaluating the effect of the adoption of ASU No. 2019-12, but anticipates that the adoption will not have a material impact on its condensed consolidated financial statements. |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Accounting Policies [Abstract] | |
Schedule of Consolidated Entities | The Company consolidates the financial results of the following entities, which the Company controls: Subsidiaries Jurisdiction of Incorporation Incorporation Date Ownership Interest (ii) Cronos Israel G.S. Cultivations Ltd. (i) Israel February 4, 2018 70% Cronos Israel G.S. Manufacturing Ltd. (i) Israel September 4, 2018 90% Cronos Israel G.S. Store Ltd. (i) Israel June 28, 2018 90% Cronos Israel G.S. Pharmacies Ltd. (i) Israel February 15, 2018 90% (i) These Israeli entities are collectively referred to as “Cronos Israel.” |
Inventory (Tables)
Inventory (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following items: As of June 30, 2020 December 31, 2019 Raw materials $ 5,488 $ 2,469 Work-in-progress – dry cannabis 21,772 11,538 Work-in-progress – cannabis extracts 19,210 17,975 Finished goods – dry cannabis 4,505 1,798 Finished goods – cannabis extracts 1,716 2,624 Supplies and consumables 525 1,639 Total $ 53,216 $ 38,043 |
Investments and Advances to J_2
Investments and Advances to Joint Ventures (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Equity Method Investments | Net investment in equity accounted investees A reconciliation of the carrying amount of the investments in associates and joint ventures is as follows: Carrying Amount Ownership % June 30, 2020 December 31, 2019 Cronos Australia (i) 31% $ — $ (346) Cronos GrowCo 50% 933 1,501 MedMen Canada 50% — — Natuera 50% — (598) $ 933 $ 557 (i) On October 25, 2019, Cronos Australia issued 40 million new shares in an initial public offering at an offering price of A$0.50 per share. The Company’s ownership in Cronos Australia decreased from 50% to 31% on November 7, 2019 when Cronos Australia began trading on the Australian Securities Exchange. This resulted in a reconsideration event, which required the reassessment of the Company’s VIE conclusion. Upon reconsideration, the Company determined that the entity was no longer a VIE as of December 31, 2019 and is now reported under the equity method. The Company’s share of net earnings (losses) from equity investments accounted for under the equity method of accounting: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 Whistler Medicinal Marijuana Company (“Whistler”) $ — $ — $ — $ 29 Cronos Australia (i) (235) (397) (235) (641) Cronos GrowCo (190) (38) (501) (27) MedMen Canada — (2) — 4 Natuera (ii) (369) (304) (1,230) (304) $ (794) $ (741) $ (1,966) $ (939) (i) The Company’s share of accumulated net losses in excess of its equity investment and advances in Cronos Australia was $512 for the six months ended June 30, 2020 (June 30, 2019 – $nil). (ii) The Company’s share of accumulated net losses in excess of its equity investment in Natuera has been applied as a loss allowance on the loan receivable. See Note 6(b) and Note 10. |
Schedule of Advances to Joint Ventures | Advances to Joint Venture MedMen Canada (i) Cronos GrowCo Cronos Australia (ii) Natuera Total As of January 1, 2020 $ 471 $ 18,966 $ — $ — $ 19,437 Credit loss allowance (iii) — — — — — Effect from foreign exchange (20) (819) — — (839) As of June 30, 2020 $ 451 $ 18,147 $ — $ — $ 18,598 As of January 1, 2019 $ 1,244 $ 2,970 $ 475 $ — $ 4,689 Advances (repayment) (852) 15,494 274 219 15,135 Advances to joint ventures recovered from (applied to) carrying amount of investments 35 22 (779) (224) (946) Effect from foreign exchange 44 480 30 5 559 As of December 31, 2019 $ 471 $ 18,966 $ — $ — $ 19,437 (i) Advance is unsecured, non-interest bearing, and there are no terms of repayment. (ii) A$1,500 is governed by an unsecured loan bearing interest at a rate of 12% per annum, calculated and compounded daily, in arrears, on the amounts advanced from the date of each advance. The loan is due on January 1, 2022. If the loan is overdue, the outstanding amount bears interest at an additional 2% per annum. (iii) For the three months ended June 30, 2020, a reversal of $917 related to the credit loss allowance for Cronos GrowCo was recorded as the Company assessed its recoverability. As of June 30, 2020, total credit losses were $nil. |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Equity [Abstract] | |
Schedule of Accumulated Other Comprehensive Income (Loss) | The following are continuity schedules of accumulated other comprehensive income (loss): Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Net unrealized gain (loss) on revaluation and disposal of other investments Balance beginning of period 5 5 5 5 Cumulative effect from adoption of ASU 2016-01 — — — — Balance as of June 30 5 5 5 5 Net foreign exchange gain (loss) on translation Balance beginning of period (85,882) (5,980) 27,833 (9,875) Net unrealized (loss) gain 51,907 17,948 (61,808) 21,843 Balance as of June 30 (33,975) 11,968 (33,975) 11,968 Total accumulated other comprehensive income (loss) $ (33,970) $ 11,973 $ (33,970) $ 11,973 |
Loans Receivable, net (Tables)
Loans Receivable, net (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Loan Receivable | As of June 30, 2020 December 31, 2019 Current portion Natuera Series A loan (i) $ 2,984 $ 4,575 Cronos GrowCo Credit Facility (ii) 1,474 — Add: Accrued interest — 89 Total current portion of loans receivable 4,458 4,664 Long term portion Cronos GrowCo Credit Facility (ii) 50,582 31,678 2645485 Ontario Inc. ( “ Mucci ” ) Promissory Note (iii) 11,793 12,587 Cannasoul Collaboration Loan (iv) 1,174 — Add: Accrued interest 1,822 702 Total long-term portion of loans receivable 65,371 44,967 Total loans receivable $ 69,829 $ 49,631 (i) On September 27, 2019, the Company entered into a master loan agreement (the “Series A Loan”) for $4,575 with Natuera with effect as of August 29, 2019. The total aggregate principal amount of the Series A Loan is $9,150, of which the Company has committed to fund 50% and its joint venture partner has committed to fund the remaining 50%. Outstanding principal amounts bear interest at a fixed annual rate of 5.67% with a maturity date of August 29, 2020. As of June 30, 2020, accrued interest is recorded in other receivables. Subsequent to June 30, 2020, an amendement to the agreement was executed. Refer to Note 25. For the six months ended June 30, 2020, a loss allowance of $1,591 was recorded against the Natuera Series A Loan related to the Company’s share of net loss from Natuera in excess of the carrying value of the equity method investment. Refer to Note 6. (ii) On August 23, 2019, the Company entered into a credit agreement with Cronos GrowCo in respect of a C$100,000 ($73,660) secured non-revolving term loan credit facility (the “GrowCo Credit Facility”). The GrowCo Credit Facility will mature on March 31, 2031 and will bear interest at varying rates based on the Canadian prime rate as announced by the Bank of Montreal. Interest began to accrue as of the closing date of the GrowCo Credit Facility and is payable on a quarterly basis until maturity, except that any interest accrued prior to March 31, 2021 will be payable no later than December 31, 2021. Repayment of principal will be made on a quarterly basis commencing on March 31, 2021. The credit facility is secured by substantially all present and after acquired property of Cronos GrowCo and its subsidiaries. Mucci, the other 50% shareholder of Cronos GrowCo, has provided a limited recourse guarantee in favor of Cronos GrowCo, secured by Mucci’s shares in Cronos GrowCo. As of June 30, 2020, Cronos GrowCo had drawn C$72,150 ($53,145) from the Cronos GrowCo Credit Facility. For the six months ended June 30, 2020, a current expected credit loss allowance of $1,089 was recorded against the GrowCo Facility. (iii) On June 28, 2019, the Company entered into a promissory note receivable agreement (the “Mucci Promissory Note”) for C$16,350 ($12,043) with Mucci. The outstanding principal amount of the Mucci Promissory Note bears interest at 3.95% annually and is due within 90 days of demand. The Company does not intend to demand the loan within 12 months. Interest accrued under the Mucci Promissory Note until July 1, 2021 is payable by way of capitalization on the principal amount and interest thereafter must be paid in cash on a quarterly basis. The Mucci Promissory Note is secured by a general security agreement covering all the assets of Mucci. For the six months ended June 30, 2020, a current expected credit loss allowance of $250 has been recorded against the Mucci loan. (iv) On April 1, 2020, Cronos Israel entered into the Cannasoul Collaboration. Cronos Israel has agreed to advance approximately ILS 8,297 (approximately $2,446) by a non-recourse loan to CLS over a period of two years for the capital and operating expenditures of the laboratory. The outstanding principal on the loan bears interest at 3.5% annually and will be repaid through the profits generated from the Cannasoul Collaboration. As of June 30, 2020, CLS has received the first installment of ILS 4,149 (approximately $1,198). For the six months ended June 30, 2020, a current expected credit loss allowance of $24 has been recorded against the Cannasoul Collaboration loan. |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Reconciliation of Carrying Amounts | A reconciliation of the carrying amounts of the derivative liability is presented below: April 1, 2020 (Gain) / Loss on revaluation Exercise of Rights Effect from foreign exchange As of June 30, 2020 (a) Altria Warrant $ 132,366 $ 30,052 $ — $ 3,540 $ 165,958 (b) Pre-emptive Rights 13,070 2,610 — 500 16,180 (c) Top-up Rights 20,740 3,218 (727) 1,072 23,576 $ 166,176 $ 35,880 $ (727) $ 5,112 $ 205,714 January 1, 2020 (Gain) / Loss on revaluation Exercise of Rights Effect from foreign exchange As of June 30, 2020 (a) Altria Warrant $ 234,428 $ (58,052) $ — $ (10,418) $ 165,958 (b) Pre-emptive Rights 12,787 3,925 — (532) 16,180 (c) Top-up Rights 49,945 (23,361) (727) (2,281) 23,576 $ 297,160 $ (77,488) $ (727) $ (13,231) $ 205,714 |
Schedule of Fair Values of Derivative Liabilities | The fair values of the derivative liabilities were determined using the Black-Scholes pricing model as of June 30, 2020 and December 31, 2019 applying the following inputs: As of June 30, 2020 As of December 31, 2019 Altria Warrant Pre-emptive Rights Top-up Rights Altria Warrant Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $8.18 $8.18 $8.18 $9.97 $9.97 $9.97 Subscription price (per share in C$) $19.00 $16.25 $16.25 $19.00 $16.25 $16.25 Weighted average risk-free interest rate (i) 0.30% 0.29% 0.26% 1.69% 1.73% 1.71% Weighted average expected life (in years) (ii) 2.68 2.00 1.11 3.18 1.25 1.66 Expected annualized volatility (iii) 91% 91% 91% 82% 82% 82% Expected dividend yield —% —% —% —% —% —% (i) The risk-free interest rate was based on Bank of Canada government treasury bills and bonds with a remaining term equal to the expected life of the derivative liabilities. The risk-free interest rate uses a range of approximate ly 0.21% to 0.61% as of June 30, 2020 (December 31, 2019 – 1.66% to 1.73%) for the Pre-emptive rights and Top-up rights. (ii) The expected life in years represents the period of time that the derivative liabilities are expected to be outstanding. The expected life of the Pre-emptive Rights and Top-up Rights is determined based on the expected term of the underlying options, warrants, and shares, to which the Pre-emptive Rights and Top-up Rights are linked. The expected life uses a range of approximately 0.25 year to 5.5 year s as of June 30, 2020 (December 31, 2019 – 0.25 year to 6 years). (iii) Volatility was based on an equally weighted blended historical volatility level of the underlying equity securities of the Company and peer companies. |
Schedule of Sensitivity Analysis | The following table quantifies each of the significant inputs described above and provides a sensitivity analysis of the impact on the reported values of the derivative liabilities. The sensitivity analysis for each significant input is performed by assuming a 10% decrease in the input while other significant inputs remain constant at management’s best estimate as of the respective dates. A decrease in the inputs noted below would cause a decrease in derivative liability and as of June 30, 2020, there would be an equal but opposite impact on net income (loss). Decrease as of June 30, 2020 Decrease as of December 31, 2019 Altria Warrant Pre-emptive Rights Top-up Rights Altria Warrant Pre-emptive Rights Top-up Rights Share price $ 26,300 $ 2,779 $ 4,939 $ 36,436 $ 2,743 $ 9,577 Weighted average expected life 14,249 1,744 1,272 17,471 2,366 2,178 Expected annualized volatility 27,711 2,652 4,769 33,343 2,180 7,714 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant & Equipment, Useful Lives | Property, plant and equipment, net consisted of the following: As of June 30, 2020 December 31, 2019 Cost Land $ 3,618 $ 3,727 Building 146,685 150,324 Furniture and equipment 11,394 10,156 Computer equipment 651 687 Leasehold improvements 3,116 2,789 Construction in progress 12,492 3,569 Less: accumulated depreciation (13,666) (9,443) Total $ 164,290 $ 161,809 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets are comprised of the following items: Weighted Average Amortization Period (in years) As of June 30, 2020 Cost Accumulated Amortization Impairment charges Net Software (i) N/A $ 612 $ (298) $ — $ 314 Enterprise Resource Planning (“ERP”) system (ii) 5 2,570 — — 2,570 Health Canada licenses 17 8,255 (1,167) — 7,088 Lord Jones ™ brand N/A 64,000 — (5,000) 59,000 Trademarks N/A 140 — — 140 Israeli Codes (iii) 25 297 (10) — 287 $ 75,874 $ (1,475) $ (5,000) $ 69,399 (i) Software amortizes using a double declining method. (ii) During the six months ended June 30, 2020, the Company capitalized costs for the ERP system. As of June 30, 2020, the system is not yet available for use, resulting in no amortization being recorded against the asset. (iii) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli Codes”) were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities specified above. Weighted Average Amortization Period (in years) As of December 31, 2019 Cost Accumulated Amortization Net Software (i) N/A $ 541 $ (202) $ 339 Health Canada licenses 17 8,627 (976) 7,651 Lord Jones ™ brand N/A 64,000 — 64,000 Trademarks N/A 36 — 36 Israeli Codes (ii) 25 298 (4) 294 $ 73,502 $ (1,182) $ 72,320 (i) Software amortizes using a double declining method. (ii) The Israeli Codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities specified above. |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets are comprised of the following items: Weighted Average Amortization Period (in years) As of June 30, 2020 Cost Accumulated Amortization Impairment charges Net Software (i) N/A $ 612 $ (298) $ — $ 314 Enterprise Resource Planning (“ERP”) system (ii) 5 2,570 — — 2,570 Health Canada licenses 17 8,255 (1,167) — 7,088 Lord Jones ™ brand N/A 64,000 — (5,000) 59,000 Trademarks N/A 140 — — 140 Israeli Codes (iii) 25 297 (10) — 287 $ 75,874 $ (1,475) $ (5,000) $ 69,399 (i) Software amortizes using a double declining method. (ii) During the six months ended June 30, 2020, the Company capitalized costs for the ERP system. As of June 30, 2020, the system is not yet available for use, resulting in no amortization being recorded against the asset. (iii) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli Codes”) were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities specified above. Weighted Average Amortization Period (in years) As of December 31, 2019 Cost Accumulated Amortization Net Software (i) N/A $ 541 $ (202) $ 339 Health Canada licenses 17 8,627 (976) 7,651 Lord Jones ™ brand N/A 64,000 — 64,000 Trademarks N/A 36 — 36 Israeli Codes (ii) 25 298 (4) 294 $ 73,502 $ (1,182) $ 72,320 (i) Software amortizes using a double declining method. (ii) The Israeli Codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities specified above. |
Schedule of Goodwill | As of December 31, 2019 Additions Impairment charges Effect of foreign exchange As of June 30, 2020 OGBC $ 302 $ — $ — $ (13) $ 289 Peace Naturals 1,078 — — (45) 1,033 Redwood 213,414 — (35,000) — 178,414 $ 214,794 $ — $ (35,000) $ (58) $ 179,736 |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Schedule of General and Administrative Expenses | General and administrative expense are comprised of the following items: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Salaries and wages $ 6,337 $ 3,354 $ 13,803 $ 5,348 Professional and consulting 3,263 5,051 8,849 7,254 Office and general 3,545 2,622 6,620 5,523 Review costs related to restatement of 2019 interim financial statements (i) 3,459 — 7,866 — Other 1,833 461 5,058 656 Total $ 18,437 $ 11,488 $ 42,196 $ 18,781 (i) These financial statement review costs include costs related to the restatement of the Company’s 2019 interim financial statements and costs related to the Company’s responses to request for information from various regulatory authorities relating to such restatement. |
Share-based Payments (Tables)
Share-based Payments (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Share-based Payment Arrangement [Abstract] | |
Summary of Changes in Warrants and DSUs | The following is a summary of the changes in warrants during the six months ended June 30, 2020 and 2019: Weighted average exercise price (C$) Number of warrants Balance as of January 1, 2020 $ 0.26 $ 18,066,662 Balance as of June 30, 2020 $ 0.26 $ 18,066,662 Balance as of January 1, 2019 $ 0.26 $ 25,457,623 Exercise of warrants 0.36 (7,390,961) Balance as of June 30, 2019 $ 0.22 $ 18,066,662 The following is a summary of the changes in DSUs from January 1, 2020 to June 30, 2020: Number of DSUs Financial liability Balance as of January 1, 2020 33,397 $ 255 Liabilities settled (8,484) (46) Loss (gain) on revaluation — (56) Balance as of June 30, 2020 24,913 $ 153 |
Summary of Outstanding Warrants | As of June 30, 2020, the Company had outstanding warrants as follows. For a description of the Altria Warrant, see Note 11. Grant Date Expiry date Weighted average exercise price (C$) Number of warrants October 8 – 28, 2015 October 8 – 28, 2020 $ 0.31 $ 2,976,610 May 13 – 27, 2016 May 13 – 27, 2021 0.25 15,090,052 As of June 30, 2020 $ 0.26 $ 18,066,662 |
Summary of the Changes in Options | The following is a summary of the changes during the six months ended June 30, 2020 and 2019: Weighted average exercise price (C$) Number of options Weighted average remaining contractual term (years) Balance as of January 1, 2020 $ 4.84 14,149,502 2.56 Exercise of options 2.05 (1,807,909) Cancellation, forfeiture and expiry of options 15.78 (127,045) Balance as of June 30, 2020 $ 5.13 12,214,548 2.05 Exercisable at June 30, 2020 3.42 8,688,645 1.78 Balance as of January 1, 2019 $ 2.99 12,902,995 3.35 Issuance of options 20.81 1,315,787 Exercise of options 3.76 (227,342) Cancellation, forfeiture and expiry of options 1.63 (2,895) Balance as of June 30, 2019 $ 4.66 13,988,545 3.04 Exercisable as of June 30, 2019 2.40 6,580,238 2.69 |
Summary of Fair Value of Options Issued | The fair value of the options issued was determined using the Black-Scholes option pricing model, using the following inputs: For the six months ended June 30, 2019 Share price at grant date (per share) C$20.65 - C$24.75 Exercise price (per option) C$20.65 - C$24.75 Risk-free interest rate 1.51% - 1.62% Expected life of options (in years) 5 Expected annualized volatility 80% Expected dividend yield —% Weighted average Black-Scholes value at grant date (per option) C$13.29 - C$15.91 Forfeiture rate —% |
Summary of Restricted Share Units Activity | The following is a summary of the changes in RSUs from January 1, 2020 to June 30, 2020: Number of RSUs Share-based reserve Balance as of January 1, 2020 732,972 $ 889 Issuance of RSUs 279,277 — Vesting of issued RSUs — 1,482 Balance as of June 30, 2020 1,012,249 $ 2,371 |
Earnings (loss) Per Share (Tabl
Earnings (loss) Per Share (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | Basic and diluted earnings (loss) per share are calculated using the following numerators and denominators: For the three months ended June 30, For the six months ended June 30, 2020 2019 2020 2019 Basic earnings per share computation Net income (loss) attributable to common shareholders of Cronos Group $ (106,977) $ 185,999 $ (30,937) $ 500,090 Weighted average number of common shares outstanding 349,075,408 334,665,873 348,946,439 317,940,749 Basic earnings per share $ (0.31) $ 0.56 $ (0.09) $ 1.57 Diluted earnings per share computation (i) Net income (loss) used in the computation of basic earnings per share $ (106,977) $ 185,999 $ (30,937) $ 500,090 Adjustment for gain (loss) on revaluation of derivative liabilities (729) (126,032) (729) (350,758) Net income (loss) used in the computation of diluted income per share $ (107,706) $ 59,967 $ (31,666) $ 149,332 Weighted average number of common shares outstanding used in the computation of basic earnings per share 349,075,408 334,665,873 348,946,439 317,940,749 Dilutive effect of warrants (i) — 19,287,262 — 21,239,056 Dilutive effect of stock options (i) — 10,992,464 — 11,291,914 Dilutive effect of restricted share units (i) — — — — Dilutive effect of Altria Warrant (i) — 9,100,465 — 13,633,605 Dilutive effect of Top-up Rights – exercised and exercisable fixed price (i) — 630,531 — 766,769 Weighted average number of common shares for computation of diluted income (loss) per share 349,075,408 374,676,595 348,946.439 364,872,093 Diluted earnings per share $ (0.31) $ 0.16 $ (0.09) $ 0.41 (i) In computing diluted earnings per share, incremental common shares are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. |
Schedule of Antidilutive Securities Excluded from Computation of Diluted Shares Outstanding | The following securities were not included in the computation of diluted shares outstanding because the effect would be anti-dilutive or because conditions for contingently issuable shares were not satisfied at the end of the reporting periods. Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Ginkgo Equity Milestones 14,674,904 14,674,904 14,674,904 14,674,904 Pre-emptive Rights 12,006,740 12,006,740 12,006,740 12,006,740 Top-up Rights – fixed price 26,686,413 — 26,686,413 — Top-up Rights – market price 1,941,349 25,150,434 1,941,349 25,150,434 Altria Warrant 77,752,533 1,076,553 77,752,533 1,076,553 Stock options 10,495,235 51,830 10,547,256 51,830 Warrants 17,536,558 — 17,521,903 — Restricted share units 1,012,249 — 1,012,249 — Total anti-dilutive securities 162,091,326 52,960,461 162,158,002 52,960,461 |
Segment Information (Tables)
Segment Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Data | Segment data was as follows for the three months ended June 30, 2020: Three months ended June 30, 2020 United States Rest of World Corporate Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 5,674 $ — $ 5,674 Cannabis extracts 2,174 1,917 — 4,091 Other — 118 — 118 Net revenue $ 2,174 $ 7,709 $ — $ 9,883 Share of loss from investments in equity accounted investees $ — $ 794 $ — $ 794 Interest income 8 3,811 (2) 3,817 Interest expense — (83) — (83) Interest income, net $ 8 $ 3,728 $ (2) $ 3,734 Impairment loss on goodwill and intangible assets 40,000 $ — $ — $ 40,000 Depreciation and amortization 36 654 (6) 684 Income tax expense — — — — Net income (loss) (47,762) (52,899) (7,042) (107,703) Segment data was as follows for the six months ended June 30, 2020: Six months ended June 30, 2020 United States Rest of World Corporate Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 8,415 $ — $ 8,415 Cannabis extracts 4,350 5,317 — 9,667 Other — 233 — 233 Net revenue $ 4,350 $ 13,965 $ — $ 18,315 Share of loss from investments in equity accounted investees $ — $ 1,966 $ — $ 1,966 Interest income 13 11,562 — 11,575 Interest expense — (90) — (90) Interest income, net $ 13 $ 11,472 $ — $ 11,485 Impairment loss on goodwill and intangible assets 40,000 $ — $ — $ 40,000 Depreciation and amortization 69 1,302 — 1,371 Income tax expense — — — — Net income (loss) (57,567) 39,257 (13,712) (32,022) Consolidated balance sheets Total assets $ 250,470 $ 348,569 $ 1,311,248 $ 1,910,287 Investments in equity accounted investees — 933 — 933 Goodwill 178,414 1,322 — 179,736 Purchase of property, plant and equipment, net 219 13,125 — 13,344 Sources of net revenue for the three and six months ended June 30, 2020 and 2019 were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Cannabis flower 5,674 6,096 $ 8,415 $ 7,921 Cannabis extracts 4,091 1,535 9,667 2,638 Other 118 22 233 98 Net revenue $ 9,883 $ 7,653 $ 18,315 $ 10,657 |
Schedule of Revenue from External Customers by Geographic Areas | Net revenue attributed to a geographic region based on the location of the customer were as follows: Three months ended June 30, Six months ended June 30, 2020 2019 2020 2019 Canada 7,416 7,340 $ 13,507 $ 10,323 United States 2,174 — 4,350 — Other countries 293 313 458 334 Total $ 9,883 $ 7,653 $ 18,315 $ 10,657 |
Schedule of Long-lived Assets by Geographic Areas | Property, plant and equipment assets were physically located in the following geographic regions: As of June 30, 2020 As of December 31, 2019 Canada $ 140,357 $ 141,021 United States 2,253 2,103 Other countries 21,680 18,685 Total $ 164,290 $ 161,809 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Fair Value Disclosures [Abstract] | |
Schedule of Fair Value, Assets and Liabilities Measured on Recurring Basis | The following tables present information about the Company’s assets that are measured at fair value on a recurring basis as of June 30, 2020 and December 31 2019, and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. June 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,109,700 $ — $ — $ 1,109,700 Short-term investments 213,614 — — 213,614 Derivative liabilities — — 205,714 205,714 December 31, 2019 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,199,693 $ — $ — $ 1,199,693 Short-term investments 306,347 — — 306,347 Derivative liabilities — — 297,160 297,160 |
Supplementary Cash Flow Infor_2
Supplementary Cash Flow Information (Tables) | 6 Months Ended |
Jun. 30, 2020 | |
Supplemental Cash Flow Elements [Abstract] | |
Schedule of Net Changes in Non-Cash Working Capital | The net changes in non-cash working capital items are as follows: For the six months ended June 30, 2020 2019 Accounts receivable $ 1,161 $ (3,986) Other receivables (2,336) (7,681) Prepaids and other assets 1,568 (2,564) Inventory (23,913) (15,105) Accounts payable and other liabilities (6,985) 9,877 Cumulative effect from foreign exchange (65) (2,132) Total $ (30,570) $ (21,591) |
Background (Details)
Background (Details) | Jun. 30, 2020brandventurecontinent |
Schedule of Equity Method Investments [Line Items] | |
Number of continents with international production and distribution | continent | 5 |
Number of adult-use brands | 2 |
Number of hemp-derived cannabidiol personal care brands | 2 |
Number of strategic joint ventures | venture | 4 |
Cronos Australia | |
Schedule of Equity Method Investments [Line Items] | |
Ownership percentage | 31.00% |
Summary of Significant Accoun_4
Summary of Significant Accounting Policies (Details) | 6 Months Ended |
Jun. 30, 2020reportingUnit | |
Subsidiary or Equity Method Investee [Line Items] | |
Number of reporting units for impairment testing | 2 |
Cronos Israel G.S. Cultivations Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 70.00% |
Cronos Israel G.S. Manufacturing Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 90.00% |
Cronos Israel G.S. Store Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 90.00% |
Cronos Israel G.S. Pharmacies Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 90.00% |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable | [1] | $ 3,477 | $ 4,638 |
Current expected credit loss | $ 80 | $ 136 | |
[1] | Net of current expected credit loss allowance of $80 as of June 30, 2020 (December 31, 2019 – $136) |
Inventory (Details)
Inventory (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Inventory [Line Items] | |||||
Raw materials | $ 5,488,000 | $ 2,469,000 | $ 5,488,000 | $ 2,469,000 | |
Supplies and consumables | 525,000 | 1,639,000 | 525,000 | 1,639,000 | |
Total | 53,216,000 | 38,043,000 | 53,216,000 | 38,043,000 | $ 38,043,000 |
Inventory write-down | 3,062,000 | 0 | 11,024,000 | 0 | |
Dry Cannabis | |||||
Inventory [Line Items] | |||||
Work-in-progress | 21,772,000 | 11,538,000 | 21,772,000 | 11,538,000 | |
Finished goods | 4,505,000 | 1,798,000 | 4,505,000 | 1,798,000 | |
Cannabis Extracts | |||||
Inventory [Line Items] | |||||
Work-in-progress | 19,210,000 | 17,975,000 | 19,210,000 | 17,975,000 | |
Finished goods | $ 1,716,000 | $ 2,624,000 | $ 1,716,000 | $ 2,624,000 |
Investments and Advances to J_3
Investments and Advances to Joint Ventures - Narrative (Details) ₪ in Thousands, $ in Thousands | Apr. 01, 2020ILS (₪) | Jun. 14, 2018 | Mar. 13, 2018 | Jun. 30, 2020ILS (₪) | Jun. 30, 2020USD ($) | Apr. 01, 2020USD ($) |
Cronos GrowCo | Variable Interest Entity, Not Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Ownership percentage | 50.00% | |||||
Natuera | Variable Interest Entity, Not Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Ownership percentage | 50.00% | |||||
MedMen Canada | Variable Interest Entity, Not Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Ownership percentage | 50.00% | |||||
Cannasoul | Establishment of a Commercial Cannabis Analytical Testing Laboratory | Variable Interest Entity, Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
Collaboration agreement, amount of advances | ₪ 8,297 | $ 2,446 | ||||
Collaboration agreement, term of agreement | 2 years | |||||
Interest rate | 3.50% | 3.50% | ||||
Collaboration agreement, percentage of profits to be received | 70.00% | 70.00% | ||||
Collaboration agreement, profits to be received, maximum percentage of amounts advanced | 150.00% | 150.00% | ||||
Collaboration agreement, percentage of profits to be received, triggering event, subsequent to maximum percentage of amounts advanced being met | 50.00% | 50.00% | ||||
Maximum loss exposure | ₪ 8,297 | |||||
Cannasoul | Establishment of a Commercial Cannabis Analytical Testing Laboratory | Variable Interest Entity, Primary Beneficiary | Cannasoul Collaboration Loan | Loans Receivable | ||||||
Variable Interest Entity [Line Items] | ||||||
Collaboration agreement, amount of advances | ₪ 8,297 | $ 2,446 | ||||
Collaboration agreement, term of agreement | 2 years | |||||
Interest rate | 3.50% | 3.50% | ||||
Minimum | MedMen Canada | Variable Interest Entity, Not Primary Beneficiary | ||||||
Variable Interest Entity [Line Items] | ||||||
License term | 20 years |
Investments and Advances to J_4
Investments and Advances to Joint Ventures - Schedule of Equity Method Investments (Details) - USD ($) | Nov. 07, 2019 | Nov. 06, 2019 | Oct. 25, 2019 | Jun. 14, 2018 | Mar. 13, 2018 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 |
Schedule of Equity Method Investments [Line Items] | ||||||||||
Investments in equity accounted investees | $ 933,000 | $ 933,000 | $ 557,000 | |||||||
Share of earnings (loss) from investments in equity accounted investees | (794,000) | $ (741,000) | (1,966,000) | $ (939,000) | ||||||
IPO | Cronos Australia | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Sale of stock, number of shares issued in transaction (in shares) | 40,000,000 | |||||||||
Sale of stock, price per share (in aud per share) | $ 0.50 | |||||||||
Whistler | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Share of earnings (loss) from investments in equity accounted investees | $ 0 | 0 | $ 0 | 29,000 | ||||||
Cronos Australia | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage (Whistler - less than) | 31.00% | 31.00% | ||||||||
Investments in equity accounted investees | $ 0 | $ 0 | (346,000) | |||||||
Share of earnings (loss) from investments in equity accounted investees | (235,000) | (397,000) | (235,000) | (641,000) | ||||||
Share of accumulated net losses in excess of its equity investment and advances | $ 512,000 | 0 | $ 512,000 | 0 | ||||||
Cronos Australia | Variable Interest Entity, Not Primary Beneficiary | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 31.00% | 50.00% | ||||||||
Cronos GrowCo | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage (Whistler - less than) | 50.00% | 50.00% | ||||||||
Investments in equity accounted investees | $ 933,000 | $ 933,000 | 1,501,000 | |||||||
Share of earnings (loss) from investments in equity accounted investees | $ (190,000) | (38,000) | $ (501,000) | (27,000) | ||||||
Cronos GrowCo | Variable Interest Entity, Not Primary Beneficiary | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 50.00% | |||||||||
MedMen Canada | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage (Whistler - less than) | 50.00% | 50.00% | ||||||||
Investments in equity accounted investees | $ 0 | $ 0 | 0 | |||||||
Share of earnings (loss) from investments in equity accounted investees | $ 0 | (2,000) | $ 0 | 4,000 | ||||||
MedMen Canada | Variable Interest Entity, Not Primary Beneficiary | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 50.00% | |||||||||
Natuera | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage (Whistler - less than) | 50.00% | 50.00% | ||||||||
Investments in equity accounted investees | $ 0 | $ 0 | $ (598,000) | |||||||
Share of earnings (loss) from investments in equity accounted investees | $ (369,000) | $ (304,000) | $ (1,230,000) | $ (304,000) | ||||||
Natuera | Variable Interest Entity, Not Primary Beneficiary | ||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||
Ownership percentage | 50.00% |
Investments and Advances to J_5
Investments and Advances to Joint Ventures - Schedule of Advances to Joint Ventures (Details) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |
Jun. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Jun. 30, 2020AUD ($) | |
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||||
Balance at beginning of period | $ 19,437,000 | $ 4,689,000 | ||
Credit loss allowance | 0 | |||
Advances (repayments) | 15,135,000 | |||
Advances to joint ventures recovered from (applied to) carrying amount of investments | (946,000) | |||
Effect from foreign exchange | (839,000) | 559,000 | ||
Balance at end of period | $ 18,598,000 | 18,598,000 | 19,437,000 | |
MedMen Canada | ||||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||||
Balance at beginning of period | 471,000 | 1,244,000 | ||
Credit loss allowance | 0 | |||
Advances (repayments) | (852,000) | |||
Advances to joint ventures recovered from (applied to) carrying amount of investments | 35,000 | |||
Effect from foreign exchange | (20,000) | 44,000 | ||
Balance at end of period | 451,000 | 451,000 | 471,000 | |
Cronos GrowCo | ||||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||||
Balance at beginning of period | 18,966,000 | 2,970,000 | ||
Credit loss allowance | 917,000 | 0 | ||
Advances (repayments) | 15,494,000 | |||
Advances to joint ventures recovered from (applied to) carrying amount of investments | 22,000 | |||
Effect from foreign exchange | (819,000) | 480,000 | ||
Balance at end of period | 18,147,000 | 18,147,000 | 18,966,000 | |
Cronos Australia | ||||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||||
Balance at beginning of period | 0 | 475,000 | ||
Credit loss allowance | 0 | |||
Advances (repayments) | 274,000 | |||
Advances to joint ventures recovered from (applied to) carrying amount of investments | (779,000) | |||
Effect from foreign exchange | 0 | 30,000 | ||
Balance at end of period | 0 | 0 | 0 | |
Face amount | $ 1,500,000 | |||
Interest rate | 12.00% | |||
Additional interest rate if past due | 2.00% | |||
Natuera | ||||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | ||||
Balance at beginning of period | 0 | 0 | ||
Credit loss allowance | 0 | |||
Advances (repayments) | 219,000 | |||
Advances to joint ventures recovered from (applied to) carrying amount of investments | (224,000) | |||
Effect from foreign exchange | 0 | 5,000 | ||
Balance at end of period | $ 0 | $ 0 | $ 0 |
Other Investments (Details)
Other Investments (Details) - Equity Securities $ in Thousands | Mar. 04, 2019shares | Jun. 30, 2020dmilestoneshares | Jun. 30, 2019USD ($)shares |
Whistler | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Number of milestones remaining | milestone | 1 | ||
Number of shares sold (in shares) | 2,563 | ||
Shares sold, percentage of shares issued and outstanding | 19.00% | ||
Aurora | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Shares received (in shares) | 2,524,341 | 578,101 | |
Proceeds from sale of equity securities, FV-NI | $ | $ 19,259 | ||
Stock issued during period, new issues, measurement input | d | 5 | ||
Number of shares sold (in shares) | 2,524,341 | ||
Canopy | |||
Debt and Equity Securities, FV-NI [Line Items] | |||
Proceeds from sale of equity securities, FV-NI | $ | $ 355 | ||
Number of shares sold (in shares) | 11,062 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Apr. 01, 2020 | Jan. 01, 2020 | Apr. 01, 2019 | Jan. 01, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning balance | $ 1,715,268 | $ 713,345 | $ 1,749,030 | $ 148,549 | ||||
Ending balance | 1,663,045 | 921,058 | 1,663,045 | 921,058 | ||||
Accumulated other comprehensive income (loss) | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (85,877) | (5,975) | 27,838 | (9,870) | ||||
Ending balance | (33,970) | 11,973 | (33,970) | 11,973 | ||||
Net unrealized gain (loss) on revaluation and disposal of other investments | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning balance | 5 | 5 | 5 | 5 | ||||
Ending balance | 5 | 5 | 5 | 5 | ||||
Net unrealized gain (loss) on revaluation and disposal of other investments | Accounting Standards Update 2016-01 | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Cumulative effect from adoption of ASU 2016-01 | $ 0 | $ 0 | $ 0 | $ 0 | ||||
Net foreign exchange gain (loss) on translation | ||||||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||||||
Beginning balance | (85,882) | (5,980) | 27,833 | (9,875) | ||||
Net unrealized (loss) gain | 51,907 | 17,948 | (61,808) | 21,843 | ||||
Ending balance | $ (33,975) | $ 11,968 | $ (33,975) | $ 11,968 |
Leases (Details)
Leases (Details) | 6 Months Ended |
Jun. 30, 2020lease | |
Land, Buildings and Equipment | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term | 15 years |
Operating lease, extension term (up to) | 10 years |
Building | |
Lessee, Lease, Description [Line Items] | |
Operating lease, number of contracts | 2 |
Minimum | Land, Buildings and Equipment | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term | 3 years |
Maximum | Land, Buildings and Equipment | |
Lessee, Lease, Description [Line Items] | |
Operating lease, term | 6 years |
Loans Receivable, net (Details)
Loans Receivable, net (Details) ₪ in Thousands | Apr. 01, 2020USD ($) | Jun. 28, 2019USD ($) | Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2020CAD ($) | Jun. 30, 2020ILS (₪) | Apr. 01, 2020ILS (₪) | Dec. 31, 2019USD ($) | Sep. 27, 2019USD ($) | Aug. 23, 2019USD ($) | Aug. 23, 2019CAD ($) | Jun. 28, 2019CAD ($) |
Current portion | |||||||||||||
Total current portion of loans receivable | $ 4,458,000 | $ 4,664,000 | |||||||||||
Long term portion | |||||||||||||
Total long-term portion of loans receivable | 65,371,000 | 44,967,000 | |||||||||||
Draw downs | 23,974,000 | $ 12,222,000 | |||||||||||
Establishment of a Commercial Cannabis Analytical Testing Laboratory | Cannasoul | Variable Interest Entity, Primary Beneficiary | |||||||||||||
Long term portion | |||||||||||||
Collaboration agreement, amount of advances | $ 2,446,000 | ₪ 8,297 | |||||||||||
Collaboration agreement, term of agreement | 2 years | ||||||||||||
Interest rate | 3.50% | 3.50% | |||||||||||
Mucci | Cronos GrowCo | |||||||||||||
Long term portion | |||||||||||||
Ownership interest | 50.00% | 50.00% | |||||||||||
Loans Receivable | |||||||||||||
Current portion | |||||||||||||
Add: Accrued interest | $ 0 | 89,000 | |||||||||||
Total current portion of loans receivable | 4,458,000 | 4,664,000 | |||||||||||
Long term portion | |||||||||||||
Add: Accrued interest | 1,822,000 | 702,000 | |||||||||||
Total long-term portion of loans receivable | 65,371,000 | 44,967,000 | |||||||||||
Total loans receivable | 69,829,000 | 49,631,000 | |||||||||||
NatuEra Series A Loan | Loans Receivable | |||||||||||||
Current portion | |||||||||||||
Current portion of loans receivable, before accrued interest | 2,984,000 | 4,575,000 | |||||||||||
Long term portion | |||||||||||||
Face amount | $ 4,575,000 | ||||||||||||
Total aggregate principal amount | $ 9,150,000 | ||||||||||||
Funding commitment percentage | 50.00% | ||||||||||||
Stated interest rate | 5.67% | ||||||||||||
Allowance for credit loss | 1,591,000 | ||||||||||||
NatuEra Series A Loan | Loans Receivable | Natuera | |||||||||||||
Long term portion | |||||||||||||
Funding commitment percentage | 50.00% | ||||||||||||
Cronos GrowCo Credit Facility | Loans Receivable | |||||||||||||
Current portion | |||||||||||||
Current portion of loans receivable, before accrued interest | 1,474,000 | 0 | |||||||||||
Long term portion | |||||||||||||
Long term portion of loans receivable, before accrued interest | 50,582,000 | 31,678,000 | |||||||||||
Face amount | $ 73,660,000 | $ 100,000,000 | |||||||||||
Allowance for credit loss | 1,089,000 | ||||||||||||
Draw downs | $ 53,145,000 | $ 72,150,000 | |||||||||||
2645485 Ontario Inc. Mucci Promissory Note | Loans Receivable | |||||||||||||
Long term portion | |||||||||||||
Long term portion of loans receivable, before accrued interest | 11,793,000 | 12,587,000 | |||||||||||
Face amount | $ 12,043,000 | $ 16,350,000 | |||||||||||
Stated interest rate | 3.95% | 3.95% | |||||||||||
Allowance for credit loss | 250,000 | ||||||||||||
Due on demand, term | 90 days | ||||||||||||
Due on demand, intended demand term, minimum | 12 months | ||||||||||||
Cannasoul Collaboration Loan | Loans Receivable | |||||||||||||
Long term portion | |||||||||||||
Long term portion of loans receivable, before accrued interest | 1,174,000 | $ 0 | |||||||||||
Cannasoul Collaboration Loan | Loans Receivable | Establishment of a Commercial Cannabis Analytical Testing Laboratory | Cannasoul | Variable Interest Entity, Primary Beneficiary | |||||||||||||
Long term portion | |||||||||||||
Allowance for credit loss | 24,000 | ||||||||||||
Collaboration agreement, amount of advances | $ 2,446,000 | ₪ 8,297 | |||||||||||
Collaboration agreement, term of agreement | 2 years | ||||||||||||
Interest rate | 3.50% | 3.50% | |||||||||||
Collaborative arrangement, installment received | $ 1,198,000 | ₪ 4,149 |
Derivative Liabilities - Narrat
Derivative Liabilities - Narrative (Details) $ in Thousands | Mar. 08, 2019daywarrant$ / sharesshares | Jun. 30, 2020USD ($)shares | Jun. 30, 2020USD ($)shares |
Derivative [Line Items] | |||
Gain on revaluation | $ (35,880) | $ 77,488 | |
Altria Group, Inc. | Cronos Group, Inc. | |||
Derivative [Line Items] | |||
Ownership percentage | 45.00% | ||
Altria Investment | |||
Derivative [Line Items] | |||
Shares issued (in shares) | shares | 149,831,154 | ||
Cronos Group, Inc. | Altria Group, Inc. | |||
Derivative [Line Items] | |||
Ownership percentage, if warrant exercised | 55.00% | ||
Altria Investment | |||
Derivative [Line Items] | |||
Maximum additional subscription percentage | 10.00% | ||
Derivative liability, additional subscription (in shares) | shares | 77,800,000 | 77,800,000 | |
Altria Warrant | |||
Derivative [Line Items] | |||
Exercise price (in dollars per share) | $ / shares | $ 19 | ||
Gain on revaluation | $ (30,052) | $ 58,052 | |
Pre-emptive Rights | |||
Derivative [Line Items] | |||
Exercise price (in dollars per share) | $ / shares | $ 16.25 | ||
Exercise rights, minimum ownership percentage | 20.00% | ||
Gain on revaluation | (2,610) | (3,925) | |
Top-up Rights | |||
Derivative [Line Items] | |||
Exercise price (in dollars per share) | $ / shares | $ 16.25 | ||
Exercise rights, minimum ownership percentage | 20.00% | ||
Exercise price, volume-weighted average price, measurement period | 10 days | ||
Exercise price, volume-weighted average price, measurement period, days preceding exercise | day | 10 | ||
Derivative transaction costs | 22,355 | ||
Gain on revaluation | $ (3,218) | $ 23,361 | |
Altria Warrant | Cronos Group, Inc. | |||
Derivative [Line Items] | |||
Number of warrants issued | warrant | 1 |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Reconciliation of Carrying Amounts (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended |
Jun. 30, 2020 | Jun. 30, 2020 | |
Derivative Instruments [Roll Forward] | ||
Beginning balance | $ 166,176 | $ 297,160 |
(Gain) / Loss on revaluation | 35,880 | (77,488) |
Exercise of Rights | (727) | (727) |
Effect from foreign exchange | 5,112 | (13,231) |
Ending balance | 205,714 | 205,714 |
Altria Warrant | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 132,366 | 234,428 |
(Gain) / Loss on revaluation | 30,052 | (58,052) |
Exercise of Rights | 0 | 0 |
Effect from foreign exchange | 3,540 | (10,418) |
Ending balance | 165,958 | 165,958 |
Pre-emptive Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 13,070 | 12,787 |
(Gain) / Loss on revaluation | 2,610 | 3,925 |
Exercise of Rights | 0 | 0 |
Effect from foreign exchange | 500 | (532) |
Ending balance | 16,180 | 16,180 |
Top-up Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 20,740 | 49,945 |
(Gain) / Loss on revaluation | 3,218 | (23,361) |
Exercise of Rights | (727) | (727) |
Effect from foreign exchange | 1,072 | (2,281) |
Ending balance | $ 23,576 | $ 23,576 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Fair Values of Derivative Liabilities (Details) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020$ / shares | Dec. 31, 2019$ / shares | |
Altria Warrant | Share price at valuation date (per share in C$) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 8.18 | 9.97 |
Altria Warrant | Subscription price (per share in C$) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 19 | 19 |
Altria Warrant | Expected annualized volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.91 | 0.82 |
Altria Warrant | Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0 | 0 |
Altria Warrant | Weighted Average | Weighted average risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.0030 | 0.0169 |
Altria Warrant | Weighted Average | Weight average expected life (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 2 years 8 months 4 days | 3 years 2 months 4 days |
Pre-emptive Rights | Share price at valuation date (per share in C$) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 8.18 | 9.97 |
Pre-emptive Rights | Subscription price (per share in C$) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 16.25 | 16.25 |
Pre-emptive Rights | Expected annualized volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.91 | 0.82 |
Pre-emptive Rights | Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0 | 0 |
Pre-emptive Rights | Weighted Average | Weighted average risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.0029 | 0.0173 |
Pre-emptive Rights | Weighted Average | Weight average expected life (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 2 years | 1 year 3 months |
Top-up Rights | Share price at valuation date (per share in C$) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 8.18 | 9.97 |
Top-up Rights | Subscription price (per share in C$) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 16.25 | 16.25 |
Top-up Rights | Expected annualized volatility | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.91 | 0.82 |
Top-up Rights | Expected dividend yield | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0 | 0 |
Top-up Rights | Weighted Average | Weighted average risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.0026 | 0.0171 |
Top-up Rights | Weighted Average | Weight average expected life (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 1 year 1 month 9 days | 1 year 7 months 28 days |
Pre-emptive Rights and Top-up Rights | Minimum | Weighted average risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.0021 | 0.0166 |
Pre-emptive Rights and Top-up Rights | Minimum | Weight average expected life (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 3 months | 3 months |
Pre-emptive Rights and Top-up Rights | Maximum | Weighted average risk-free interest rate | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 0.0061 | 0.0173 |
Pre-emptive Rights and Top-up Rights | Maximum | Weight average expected life (in years) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 5 years 6 months | 6 years |
Derivative Liabilities - Sche_3
Derivative Liabilities - Schedule of Sensitivity Analysis (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Altria Warrant | ||
Sensitivity Analysis, Impact of 10 Percent Decrease (Increase) on Net Income (Loss) [Abstract] | ||
Share price | $ 26,300 | $ 36,436 |
Weighted average expected life | 14,249 | 17,471 |
Expected annualized volatility | 27,711 | 33,343 |
Pre-emptive Rights | ||
Sensitivity Analysis, Impact of 10 Percent Decrease (Increase) on Net Income (Loss) [Abstract] | ||
Share price | 2,779 | 2,743 |
Weighted average expected life | 1,744 | 2,366 |
Expected annualized volatility | 2,652 | 2,180 |
Top-up Rights | ||
Sensitivity Analysis, Impact of 10 Percent Decrease (Increase) on Net Income (Loss) [Abstract] | ||
Share price | 4,939 | 9,577 |
Weighted average expected life | 1,272 | 2,178 |
Expected annualized volatility | $ 4,769 | $ 7,714 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation | $ (13,666,000) | $ (9,443,000) | |
Total | 164,290,000 | 161,809,000 | |
Depreciation expense included in costs of sales | 759,000 | $ 448,000 | |
Depreciation expense included in operating expenses | 1,025,000 | 425,000 | |
Interest costs capitalized | 0 | $ 367,000 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 3,618,000 | 3,727,000 | |
Office Premises | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 146,685,000 | 150,324,000 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 11,394,000 | 10,156,000 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 651,000 | 687,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 3,116,000 | 2,789,000 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 12,492,000 | $ 3,569,000 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Narrative (Details) - USD ($) | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill, impairment loss | $ 35,000,000 | |||
Impairment loss on goodwill and intangible assets | $ 40,000,000 | $ 0 | 40,000,000 | $ 0 |
Amortization of intangible assets | 346,000 | $ 301,000 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2021 | 565,000 | 565,000 | ||
2022 | 553,000 | 553,000 | ||
2023 | 536,000 | 536,000 | ||
2024 | 520,000 | 520,000 | ||
2025 | 506,000 | 506,000 | ||
Lord Jones brand | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Impairment of intangible assets, indefinite-lived (excluding goodwill) | 5,000,000 | |||
United States | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill, impairment loss | $ 35,000,000 | |||
Software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Indefinite-lived intangible assets acquired, fair value | 2,570,000 | |||
Disposal of intangible assets | $ 37,000 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated Amortization | $ (1,475) | $ (1,182) |
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 75,874 | 73,502 |
Impairment charges | (5,000) | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | 75,874 | 73,502 |
Accumulated Amortization | (1,475) | (1,182) |
Net | 69,399 | 72,320 |
Lord Jones brand | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 64,000 | 64,000 |
Impairment charges | (5,000) | |
Net | 59,000 | 64,000 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | 64,000 | 64,000 |
Trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 140 | 36 |
Net | 140 | 36 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | 140 | 36 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Cost | 612 | 541 |
Accumulated Amortization | (298) | (202) |
Net | 314 | 339 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | $ (298) | $ (202) |
ERP System | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 5 years | |
Cost | $ 2,570 | |
Accumulated Amortization | 0 | |
Net | 2,570 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | $ 0 | |
Health Canada licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 17 years | 17 years |
Cost | $ 8,255 | $ 8,627 |
Accumulated Amortization | (1,167) | (976) |
Net | 7,088 | 7,651 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | $ (1,167) | $ (976) |
Israeli Codes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted Average Amortization Period (in years) | 25 years | 25 years |
Cost | $ 297 | $ 298 |
Accumulated Amortization | (10) | (4) |
Net | 287 | 294 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated Amortization | $ (10) | $ (4) |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands | 6 Months Ended |
Jun. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 214,794 |
Additions | 0 |
Impairment charges | (35,000) |
Effect of foreign exchange | (58) |
Balance at end of period | 179,736 |
OGBC | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 302 |
Additions | 0 |
Impairment charges | 0 |
Effect of foreign exchange | (13) |
Balance at end of period | 289 |
Peace Naturals | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 1,078 |
Additions | 0 |
Impairment charges | 0 |
Effect of foreign exchange | (45) |
Balance at end of period | 1,033 |
Redwood | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 213,414 |
Additions | 0 |
Impairment charges | (35,000) |
Effect of foreign exchange | 0 |
Balance at end of period | $ 178,414 |
General and Administrative Ex_3
General and Administrative Expenses (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Salaries and wages | $ 6,337 | $ 3,354 | $ 13,803 | $ 5,348 |
Professional and consulting | 3,263 | 5,051 | 8,849 | 7,254 |
Office and general | 3,545 | 2,622 | 6,620 | 5,523 |
Review costs related to restatement of 2019 interim financial statements | 3,459 | 0 | 7,866 | 0 |
Other | 1,833 | 461 | 5,058 | 656 |
Total | $ 18,437 | $ 11,488 | $ 42,196 | $ 18,781 |
Share-based Payments - Summary
Share-based Payments - Summary of Changes in Warrants (Details) - Warrants - $ / shares | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Weighted average exercise price (C$) | ||
Balance at beginning of period (in dollars per share) | $ 0.26 | $ 0.26 |
Exercise of warrants (in dollars per share) | 0.36 | |
Balance at end of period (in dollars per share) | $ 0.26 | $ 0.22 |
Number of awards | ||
Balance at beginning of period (in shares) | 18,066,662 | 25,457,623 |
Exercise of warrants (in shares) | (7,390,961) | |
Balance at end of period (in shares) | 18,066,662 | 18,066,662 |
Share-based Payments - Summar_2
Share-based Payments - Summary of Outstanding Warrants (Details) - Warrants - $ / shares | Jun. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average exercise price (in dollars per share) | $ 0.26 | $ 0.26 | $ 0.22 | $ 0.26 |
Number of warrants (in shares) | 18,066,662 | 18,066,662 | 18,066,662 | 25,457,623 |
October 8 – 28, 2015 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average exercise price (in dollars per share) | $ 0.31 | |||
Number of warrants (in shares) | 2,976,610 | |||
May 13 – 27, 2016 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average exercise price (in dollars per share) | $ 0.25 | |||
Number of warrants (in shares) | 15,090,052 |
Share-based Payments - Stock Op
Share-based Payments - Stock Options Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | ||||||
Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($)shares | Dec. 31, 2019shares | Jun. 30, 2019$ / sharesshares | Dec. 31, 2018shares | Jun. 28, 2018shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of options outstanding (in shares) | 12,214,548 | 12,214,548 | 14,149,502 | 13,988,545 | 12,902,995 | |||
Share-based payments | $ | $ 2,546 | $ 2,647 | $ 4,982 | $ 4,418 | ||||
Issuance of options (in shares) | 1,315,787 | |||||||
2015 Stock Option Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of options outstanding (in shares) | 10,486,569 | 10,486,569 | ||||||
2018 Stock Option Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of options outstanding (in shares) | 1,727,979 | 1,727,979 | ||||||
Issuance of options (in shares) | 0 | |||||||
2020 Omnibus Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Number of options outstanding (in shares) | 0 | 0 | ||||||
Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share-based payments | $ | $ 1,770 | $ 2,647 | $ 3,500 | $ 4,418 | ||||
Stock options | 2015 Stock Option Plan | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Future awards to be granted (in shares) | 0 | |||||||
Weighted Average | Stock options | ||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||
Share price at grant date (in dollars per share) | $ / shares | $ 13.35 |
Share-based Payments - Summar_3
Share-based Payments - Summary of the Changes in Options (Details) | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020$ / shares$ / sharesshares | Jun. 30, 2019$ / shares$ / sharesshares | Dec. 31, 2019$ / sharesshares | Dec. 31, 2018$ / sharesshares | |
Weighted average exercise price (C$) | ||||
Balance at beginning of period (in dollars per share) | $ / shares | $ 4.84 | $ 2.99 | $ 2.99 | |
Issuance of options (in dollars per share) | $ / shares | 20.81 | |||
Exercise of options (in dollars per share) | $ / shares | 2.05 | 3.76 | ||
Cancellation, forfeiture and expiry of options (in dollars per share) | $ / shares | 15.78 | 1.63 | ||
Balance at end of period (in dollars per share) | $ / shares | $ 5.13 | $ 4.66 | $ 4.84 | $ 2.99 |
Weighted average exercise price of options exercisable (in dollars per share) | $ / shares | $ 3.42 | $ 2.40 | ||
Number of options | ||||
Balance at beginning of period (in shares) | shares | 14,149,502 | 12,902,995 | 12,902,995 | |
Issuance of options (in shares) | shares | 1,315,787 | |||
Exercise of options (in shares) | shares | (1,807,909) | (227,342) | ||
Cancellation, forfeiture and expiry of options (in shares) | shares | (127,045) | (2,895) | ||
Balance at end of period (in shares) | shares | 12,214,548 | 13,988,545 | 14,149,502 | 12,902,995 |
Exercisable (in shares) | shares | 8,688,645 | 6,580,238 | ||
Weighted average remaining contractual term (years) | ||||
Outstanding | 2 years 18 days | 3 years 14 days | 2 years 6 months 21 days | 3 years 4 months 6 days |
Exercisable | 1 year 9 months 10 days | 2 years 8 months 8 days |
Share-based Payments - Summar_4
Share-based Payments - Summary of Fair Value of Options Issued (Details) - Stock options | 6 Months Ended |
Jun. 30, 2019$ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expected life of options (in years) | 5 years |
Expected annualized volatility | 80.00% |
Expected dividend yield | 0.00% |
Forfeiture rate | 0.00% |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price at grant date (in dollars per share) | $ 20.65 |
Exercise price (per option) (in dollars per share) | $ 20.65 |
Risk-free interest rate | 1.51% |
Weighted average Black-Scholes value at grant date (per option) (in dollars per share) | $ 13.29 |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price at grant date (in dollars per share) | 24.75 |
Exercise price (per option) (in dollars per share) | $ 24.75 |
Risk-free interest rate | 1.62% |
Weighted average Black-Scholes value at grant date (per option) (in dollars per share) | $ 15.91 |
Share-based Payments - Restrict
Share-based Payments - Restricted Share Units Narrative (Details) | Jul. 20, 2020shares | May 11, 2020$ / sharesshares | Sep. 05, 2019subsidiary$ / sharesshares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($)shares | Jun. 30, 2020USD ($)shares | Jun. 30, 2019USD ($)shares | May 11, 2020$ / shares | Dec. 31, 2019shares |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Share-based payments | $ | $ 2,546,000 | $ 2,647,000 | $ 4,982,000 | $ 4,418,000 | |||||
Redwood | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Number of subsidiaries acquired | subsidiary | 4 | ||||||||
Restricted share units | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Issuances (in shares) | 279,277 | 732,972 | 279,277 | 0 | |||||
Vesting rights, number of common shares per award | 1 | 1 | |||||||
Share price at grant date (in dollars per share) | (per share) | $ 5.42 | $ 15.34 | $ 7.52 | ||||||
Vesting period | 3 years | ||||||||
Share-based payments | $ | $ 776,000 | $ 0 | $ 1,482,000 | $ 0 | |||||
Outstanding awards (in shares) | 1,012,249 | 0 | 1,012,249 | 0 | 732,972 | ||||
Restricted share units | Subsequent Event | |||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||||||
Shares accelerated and vested (in shares) | 732,972 |
Share-based Payments - Summar_5
Share-based Payments - Summary of Restricted Share Units Activity (Details) - USD ($) | May 11, 2020 | Sep. 05, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 |
Share-based reserve | ||||||
Vesting of issued RSUs | $ 2,546,000 | $ 2,647,000 | $ 4,982,000 | $ 4,418,000 | ||
Restricted share units | ||||||
Number of awards | ||||||
Balance at beginning of period (in shares) | 732,972 | |||||
Issuance of RSUs (in shares) | 279,277 | 732,972 | 279,277 | 0 | ||
Balance at end of period (in shares) | 1,012,249 | 0 | 1,012,249 | 0 | ||
Share-based reserve | ||||||
Balance as of January 1, 2020 | $ 889,000 | |||||
Vesting of issued RSUs | $ 776,000 | $ 0 | 1,482,000 | $ 0 | ||
Balance as of June 30, 2020 | $ 2,371,000 | $ 2,371,000 |
Share-based Payments - Summar_6
Share-based Payments - Summary of Deferred Share Units Activity (Details) - Deferred Share Units (DSUs) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Number of awards | ||
Balance at beginning of period (in shares) | 33,397 | |
Liabilities settled (in shares) | (8,484) | |
Balance at end of period (in shares) | 24,913 | 0 |
Financial liability | ||
Balance as of January 1, 2020 | $ 255 | |
Liabilities settled | (46) | |
Loss (gain) on revaluation | (56) | |
Balance as of June 30, 2020 | $ 153 |
Share-based Payments - Deferred
Share-based Payments - Deferred Share Units Narrative (Details) - Deferred Share Units (DSUs) - shares | 6 Months Ended | ||
Jun. 30, 2019 | Jun. 30, 2020 | Dec. 31, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Issuances (in shares) | 0 | ||
Outstanding awards (in shares) | 0 | 24,913 | 33,397 |
Earnings (loss) Per Share - Sch
Earnings (loss) Per Share - Schedule of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | ||
Net Income (Loss) Available to Common Stockholders, Diluted [Abstract] | |||||
Net income (loss) attributable to common shareholders of Cronos Group | $ (106,977) | $ 185,999 | $ (30,937) | $ 500,090 | |
Weighted average number of common shares outstanding used in the computation of basic earnings per share (in shares) | 349,075,408 | 334,665,873 | 348,946,439 | 317,940,749 | |
Basic earnings per share (in dollars per share) | $ (0.31) | $ 0.56 | $ (0.09) | $ 1.57 | |
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Net income (loss) used in the computation of basic earnings per share | $ (106,977) | $ 185,999 | $ (30,937) | $ 500,090 | |
Adjustment for gain (loss) on revaluation of derivative liabilities | (729) | (126,032) | (729) | (350,758) | |
Net income (loss) used in the computation of diluted income per share | $ (107,706) | $ 59,967 | $ (31,666) | $ 149,332 | |
Weighted average number of common shares outstanding used in the computation of basic earnings per share (in shares) | 349,075,408 | 334,665,873 | 348,946,439 | 317,940,749 | |
Weighted average number of common shares for computation of diluted income (loss) per share (in shares) | [1] | 349,075,408 | 374,676,595 | 348,946,439 | 364,872,093 |
Diluted earnings per share (in dollars per share) | $ (0.31) | $ 0.16 | $ (0.09) | $ 0.41 | |
Altria Warrant | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Dilutive effect of derivative liabilities (in shares) | 0 | 9,100,465 | 0 | 13,633,605 | |
Top-up Rights | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Dilutive effect of derivative liabilities (in shares) | 0 | 630,531 | 0 | 766,769 | |
Warrants | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Dilutive effect of awards (in shares) | 0 | 19,287,262 | 0 | 21,239,056 | |
Stock options | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Dilutive effect of awards (in shares) | 0 | 10,992,464 | 0 | 11,291,914 | |
Restricted share units | |||||
Weighted Average Number of Shares Outstanding Reconciliation [Abstract] | |||||
Dilutive effect of awards (in shares) | 0 | 0 | 0 | 0 | |
[1] | In computing diluted earnings per share, incremental common shares are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. |
Earnings (loss) Per Share - S_2
Earnings (loss) Per Share - Schedule of Antidilutive Securities Excluded from Computation of Diluted Shares Outstanding (Details) - shares | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 162,091,326 | 52,960,461 | 162,158,002 | 52,960,461 |
Ginkgo Equity Milestones | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 14,674,904 | 14,674,904 | 14,674,904 | 14,674,904 |
Pre-emptive Rights | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 12,006,740 | 12,006,740 | 12,006,740 | 12,006,740 |
Top-up Rights – fixed price | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 26,686,413 | 0 | 26,686,413 | 0 |
Top-up Rights – market price | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 1,941,349 | 25,150,434 | 1,941,349 | 25,150,434 |
Altria Warrant | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 77,752,533 | 1,076,553 | 77,752,533 | 1,076,553 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 10,495,235 | 51,830 | 10,547,256 | 51,830 |
Warrants | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 17,536,558 | 0 | 17,521,903 | 0 |
Restricted share units | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 1,012,249 | 0 | 1,012,249 | 0 |
Related Party Transactions an_2
Related Party Transactions and Balances (Details) - USD ($) | 3 Months Ended | 6 Months Ended | 12 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | Mar. 08, 2019 | |
Cronos Group, Inc. | Altria Group, Inc. | ||||||
Related Party Transaction [Line Items] | ||||||
Ownership percentage | 45.00% | |||||
Altria Pinnacle LLC. | Consulting Services | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Consulting fees | $ 281,000 | $ 0 | $ 953,000 | $ 0 | ||
Accrual for consulting services | $ 281,000 | $ 281,000 | $ 1,152,000 | |||
Altria Pinnacle LLC. | Purchase of Machinery and Equipment | Affiliated Entity | ||||||
Related Party Transaction [Line Items] | ||||||
Purchases | $ 1,258,000 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Thousands | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020USD ($) | Jun. 30, 2019USD ($) | Jun. 30, 2020USD ($)segment | Jun. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Current expected credit loss | $ 80 | $ 80 | $ 136 | ||
Net revenue, before excise taxes | 11,432 | $ 8,064 | 20,776 | $ 11,455 | |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Current expected credit loss | 46 | 46 | 12 | ||
Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Current expected credit loss | 34 | 34 | $ 124 | ||
Four Major Customers | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue, before excise taxes | $ 7,040 | $ 11,819 | |||
Customer Concentration Risk | Revenue Benchmark | BC Liquor Distribution Branch | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 26.00% | 19.00% | |||
Customer Concentration Risk | Revenue Benchmark | Albert Gaming, Liquor and Cannabis Commission | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 19.00% | 22.00% | |||
Customer Concentration Risk | Revenue Benchmark | Ontario Cannabis Retail Corporation | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 16.00% | 13.00% | |||
Customer Concentration Risk | Revenue Benchmark | Societe Quebecoise Du Cannabis | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 12.00% | 13.00% | |||
Customer Concentration Risk | Revenue Benchmark | One Major Customer | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue, before excise taxes | 4,118 | ||||
Concentration risk, percentage | 54.00% | ||||
Customer Concentration Risk | Revenue Benchmark | Two Major Customers | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue, before excise taxes | $ 5,800 | ||||
Concentration risk, percentage | 54.00% |
Segment Information - Schedule
Segment Information - Schedule of Segment Data (Details) - USD ($) | 3 Months Ended | 6 Months Ended | |||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | $ 9,883,000 | $ 7,653,000 | $ 18,315,000 | $ 10,657,000 | |
Share of loss from investments in equity accounted investees | 794,000 | 741,000 | 1,966,000 | 939,000 | |
Interest income | 3,817,000 | 11,575,000 | |||
Interest expense | (83,000) | (90,000) | |||
Interest income, net | 3,734,000 | 9,442,000 | 11,485,000 | 11,528,000 | |
Impairment loss on goodwill and intangible assets | 40,000,000 | 0 | 40,000,000 | 0 | |
Depreciation and amortization | 684,000 | 408,000 | 1,371,000 | 726,000 | |
Income tax expense | 0 | 0 | 0 | 0 | |
Net (loss) income | (107,703,000) | 185,888,000 | (32,022,000) | 499,876,000 | |
Consolidated balance sheets | |||||
Total assets | 1,910,287,000 | 1,910,287,000 | $ 2,090,442,000 | ||
Investments in equity accounted investees | 933,000 | 933,000 | 557,000 | ||
Goodwill | 179,736,000 | 179,736,000 | $ 214,794,000 | ||
Purchase of property, plant and equipment, net | 13,344,000 | ||||
Operating Segments | United States | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 2,174,000 | 4,350,000 | |||
Share of loss from investments in equity accounted investees | 0 | 0 | |||
Interest income | 8,000 | 13,000 | |||
Interest expense | 0 | 0 | |||
Interest income, net | 8,000 | 13,000 | |||
Impairment loss on goodwill and intangible assets | 40,000,000 | 40,000,000 | |||
Depreciation and amortization | 36,000 | 69,000 | |||
Income tax expense | 0 | 0 | |||
Net (loss) income | (47,762,000) | (57,567,000) | |||
Consolidated balance sheets | |||||
Total assets | 250,470,000 | 250,470,000 | |||
Investments in equity accounted investees | 0 | 0 | |||
Goodwill | 178,414,000 | 178,414,000 | |||
Purchase of property, plant and equipment, net | 219,000 | ||||
Operating Segments | Rest of World | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 7,709,000 | 13,965,000 | |||
Share of loss from investments in equity accounted investees | 794,000 | 1,966,000 | |||
Interest income | 3,811,000 | 11,562,000 | |||
Interest expense | (83,000) | (90,000) | |||
Interest income, net | 3,728,000 | 11,472,000 | |||
Impairment loss on goodwill and intangible assets | 0 | 0 | |||
Depreciation and amortization | 654,000 | 1,302,000 | |||
Income tax expense | 0 | 0 | |||
Net (loss) income | (52,899,000) | 39,257,000 | |||
Consolidated balance sheets | |||||
Total assets | 348,569,000 | 348,569,000 | |||
Investments in equity accounted investees | 933,000 | 933,000 | |||
Goodwill | 1,322,000 | 1,322,000 | |||
Purchase of property, plant and equipment, net | 13,125,000 | ||||
Corporate | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 0 | 0 | |||
Share of loss from investments in equity accounted investees | 0 | 0 | |||
Interest income | (2,000) | 0 | |||
Interest expense | 0 | 0 | |||
Interest income, net | (2,000) | 0 | |||
Impairment loss on goodwill and intangible assets | 0 | 0 | |||
Depreciation and amortization | (6,000) | 0 | |||
Income tax expense | 0 | 0 | |||
Net (loss) income | (7,042,000) | (13,712,000) | |||
Consolidated balance sheets | |||||
Total assets | 1,311,248,000 | 1,311,248,000 | |||
Investments in equity accounted investees | 0 | 0 | |||
Goodwill | 0 | 0 | |||
Purchase of property, plant and equipment, net | 0 | ||||
Cannabis flower | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 5,674,000 | 6,096,000 | 8,415,000 | 7,921,000 | |
Cannabis flower | Operating Segments | United States | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 0 | 0 | |||
Cannabis flower | Operating Segments | Rest of World | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 5,674,000 | 8,415,000 | |||
Cannabis flower | Corporate | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 0 | 0 | |||
Cannabis extracts | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 4,091,000 | 1,535,000 | 9,667,000 | 2,638,000 | |
Cannabis extracts | Operating Segments | United States | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 2,174,000 | 4,350,000 | |||
Cannabis extracts | Operating Segments | Rest of World | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 1,917,000 | 5,317,000 | |||
Cannabis extracts | Corporate | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 0 | 0 | |||
Other | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 118,000 | $ 22,000 | 233,000 | $ 98,000 | |
Other | Operating Segments | United States | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 0 | 0 | |||
Other | Operating Segments | Rest of World | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 118,000 | 233,000 | |||
Other | Corporate | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | $ 0 | $ 0 |
Segment Information - Schedul_2
Segment Information - Schedule of Revenue from External Customers by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | $ 9,883 | $ 7,653 | $ 18,315 | $ 10,657 |
Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 7,416 | 7,340 | 13,507 | 10,323 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 2,174 | 0 | 4,350 | 0 |
Other countries | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | $ 293 | $ 313 | $ 458 | $ 334 |
Segment Information - Schedul_3
Segment Information - Schedule of Long-lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 164,290 | $ 161,809 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 140,357 | 141,021 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 2,253 | 2,103 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 21,680 | $ 18,685 |
Commitments - R&D Commitments a
Commitments - R&D Commitments and Altria Consulting Services (Details) $ in Thousands | Feb. 18, 2019 | Oct. 15, 2018USD ($) | Sep. 04, 2018USD ($)cannabinoidshares | Jul. 17, 2018USD ($) |
Ginkgo | Research and Development Arrangement | ||||
Long-term Purchase Commitment [Line Items] | ||||
Number of cannabinoids targeted to develop scalable and consistent production | cannabinoid | 8 | |||
Common shares issuable (up to) (in shares) | shares | 14,674,903 | |||
Common shares issuable, value assigned | $ 100,000 | |||
Payments subject to milestones | $ 22,000 | |||
Technion | Research and Development Arrangement | ||||
Long-term Purchase Commitment [Line Items] | ||||
Payments subject to milestones | $ 4,900 | |||
Amount of commitment | $ 1,784 | |||
Research funding period | 3 years | |||
Altria Ventures | Consulting Services Arrangement | ||||
Long-term Purchase Commitment [Line Items] | ||||
Monthly fee, percentage of direct and indirect service costs | 105.00% |
Commitments - Use of Publicity
Commitments - Use of Publicity Rights in Brand Development (Details) - Common Shares | Dec. 23, 2022 | Jun. 23, 2021 | Jan. 31, 2020 | Dec. 23, 2019USD ($)dshares | Jun. 30, 2019shares |
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | shares | 149,831,154 | ||||
Private Placements | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Shares issued (in shares) | shares | 856,017 | ||||
Stock issued during period, new issues, fair value | $ 6,000,000 | ||||
Stock issued during period, new issues, measurement input | d | 10 | ||||
Private Placements | Sale of Stock, Performance Milestone One | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Triggering event, minimum revenue | $ 50,000,000 | ||||
Triggering event, shares issued, value | 1,000,000 | ||||
Private Placements | Sale of Stock, Performance Milestone Two | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Triggering event, minimum revenue | 100,000,000 | ||||
Triggering event, shares issued, value | $ 1,000,000 | ||||
Vested on January 31, 2020 | Private Placements | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Award vesting rights, percentage | 33.33% | ||||
Vesting on June 23, 2021 | Private Placements | Forecast | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Award vesting rights, percentage | 33.33% | ||||
Vesting on December 23, 2022 | Private Placements | Forecast | |||||
Subsidiary, Sale of Stock [Line Items] | |||||
Award vesting rights, percentage | 33.33% |
Commitments - Take or Pay (Deta
Commitments - Take or Pay (Details) - Dried Cannabis Flower $ in Thousands, $ in Thousands | 1 Months Ended | |||
Jan. 31, 2020CAD ($) | Jun. 30, 2020CAD ($) | Jun. 30, 2020USD ($) | Jan. 31, 2020USD ($) | |
Recorded Unconditional Purchase Obligation [Line Items] | ||||
Take or pay supply agreement, purchase amount | $ 1,230 | $ 906 | ||
Take or pay supply agreement, term of agreement | 6 months | |||
Minimum | ||||
Recorded Unconditional Purchase Obligation [Line Items] | ||||
Take or pay supply agreement, purchase amount | $ 1,734 | $ 1,290 | ||
Maximum | ||||
Recorded Unconditional Purchase Obligation [Line Items] | ||||
Take or pay supply agreement, purchase amount | $ 4,284 | $ 3,188 |
Contingencies (Details)
Contingencies (Details) - Pending Litigation $ in Millions | Jun. 16, 2020CAD ($) | Mar. 12, 2020shareholdercomplaint |
Litigation Relating to Marketing, Distribution and Sale of Products | ||
Loss Contingencies [Line Items] | ||
Damages sought | $ 500 | |
Punitive damages sought | $ 5 | |
U.S. District Court of Eastern District of New York Vs. Cronos | ||
Loss Contingencies [Line Items] | ||
Number of alleged shareholders | shareholder | 2 | |
Number of putative class action complaints | complaint | 2 |
Financial Instruments - Credit
Financial Instruments - Credit Risk Narrative (Details) - USD ($) | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | ||
Maximum exposure to credit risk | $ 1,424,786,000 | $ 1,586,978,000 |
Accounts receivable, threshold period past due, writeoff | 120 days | |
Current expected credit loss | $ 80,000 | 136,000 |
Cash and cash equivalents | 1,109,700,000 | 1,199,693,000 |
Short-term investments | 213,614,000 | 306,347,000 |
Advances to joint ventures, allowance for credit loss | $ 0 | $ 0 |
Four Customers | Accounts Receivable | Credit Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 78.00% | |
Two Customers | Accounts Receivable | Credit Concentration Risk | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 56.00% |
Financial Instruments - Liquidi
Financial Instruments - Liquidity Risk Narrative (Details) - Accounts Payable - Supplier Concentration Risk | 6 Months Ended | 12 Months Ended |
Jun. 30, 2020 | Dec. 31, 2019 | |
One Vendor | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 14.00% | |
Three Vendors | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 42.00% |
Financial Instruments - Interes
Financial Instruments - Interest Rate Risk Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | |
Investments, All Other Investments [Abstract] | ||||
Interest income, net | $ 3,734 | $ 9,442 | $ 11,485 | $ 11,528 |
Impact of change in average variable rate, percent | (0.73%) | (1.45%) | ||
Impact of change in average variable rate, amount | $ 2,090 | $ 7,292 |
Financial Instruments - Currenc
Financial Instruments - Currency Rate Risk Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 6 Months Ended | 12 Months Ended | ||
Jun. 30, 2020 | Jun. 30, 2019 | Jun. 30, 2020 | Jun. 30, 2019 | Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |||||
Foreign exchange gain (loss) on translation | $ 51,871 | $ 17,947 | $ (61,821) | $ 21,845 | $ 21,845 |
Impact of ten percent change in exchange rate | $ 166,395 | $ 166,395 | $ 174,902 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Jun. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 1,109,700 | $ 1,199,693 |
Short-term investments | 213,614 | 306,347 |
Derivative liabilities | 205,714 | 297,160 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 1,109,700 | 1,199,693 |
Short-term investments | 213,614 | 306,347 |
Derivative liabilities | 0 | 0 |
Level 2 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Derivative liabilities | 0 | 0 |
Level 3 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 0 | 0 |
Short-term investments | 0 | 0 |
Derivative liabilities | $ 205,714 | $ 297,160 |
Supplementary Cash Flow Infor_3
Supplementary Cash Flow Information (Details) - USD ($) $ in Thousands | 6 Months Ended | |
Jun. 30, 2020 | Jun. 30, 2019 | |
Increase (Decrease) in Operating Capital [Abstract] | ||
Accounts receivable | $ 1,161 | $ (3,986) |
Other receivables | (2,336) | (7,681) |
Prepaids and other assets | 1,568 | (2,564) |
Inventory | (23,913) | (15,105) |
Accounts payable and other liabilities | (6,985) | 9,877 |
Cumulative effect from foreign exchange | (65) | (2,132) |
Total | $ (30,570) | $ (21,591) |
Non-monetary Transactions (Deta
Non-monetary Transactions (Details) | Mar. 28, 2019USD ($)transaction | Jun. 30, 2020transaction |
Nonmonetary Transaction [Line Items] | ||
Number of transactions | transaction | 0 | |
Purchased Cannabis Resin and Sold Cannabis Dry Flower | ||
Nonmonetary Transaction [Line Items] | ||
Number of transactions | transaction | 2 | |
Revenue recognized | $ | $ 0 | |
Gain (loss) recognized on transfer | $ | $ 0 |
Subsequent Events (Details)
Subsequent Events (Details) - USD ($) | Jul. 20, 2020 | Sep. 30, 2020 | Jul. 24, 2020 | Jun. 30, 2020 | Dec. 31, 2019 | Sep. 27, 2019 |
NatuEra Series A Loan | Loans Receivable | ||||||
Subsequent Event [Line Items] | ||||||
Total aggregate principal amount | $ 9,150,000 | |||||
Funding commitment percentage | 50.00% | |||||
Stated interest rate | 5.67% | |||||
Current portion of loans receivable, before accrued interest | $ 2,984,000 | $ 4,575,000 | ||||
NatuEra Series A Loan | Loans Receivable | Natuera | ||||||
Subsequent Event [Line Items] | ||||||
Funding commitment percentage | 50.00% | |||||
Subsequent Event | Restricted share units | ||||||
Subsequent Event [Line Items] | ||||||
Shares accelerated and vested (in shares) | 732,972 | |||||
Subsequent Event | Restricted share units | Forecast | ||||||
Subsequent Event [Line Items] | ||||||
Accelerated share-based compensation costs | $ 6,200,000 | |||||
Subsequent Event | NatuEra Series A Loan | Loans Receivable | ||||||
Subsequent Event [Line Items] | ||||||
Additional principal amount | $ 6,350,000 | |||||
Total aggregate principal amount | $ 15,500,000 | |||||
Funding commitment percentage | 50.00% | |||||
Stated interest rate | 5.67% | |||||
Subsequent Event | NatuEra Series A Loan | Loans Receivable | Natuera | ||||||
Subsequent Event [Line Items] | ||||||
Funding commitment percentage | 50.00% |