Cover Page
Cover Page - shares | 9 Months Ended | |
Sep. 30, 2020 | Nov. 04, 2020 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Sep. 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) | 356,186,817 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2020 | |
Document Fiscal Period Focus | Q3 | |
Entity Central Index Key | 0001656472 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | ||
Current assets | ||||
Cash and cash equivalents | $ 1,097,846 | $ 1,199,693 | ||
Short-term investments | 202,883 | 306,347 | ||
Accounts receivable | [1] | 6,086 | 4,638 | |
Other receivables | 10,401 | 7,232 | ||
Current portion of loans receivable | 7,781 | 4,664 | ||
Prepaids and other assets | 10,532 | 9,395 | ||
Inventory, net | 56,359 | 38,043 | ||
Held-for-sale assets | 2,066 | 3,248 | ||
Total current assets | 1,393,954 | 1,573,260 | ||
Investments in equity accounted investees | 19,059 | 557 | ||
Advances to joint ventures | 461 | 19,437 | ||
Loan receivable, net | 76,148 | 44,967 | ||
Property, plant and equipment | 171,404 | 159,948 | ||
Right-of-use assets | 9,840 | 6,546 | ||
Intangible assets | 68,604 | 71,235 | ||
Goodwill | 179,459 | 214,492 | ||
Total assets | 1,918,929 | 2,090,442 | ||
Current liabilities | ||||
Accounts payable and other liabilities | 39,012 | 35,301 | ||
Current portion of lease obligation | 1,274 | 427 | ||
Derivative liabilities | 102,655 | 297,160 | ||
Total current liabilities | 142,941 | 332,888 | ||
Due to non-controlling interests | 2,889 | 1,844 | ||
Lease obligation | 8,612 | 6,680 | ||
Total liabilities | 154,442 | 341,412 | ||
Commitments and contingencies | [2] | |||
Shareholders’ equity | ||||
Share capital | 566,577 | 561,165 | [3],[4] | |
Additional paid-in capital | 32,491 | 23,234 | ||
Retained earnings | 1,175,742 | 1,137,646 | ||
Accumulated other comprehensive income (loss) | (7,820) | 27,838 | ||
Total equity attributable to shareholders of Cronos Group | 1,766,990 | 1,749,883 | ||
Non-controlling interests | (2,503) | (853) | ||
Total shareholders’ equity | 1,764,487 | 1,749,030 | ||
Total liabilities and shareholders’ equity | $ 1,918,929 | $ 2,090,442 | ||
[1] | Net of current expected credit loss allowance of $64 as of September 30, 2020 (December 31, 2019 – $136) | |||
[2] | Refer to Note 19 and Note 20 in the notes to condensed consolidated financial statements. | |||
[3] | Authorized for issuance as of September 30, 2020: unlimited (December 31, 2019 – unlimited). | |||
[4] | Shares issued as of September 30, 2020: 355,733,914 (as of December 31, 2019: 348,817,472) |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheet (Parenthetical) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Statement of Financial Position [Abstract] | ||
Current expected credit loss | $ 64 | $ 136 |
Common stock, shares issued (in shares) | 355,733,914 | 348,817,472 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Net Income (Loss) and Comprehensive Income (Loss) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Income Statement [Abstract] | |||||
Net revenue, before excise taxes | $ 13,621,000 | $ 6,269,000 | $ 34,397,000 | $ 17,724,000 | |
Excise taxes | (2,263,000) | (484,000) | (4,724,000) | (1,282,000) | |
Net revenue | 11,358,000 | 5,785,000 | 29,673,000 | 16,442,000 | |
Cost of sales | 12,895,000 | 3,498,000 | 29,584,000 | 8,507,000 | |
Inventory write-down | 0 | 5,424,000 | 11,024,000 | 5,424,000 | |
Gross profit (loss) | (1,537,000) | (3,137,000) | (10,935,000) | 2,511,000 | |
Operating expenses | |||||
Sales and marketing | 7,236,000 | 4,591,000 | 20,849,000 | 9,723,000 | |
Research and development (“R&D”) | 4,734,000 | 2,605,000 | 12,955,000 | 6,076,000 | |
General and administrative | 18,860,000 | 16,202,000 | 61,048,000 | 34,987,000 | |
Share-based payments | 7,916,000 | 3,531,000 | 12,898,000 | 7,949,000 | |
Depreciation and amortization | 886,000 | 632,000 | 2,252,000 | 1,315,000 | |
Total operating expenses | 39,632,000 | 27,561,000 | 110,002,000 | 60,050,000 | |
Operating loss | (41,169,000) | (30,698,000) | (120,937,000) | (57,539,000) | |
Other income (expense) | |||||
Interest income, net | 3,781,000 | 8,939,000 | 15,266,000 | 20,455,000 | |
Share of loss from investments in equity accounted investees | (1,327,000) | (565,000) | (3,293,000) | (1,504,000) | |
Gain on revaluation of derivative liabilities | 105,307,000 | 632,482,000 | 182,795,000 | 1,158,008,000 | |
Financing and transaction costs | (40,000) | (6,083,000) | (40,000) | (31,684,000) | |
Impairment loss on goodwill and intangible assets | 0 | 0 | (40,000,000) | 0 | |
Gain on disposal of other investments | 3,974,000 | 0 | 4,743,000 | 16,242,000 | |
Loss on reclassification of held-for-sale assets | (919,000) | 0 | (919,000) | 0 | |
Other income (loss) | 318,000 | 147,000 | 334,000 | 147,000 | |
Total other income (loss) | 111,094,000 | 634,920,000 | 158,886,000 | 1,161,664,000 | |
Income (loss) before income taxes | 69,925,000 | 604,222,000 | 37,949,000 | 1,104,125,000 | |
Income tax expense | 988,000 | 58,000 | 988,000 | 58,000 | |
Income from continuing operations | 68,937,000 | 604,164,000 | 36,961,000 | 1,104,067,000 | |
Income (loss) from discontinued operations | (473,000) | (36,000) | (519,000) | (63,000) | |
Net income (loss) | 68,464,000 | 604,128,000 | 36,442,000 | 1,104,004,000 | |
Net income (loss) attributable to: | |||||
Cronos Group | 69,033,000 | 604,410,000 | 38,096,000 | 1,104,501,000 | |
Non-controlling interests | (569,000) | (282,000) | (1,654,000) | (497,000) | |
Net income (loss) | 68,464,000 | 604,128,000 | 36,442,000 | 1,104,004,000 | |
Other comprehensive income (loss) | |||||
Foreign exchange gain (loss) on translation | 26,167,000 | (12,422,000) | (35,654,000) | ||
Total other comprehensive income (loss) | 26,167,000 | (12,422,000) | (35,654,000) | 9,424,000 | |
Comprehensive income (loss) | 94,631,000 | 591,706,000 | 788,000 | 1,113,428,000 | |
Comprehensive income (loss) attributable to: | |||||
Cronos Group | 95,183,000 | 591,996,000 | 2,438,000 | 1,113,929,000 | |
Non-controlling interests | (552,000) | (290,000) | (1,650,000) | (501,000) | |
Comprehensive income (loss) | $ 94,631,000 | $ 591,706,000 | $ 788,000 | $ 1,113,428,000 | |
Net income (loss) per share | |||||
Basic - continuing operations (in dollars per share) | $ 0.20 | $ 1.78 | $ 0.11 | $ 3.71 | |
Basic - discontinued operations (in dollars per share) | 0 | 0 | 0 | 0 | |
Diluted - continuing operations (in dollars per share) | 0.19 | 1.62 | 0.10 | 0.92 | |
Diluted - discontinued operations (in dollars per share) | [1] | $ 0 | $ 0 | $ 0 | $ 0 |
Weighted average number of outstanding shares | |||||
Basic (in shares) | 350,288,783 | 338,957,949 | 349,397,156 | 297,964,058 | |
Diluted (in shares) | [1] | 369,619,020 | 369,268,672 | 374,731,451 | 333,618,691 |
[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) | 154,917,740 | |||||
Shares issued | 304,411 | $ 304,411 | ||||
Share issuance costs | (3,722) | $ (3,722) | ||||
Warrants exercised (in shares) | 7,390,961 | |||||
Warrants exercised | 1,438 | $ 2,034 | (596) | |||
Vesting of options | $ 7,309 | 7,309 | ||||
Options exercised (in shares) | 254,199 | 170,087 | ||||
Options exercised | $ (844) | $ 356 | (339) | (861) | ||
Vesting of restricted share units, net of withholding taxes | 186 | 186 | 0 | |||
Top-up Rights exercised (in shares) | 2,565,397 | |||||
Top-up Rights exercised | 46,509 | $ 46,509 | ||||
Net income (loss) | 1,104,004 | 1,104,501 | (497) | |||
Other comprehensive income (loss) | 9,424 | 9,429 | (5) | |||
Ending balance (in shares) at Sep. 30, 2019 | 343,764,207 | |||||
Ending balance at Sep. 30, 2019 | 1,617,264 | $ 524,589 | 17,823 | 1,075,695 | (441) | (402) |
Beginning balance (in shares) at Jun. 30, 2019 | 336,144,543 | |||||
Beginning balance at Jun. 30, 2019 | 921,058 | $ 423,108 | 14,779 | 471,310 | 11,973 | (112) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Shares issued (in shares) | 5,086,586 | |||||
Shares issued | 56,109 | $ 56,109 | ||||
Share issuance costs | (4) | $ (4) | ||||
Vesting of options | 2,891 | 2,891 | ||||
Options exercised (in shares) | 18,619 | |||||
Options exercised | (20) | $ 38 | (33) | (25) | ||
Vesting of restricted share units, net of withholding taxes | 186 | 186 | ||||
Top-up Rights exercised (in shares) | 2,514,459 | |||||
Top-up Rights exercised | 45,338 | $ 45,338 | ||||
Net income (loss) | 604,128 | 604,410 | (282) | |||
Other comprehensive income (loss) | (12,422) | (12,414) | (8) | |||
Ending balance (in shares) at Sep. 30, 2019 | 343,764,207 | |||||
Ending balance at Sep. 30, 2019 | 1,617,264 | $ 524,589 | 17,823 | 1,075,695 | (441) | (402) |
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] | ||||||
Warrants exercised (in shares) | 5,407,890 | |||||
Warrants exercised | 0 | $ 619 | (619) | |||
Vesting of options | $ 5,051 | 5,051 | ||||
Options exercised (in shares) | 1,841,863 | 1,094,464 | ||||
Options exercised | $ 5 | $ 1,386 | (1,381) | |||
Vesting of restricted share units, net of withholding (in shares) | 414,088 | |||||
Vesting of restricted share units, net of withholding taxes | 5,699 | 5,699 | ||||
Vesting of common shares issued in connection with the use of certain publicity rights in brand development | 2,507 | $ 2,000 | 507 | |||
Top-up Rights exercised | 1,407 | $ 1,407 | ||||
Net income (loss) | 36,442 | 38,096 | (1,654) | |||
Other comprehensive income (loss) | (35,654) | (35,658) | 4 | |||
Ending balance (in shares) at Sep. 30, 2020 | 355,733,914 | |||||
Ending balance at Sep. 30, 2020 | 1,764,487 | $ 566,577 | 32,491 | 1,175,742 | (7,820) | (2,503) |
Beginning balance (in shares) at Jun. 30, 2020 | 349,886,402 | |||||
Beginning balance at Jun. 30, 2020 | 1,663,055 | $ 565,221 | 27,046 | 1,106,709 | (33,970) | (1,951) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Warrants exercised (in shares) | 5,407,890 | |||||
Warrants exercised | 0 | $ 619 | (619) | |||
Vesting of options | 1,551 | 1,551 | ||||
Options exercised (in shares) | 25,534 | |||||
Options exercised | 4 | $ 57 | (53) | |||
Vesting of restricted share units, net of withholding (in shares) | 414,088 | |||||
Vesting of restricted share units, net of withholding taxes | 4,217 | 4,217 | ||||
Vesting of common shares issued in connection with the use of certain publicity rights in brand development | 349 | 349 | ||||
Top-up Rights exercised | 680 | $ 680 | 0 | |||
Net income (loss) | 68,464 | 69,033 | (569) | |||
Other comprehensive income (loss) | 26,167 | 26,150 | 17 | |||
Ending balance (in shares) at Sep. 30, 2020 | 355,733,914 | |||||
Ending balance at Sep. 30, 2020 | $ 1,764,487 | $ 566,577 | $ 32,491 | $ 1,175,742 | $ (7,820) | $ (2,503) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Operating activities | ||
Net income (loss) | $ 36,442,000 | $ 1,104,004,000 |
Items not affecting cash: | ||
Inventory write-down | 11,024,000 | 5,424,000 |
Share-based payments | 12,898,000 | 7,949,000 |
Depreciation and amortization | 5,095,000 | 2,956,000 |
Share of loss from investments in equity accounted investees | 3,293,000 | 1,504,000 |
Gain on revaluation of derivative liabilities | (182,795,000) | (1,158,008,000) |
Gain on disposal of other investments | (4,743,000) | (16,242,000) |
Impairment loss on goodwill and intangible assets | 40,000,000 | 0 |
Loss (gain) on unrealized foreign exchange | (3,020,000) | 807,000 |
Provision for inventory and doubtful accounts | 3,119,000 | 0 |
Non-cash sales and marketing | 2,505,000 | 0 |
Loss on reclassification of held-for-sale assets | 919,000 | 0 |
Other, net | (298,000) | (89,000) |
Net changes in non-cash working capital | (29,123,000) | (25,098,000) |
Cash flows used in operating activities | (104,684,000) | (76,793,000) |
Investing activities | ||
Purchase of short-term investments | (125,562,000) | (384,288,000) |
Proceeds from disposal of short-term investments | 220,058,000 | 0 |
Investments in equity accounted investees | 0 | (1,658,000) |
Proceeds from sale of other investments | 4,743,000 | 19,614,000 |
Advances to joint ventures | 0 | (15,951,000) |
Purchase of property, plant and equipment | (21,334,000) | (37,622,000) |
Payment of accrued interest on construction loan payable | 0 | (89,000) |
Purchase of intangible assets | (3,094,000) | (574,000) |
Acquisition of Redwood | 0 | (227,224,000) |
Advances on loans receivable | (37,000,000) | (33,012,000) |
Proceeds from repayment of loans receivable | 0 | 238,000 |
Cash assumed on acquisition | 0 | 2,957,000 |
Cash flows provided by (used in) investing activities | 37,811,000 | (677,609,000) |
Financing activities | ||
Advance from non-controlling interests | (187,000) | |
Advance from non-controlling interests | 183,000 | |
Repayment of lease obligations | (1,859,000) | (414,000) |
Proceeds from Altria Investment | 0 | 1,809,556,000 |
Proceeds from exercise of Top-up Rights | 0 | 31,566,000 |
Proceeds from exercise of warrants and options | 5,000 | 1,455,000 |
Withholding taxes paid on equity awards | (2,148,000) | (861,000) |
Share issuance costs | 0 | (3,722,000) |
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 by (used in) financing activities | (4,189,000) | 1,822,198,000 |
Effect of foreign currency translation on cash and cash equivalents | (30,785,000) | 22,691,000 |
Net change in cash and cash equivalents | (101,847,000) | 1,090,487,000 |
Cash and cash equivalents, beginning of period | 1,199,693,000 | 23,927,000 |
Cash and cash equivalents, end of period | 1,097,846,000 | 1,114,414,000 |
Supplemental cash flow information | ||
Interest paid | 156,000 | 647,000 |
Interest received | $ 13,473,000 | $ 9,690,000 |
Background
Background | 9 Months Ended |
Sep. 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 three U.S. hemp-derived consumer products brands, Lord Jones ™ , Happy Dance ™ 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 and Changes in Accounting Policy | 9 Months Ended |
Sep. 30, 2020 | |
Accounting Policies [Abstract] | |
Summary of Significant Accounting Policies and Changes in Accounting Policy | Summary of Significant Accounting Policies and Changes in Accounting Policy (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 nine months ended September 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. Cultivation 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. Pharmacy 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 second quarter of 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 period 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. No triggering events were identified during the three months ended September 30, 2020. See Note 13 for more information regarding intangibles assets and goodwill. (d) Definite life intangible assets On July 1, 2020, the Company changed its method of amortization for the computer software asset class from an accelerated 50% double declining method to the straight-line method of five years. The Company determined that the change in estimate to the straight-line method is more appropriate based on the usage of the assets in the asset class. The change in estimate is applied prospectively as of July 1, 2020. Intangible assets with finite useful lives are recorded at cost less any accumulated amortization and accumulated impairment losses. Intangible assets acquired through a business combination are measured at fair value at the acquisition date. The Company capitalizes certain costs incurred in connection with its enterprise resource planning software, which include external direct costs of materials and services consumed in developing or obtaining internal-use software, payroll and payroll-related costs for employees who are directly associated with and who devote time to the development of the software for the function intended. All other costs are expensed as incurred. Intangible assets with finite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Enterprise resource planning (“ERP”) system Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Israeli codes (i) Straight-line Useful life of corresponding facilities (i) 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 equity interests in the Cronos Israel entities specified above. Amortization begins when assets become available for use. The estimated useful life, amortization method, and rate are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. (e) Assets held for sale and discontinued operations In accordance with Accounting Standards Codification (“ASC”) 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meet the criteria in paragraph 205-20-45-10. In the period in which the component meets held-for-sale or discontinued operations criteria the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations. During the three months ended September 30, 2020, Original B.C. Ltd. (“OGBC”) met the criteria for “held-for-sale”. As a result, the Company has reflected amounts relating to OGBC as a disposal group classified as held-for-sale on the consolidated balance sheet and included as part of discontinued operations on the consolidated statement of net income (loss) and comprehensive income (loss) for all periods presented in this Quarterly Report. OGBC is no longer included in the segment reporting following the reclassification to discontinued operations. The discontinued operations of OGBC are described further in Note 24. The following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operations to total assets and liabilities of the disposal group classified as held-for-sale in the consolidated balance sheet of December 31, 2019: As of December 31, 2019 As previously disclosed Held-for-sale adjustment Adjusted balance Property, plant and equipment $ 161,809 $ (1,861) $ 159,948 Intangible assets 72,320 (1,085) 71,235 Goodwill 214,794 (302) 214,492 The following table presents a reconciliation of the major classes of line items constituting reported operating loss of discontinued operations to net loss of discontinued operations for the three and nine months ended September 30, 2019: Three months ended September 30, 2019 Nine months ended September 30, 2019 As previously disclosed Held-for-sale adjustment Adjusted balance As previously disclosed Held-for-sale adjustment Adjusted balance Operating expenses $ 27,597 $ (36) $ 27,561 $ 60,126 $ (76) $ 60,050 Other income (loss) 634,920 — 634,920 1,161,677 (13) 1,161,664 Net income (loss) from continuing operations 604,128 36 604,164 1,104,004 63 1,104,067 (f) Reclassifications Certain reclassifications have been made to the prior period financial information to conform to the presentation used in the financial statements for the three and nine months ended September 30, 2020. These reclassifications have no effect on the results of reported operating loss, net income, shareholders’ equity or cash flows. See Note 2(e) and Note 24. Corporate expense reclassifications within segment disclosures: In the three months ended September 30, 2020, the Company recorded a reclassification related to the allocation of operating expenses that was determined to be corporate expenses in nature to its segments, which decreased its Rest of World segment net loss by $4,626 and increased net loss attributable to corporate expenses by the same amount. This reclassification had no effect on the Company's consolidated statement of net income (loss). See Note 18. Had all these amounts been classified in this manner for the three-month periods ended March 31, 2020 and June 30, 2020, net income (loss) attributable to the Rest of World segment would have increased by $2,899 and $1,727, respectively, and increased net loss attributable to corporate expenses by the same amounts. The Company does not consider the effect on year-to-date 2020 results or the effect on comparable quarterly periods to be material, and there was no impact on 2019 full year results. After evaluating the quantitative and qualitative aspects of these reclassifications, the Company concluded that its prior period financial statements were not materially misstated, and, therefore, no restatement was required . Revision of previously issued financial statements: During the three months ended September 30, 2020, the Company identified an error in the manner in which it calculated diluted earnings (loss) per share for the three months ended September 30, 2019. The error had no impact on diluted earnings (loss) per share for the nine months ended September 30, 2019. See Note 16. While the Company had excluded the anti-dilutive effect of the one warrant of the Company (the “Altria Warrant”), refer to Note 15(a) in the calculation of weighted average number of common shares for computation of diluted income (loss) per share, the gain on revaluation of derivative liabilities attributable to the Altria Warrant was incorrectly included in the calculation of diluted earnings (loss) per share, which resulted in an error in the previously reported amount for the three months ended September 30, 2019. Because the average market price of the Company’s common stock remained above the strike price of the Altria Warrant for the nine months ended September 30, 2019, there was no impact on the reported amount for the nine months ended September 30, 2019, and there was no impact in prior or subsequent quarterly periods. After evaluating the quantitative and qualitative aspects of this error, the Company concluded that its prior period financial statements were not materially misstated, and, therefore, no restatement was required. However, the Company is revising the previously presented September 30, 2019 diluted earnings (loss) per share and adjustment for gain (loss) on revaluation of derivative liabilities, as follows: Three months ended September 30, 2019 As previously disclosed Adjusted Diluted earnings (loss) per share $ 0.42 $ 1.62 Adjustment for gain (loss) on revaluation of derivative liabilities (488,041) (6,952) |
New Accounting Pronouncements
New Accounting Pronouncements | 9 Months Ended |
Sep. 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. In August 2020, the FASB issued ASU 2020-06, Debt –Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging –Contracts in Entity’s Own Equity (Subtopic 815–40) (“ASU No. 2020-06”). ASU No. 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU No 2020-06 is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. ASU No. 2020-6 is effective for fiscal years beginning after December 15, 2021, and interim |
Revenues from Contracts with Cu
Revenues from Contracts with Customers | 9 Months Ended |
Sep. 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 $6,086 as of September 30, 2020 (December 31, 2019 – $4,638). The Company recorded a current expected credit loss allowance on receivables of $64 as of September 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 | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Inventory, net | Inventory, net Inventory is comprised of the following items: As of September 30, 2020 December 31, 2019 Raw materials $ 10,214 $ 2,469 Work-in-progress – dry cannabis 25,799 11,538 Work-in-progress – cannabis extracts 13,436 17,975 Finished goods – dry cannabis 4,514 1,798 Finished goods – cannabis extracts 2,067 2,624 Supplies and consumables 329 1,639 Total $ 56,359 $ 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 nine months ended September 30, 2020, the Company recorded write-downs related to inventory of $11,024 (for the three and nine months ended September 30, 2019 – $5,424). No inventory write-downs were recorded during the three months ended September 30, 2020. As of September 30, 2020, an inventory reserve of $1,403 was recorded (September 30, 2019 – $nil) |
Investments and Advances to Joi
Investments and Advances to Joint Ventures | 9 Months Ended |
Sep. 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. 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 hemp and cannabis products 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 each entities’ economic performance. Thus, Cronos Group is not considered the primary beneficiary of each 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 % September 30, 2020 December 31, 2019 Cronos Australia (i) 31% $ — $ (346) Cronos GrowCo (ii) 50% 19,059 1,501 MedMen Canada 50% — — Natuera 50% — (598) $ 19,059 $ 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 variable interest entity conclusion. Upon reconsideration, the Company determined that the entity was no longer a variable interest entity as of December 31, 2019 and is now reported under the equity method. (ii) On September 25, 2020, the Company and 2645485 Ontario Inc. (“Mucci”), the other joint venture partner of Cronos GrowCo, agreed to capitalize certain historical advances made by each shareholder to Cronos GrowCo. Total aggregate gross advances to Cronos GrowCo, excluding any amounts advanced by the Company to Cronos GrowCo under the GrowCo Credit Facility, were C$49,300 ($37,932), of which the Company advanced 50% and Mucci advanced the remaining 50% for an amount of C$24,650 ($18,505) each. As a result, the Company transferred the advances of C$24,650 ($18,505) to investments in equity accounted investees in respect of Cronos GrowCo.. The Company’s share of net earnings (losses) from equity investments accounted for under the equity method of accounting: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Whistler Medicinal Marijuana Company (“Whistler”) $ — $ — $ — $ 29 Cronos Australia (i) (57) (251) (292) (892) Cronos GrowCo (401) (60) (902) (87) MedMen Canada — 32 — 36 Natuera (ii) (869) (286) (2,099) (590) $ (1,327) $ (565) $ (3,293) $ (1,504) (i) The Company’s share of accumulated net losses in excess of its equity investment and advances in Cronos Australia was $512 for the nine months ended September 30, 2020 (September 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 (ii) Cronos Australia (iii) Natuera Total As of January 1, 2020 $ 471 $ 18,966 $ — $ — $ 19,437 Transfer to investments in equity accounted investees (ii) — (18,505) — — (18,505) Interest on advances — — 35 — 35 Advances to joint ventures recovered from (applied to) carrying amount of investments — — (36) — (36) Effect from foreign exchange (10) (461) 1 — (470) As of September 30, 2020 $ 461 $ — $ — $ — $ 461 MedMen Canada (i) Cronos GrowCo (ii) Cronos Australia (iii) Natuera Total 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) On September 25, 2020, the Company and Mucci agreed to capitalize historical advances made by each shareholder to Cronos GrowCo. The Company capitalized C$24,650 ($18,505) through a transfer of aggregate gross advances from advances to joint ventures to investments in equity accounted investees in respect of Cronos GrowCo. Refer to Note 6(a)(ii). |
Other Investments
Other Investments | 9 Months Ended |
Sep. 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 September 30, 2020, the Company did not hold any other investments. The gain and losses on sale of other investments are classified as fair value through net income. During the three months ended September 30, 2020, in connection with the achievement of the final milestone related to the Whistler Transaction (defined below), the Company received 402,561 shares of Aurora Cannabis Inc. (“Aurora”). The Company subsequently sold all 402,561 of the Aurora shares during the three months ended September 30, 2020 for gross proceeds of approximately $3,974 (C$5,354) recorded as a gain on disposal of other investments in other income (expense). During the nine months ended September 30, 2020, in connection with the achievement of certain milestones related to the Whistler Transaction, the Company received 980,662 shares of Aurora. The Company sold all 980,662 of the Aurora shares during the nine months ended September 30, 2020 for gross proceeds of approximately $4,743 (C$6,404) recorded as a gain on disposal of other investments in other income (expense). 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 nine months ended September 30, 2019, the Company sold all 2,524,341 common shares of Aurora, for gross proceeds of $19,259 recorded as a gain on disposal of other investments in other income (expense). No transactions occurred during the three months ended September 30, 2019. |
Accumulated Other Comprehensive
Accumulated Other Comprehensive Income (Loss) | 9 Months Ended |
Sep. 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 September 30, Nine months ended September 30, 2020 2019 2020 2019 Net unrealized gain (loss) on revaluation and disposal of other investments Balance beginning of period $ 5 $ 5 $ 5 $ 5 Balance as of September 30 $ 5 $ 5 $ 5 $ 5 Net foreign exchange gain (loss) on translation Balance beginning of period $ (33,975) $ 11,968 $ 27,833 $ (9,875) Net unrealized (loss) gain 26,150 (12,414) (35,658) 9,429 Balance as of September 30 (7,825) (446) (7,825) (446) Total accumulated other comprehensive income (loss) $ (7,820) $ (441) $ (7,820) $ (441) |
Leases
Leases | 9 Months Ended |
Sep. 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 an option will be exercised, the impact of such 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 nine months ended September 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 an office premise. 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 September 30, 2020 and December 31, 2019. |
Loans Receivable, net
Loans Receivable, net | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Loans Receivable, net | Loans Receivable, net As of September 30, 2020 December 31, 2019 Current portion Natuera Series A loan (i) $ 5,210 $ 4,575 GrowCo Credit Facility (ii) 2,254 — Add: Accrued interest 317 89 Total current portion of loans receivable 7,781 4,664 Long term portion GrowCo Credit Facility (ii) 60,408 31,678 Mucci Promissory Note (iii) 12,648 12,587 Cannasoul Collaboration loan (iv) 1,187 — Add: Accrued interest 1,905 702 Total long-term portion of loans receivable 76,148 44,967 Total loans receivable $ 83,929 $ 49,631 (i) On July 24, 2020, the Company and its joint venture partner 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. For the nine months ended September 30, 2020, a loss allowance of $2,552 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 ($75,140) 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 September 30, 2020, Cronos GrowCo had drawn C$85,150 ($63,981) from the Cronos GrowCo Credit Facility. For the nine months ended September 30, 2020, a current expected credit loss allowance of $1,317 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 ($12,285) 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 nine months ended September 30, 2020, a current expected credit loss allowance of $258 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 $2,495) 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 September 30, 2020, CLS has received ILS 4,149 (approximately $1,198). For the nine months ended September 30, 2020, a current expected credit loss allowance of $25 has been recorded against the Cannasoul Collaboration loan. |
Derivative Liabilities
Derivative Liabilities | 9 Months Ended |
Sep. 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 the Altria Warrant, 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 79.1 million common shares at September 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: As of July 1, 2020 (Gain) / loss on revaluation Exercise of rights Effect from foreign exchange As of September 30, 2020 (a) Altria Warrant $ 165,958 $ (82,495) $ — $ 2,374 $ 85,837 (b) Pre-emptive Rights 16,180 (8,702) — 143 7,621 (c) Top-up Rights 23,576 (14,110) (680) 411 9,197 $ 205,714 $ (105,307) $ (680) $ 2,928 $ 102,655 As of January 1, 2020 (Gain) / loss on revaluation Exercise of rights Effect from foreign exchange As of September 30, 2020 (a) Altria Warrant $ 234,428 $ (140,547) $ — $ (8,044) $ 85,837 (b) Pre-emptive Rights 12,787 (4,777) — (389) 7,621 (c) Top-up Rights 49,945 (37,471) (1,407) (1,870) 9,197 $ 297,160 $ (182,795) $ (1,407) $ (10,303) $ 102,655 The fair values of the derivative liabilities were determined using the Black-Scholes pricing model as of September 30, 2020 and December 31, 2019 applying the following inputs: As of September 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$) $6.69 $6.69 $6.69 $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) 0.25% 0.24% 0.20% 1.69% 1.73% 1.71% Weighted average expected life (in years) (ii) 2.43 1.75 1.13 3.18 1.25 1.66 Expected annualized volatility (iii) 81% 81% 81% 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 approximately 0.12% to 0.36% as of September 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 5.25 years as of September 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 September 30, 2020, there would be an equal but opposite impact on net income (loss). Decrease as of September 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 $ 16,133 $ 1,598 $ 2,196 $ 36,436 $ 2,743 $ 9,577 Weighted average expected life 9,996 1,304 1,999 17,471 2,366 2,178 Expected annualized volatility 19,188 1,737 2,347 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 | 9 Months Ended |
Sep. 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 September 30, 2020 December 31, 2019 Cost Land $ 3,037 $ 3,071 Building 148,112 149,690 Furniture and equipment 17,161 10,079 Computer equipment 669 526 Leasehold improvements 3,400 1,758 Construction in progress 14,267 3,569 Less: accumulated depreciation (15,242) (8,745) Total $ 171,404 $ 159,948 Depreciation expense included in cost of sales relating to manufacturing equipment and production facilities for the nine months ended September 30, 2020 was $1,935 (September 30, 2019 – $1,628). Depreciation expense included in operating expenses related to general office space and equipment for the nine months ended September 30, 2020 was $1,682 (September 30, 2019 – $577). The remaining depreciation is included in inventory. |
Intangible Assets and Goodwill
Intangible Assets and Goodwill | 9 Months Ended |
Sep. 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. 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 as of 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 of 2020 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 $35,000 of impairment charges on the U.S. reporting unit and $5,000 on the Lord Jones™ brand for the nine months ended September 30, 2020. No impairment loss was recorded for either goodwill or intangible assets during the three months ended September 30, 2020 or during the three and nine months ended September 30, 2019. (a) Intangible assets Intangible assets are comprised of the following items: Weighted average amortization period (in years) As of September 30, 2020 Cost Accumulated amortization Impairment charges Net Software 5 $ 575 $ (234) $ — $ 341 ERP system 5 2,851 (130) — 2,721 Health Canada licenses 17 7,211 (1,102) 6,109 Lord Jones ™ brand N/A 64,000 — (5,000) 59,000 Trademarks N/A 146 — — 146 Israeli codes (i) 25 300 (13) — 287 $ 75,083 $ (1,479) $ (5,000) $ 68,604 (i) 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 5 $ 541 $ (202) $ 339 Health Canada licenses 17 7,387 (821) 6,566 Lord Jones ™ brand N/A 64,000 — 64,000 Trademarks N/A 36 — 36 Israeli codes (i) 25 298 (4) 294 $ 72,262 $ (1,027) $ 71,235 (i) 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 nine months ended September 30, 2020 was $570 (September 30, 2019 – $480). There were no disposals of software during the three months ended September 30, 2020 and 2019. The amortization expense for the next five years on intangible assets in use is estimated to be as follows: 2021 – $573; 2022 – $562; 2023: $529; 2024 – $524; 2025 – $509. (b) Goodwill As of December 31, 2019 Additions Impairment charges Effect of foreign exchange As of September 30, 2020 Peace Naturals 1,078 — — (33) 1,045 Redwood 213,414 — (35,000) — 178,414 $ 214,492 $ — $ (35,000) $ (33) $ 179,459 |
General and Administrative Expe
General and Administrative Expenses | 9 Months Ended |
Sep. 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 September 30, Nine months ended September 30, 2020 2019 2020 2019 Salaries and wages $ 4,611 $ 7,789 $ 18,412 $ 13,137 Professional and consulting 4,295 4,694 13,144 11,948 Office and general 4,449 1,643 11,064 7,166 Review costs related to restatement of 2019 interim financial statements (i) 958 — 8,824 — Other 4,547 2,076 9,604 2,736 Total $ 18,860 $ 16,202 $ 61,048 $ 34,987 (i) These financial statement review costs include costs related to the restatement of the Company’s 2019 interim financial statements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to such restatement and legal costs defending shareholder class action complaints brought against the Company as a result of the restatement. |
Share-based Payments
Share-based Payments | 9 Months Ended |
Sep. 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 nine months ended September 30, 2020 and 2019: Weighted average exercise price (C$) Number of warrants Balance as of January 1, 2020 $ 0.26 18,066,662 Exercise of warrants 0.27 (5,626,410) Balance as of September 30, 2020 $ 0.25 12,440,252 Balance as of January 1, 2019 $ 0.26 25,457,623 Exercise of warrants 0.26 (7,390,961) Balance as of September 30, 2019 $ 0.26 18,066,662 As of September 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 $ 0.31 452,903 May 13 – 27, 2016 May 13 – 27, 2021 0.25 11,987,349 As of September 30, 2020 $ 0.25 12,440,252 (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 September 30, 2020, options to purchase 10,443,447 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 September 30, 2020, options to purchase 1,641,759 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 (“RSUs”) 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 September 30, 2020, options to purchase 2,000,000 Company common shares were outstanding under the 2020 Omnibus Plan. For the three and nine months ended September 30, 2020, the total stock-based compensation expense associated with the stock options was $1,551 and $5,051 respectively (September 30, 2019 – $3,531 and $7,949, respectively). (ii) Summary of changes The following is a summary of the changes during the nine months ended September 30, 2020 and 2019: Weighted average exercise price (C$) Number of options Weighted average remaining contractual term (years) Balance as of January 1, 2020 $ 4.84 14,149,502 2.56 Issuance of options (i) 6.96 2,000,000 Exercise of options 2.04 (1,841,863) Cancellation, forfeiture and expiry of options 15.06 (222,433) Balance as of September 30, 2020 $ 5.34 14,085,206 2.54 Exercisable as of September 30, 2020 $ 3.56 9,381,601 1.57 Balance as of January 1, 2019 $ 2.99 12,902,995 3.35 Issuance of options 20.08 1,534,162 Exercise of options 3.72 (254,199) Cancellation, forfeiture and expiry of options — (5,083) Balance as of September 30, 2019 $ 4.83 14,177,875 2.81 Exercisable as of September 30, 2019 $ 2.66 7,442,390 2.47 (i) On September 9, 2020, options to purchase 2,000,000 Company common shares were granted to Kurt Schmidt in connection with his appointment as President and Chief Executive Officer of the Company under the 2020 Omnibus Plan. (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 nine months ended September 30, 2020 2019 Share price at grant date (per share) C$6.96 C$15.34 - C$24.75 Exercise price (per option) C$6.96 C$15.34 - C$24.75 Risk-free interest rate 0.43% 1.39% - 1.62% Expected life of options (in years) (i) 5 5 Expected annualized volatility 91% 89% Expected dividend yield —% —% Weighted average Black-Scholes value at grant date (per option) C$4.84 C$10.6 - C$15.91 Forfeiture rate —% —% (i) 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 based on an equally weighted blended historical volatility level of the underlying equity securities of the Company and peer companies. 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. During the nine months ended September 30, 2020, the weighted average fair value per share at grant date of options was C$4.84 (nine months ended September 30, 2019 - C$13.32). (c) Restricted share units For the three and nine months ended September 30, 2020, the Company reco rded $6,365 and $7,847, respectively (for three and nine months ended September 30, 2019 – $186) in share-based compensation expense related to the issuance of RSUs during such periods. The following is a summary of the changes in RSUs from January 1, 2020 to September 30, 2020: Number of RSUs Weighted average grant date fair value (C$) Balance as of January 1, 2020 732,972 $ 15.34 Granted (i) 814,874 7.32 Vested and issued (ii) (732,972) 15.34 Cancellation and forfeitures (9,497) 7.52 Balance as of September 30, 2020 805,377 $ 7.32 (i) On September 9, 2020, the Company issued 450,000 RSUs to Mr. Schmidt in connection with his appointment as President and Chief Executive Officer of the Company under the 2020 Omnibus Plan. The RSUs vest on September 10, 2023, subject to Mr. Schmidt’s continued employment through such date. The vesting of such RSUs is not subject to the achievement of any performance criteria. In August 2020 and May 2020, the Company issued an aggregate of 85,597 and 279,277 RSUs, respectively, to certain employees under the 2020 Omnibus Plan. Each RSU entitles the holder thereof to receive upon vesting one common share of the Company. The RSUs vest annually in equal installments over a three-year period following the grant date, subject to such holder’s continued employment through each vesting date. The vesting of such RSUs is not subject to the achievement of any performance criteria. (ii) 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, 732,972 outstanding and unvested RSUs were accelerated and vested during the three months ended September 30, 2020. The following is a summary of the changes in RSUs from January 1, 2019 to September 30, 2019: Number of RSUs Weighted average grant date fair value (C$) Balance as of January 1, 2019 — $ — Granted (i) 732,972 15.34 Balance as of September 30, 2019 732,972 $ 15.34 (i) During the three months ended September 30, 2019, the Company issued an aggregate of 732,972 RSUs to Mr. Rosenheck and another Redwood employee in connection with the acquisition of four Redwood Holding Group, LLC subsidiaries. These RSUs were accelerated and vested during the three months ended September 30, 2020. (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 September 30, 2020: Number of DSUs Financial liability Balance as of January 1, 2020 33,397 $ 255 Granting and vesting of DSUs 58,380 338 Liabilities settled (8,484) (46) Loss (gain) on revaluation — (128) Balance as of September 30, 2020 83,293 $ 419 The following is a summary of the changes in DSUs from January 1, 2019 to September 30, 2019: Number of DSUs Financial liability Balance as of January 1, 2019 — $ — Granting and vesting of DSUs 33,937 454 Loss (gain) on revaluation — (147) Balance as of September 30, 2019 33,937 $ 307 |
Earnings (Loss) Per Share
Earnings (Loss) Per Share | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Earnings (Loss) Per Share | Earnings (Loss) Per Share Basic and diluted earnings (loss) per share from continuing operations are calculated using the following numerators and denominators: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Basic earnings per share computation Net income (loss) attributable to common shareholders of Cronos Group $ 69,506 $ 604,446 $ 38,615 $ 1,104,564 Weighted average number of common shares outstanding 350,288,783 338,957,949 349,397,156 297,964,058 Basic earnings per share (i) $ 0.20 $ 1.78 $ 0.11 $ 3.71 Diluted earnings per share computation Net income (loss) used in the computation of basic earnings per share $ 69,506 $ 604,446 $ 38,615 $ 1,104,564 Adjustment for gain (loss) on revaluation of derivative liabilities (680) (6,952) (1,407) (798,799) Net income (loss) used in the computation of diluted income per share $ 68,826 $ 597,494 $ 37,208 $ 305,765 Weighted average number of common shares outstanding used in the computation of basic earnings per share 350,288,783 338,957,949 349,397,156 297,964,058 Dilutive effect of warrants 12,514,864 17,792,227 17,126,222 20,080,244 Dilutive effect of stock options 6,688,620 10,435,804 7,992,139 11,030,736 Dilutive effect of RSUs 126,753 732,972 215,934 732,972 Dilutive effect of Altria Warrant — — — 1,833,853 Dilutive effect of Top-up Rights – exercised and exercisable fixed price — 1,349,720 — 1,976,828 Weighted average number of common shares for computation of diluted income (loss) per share 369,619,020 369,268,672 374,731.451 333,618,691 Diluted earnings per share (i) $ 0.19 $ 1.62 $ 0.10 $ 0.92 (i) Basic and dilutive earnings per share from discontinued operations were $0.00 for the three and nine months ended September 30, 2020 and 2019. 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 September 30, Nine months ended September 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 22,551,531 25,126,670 22,551,531 25,126,670 Top-up Rights – market price 3,065,570 1,255,223 3,065,570 1,255,223 Altria Warrant 79,051,981 76,392,046 79,051,981 — Stock options 2,017,176 1,346,902 1,571,134 51,830 Total anti-dilutive securities 133,367,902 130,802,485 132,921,860 53,115,367 |
Related Party Transactions and
Related Party Transactions and Balances | 9 Months Ended |
Sep. 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. The Company incurred the following expenses for consulting services from Altria Pinnacle LLC, a subsidiary of Altria (“Altria Pinnacle”): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Altria Pinnacle – expense $ 160 $ 1,772 $ 1,113 $ 1,772 Total $ 160 $ 1,772 $ 1,113 $ 1,772 The following is a summary of amounts payable related to the consulting services with Altria Pinnacle: As of September 30, 2020 December 31, 2019 Altria Pinnacle – payable $ 5 $ 1,152 Total $ 5 $ 1,152 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 three and nine months ended September 30, 2020 and 2019. |
Segment Information
Segment Information | 9 Months Ended |
Sep. 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. Corporate expenses are expenses that relate to the consolidated business and not to an individual operating segment. The Company’s method of allocating corporate costs is refined periodically. 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 September 30, 2020: Three months ended September 30, 2020 United States Rest of World Corporate expenses Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 7,958 $ — $ 7,958 Cannabis extracts 1,639 1,504 — 3,143 Other — 257 — 257 Net revenue $ 1,639 $ 9,719 $ — $ 11,358 Share of loss from investments in equity accounted investees $ — $ 1,327 $ — $ 1,327 Interest income 3 3,844 — 3,847 Interest expense — (66) — (66) Interest income, net $ 3 $ 3,778 $ — $ 3,781 Impairment loss on goodwill and intangible assets $ — $ — $ — $ — Depreciation and amortization 35 851 — 886 Income tax expense 143 845 — 988 Income (loss) from discontinued operations — (473) — (473) Net income (loss) (14,004) 93,447 (10,979) 68,464 Segment data was as follows for the nine months ended September 30, 2020: Nine months ended September 30, 2020 United States Rest of World Corporate expenses Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 16,373 $ — $ 16,373 Cannabis extracts 5,989 6,821 — 12,810 Other — 490 — 490 Net revenue $ 5,989 $ 23,684 $ — $ 29,673 Share of loss from investments in equity accounted investees $ — $ 3,293 $ — $ 3,293 Interest income 16 15,406 — 15,422 Interest expense — (156) — (156) Interest income, net $ 16 $ 15,250 $ — $ 15,266 Impairment loss on goodwill and intangible assets $ 40,000 $ — $ — $ 40,000 Depreciation and amortization 104 2,148 — 2,252 Income tax expense 143 845 — 988 Income (loss) from discontinued operations — (519) — (519) Net income (loss) (71,571) 132,704 (24,691) 36,442 Consolidated balance sheets Total assets $ 251,835 $ 369,621 $ 1,297,473 $ 1,918,929 Investments in equity accounted investees — 19,059 — 19,059 Goodwill 178,414 1,045 — 179,459 Purchase of property, plant and equipment, net 294 21,040 — 21,334 Sources of net revenue for the three and nine months ended September 30, 2020 and 2019 were as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Cannabis flower $ 7,958 $ 4,266 $ 16,373 $ 12,187 Cannabis extracts 3,143 1,500 12,810 4,138 Other 257 19 490 117 Net revenue $ 11,358 $ 5,785 $ 29,673 $ 16,442 Net revenue attributed to a geographic region based on the location of the customer were as follows: Three months ended September 31, Nine months ended September 31, 2020 2019 2020 2019 Canada $ 9,205 $ 5,093 $ 22,712 $ 15,416 United States 1,639 675 5,989 675 Other countries 514 17 972 351 Net revenue $ 11,358 $ 5,785 $ 29,673 $ 16,442 Property, plant and equipment assets were physically located in the following geographic regions: As of September 30, 2020 As of December 31, 2019 Canada $ 146,292 $ 139,160 United States 2,302 2,103 Other countries 22,810 18,685 Total $ 171,404 $ 159,948 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 nine months ended September 30, 2020 and 2019, the U.S. segment had no major customers. As of September 30, 2020, $41 (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 September 30, 2020, the Rest of World segment earned a total net revenue before excise taxes of $9,790 from four major customers, Société Québécoise du Cannabis, Alberta Gaming, Liquor and Cannabis Commission, Ontario Cannabis Retail Corporation, and BC Liquor Distribution Branch accounting for 26%, 22%, 20% and 14%, respectively, of the Company’s total revenue (three months ended September 30, 2019 – $3,351 from two major customers, together accounting for 58% of the Company’s total revenues). During the nine months ended September 30, 2020, the Rest of World segment earned a total net revenue before excise taxes of $22,142 from the same four major customers as mentioned above, accounting for 18%, 23%, 16%, and 17%, respectively, of the Company’s total revenue (nine months ended September 30, 2019 – $7,101 from two major customers, together accounting for 43% of the Company’s total revenues). As of September 30, 2020, $23 (December 31, 2019 – $124) in expected credit losses has been recognized on receivables from contracts with customers. During the three months ended September 30, 2020, the Company classified OGBC as held-for-sale. The loss from discontinued operations from the Rest of World segment for the three and nine months ended September 30, 2020 was $473 and $519, respectively. The loss from discontinued operations from the Rest of World segment for the three and nine months ended September 30, 2019 was $36 and $63, respectively. |
Commitments
Commitments | 9 Months Ended |
Sep. 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 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 Kristen Bell, 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 the brand development of Happy Dance™. 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. |
Contingencies
Contingencies | 9 Months Ended |
Sep. 30, 2020 | |
Loss Contingency [Abstract] | |
Contingencies | Contingencies The Company is subject to various legal proceedings in the ordinary course of its 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 its financial condition but could be material to the its results of operations for a quarterly period depending, in part, on its results for that quarter. (a) Class action complaints relating to restatement 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 former Chief Executive Officer (now Executive Chairman) 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 former Chief Executive Officer (now Executive Chairman), 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 restatement. 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 restatement 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 and investigations. (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 10, 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. On April 28, 2020, the action was dismissed without prejudice for failure to prosecute and for failure to comply with a court order. As of the date of this Quarterly Report, the plaintiff has not refiled the complaint. |
Financial Instruments
Financial Instruments | 9 Months Ended |
Sep. 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 $1,401,606 as of September 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 September 30, 2020, the Company recorded a current expected credit loss allowance of $64 (December 31, 2019 – $136). The Company has assessed that there is a concentration of credit risk, as 59% of the Company’s accounts receivable were due from four customers as of September 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 $1,097,846 as of September 30, 2020 (December 31, 2019 – $1,199,693). The short-term investments and related interest receivable of $202,883 as of September 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. The expected loss rates are based on the historical credit losses experienced. Where appropriate, the historical loss rates are adjusted to reflect current and forward-looking information. The Company has assessed an expected credit loss allowance on these advances as of September 30, 2020 to be $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 September 30, 2020, the Company had no concentration risk of vendors (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 September 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 nine months ended September 30, 2020, the Company had net interest income of $15,266 (September 30, 2019 – $20,455). During the three and nine months ended September 30, 2020, the Company’s average variable interest rate fell 0.03% and 1.44%, respectively. Had the interest rates been consistent, net interest income would have increased by $303 and $15,214, respectively for the three and nine months ended September 30, 2020. (e) Currency rate risk Currency rate risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in foreign exchange rates. The Company is exposed to this risk on advances to joint ventures denominated in A$ 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 September 30, 2020, the Company had foreign currency gain (loss) on translation of $(35,654) (September 30, 2019 – $9,424). A 10% change in the exchange rates for the U.S. dollar would affect the carrying value of net assets by approximately $176,449 as of September 30, 2020 (December 31, 2019 –$174,902). |
Fair Value Measurement
Fair Value Measurement | 9 Months Ended |
Sep. 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 September 30, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. September 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,097,846 $ — $ — $ 1,097,846 Short-term investments 202,883 — — 202,883 Derivative liabilities — — 102,655 102,655 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 | 9 Months Ended |
Sep. 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 nine months ended September 30, 2020 2019 Accounts receivable $ (1,448) $ (1,991) Other receivables (3,169) (3,315) Prepaids and other assets (1,137) (5,930) Current portion of loans receivable — (4,607) Inventory, net (18,316) (33,903) Accounts payable and other liabilities 3,711 23,676 Cumulative effect from foreign exchange (8,764) — Add back: net working capital assumed on acquisition — 972 Total $ (29,123) $ (25,098) |
Held-For-Sale Assets and Discon
Held-For-Sale Assets and Discontinued Operations | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Held-For-Sale Assets and Discontinued Operations | Held-For-Sale Assets and Discontinued Operations During the three months ended September 30, 2020, the Company advanced its plans for the sale and disposal of substantially all of the assets of OGBC. As a result, OGBC’s results of operations have been reclassified as discontinued operations in the accompanying condensed consolidated financial statements. Accordingly, the assets and liabilities of OGBC are separately reported as assets and liabilities “held-for-sale” as of September 30, 2020 on the consolidated balance sheet. For comparative purposes, amounts in the prior periods have been reclassified to conform to current year presentation, as disclosed in Note 2(e). The Company recorded $919 as a valuation allowance upon reclassification of assets as held-for-sale on OGBC for the three and nine months ended September 30, 2020. The following table summarizes the financial information for discontinued operations: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Consolidated statements of net income (loss) and comprehensive income (loss) OGBC income from discontinued operations, net of income taxes $ (473) $ (36) $ (519) $ (63) As of September 30, 2020 December 31, 2019 Consolidated balance sheets Long-term assets classified as discontinued operations 2,066 3,248 |
Non-monetary Transactions
Non-monetary Transactions | 9 Months Ended |
Sep. 30, 2020 | |
Nonmonetary Transactions [Abstract] | |
Non-monetary Transactions | Non-monetary Transactions During the nine months ended September 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 net income (loss) and comprehensive income (loss). In September 2019, the Company entered into three transactions to simultaneously purchase and sell inventory to a third party. The Company purchased cannabis resin and cannabis tincture oil 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 in accordance with ASC 845 Non-monetary transactions at the carrying value of inventory transferred by the Company. $2,300 was recognized in revenue as a result of this transaction and no gain or loss was recognized in the consolidated statements of net income (loss) and comprehensive income (loss). |
Summary of Significant Accoun_2
Summary of Significant Accounting Policies and Changes in Accounting Policy (Policies) | 9 Months Ended |
Sep. 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 nine months ended September 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 assetsGoodwill 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. |
Definite life intangible assets | Definite life intangible assets On July 1, 2020, the Company changed its method of amortization for the computer software asset class from an accelerated 50% double declining method to the straight-line method of five years. The Company determined that the change in estimate to the straight-line method is more appropriate based on the usage of the assets in the asset class. The change in estimate is applied prospectively as of July 1, 2020. Intangible assets with finite useful lives are recorded at cost less any accumulated amortization and accumulated impairment losses. Intangible assets acquired through a business combination are measured at fair value at the acquisition date. The Company capitalizes certain costs incurred in connection with its enterprise resource planning software, which include external direct costs of materials and services consumed in developing or obtaining internal-use software, payroll and payroll-related costs for employees who are directly associated with and who devote time to the development of the software for the function intended. All other costs are expensed as incurred. Intangible assets with finite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Enterprise resource planning (“ERP”) system Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Israeli codes (i) Straight-line Useful life of corresponding facilities (i) 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 equity interests in the Cronos Israel entities specified above. Amortization begins when assets become available for use. The estimated useful life, amortization method, and rate are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. |
Assets held for sale and discontinued operations | Assets held for sale and discontinued operations In accordance with Accounting Standards Codification (“ASC”) 205-20 Presentation of Financial Statements: Discontinued Operations, a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meet the criteria in paragraph 205-20-45-10. In the period in which the component meets held-for-sale or discontinued operations criteria the major current assets, other assets, current liabilities, and noncurrent liabilities shall be reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), shall be reported as components of net income (loss) separate from the net income (loss) of continuing operations. During the three months ended September 30, 2020, Original B.C. Ltd. (“OGBC”) met the criteria for “held-for-sale”. As a result, the Company has reflected amounts relating to OGBC as a disposal group classified as held-for-sale on the consolidated balance sheet and included as part of discontinued operations on the consolidated statement of net income (loss) and comprehensive income (loss) for all |
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. In August 2020, the FASB issued ASU 2020-06, Debt –Debt with Conversion and Other Options (Subtopic 470-20) and Derivatives and Hedging –Contracts in Entity’s Own Equity (Subtopic 815–40) (“ASU No. 2020-06”). ASU No. 2020-06 simplifies the accounting for certain financial instruments with characteristics of liabilities and equity, including convertible instruments and contracts on an entity’s own equity. ASU No 2020-06 is part of the FASB’s simplification initiative, which aims to reduce unnecessary complexity in U.S. GAAP. ASU No. 2020-6 is effective for fiscal years beginning after December 15, 2021, and interim |
Summary of Significant Accoun_3
Summary of Significant Accounting Policies and Changes in Accounting Policy (Tables) | 9 Months Ended |
Sep. 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. Cultivation 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. Pharmacy Ltd. (i) Israel February 15, 2018 90% (i) These Israeli entities are collectively referred to as “Cronos Israel.” |
Schedule of Finite-Lived Intangible Assets | Intangible assets with finite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Enterprise resource planning (“ERP”) system Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Israeli codes (i) Straight-line Useful life of corresponding facilities (i) 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 equity interests in the Cronos Israel entities specified above. Intangible assets are comprised of the following items: Weighted average amortization period (in years) As of September 30, 2020 Cost Accumulated amortization Impairment charges Net Software 5 $ 575 $ (234) $ — $ 341 ERP system 5 2,851 (130) — 2,721 Health Canada licenses 17 7,211 (1,102) 6,109 Lord Jones ™ brand N/A 64,000 — (5,000) 59,000 Trademarks N/A 146 — — 146 Israeli codes (i) 25 300 (13) — 287 $ 75,083 $ (1,479) $ (5,000) $ 68,604 (i) 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 5 $ 541 $ (202) $ 339 Health Canada licenses 17 7,387 (821) 6,566 Lord Jones ™ brand N/A 64,000 — 64,000 Trademarks N/A 36 — 36 Israeli codes (i) 25 298 (4) 294 $ 72,262 $ (1,027) $ 71,235 (i) 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. |
Summary of Financial Information for Discontinued Operations | The following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operations to total assets and liabilities of the disposal group classified as held-for-sale in the consolidated balance sheet of December 31, 2019: As of December 31, 2019 As previously disclosed Held-for-sale adjustment Adjusted balance Property, plant and equipment $ 161,809 $ (1,861) $ 159,948 Intangible assets 72,320 (1,085) 71,235 Goodwill 214,794 (302) 214,492 The following table presents a reconciliation of the major classes of line items constituting reported operating loss of discontinued operations to net loss of discontinued operations for the three and nine months ended September 30, 2019: Three months ended September 30, 2019 Nine months ended September 30, 2019 As previously disclosed Held-for-sale adjustment Adjusted balance As previously disclosed Held-for-sale adjustment Adjusted balance Operating expenses $ 27,597 $ (36) $ 27,561 $ 60,126 $ (76) $ 60,050 Other income (loss) 634,920 — 634,920 1,161,677 (13) 1,161,664 Net income (loss) from continuing operations 604,128 36 604,164 1,104,004 63 1,104,067 The following table summarizes the financial information for discontinued operations: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Consolidated statements of net income (loss) and comprehensive income (loss) OGBC income from discontinued operations, net of income taxes $ (473) $ (36) $ (519) $ (63) As of September 30, 2020 December 31, 2019 Consolidated balance sheets Long-term assets classified as discontinued operations 2,066 3,248 |
Schedule of Prior Period Adjustments | However, the Company is revising the previously presented September 30, 2019 diluted earnings (loss) per share and adjustment for gain (loss) on revaluation of derivative liabilities, as follows: Three months ended September 30, 2019 As previously disclosed Adjusted Diluted earnings (loss) per share $ 0.42 $ 1.62 Adjustment for gain (loss) on revaluation of derivative liabilities (488,041) (6,952) |
Inventory, net (Tables)
Inventory, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory is comprised of the following items: As of September 30, 2020 December 31, 2019 Raw materials $ 10,214 $ 2,469 Work-in-progress – dry cannabis 25,799 11,538 Work-in-progress – cannabis extracts 13,436 17,975 Finished goods – dry cannabis 4,514 1,798 Finished goods – cannabis extracts 2,067 2,624 Supplies and consumables 329 1,639 Total $ 56,359 $ 38,043 |
Investments and Advances to J_2
Investments and Advances to Joint Ventures (Tables) | 9 Months Ended |
Sep. 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 % September 30, 2020 December 31, 2019 Cronos Australia (i) 31% $ — $ (346) Cronos GrowCo (ii) 50% 19,059 1,501 MedMen Canada 50% — — Natuera 50% — (598) $ 19,059 $ 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 variable interest entity conclusion. Upon reconsideration, the Company determined that the entity was no longer a variable interest entity as of December 31, 2019 and is now reported under the equity method. (ii) On September 25, 2020, the Company and 2645485 Ontario Inc. (“Mucci”), the other joint venture partner of Cronos GrowCo, agreed to capitalize certain historical advances made by each shareholder to Cronos GrowCo. Total aggregate gross advances to Cronos GrowCo, excluding any amounts advanced by the Company to Cronos GrowCo under the GrowCo Credit Facility, were C$49,300 ($37,932), of which the Company advanced 50% and Mucci advanced the remaining 50% for an amount of C$24,650 ($18,505) each. As a result, the Company transferred the advances of C$24,650 ($18,505) to investments in equity accounted investees in respect of Cronos GrowCo.. The Company’s share of net earnings (losses) from equity investments accounted for under the equity method of accounting: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Whistler Medicinal Marijuana Company (“Whistler”) $ — $ — $ — $ 29 Cronos Australia (i) (57) (251) (292) (892) Cronos GrowCo (401) (60) (902) (87) MedMen Canada — 32 — 36 Natuera (ii) (869) (286) (2,099) (590) $ (1,327) $ (565) $ (3,293) $ (1,504) (i) The Company’s share of accumulated net losses in excess of its equity investment and advances in Cronos Australia was $512 for the nine months ended September 30, 2020 (September 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 (ii) Cronos Australia (iii) Natuera Total As of January 1, 2020 $ 471 $ 18,966 $ — $ — $ 19,437 Transfer to investments in equity accounted investees (ii) — (18,505) — — (18,505) Interest on advances — — 35 — 35 Advances to joint ventures recovered from (applied to) carrying amount of investments — — (36) — (36) Effect from foreign exchange (10) (461) 1 — (470) As of September 30, 2020 $ 461 $ — $ — $ — $ 461 MedMen Canada (i) Cronos GrowCo (ii) Cronos Australia (iii) Natuera Total 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) On September 25, 2020, the Company and Mucci agreed to capitalize historical advances made by each shareholder to Cronos GrowCo. The Company capitalized C$24,650 ($18,505) through a transfer of aggregate gross advances from advances to joint ventures to investments in equity accounted investees in respect of Cronos GrowCo. Refer to Note 6(a)(ii). |
Accumulated Other Comprehensi_2
Accumulated Other Comprehensive Income (Loss) (Tables) | 9 Months Ended |
Sep. 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 September 30, Nine months ended September 30, 2020 2019 2020 2019 Net unrealized gain (loss) on revaluation and disposal of other investments Balance beginning of period $ 5 $ 5 $ 5 $ 5 Balance as of September 30 $ 5 $ 5 $ 5 $ 5 Net foreign exchange gain (loss) on translation Balance beginning of period $ (33,975) $ 11,968 $ 27,833 $ (9,875) Net unrealized (loss) gain 26,150 (12,414) (35,658) 9,429 Balance as of September 30 (7,825) (446) (7,825) (446) Total accumulated other comprehensive income (loss) $ (7,820) $ (441) $ (7,820) $ (441) |
Loans Receivable, net (Tables)
Loans Receivable, net (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Receivables [Abstract] | |
Schedule of Loan Receivable | As of September 30, 2020 December 31, 2019 Current portion Natuera Series A loan (i) $ 5,210 $ 4,575 GrowCo Credit Facility (ii) 2,254 — Add: Accrued interest 317 89 Total current portion of loans receivable 7,781 4,664 Long term portion GrowCo Credit Facility (ii) 60,408 31,678 Mucci Promissory Note (iii) 12,648 12,587 Cannasoul Collaboration loan (iv) 1,187 — Add: Accrued interest 1,905 702 Total long-term portion of loans receivable 76,148 44,967 Total loans receivable $ 83,929 $ 49,631 (i) On July 24, 2020, the Company and its joint venture partner 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. For the nine months ended September 30, 2020, a loss allowance of $2,552 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 ($75,140) 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 September 30, 2020, Cronos GrowCo had drawn C$85,150 ($63,981) from the Cronos GrowCo Credit Facility. For the nine months ended September 30, 2020, a current expected credit loss allowance of $1,317 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 ($12,285) 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 nine months ended September 30, 2020, a current expected credit loss allowance of $258 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 $2,495) 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 September 30, 2020, CLS has received ILS 4,149 (approximately $1,198). For the nine months ended September 30, 2020, a current expected credit loss allowance of $25 has been recorded against the Cannasoul Collaboration loan. |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 9 Months Ended |
Sep. 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: As of July 1, 2020 (Gain) / loss on revaluation Exercise of rights Effect from foreign exchange As of September 30, 2020 (a) Altria Warrant $ 165,958 $ (82,495) $ — $ 2,374 $ 85,837 (b) Pre-emptive Rights 16,180 (8,702) — 143 7,621 (c) Top-up Rights 23,576 (14,110) (680) 411 9,197 $ 205,714 $ (105,307) $ (680) $ 2,928 $ 102,655 As of January 1, 2020 (Gain) / loss on revaluation Exercise of rights Effect from foreign exchange As of September 30, 2020 (a) Altria Warrant $ 234,428 $ (140,547) $ — $ (8,044) $ 85,837 (b) Pre-emptive Rights 12,787 (4,777) — (389) 7,621 (c) Top-up Rights 49,945 (37,471) (1,407) (1,870) 9,197 $ 297,160 $ (182,795) $ (1,407) $ (10,303) $ 102,655 |
Schedule of Fair Values of Derivative Liabilities | The fair values of the derivative liabilities were determined using the Black-Scholes pricing model as of September 30, 2020 and December 31, 2019 applying the following inputs: As of September 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$) $6.69 $6.69 $6.69 $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) 0.25% 0.24% 0.20% 1.69% 1.73% 1.71% Weighted average expected life (in years) (ii) 2.43 1.75 1.13 3.18 1.25 1.66 Expected annualized volatility (iii) 81% 81% 81% 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 approximately 0.12% to 0.36% as of September 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 5.25 years as of September 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 September 30, 2020, there would be an equal but opposite impact on net income (loss). Decrease as of September 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 $ 16,133 $ 1,598 $ 2,196 $ 36,436 $ 2,743 $ 9,577 Weighted average expected life 9,996 1,304 1,999 17,471 2,366 2,178 Expected annualized volatility 19,188 1,737 2,347 33,343 2,180 7,714 |
Property, Plant and Equipment (
Property, Plant and Equipment (Tables) | 9 Months Ended |
Sep. 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 September 30, 2020 December 31, 2019 Cost Land $ 3,037 $ 3,071 Building 148,112 149,690 Furniture and equipment 17,161 10,079 Computer equipment 669 526 Leasehold improvements 3,400 1,758 Construction in progress 14,267 3,569 Less: accumulated depreciation (15,242) (8,745) Total $ 171,404 $ 159,948 |
Intangible Assets and Goodwill
Intangible Assets and Goodwill (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Finite-Lived Intangible Assets | Intangible assets with finite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Enterprise resource planning (“ERP”) system Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Israeli codes (i) Straight-line Useful life of corresponding facilities (i) 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 equity interests in the Cronos Israel entities specified above. Intangible assets are comprised of the following items: Weighted average amortization period (in years) As of September 30, 2020 Cost Accumulated amortization Impairment charges Net Software 5 $ 575 $ (234) $ — $ 341 ERP system 5 2,851 (130) — 2,721 Health Canada licenses 17 7,211 (1,102) 6,109 Lord Jones ™ brand N/A 64,000 — (5,000) 59,000 Trademarks N/A 146 — — 146 Israeli codes (i) 25 300 (13) — 287 $ 75,083 $ (1,479) $ (5,000) $ 68,604 (i) 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 5 $ 541 $ (202) $ 339 Health Canada licenses 17 7,387 (821) 6,566 Lord Jones ™ brand N/A 64,000 — 64,000 Trademarks N/A 36 — 36 Israeli codes (i) 25 298 (4) 294 $ 72,262 $ (1,027) $ 71,235 (i) 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 September 30, 2020 Cost Accumulated amortization Impairment charges Net Software 5 $ 575 $ (234) $ — $ 341 ERP system 5 2,851 (130) — 2,721 Health Canada licenses 17 7,211 (1,102) 6,109 Lord Jones ™ brand N/A 64,000 — (5,000) 59,000 Trademarks N/A 146 — — 146 Israeli codes (i) 25 300 (13) — 287 $ 75,083 $ (1,479) $ (5,000) $ 68,604 (i) 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 5 $ 541 $ (202) $ 339 Health Canada licenses 17 7,387 (821) 6,566 Lord Jones ™ brand N/A 64,000 — 64,000 Trademarks N/A 36 — 36 Israeli codes (i) 25 298 (4) 294 $ 72,262 $ (1,027) $ 71,235 (i) 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 September 30, 2020 Peace Naturals 1,078 — — (33) 1,045 Redwood 213,414 — (35,000) — 178,414 $ 214,492 $ — $ (35,000) $ (33) $ 179,459 |
General and Administrative Ex_2
General and Administrative Expenses (Tables) | 9 Months Ended |
Sep. 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 September 30, Nine months ended September 30, 2020 2019 2020 2019 Salaries and wages $ 4,611 $ 7,789 $ 18,412 $ 13,137 Professional and consulting 4,295 4,694 13,144 11,948 Office and general 4,449 1,643 11,064 7,166 Review costs related to restatement of 2019 interim financial statements (i) 958 — 8,824 — Other 4,547 2,076 9,604 2,736 Total $ 18,860 $ 16,202 $ 61,048 $ 34,987 (i) These financial statement review costs include costs related to the restatement of the Company’s 2019 interim financial statements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to such restatement and legal costs defending shareholder class action complaints brought against the Company as a result of the restatement. |
Share-based Payments (Tables)
Share-based Payments (Tables) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2020 and 2019: Weighted average exercise price (C$) Number of warrants Balance as of January 1, 2020 $ 0.26 18,066,662 Exercise of warrants 0.27 (5,626,410) Balance as of September 30, 2020 $ 0.25 12,440,252 Balance as of January 1, 2019 $ 0.26 25,457,623 Exercise of warrants 0.26 (7,390,961) Balance as of September 30, 2019 $ 0.26 18,066,662 The following is a summary of the changes in DSUs from January 1, 2020 to September 30, 2020: Number of DSUs Financial liability Balance as of January 1, 2020 33,397 $ 255 Granting and vesting of DSUs 58,380 338 Liabilities settled (8,484) (46) Loss (gain) on revaluation — (128) Balance as of September 30, 2020 83,293 $ 419 The following is a summary of the changes in DSUs from January 1, 2019 to September 30, 2019: Number of DSUs Financial liability Balance as of January 1, 2019 — $ — Granting and vesting of DSUs 33,937 454 Loss (gain) on revaluation — (147) Balance as of September 30, 2019 33,937 $ 307 |
Summary of Outstanding Warrants | As of September 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 $ 0.31 452,903 May 13 – 27, 2016 May 13 – 27, 2021 0.25 11,987,349 As of September 30, 2020 $ 0.25 12,440,252 |
Summary of the Changes in Options | The following is a summary of the changes during the nine months ended September 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 Issuance of options (i) 6.96 2,000,000 Exercise of options 2.04 (1,841,863) Cancellation, forfeiture and expiry of options 15.06 (222,433) Balance as of September 30, 2020 $ 5.34 14,085,206 2.54 Exercisable as of September 30, 2020 $ 3.56 9,381,601 1.57 Balance as of January 1, 2019 $ 2.99 12,902,995 3.35 Issuance of options 20.08 1,534,162 Exercise of options 3.72 (254,199) Cancellation, forfeiture and expiry of options — (5,083) Balance as of September 30, 2019 $ 4.83 14,177,875 2.81 Exercisable as of September 30, 2019 $ 2.66 7,442,390 2.47 (i) On September 9, 2020, options to purchase 2,000,000 Company common shares were granted to Kurt Schmidt in connection with his appointment as President and Chief Executive Officer of the Company under the 2020 Omnibus Plan. |
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 nine months ended September 30, 2020 2019 Share price at grant date (per share) C$6.96 C$15.34 - C$24.75 Exercise price (per option) C$6.96 C$15.34 - C$24.75 Risk-free interest rate 0.43% 1.39% - 1.62% Expected life of options (in years) (i) 5 5 Expected annualized volatility 91% 89% Expected dividend yield —% —% Weighted average Black-Scholes value at grant date (per option) C$4.84 C$10.6 - C$15.91 Forfeiture rate —% —% (i) The expected life of the awards represents the period of time stock options are expected to be outstanding and is estimated considering vesting terms and employees’ and non-employees’ historical exercise and post-vesting employment termination behavior. Volatility was based on an equally weighted blended historical volatility level of the underlying equity securities of the Company and peer companies. The risk-free interest rate was based on the Bank of Canada government bonds with a remaining term equal to the expected life of the options at the grant date. |
Summary of Restricted Share Units Activity | The following is a summary of the changes in RSUs from January 1, 2020 to September 30, 2020: Number of RSUs Weighted average grant date fair value (C$) Balance as of January 1, 2020 732,972 $ 15.34 Granted (i) 814,874 7.32 Vested and issued (ii) (732,972) 15.34 Cancellation and forfeitures (9,497) 7.52 Balance as of September 30, 2020 805,377 $ 7.32 The following is a summary of the changes in RSUs from January 1, 2019 to September 30, 2019: Number of RSUs Weighted average grant date fair value (C$) Balance as of January 1, 2019 — $ — Granted (i) 732,972 15.34 Balance as of September 30, 2019 732,972 $ 15.34 (i) During the three months ended September 30, 2019, the Company issued an aggregate of 732,972 RSUs to Mr. Rosenheck and another Redwood employee in connection with the acquisition of four Redwood Holding Group, LLC subsidiaries. These RSUs were accelerated and vested during the three months ended September 30, 2020. |
Earnings (Loss) Per Share (Tabl
Earnings (Loss) Per Share (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | Basic and diluted earnings (loss) per share from continuing operations are calculated using the following numerators and denominators: For the three months ended September 30, For the nine months ended September 30, 2020 2019 2020 2019 Basic earnings per share computation Net income (loss) attributable to common shareholders of Cronos Group $ 69,506 $ 604,446 $ 38,615 $ 1,104,564 Weighted average number of common shares outstanding 350,288,783 338,957,949 349,397,156 297,964,058 Basic earnings per share (i) $ 0.20 $ 1.78 $ 0.11 $ 3.71 Diluted earnings per share computation Net income (loss) used in the computation of basic earnings per share $ 69,506 $ 604,446 $ 38,615 $ 1,104,564 Adjustment for gain (loss) on revaluation of derivative liabilities (680) (6,952) (1,407) (798,799) Net income (loss) used in the computation of diluted income per share $ 68,826 $ 597,494 $ 37,208 $ 305,765 Weighted average number of common shares outstanding used in the computation of basic earnings per share 350,288,783 338,957,949 349,397,156 297,964,058 Dilutive effect of warrants 12,514,864 17,792,227 17,126,222 20,080,244 Dilutive effect of stock options 6,688,620 10,435,804 7,992,139 11,030,736 Dilutive effect of RSUs 126,753 732,972 215,934 732,972 Dilutive effect of Altria Warrant — — — 1,833,853 Dilutive effect of Top-up Rights – exercised and exercisable fixed price — 1,349,720 — 1,976,828 Weighted average number of common shares for computation of diluted income (loss) per share 369,619,020 369,268,672 374,731.451 333,618,691 Diluted earnings per share (i) $ 0.19 $ 1.62 $ 0.10 $ 0.92 (i) Basic and dilutive earnings per share from discontinued operations were $0.00 for the three and nine months ended September 30, 2020 and 2019. |
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 September 30, Nine months ended September 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 22,551,531 25,126,670 22,551,531 25,126,670 Top-up Rights – market price 3,065,570 1,255,223 3,065,570 1,255,223 Altria Warrant 79,051,981 76,392,046 79,051,981 — Stock options 2,017,176 1,346,902 1,571,134 51,830 Total anti-dilutive securities 133,367,902 130,802,485 132,921,860 53,115,367 |
Related Party Disclosures (Tabl
Related Party Disclosures (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The Company incurred the following expenses for consulting services from Altria Pinnacle LLC, a subsidiary of Altria (“Altria Pinnacle”): Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Altria Pinnacle – expense $ 160 $ 1,772 $ 1,113 $ 1,772 Total $ 160 $ 1,772 $ 1,113 $ 1,772 The following is a summary of amounts payable related to the consulting services with Altria Pinnacle: As of September 30, 2020 December 31, 2019 Altria Pinnacle – payable $ 5 $ 1,152 Total $ 5 $ 1,152 |
Segment Information (Tables)
Segment Information (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Segment Reporting [Abstract] | |
Schedule of Segment Data | Segment data was as follows for the three months ended September 30, 2020: Three months ended September 30, 2020 United States Rest of World Corporate expenses Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 7,958 $ — $ 7,958 Cannabis extracts 1,639 1,504 — 3,143 Other — 257 — 257 Net revenue $ 1,639 $ 9,719 $ — $ 11,358 Share of loss from investments in equity accounted investees $ — $ 1,327 $ — $ 1,327 Interest income 3 3,844 — 3,847 Interest expense — (66) — (66) Interest income, net $ 3 $ 3,778 $ — $ 3,781 Impairment loss on goodwill and intangible assets $ — $ — $ — $ — Depreciation and amortization 35 851 — 886 Income tax expense 143 845 — 988 Income (loss) from discontinued operations — (473) — (473) Net income (loss) (14,004) 93,447 (10,979) 68,464 Segment data was as follows for the nine months ended September 30, 2020: Nine months ended September 30, 2020 United States Rest of World Corporate expenses Total Consolidated statements of net income (loss) and comprehensive income (loss) Net revenue Cannabis flower $ — $ 16,373 $ — $ 16,373 Cannabis extracts 5,989 6,821 — 12,810 Other — 490 — 490 Net revenue $ 5,989 $ 23,684 $ — $ 29,673 Share of loss from investments in equity accounted investees $ — $ 3,293 $ — $ 3,293 Interest income 16 15,406 — 15,422 Interest expense — (156) — (156) Interest income, net $ 16 $ 15,250 $ — $ 15,266 Impairment loss on goodwill and intangible assets $ 40,000 $ — $ — $ 40,000 Depreciation and amortization 104 2,148 — 2,252 Income tax expense 143 845 — 988 Income (loss) from discontinued operations — (519) — (519) Net income (loss) (71,571) 132,704 (24,691) 36,442 Consolidated balance sheets Total assets $ 251,835 $ 369,621 $ 1,297,473 $ 1,918,929 Investments in equity accounted investees — 19,059 — 19,059 Goodwill 178,414 1,045 — 179,459 Purchase of property, plant and equipment, net 294 21,040 — 21,334 Sources of net revenue for the three and nine months ended September 30, 2020 and 2019 were as follows: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Cannabis flower $ 7,958 $ 4,266 $ 16,373 $ 12,187 Cannabis extracts 3,143 1,500 12,810 4,138 Other 257 19 490 117 Net revenue $ 11,358 $ 5,785 $ 29,673 $ 16,442 |
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 September 31, Nine months ended September 31, 2020 2019 2020 2019 Canada $ 9,205 $ 5,093 $ 22,712 $ 15,416 United States 1,639 675 5,989 675 Other countries 514 17 972 351 Net revenue $ 11,358 $ 5,785 $ 29,673 $ 16,442 |
Schedule of Long-lived Assets by Geographic Areas | Property, plant and equipment assets were physically located in the following geographic regions: As of September 30, 2020 As of December 31, 2019 Canada $ 146,292 $ 139,160 United States 2,302 2,103 Other countries 22,810 18,685 Total $ 171,404 $ 159,948 |
Fair Value Measurement (Tables)
Fair Value Measurement (Tables) | 9 Months Ended |
Sep. 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 September 30, 2020 and December 31, 2019 and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value. September 30, 2020 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 1,097,846 $ — $ — $ 1,097,846 Short-term investments 202,883 — — 202,883 Derivative liabilities — — 102,655 102,655 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) | 9 Months Ended |
Sep. 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 nine months ended September 30, 2020 2019 Accounts receivable $ (1,448) $ (1,991) Other receivables (3,169) (3,315) Prepaids and other assets (1,137) (5,930) Current portion of loans receivable — (4,607) Inventory, net (18,316) (33,903) Accounts payable and other liabilities 3,711 23,676 Cumulative effect from foreign exchange (8,764) — Add back: net working capital assumed on acquisition — 972 Total $ (29,123) $ (25,098) |
Held-For-Sale Assets and Disc_2
Held-For-Sale Assets and Discontinued Operations (Tables) | 9 Months Ended |
Sep. 30, 2020 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Financial Information for Discontinued Operations | The following table presents a reconciliation of the carrying amounts of major classes of assets and liabilities of the discontinued operations to total assets and liabilities of the disposal group classified as held-for-sale in the consolidated balance sheet of December 31, 2019: As of December 31, 2019 As previously disclosed Held-for-sale adjustment Adjusted balance Property, plant and equipment $ 161,809 $ (1,861) $ 159,948 Intangible assets 72,320 (1,085) 71,235 Goodwill 214,794 (302) 214,492 The following table presents a reconciliation of the major classes of line items constituting reported operating loss of discontinued operations to net loss of discontinued operations for the three and nine months ended September 30, 2019: Three months ended September 30, 2019 Nine months ended September 30, 2019 As previously disclosed Held-for-sale adjustment Adjusted balance As previously disclosed Held-for-sale adjustment Adjusted balance Operating expenses $ 27,597 $ (36) $ 27,561 $ 60,126 $ (76) $ 60,050 Other income (loss) 634,920 — 634,920 1,161,677 (13) 1,161,664 Net income (loss) from continuing operations 604,128 36 604,164 1,104,004 63 1,104,067 The following table summarizes the financial information for discontinued operations: Three months ended September 30, Nine months ended September 30, 2020 2019 2020 2019 Consolidated statements of net income (loss) and comprehensive income (loss) OGBC income from discontinued operations, net of income taxes $ (473) $ (36) $ (519) $ (63) As of September 30, 2020 December 31, 2019 Consolidated balance sheets Long-term assets classified as discontinued operations 2,066 3,248 |
Background (Details)
Background (Details) | Sep. 30, 2020continentventurebrand |
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 | 3 |
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 and Changes in Accounting Policy - Schedule of Consolidated Entities (Details) | 9 Months Ended |
Sep. 30, 2020 | |
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% |
Summary of Significant Accoun_5
Summary of Significant Accounting Policies and Changes in Accounting Policy - Additional Information (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | ||||
Sep. 30, 2020USD ($) | Jun. 30, 2020USD ($) | Mar. 31, 2020USD ($) | Sep. 30, 2019USD ($)warrant | Sep. 30, 2020USD ($)reportingUnit | Sep. 30, 2019USD ($) | |
Accounting Policies [Abstract] | ||||||
Number of reporting units for impairment testing | reportingUnit | 2 | |||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net income (loss) | $ 68,464 | $ 604,128 | $ 36,442 | $ 1,104,004 | ||
Cronos Group, Inc. | Altria Warrant | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Number of warrants issued | warrant | 1 | |||||
Operating Segments | Rest of World | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net income (loss) | 93,447 | 132,704 | ||||
Corporate expenses | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net income (loss) | (10,979) | $ (24,691) | ||||
Restatement Adjustment | Operating Segments | Rest of World | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net income (loss) | 4,626 | $ 1,727 | $ 2,899 | |||
Restatement Adjustment | Corporate expenses | ||||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||||
Net income (loss) | $ (4,626) | $ (1,727) | $ (2,899) |
Summary of Significant Accoun_6
Summary of Significant Accounting Policies and Changes in Accounting Policy - Finite-lived Intangibles (Details) | 9 Months Ended | 12 Months Ended | |
Sep. 30, 2020 | Dec. 31, 2019 | Jun. 30, 2020 | |
Software | |||
Finite-Lived Intangible Assets [Line Items] | |||
Amortization rate | 0.50 | ||
Weighted average amortization period (in years) | 5 years | 5 years | |
ERP system | |||
Finite-Lived Intangible Assets [Line Items] | |||
Weighted average amortization period (in years) | 5 years |
Summary of Significant Accoun_7
Summary of Significant Accounting Policies and Changes in Accounting Policy - Summary of Financial Information for Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Property, plant and equipment | $ 171,404 | $ 171,404 | $ 159,948 | ||
Intangible assets | 68,604 | 68,604 | 71,235 | ||
Goodwill | 179,459 | 179,459 | 214,492 | ||
Operating expenses | 39,632 | $ 27,561 | 110,002 | $ 60,050 | |
Other income (loss) | 111,094 | 634,920 | 158,886 | 1,161,664 | |
Net income (loss) from continuing operations | $ 68,937 | 604,164 | $ 36,961 | 1,104,067 | |
As previously disclosed | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Property, plant and equipment | 161,809 | ||||
Intangible assets | 72,320 | ||||
Goodwill | 214,794 | ||||
Operating expenses | 27,597 | 60,126 | |||
Other income (loss) | 634,920 | 1,161,677 | |||
Net income (loss) from continuing operations | 604,128 | 1,104,004 | |||
Held-for-sale adjustment | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Property, plant and equipment | (1,861) | ||||
Intangible assets | (1,085) | ||||
Goodwill | $ (302) | ||||
Operating expenses | (36) | (76) | |||
Other income (loss) | 0 | (13) | |||
Net income (loss) from continuing operations | $ 36 | $ 63 |
Summary of Significant Accoun_8
Summary of Significant Accounting Policies and Changes in Accounting Policy - Schedule of Prior Period Adjustments (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Diluted earnings (loss) per share (in dollars per share) | $ 0.19 | $ 1.62 | $ 0.10 | $ 0.92 |
Adjustment for gain (loss) on revaluation of derivative liabilities | $ (680) | $ (6,952) | $ (1,407) | $ (798,799) |
As previously disclosed | ||||
Error Corrections and Prior Period Adjustments Restatement [Line Items] | ||||
Diluted earnings (loss) per share (in dollars per share) | $ 0.42 | |||
Adjustment for gain (loss) on revaluation of derivative liabilities | $ (488,041) |
Revenues from Contracts with _2
Revenues from Contracts with Customers (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 | |
Revenue from Contract with Customer [Abstract] | |||
Accounts receivable | [1] | $ 6,086 | $ 4,638 |
Current expected credit loss | $ 64 | $ 136 | |
[1] | Net of current expected credit loss allowance of $64 as of September 30, 2020 (December 31, 2019 – $136) |
Inventory, net (Details)
Inventory, net (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Inventory [Line Items] | |||||
Raw materials | $ 10,214,000 | $ 10,214,000 | $ 2,469,000 | ||
Supplies and consumables | 329,000 | 329,000 | 1,639,000 | ||
Inventory, net | 56,359,000 | 56,359,000 | 38,043,000 | ||
Inventory write-down | 0 | $ 5,424,000 | 11,024,000 | $ 5,424,000 | |
Inventory reserve for obsolescence | 1,403,000 | 1,403,000 | |||
Dry Cannabis | |||||
Inventory [Line Items] | |||||
Work-in-progress | 25,799,000 | 25,799,000 | 11,538,000 | ||
Finished goods | 4,514,000 | 4,514,000 | 1,798,000 | ||
Cannabis Extracts | |||||
Inventory [Line Items] | |||||
Work-in-progress | 13,436,000 | 13,436,000 | 17,975,000 | ||
Finished goods | $ 2,067,000 | $ 2,067,000 | $ 2,624,000 |
Investments and Advances to J_3
Investments and Advances to Joint Ventures - Narrative (Details) ₪ in Thousands, $ in Thousands | Jun. 14, 2018 | Mar. 13, 2018 | Sep. 30, 2020ILS (₪) | Sep. 30, 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 | |||
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) $ in Thousands | Sep. 25, 2020USD ($) | Sep. 25, 2020CAD ($) | Nov. 07, 2019 | Nov. 06, 2019 | Oct. 25, 2019$ / sharesshares | Jun. 14, 2018 | Mar. 13, 2018 | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) |
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Carrying Amount | $ 19,059,000 | $ 19,059,000 | $ 557,000 | |||||||||
Advances to affiliates | 15,135,000 | |||||||||||
Transfer to investments in equity accounted investees | 18,505,000 | |||||||||||
Share of earnings (loss) from investments in equity accounted investees | (1,327,000) | $ (565,000) | (3,293,000) | $ (1,504,000) | ||||||||
IPO | Cronos Australia | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 40,000,000 | |||||||||||
Sale of stock, price per share (in aud per share) | $ / shares | $ 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 | 31.00% | 31.00% | ||||||||||
Carrying Amount | $ 0 | $ 0 | (346,000) | |||||||||
Advances to affiliates | 274,000 | |||||||||||
Transfer to investments in equity accounted investees | 0 | |||||||||||
Share of earnings (loss) from investments in equity accounted investees | (57,000) | (251,000) | (292,000) | (892,000) | ||||||||
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 | 50.00% | 50.00% | ||||||||||
Carrying Amount | $ 19,059,000 | $ 19,059,000 | 1,501,000 | |||||||||
Advances to affiliates | $ 37,932,000 | $ 49,300 | 15,494,000 | |||||||||
Transfer to investments in equity accounted investees | 18,505,000 | 24,650 | 18,505,000 | |||||||||
Share of earnings (loss) from investments in equity accounted investees | $ (401,000) | (60,000) | $ (902,000) | (87,000) | ||||||||
Cronos GrowCo | Variable Interest Entity, Not Primary Beneficiary | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Ownership percentage | 50.00% | |||||||||||
Cronos GrowCo | Cronos Group Inc. | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Advances to affiliates | $ 18,505,000 | $ 24,650 | ||||||||||
Funding commitment percentage | 0.50 | 0.50 | ||||||||||
Cronos GrowCo | Mucci | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Advances to affiliates | $ 18,505,000 | $ 24,650 | ||||||||||
Funding commitment percentage | 0.50 | 0.50 | ||||||||||
MedMen Canada | ||||||||||||
Schedule of Equity Method Investments [Line Items] | ||||||||||||
Ownership percentage | 50.00% | 50.00% | ||||||||||
Carrying Amount | $ 0 | $ 0 | 0 | |||||||||
Advances to affiliates | (852,000) | |||||||||||
Transfer to investments in equity accounted investees | 0 | |||||||||||
Share of earnings (loss) from investments in equity accounted investees | $ 0 | 32,000 | $ 0 | 36,000 | ||||||||
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 | 50.00% | 50.00% | ||||||||||
Carrying Amount | $ 0 | $ 0 | (598,000) | |||||||||
Advances to affiliates | $ 219,000 | |||||||||||
Transfer to investments in equity accounted investees | 0 | |||||||||||
Share of earnings (loss) from investments in equity accounted investees | $ (869,000) | $ (286,000) | $ (2,099,000) | $ (590,000) | ||||||||
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) $ in Thousands, $ in Thousands | Sep. 25, 2020USD ($) | Sep. 25, 2020CAD ($) | Sep. 30, 2020USD ($) | Dec. 31, 2019USD ($) | Sep. 30, 2020AUD ($) |
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | |||||
Balance at beginning of period | $ 19,437 | $ 4,689 | |||
Transfer to investments in equity accounted investees | (18,505) | ||||
Interest on advances | 35 | ||||
Advances (repayments) | 15,135 | ||||
Advances to joint ventures recovered from (applied to) carrying amount of investments | (36) | (946) | |||
Effect from foreign exchange | (470) | 559 | |||
Balance at end of period | 461 | 19,437 | |||
MedMen Canada | |||||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | |||||
Balance at beginning of period | 471 | 1,244 | |||
Transfer to investments in equity accounted investees | 0 | ||||
Interest on advances | 0 | ||||
Advances (repayments) | (852) | ||||
Advances to joint ventures recovered from (applied to) carrying amount of investments | 0 | 35 | |||
Effect from foreign exchange | (10) | 44 | |||
Balance at end of period | 461 | 471 | |||
Cronos GrowCo | |||||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | |||||
Balance at beginning of period | 18,966 | 2,970 | |||
Transfer to investments in equity accounted investees | $ (18,505) | $ (24,650) | (18,505) | ||
Interest on advances | 0 | ||||
Advances (repayments) | $ 37,932 | $ 49,300 | 15,494 | ||
Advances to joint ventures recovered from (applied to) carrying amount of investments | 0 | 22 | |||
Effect from foreign exchange | (461) | 480 | |||
Balance at end of period | 0 | 18,966 | |||
Cronos Australia | |||||
Investments in and Advances to Affiliates, at Fair Value [Roll Forward] | |||||
Balance at beginning of period | 0 | 475 | |||
Transfer to investments in equity accounted investees | 0 | ||||
Interest on advances | 35 | ||||
Advances (repayments) | 274 | ||||
Advances to joint ventures recovered from (applied to) carrying amount of investments | (36) | (779) | |||
Effect from foreign exchange | 1 | 30 | |||
Balance at end of period | 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 | |||
Transfer to investments in equity accounted investees | 0 | ||||
Interest on advances | 0 | ||||
Advances (repayments) | 219 | ||||
Advances to joint ventures recovered from (applied to) carrying amount of investments | 0 | (224) | |||
Effect from foreign exchange | 0 | 5 | |||
Balance at end of period | $ 0 | $ 0 |
Other Investments (Details)
Other Investments (Details) - Equity Securities $ in Thousands, $ in Thousands | Mar. 04, 2019shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2020CAD ($)shares | Sep. 30, 2020USD ($)shares | Sep. 30, 2020CAD ($)shares | Sep. 30, 2019USD ($)shares |
Whistler | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Shares received (in shares) | 402,561 | 402,561 | 980,662 | 980,662 | ||
Number of shares sold (in shares) | 2,563 | 402,561 | 402,561 | 980,662 | 980,662 | |
Proceeds from sale of equity securities, FV-NI | $ 3,974 | $ 5,354 | $ 4,743 | $ 6,404 | ||
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 | |||||
Number of shares sold (in shares) | 2,524,341 | |||||
Proceeds from sale of equity securities, FV-NI | $ | $ 19,259 | |||||
Canopy | ||||||
Debt and Equity Securities, FV-NI [Line Items] | ||||||
Number of shares sold (in shares) | 11,062 | |||||
Proceeds from sale of equity securities, FV-NI | $ | $ 355 |
Accumulated Other Comprehensi_3
Accumulated Other Comprehensive Income (Loss) (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | $ 1,663,055 | $ 921,058 | $ 1,749,030 | $ 148,549 |
Ending balance | 1,764,487 | 1,617,264 | 1,764,487 | 1,617,264 |
Accumulated other comprehensive income (loss) | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (33,970) | 11,973 | 27,838 | (9,870) |
Ending balance | (7,820) | (441) | (7,820) | (441) |
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 foreign exchange gain (loss) on translation | ||||
AOCI Including Portion Attributable to Noncontrolling Interest, Net of Tax [Roll Forward] | ||||
Beginning balance | (33,975) | 11,968 | 27,833 | (9,875) |
Net unrealized (loss) gain | 26,150 | (12,414) | (35,658) | 9,429 |
Ending balance | $ (7,825) | $ (446) | $ (7,825) | $ (446) |
Leases (Details)
Leases (Details) | 9 Months Ended |
Sep. 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 ($) | Jun. 28, 2019USD ($) | Mar. 31, 2020USD ($) | Mar. 31, 2020CAD ($) | Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020ILS (₪) | Jul. 24, 2020USD ($) | Apr. 01, 2020ILS (₪) | Dec. 31, 2019USD ($) | Sep. 27, 2019 | Aug. 23, 2019USD ($) | Aug. 23, 2019CAD ($) | Jun. 28, 2019CAD ($) |
Current portion | ||||||||||||||
Total current portion of loans receivable | $ 7,781,000 | $ 4,664,000 | ||||||||||||
Long term portion | ||||||||||||||
Total long-term portion of loans receivable | 76,148,000 | 44,967,000 | ||||||||||||
Draw downs | 37,000,000 | $ 33,012,000 | ||||||||||||
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 | $ 317,000 | 89,000 | ||||||||||||
Total current portion of loans receivable | 7,781,000 | 4,664,000 | ||||||||||||
Long term portion | ||||||||||||||
Add: Accrued interest | 1,905,000 | 702,000 | ||||||||||||
Total long-term portion of loans receivable | 76,148,000 | 44,967,000 | ||||||||||||
Total loans receivable | 83,929,000 | 49,631,000 | ||||||||||||
NatuEra Series A Loan | Loans Receivable | ||||||||||||||
Current portion | ||||||||||||||
Current portion of loans receivable, before accrued interest | 5,210,000 | 4,575,000 | ||||||||||||
Long term portion | ||||||||||||||
Additional principal amount | $ 6,350,000 | |||||||||||||
Total aggregate principal amount | $ 15,500,000 | |||||||||||||
Funding commitment percentage | 50.00% | |||||||||||||
Stated interest rate | 5.67% | |||||||||||||
Allowance for credit loss | 2,552,000 | |||||||||||||
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 | 2,254,000 | 0 | ||||||||||||
Long term portion | ||||||||||||||
Long term portion of loans receivable, before accrued interest | 60,408,000 | 31,678,000 | ||||||||||||
Allowance for credit loss | 1,317,000 | |||||||||||||
Face amount | $ 75,140,000 | $ 100,000,000 | ||||||||||||
Draw downs | $ 63,981,000 | $ 85,150,000 | ||||||||||||
2645485 Ontario Inc. Mucci Promissory Note | Loans Receivable | ||||||||||||||
Long term portion | ||||||||||||||
Long term portion of loans receivable, before accrued interest | 12,648,000 | 12,587,000 | ||||||||||||
Stated interest rate | 3.95% | 3.95% | ||||||||||||
Allowance for credit loss | 258,000 | |||||||||||||
Face amount | $ 12,285,000 | $ 16,350,000 | ||||||||||||
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 | 1,187,000 | $ 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 | 25,000 | |||||||||||||
Collaboration agreement, amount of advances | $ 2,495,000 | ₪ 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, 2019day$ / sharesshares | Sep. 30, 2020USD ($)shares | Sep. 30, 2019warrant | Sep. 30, 2020USD ($)shares | Dec. 31, 2019USD ($) |
Derivative [Line Items] | |||||
Gain on revaluation | $ 105,307 | $ 182,795 | |||
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 | 79,100,000 | 79,100,000 | |||
Altria Warrant | |||||
Derivative [Line Items] | |||||
Exercise price (in dollars per share) | $ / shares | $ 19 | ||||
Gain on revaluation | $ 82,495 | $ 140,547 | |||
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 | 8,702 | 4,777 | |||
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 | $ 14,110 | $ 37,471 | |||
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 | 9 Months Ended |
Sep. 30, 2020 | Sep. 30, 2020 | |
Derivative Instruments [Roll Forward] | ||
Beginning balance | $ 205,714 | $ 297,160 |
(Gain) / loss on revaluation | (105,307) | (182,795) |
Exercise of rights | (680) | (1,407) |
Effect from foreign exchange | 2,928 | (10,303) |
Ending balance | 102,655 | 102,655 |
Altria Warrant | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 165,958 | 234,428 |
(Gain) / loss on revaluation | (82,495) | (140,547) |
Exercise of rights | 0 | 0 |
Effect from foreign exchange | 2,374 | (8,044) |
Ending balance | 85,837 | 85,837 |
Pre-emptive Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 16,180 | 12,787 |
(Gain) / loss on revaluation | (8,702) | (4,777) |
Exercise of rights | 0 | 0 |
Effect from foreign exchange | 143 | (389) |
Ending balance | 7,621 | 7,621 |
Top-up Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 23,576 | 49,945 |
(Gain) / loss on revaluation | (14,110) | (37,471) |
Exercise of rights | (680) | (1,407) |
Effect from foreign exchange | 411 | (1,870) |
Ending balance | $ 9,197 | $ 9,197 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Fair Values of Derivative Liabilities (Details) | 3 Months Ended | 9 Months Ended | 12 Months Ended |
Mar. 31, 2020 | Sep. 30, 2020$ / shares | Dec. 31, 2019$ / shares | |
Altria Warrant | Share price at valuation date (per share in C$) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 6.69 | 9.97 | |
Altria Warrant | Subscription price (per share in C$) | |||
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 | 0.81 | 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 | 0.0025 | 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 5 months 4 days | 3 years 2 months 4 days | |
Pre-emptive Rights | Share price at valuation date (per share in C$) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 6.69 | 9.97 | |
Pre-emptive Rights | Subscription price (per share in C$) | |||
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 | 0.81 | 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 | 0.0024 | 0.0173 | |
Pre-emptive Rights | Weighted Average | Weight average expected life (in years) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Expected life | 1 year 9 months | 1 year 3 months | |
Top-up Rights | Share price at valuation date (per share in C$) | |||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | |||
Derivative liability, measurement input | 6.69 | 9.97 | |
Top-up Rights | Subscription price (per share in C$) | |||
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 | 0.81 | 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 | 0.0020 | 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 17 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 | 0.0012 | 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 | 0.0036 | 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 | 6 years | 5 years 3 months |
Derivative Liabilities - Sche_3
Derivative Liabilities - Schedule of Sensitivity Analysis (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Altria Warrant | ||
Sensitivity Analysis, Impact of 10 Percent Decrease (Increase) on Net Income (Loss) [Abstract] | ||
Share price | $ 16,133 | $ 36,436 |
Weighted average expected life | 9,996 | 17,471 |
Expected annualized volatility | 19,188 | 33,343 |
Pre-emptive Rights | ||
Sensitivity Analysis, Impact of 10 Percent Decrease (Increase) on Net Income (Loss) [Abstract] | ||
Share price | 1,598 | 2,743 |
Weighted average expected life | 1,304 | 2,366 |
Expected annualized volatility | 1,737 | 2,180 |
Top-up Rights | ||
Sensitivity Analysis, Impact of 10 Percent Decrease (Increase) on Net Income (Loss) [Abstract] | ||
Share price | 2,196 | 9,577 |
Weighted average expected life | 1,999 | 2,178 |
Expected annualized volatility | $ 2,347 | $ 7,714 |
Property, Plant and Equipment_2
Property, Plant and Equipment (Details) - USD ($) | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Property, Plant and Equipment [Line Items] | |||
Less: accumulated depreciation | $ (15,242,000) | $ (8,745,000) | |
Total | 171,404,000 | 159,948,000 | |
Depreciation expense included in costs of sales | 1,935,000 | $ 1,628,000 | |
Depreciation expense included in operating expenses | 1,682,000 | 577,000 | |
Interest costs capitalized | 0 | $ 367,000 | |
Land | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 3,037,000 | 3,071,000 | |
Building | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 148,112,000 | 149,690,000 | |
Furniture and equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 17,161,000 | 10,079,000 | |
Computer equipment | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 669,000 | 526,000 | |
Leasehold improvements | |||
Property, Plant and Equipment [Line Items] | |||
Cost | 3,400,000 | 1,758,000 | |
Construction in progress | |||
Property, Plant and Equipment [Line Items] | |||
Cost | $ 14,267,000 | $ 3,569,000 |
Intangible Assets and Goodwil_2
Intangible Assets and Goodwill - Narrative (Details) - USD ($) | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||||
Goodwill, impairment loss | $ 35,000,000 | |||
Impairment loss on goodwill and intangible assets | $ 0 | $ 0 | 40,000,000 | $ 0 |
Amortization of intangible assets | 570,000 | $ 480,000 | ||
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||||
2021 | 573,000 | 573,000 | ||
2022 | 562,000 | 562,000 | ||
2023 | 529,000 | 529,000 | ||
2024 | 524,000 | 524,000 | ||
2025 | 509,000 | 509,000 | ||
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] | ||||
Disposal of intangible assets | $ 0 | $ 0 |
Intangible Assets and Goodwil_3
Intangible Assets and Goodwill - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Finite-Lived Intangible Assets [Line Items] | ||
Accumulated amortization | $ (1,479) | $ (1,027) |
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 75,083 | 72,262 |
Impairment charges | (5,000) | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | 75,083 | 72,262 |
Accumulated amortization | (1,479) | (1,027) |
Impairment charges | (5,000) | |
Net | 68,604 | 71,235 |
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 |
Impairment charges | (5,000) | |
Trademarks | ||
Indefinite-lived Intangible Assets [Line Items] | ||
Cost | 146 | 36 |
Net | 146 | 36 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Cost | $ 146 | $ 36 |
Software | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 5 years | 5 years |
Cost | $ 575 | $ 541 |
Accumulated amortization | (234) | (202) |
Net | 341 | 339 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (234) | $ (202) |
ERP system | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 5 years | |
Cost | $ 2,851 | |
Accumulated amortization | (130) | |
Net | 2,721 | |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (130) | |
Health Canada licenses | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 17 years | 17 years |
Cost | $ 7,211 | $ 7,387 |
Accumulated amortization | (1,102) | (821) |
Net | 6,109 | 6,566 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (1,102) | $ (821) |
Israeli codes | ||
Finite-Lived Intangible Assets [Line Items] | ||
Weighted average amortization period (in years) | 25 years | 25 years |
Cost | $ 300 | $ 298 |
Accumulated amortization | (13) | (4) |
Net | 287 | 294 |
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||
Accumulated amortization | $ (13) | $ (4) |
Intangible Assets and Goodwil_4
Intangible Assets and Goodwill - Schedule of Goodwill (Details) $ in Thousands | 9 Months Ended |
Sep. 30, 2020USD ($) | |
Goodwill [Roll Forward] | |
Balance at beginning of period | $ 214,492 |
Additions | 0 |
Impairment charges | (35,000) |
Effect of foreign exchange | (33) |
Balance at end of period | 179,459 |
Peace Naturals | |
Goodwill [Roll Forward] | |
Balance at beginning of period | 1,078 |
Additions | 0 |
Impairment charges | 0 |
Effect of foreign exchange | (33) |
Balance at end of period | 1,045 |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | ||||
Salaries and wages | $ 4,611 | $ 7,789 | $ 18,412 | $ 13,137 |
Professional and consulting | 4,295 | 4,694 | 13,144 | 11,948 |
Office and general | 4,449 | 1,643 | 11,064 | 7,166 |
Review costs related to restatement of 2019 interim financial statements | 958 | 0 | 8,824 | 0 |
Other | 4,547 | 2,076 | 9,604 | 2,736 |
Total | $ 18,860 | $ 16,202 | $ 61,048 | $ 34,987 |
Share-based Payments - Summary
Share-based Payments - Summary of Changes in Warrants (Details) - Warrants - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 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) | 0.27 | 0.26 |
Balance at end of period (in dollars per share) | $ 0.25 | $ 0.26 |
Number of awards | ||
Balance at beginning of period (in shares) | 18,066,662 | 25,457,623 |
Exercise of warrants (in shares) | (5,626,410) | (7,390,961) |
Balance at end of period (in shares) | 12,440,252 | 18,066,662 |
Share-based Payments - Summar_2
Share-based Payments - Summary of Outstanding Warrants (Details) - Warrants - $ / shares | Sep. 30, 2020 | Dec. 31, 2019 | Sep. 30, 2019 | Dec. 31, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Weighted average exercise price (in dollars per share) | $ 0.25 | $ 0.26 | $ 0.26 | $ 0.26 |
Number of warrants (in shares) | 12,440,252 | 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) | 452,903 | |||
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) | 11,987,349 |
Share-based Payments - Stock Op
Share-based Payments - Stock Options Narrative (Details) $ / shares in Units, $ in Thousands | 3 Months Ended | 9 Months Ended | ||||||||
Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)$ / sharesshares | Sep. 30, 2019USD ($) | Sep. 30, 2020$ / sharesshares | Jun. 25, 2020shares | Dec. 31, 2019shares | Sep. 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) | 14,085,206 | 14,085,206 | 14,085,206 | 14,149,502 | 14,177,875 | 12,902,995 | ||||
Share-based payments | $ | $ 7,916 | $ 3,531 | $ 12,898 | $ 7,949 | ||||||
2015 Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of options outstanding (in shares) | 10,443,447 | 10,443,447 | 10,443,447 | |||||||
2018 Stock Option Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of options outstanding (in shares) | 1,641,759 | 1,641,759 | 1,641,759 | |||||||
2020 Omnibus Plan | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Number of options outstanding (in shares) | 2,000,000 | 2,000,000 | 2,000,000 | |||||||
Stock options | ||||||||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||||||||
Share-based payments | $ | $ 1,551 | $ 3,531 | $ 5,051 | $ 7,949 | ||||||
Share price at grant date (in dollars per share) | $ / shares | $ 6.96 | $ 6.96 | ||||||||
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 | |||||||||
Stock options | 2018 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 | $ 4.84 | $ 13.32 |
Share-based Payments - Summar_3
Share-based Payments - Summary of the Changes in Options (Details) | Sep. 09, 2020shares | Sep. 30, 2020$ / shares$ / sharesshares | Sep. 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 | 6.96 | 20.08 | |||
Exercise of options (in dollars per share) | $ / shares | 2.04 | 3.72 | |||
Cancellation, forfeiture and expiry of options (in dollars per share) | $ / shares | 15.06 | 0 | |||
Balance at end of period (in dollars per share) | $ / shares | $ 5.34 | $ 4.83 | $ 4.84 | $ 2.99 | |
Weighted average exercise price of options exercisable (in dollars per share) | $ / shares | $ 3.56 | $ 2.66 | |||
Number of options | |||||
Balance at beginning of period (in shares) | 14,149,502 | 12,902,995 | 12,902,995 | ||
Issuance of options (in shares) | 2,000,000 | 1,534,162 | |||
Exercise of options (in shares) | (1,841,863) | (254,199) | |||
Cancellation, forfeiture and expiry of options (in shares) | (222,433) | (5,083) | |||
Balance at end of period (in shares) | 14,085,206 | 14,177,875 | 14,149,502 | 12,902,995 | |
Exercisable (in shares) | 9,381,601 | 7,442,390 | |||
Weighted average remaining contractual term (years) | |||||
Outstanding | 2 years 6 months 14 days | 2 years 9 months 21 days | 2 years 6 months 21 days | 3 years 4 months 6 days | |
Exercisable | 1 year 6 months 25 days | 2 years 5 months 19 days | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of options (in shares) | 2,000,000 | 1,534,162 | |||
2020 Omnibus Plan | |||||
Number of options | |||||
Issuance of options (in shares) | 2,000,000 | ||||
Balance at end of period (in shares) | 2,000,000 | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Issuance of options (in shares) | 2,000,000 |
Share-based Payments - Summar_4
Share-based Payments - Summary of Fair Value of Options Issued (Details) - Stock options - $ / shares | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share price at grant date (in dollars per share) | $ 6.96 | |
Exercise price (per option) (in dollars per share) | $ 6.96 | |
Risk-free interest rate | 43.00% | |
Expected life of options (in years) | 5 years | 5 years |
Expected annualized volatility | 91.00% | 89.00% |
Expected dividend yield | 0.00% | 0.00% |
Weighted average Black-Scholes value at grant date (per option) (in dollars per share) | $ 4.84 | |
Forfeiture rate | 0.00% | 0.00% |
Minimum | ||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share price at grant date (in dollars per share) | $ 15.34 | |
Exercise price (per option) (in dollars per share) | $ 15.34 | |
Risk-free interest rate | 1.39% | |
Weighted average Black-Scholes value at grant date (per option) (in dollars per share) | $ 10.6 | |
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) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payments | $ 7,916 | $ 3,531 | $ 12,898 | $ 7,949 |
Restricted share units | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Share-based payments | $ 6,365 | $ 186 | $ 7,847 | $ 186 |
Share-based Payments - Summar_5
Share-based Payments - Summary of Restricted Share Units Activity (Details) | Sep. 09, 2020shares | Aug. 31, 2020shares | May 31, 2020shares | Sep. 30, 2020subsidiary$ / sharesshares | Sep. 30, 2020$ / sharesshares | Sep. 30, 2019$ / sharesshares |
Redwood | ||||||
Weighted average grant date fair value (C$) | ||||||
Number of subsidiaries acquired | subsidiary | 4 | |||||
Restricted share units | ||||||
Number of awards | ||||||
Balance at beginning of period (in shares) | 732,972 | 0 | ||||
Granted (in shares) | 814,874 | 732,972 | ||||
Vested and issued/liabilities settled (in shares) | (732,972) | (732,972) | ||||
Cancellation and forfeitures (in shares) | (9,497) | |||||
Balance at end of period (in shares) | 805,377 | 805,377 | 732,972 | |||
Weighted average grant date fair value (C$) | ||||||
Balance at beginning of period (in dollars per share) | $ / shares | $ 15.34 | $ 0 | ||||
Granted (in dollars per share) | $ / shares | 7.32 | 15.34 | ||||
Vested and issued (in dollars per share) | $ / shares | 15.34 | |||||
Cancellation and forfeitures (in dollars per share) | $ / shares | 7.52 | |||||
Balance at end of period (in dollars per share) | $ / shares | $ 7.32 | $ 7.32 | $ 15.34 | |||
Restricted share units | Redwood | ||||||
Number of awards | ||||||
Granted (in shares) | 732,972 | |||||
Restricted share units | 2020 Omnibus Plan | ||||||
Number of awards | ||||||
Granted (in shares) | 450,000 | 85,597 | 279,277 | |||
Weighted average grant date fair value (C$) | ||||||
Vesting period | 3 years |
Share-based Payments - Summar_6
Share-based Payments - Summary of Deferred Share Units Activity (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Financial liability | ||||
Granting and vesting of DSUs | $ 7,916 | $ 3,531 | $ 12,898 | $ 7,949 |
Deferred Share Units (DSUs) | ||||
Number of awards | ||||
Balance at beginning of period (in shares) | 33,397 | 0 | ||
Granting and vesting of DSUs (in shares) | 58,380 | 33,937 | ||
Vested and issued/liabilities settled (in shares) | (8,484) | |||
Balance at end of period (in shares) | 83,293 | 33,937 | 83,293 | 33,937 |
Financial liability | ||||
Balance at beginning of period | $ 255 | $ 0 | ||
Granting and vesting of DSUs | 338 | 454 | ||
Liabilities settled | (46) | |||
Loss (gain) on revaluation | (128) | (147) | ||
Balance at end of period | $ 419 | $ 307 | $ 419 | $ 307 |
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 | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | ||
Basic earnings per share computation | |||||
Net income (loss) attributable to common shareholders of Cronos Group | $ 69,506 | $ 604,446 | $ 38,615 | $ 1,104,564 | |
Weighted average number of common shares outstanding used in the computation of basic earnings per share (in shares) | 350,288,783 | 338,957,949 | 349,397,156 | 297,964,058 | |
Basic earnings per share (in dollars per share) | $ 0.20 | $ 1.78 | $ 0.11 | $ 3.71 | |
Diluted earnings per share computation | |||||
Net income (loss) used in the computation of basic earnings per share | $ 69,506 | $ 604,446 | $ 38,615 | $ 1,104,564 | |
Adjustment for gain (loss) on revaluation of derivative liabilities | (680) | (6,952) | (1,407) | (798,799) | |
Net income (loss) used in the computation of diluted income per share | $ 68,826 | $ 597,494 | $ 37,208 | $ 305,765 | |
Weighted average number of common shares outstanding used in the computation of basic earnings per share (in shares) | 350,288,783 | 338,957,949 | 349,397,156 | 297,964,058 | |
Weighted average number of common shares for computation of diluted income (loss) per share (in shares) | [1] | 369,619,020 | 369,268,672 | 374,731,451 | 333,618,691 |
Diluted earnings per share (in dollars per share) | $ 0.19 | $ 1.62 | $ 0.10 | $ 0.92 | |
Basic and dilutive earnings per share from discontinued operations (in dollars per share) | $ 0 | $ 0 | $ 0 | $ 0 | |
Altria Warrant | |||||
Diluted earnings per share computation | |||||
Dilutive effect of derivative liabilities (in shares) | 0 | 0 | 0 | 1,833,853 | |
Top-up Rights | |||||
Diluted earnings per share computation | |||||
Dilutive effect of derivative liabilities (in shares) | 0 | 1,349,720 | 0 | 1,976,828 | |
Warrants | |||||
Diluted earnings per share computation | |||||
Dilutive effect of awards (in shares) | 12,514,864 | 17,792,227 | 17,126,222 | 20,080,244 | |
Stock options | |||||
Diluted earnings per share computation | |||||
Dilutive effect of awards (in shares) | 6,688,620 | 10,435,804 | 7,992,139 | 11,030,736 | |
Restricted share units | |||||
Diluted earnings per share computation | |||||
Dilutive effect of awards (in shares) | 126,753 | 732,972 | 215,934 | 732,972 | |
[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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 133,367,902 | 130,802,485 | 132,921,860 | 53,115,367 |
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) | 22,551,531 | 25,126,670 | 22,551,531 | 25,126,670 |
Top-up Rights – market price | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 3,065,570 | 1,255,223 | 3,065,570 | 1,255,223 |
Altria Warrant | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 79,051,981 | 76,392,046 | 79,051,981 | 0 |
Stock options | ||||
Antidilutive Securities Excluded from Computation of Earnings Per Share [Line Items] | ||||
Total anti-dilutive securities (in shares) | 2,017,176 | 1,346,902 | 1,571,134 | 51,830 |
Related Party Transactions an_2
Related Party Transactions and Balances (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | Mar. 08, 2019 | |
Cronos Group, Inc. | Altria Group, Inc. | |||||||
Related Party Transaction [Line Items] | |||||||
Ownership percentage | 45.00% | ||||||
Consulting Services | |||||||
Related Party Transaction [Line Items] | |||||||
Consulting fees | $ 160 | $ 1,772 | $ 1,113 | ||||
Altria Pinnacle LLC. | Consulting Services | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Consulting fees | 160 | $ 1,772 | 1,113 | $ 1,772 | |||
Accrual for consulting services | $ 5 | $ 5 | $ 1,152 | ||||
Altria Pinnacle LLC. | Purchase of Machinery and Equipment | Affiliated Entity | |||||||
Related Party Transaction [Line Items] | |||||||
Purchases | $ 1,258 |
Segment Information - Narrative
Segment Information - Narrative (Details) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020USD ($) | Sep. 30, 2019USD ($) | Sep. 30, 2020USD ($)segment | Sep. 30, 2019USD ($) | Dec. 31, 2019USD ($) | |
Segment Reporting Information [Line Items] | |||||
Number of reportable segments | segment | 2 | ||||
Current expected credit loss | $ 64 | $ 64 | $ 136 | ||
Net revenue, before excise taxes | 13,621 | $ 6,269 | 34,397 | $ 17,724 | |
Loss from discontinued operations | 473 | 36 | 519 | 63 | |
United States | |||||
Segment Reporting Information [Line Items] | |||||
Current expected credit loss | 41 | 41 | 12 | ||
Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Current expected credit loss | 23 | 23 | $ 124 | ||
Loss from discontinued operations | 473 | 36 | 519 | 63 | |
Four Major Customers | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue, before excise taxes | $ 9,790 | $ 22,142 | |||
Customer Concentration Risk | Revenue Benchmark | Societe Quebecoise Du Cannabis | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 26.00% | 18.00% | |||
Customer Concentration Risk | Revenue Benchmark | Albert Gaming, Liquor and Cannabis Commission | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 22.00% | 23.00% | |||
Customer Concentration Risk | Revenue Benchmark | Ontario Cannabis Retail Corporation | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 20.00% | 16.00% | |||
Customer Concentration Risk | Revenue Benchmark | BC Liquor Distribution Branch | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Concentration risk, percentage | 14.00% | 17.00% | |||
Customer Concentration Risk | Revenue Benchmark | Two Major Customers | Rest of World | |||||
Segment Reporting Information [Line Items] | |||||
Net revenue, before excise taxes | $ 3,351 | $ 7,101 | |||
Concentration risk, percentage | 58.00% | 43.00% |
Segment Information - Schedule
Segment Information - Schedule of Segment Data (Details) - USD ($) | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | $ 11,358,000 | $ 5,785,000 | $ 29,673,000 | $ 16,442,000 | |
Share of loss from investments in equity accounted investees | 1,327,000 | 565,000 | 3,293,000 | 1,504,000 | |
Interest income | 3,847,000 | 15,422,000 | |||
Interest expense | (66,000) | (156,000) | |||
Interest income, net | 3,781,000 | 8,939,000 | 15,266,000 | 20,455,000 | |
Impairment loss on goodwill and intangible assets | 0 | 0 | 40,000,000 | 0 | |
Depreciation and amortization | 886,000 | 632,000 | 2,252,000 | 1,315,000 | |
Income tax expense | 988,000 | 58,000 | 988,000 | 58,000 | |
Income (loss) from discontinued operations | (473,000) | (36,000) | (519,000) | (63,000) | |
Net income (loss) | 68,464,000 | 604,128,000 | 36,442,000 | 1,104,004,000 | |
Consolidated balance sheets | |||||
Total assets | 1,918,929,000 | 1,918,929,000 | $ 2,090,442,000 | ||
Investments in equity accounted investees | 19,059,000 | 19,059,000 | 557,000 | ||
Goodwill | 179,459,000 | 179,459,000 | $ 214,492,000 | ||
Purchase of property, plant and equipment, net | 21,334,000 | ||||
Rest of World | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Income (loss) from discontinued operations | (473,000) | (36,000) | (519,000) | (63,000) | |
Operating Segments | United States | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 1,639,000 | 5,989,000 | |||
Share of loss from investments in equity accounted investees | 0 | 0 | |||
Interest income | 3,000 | 16,000 | |||
Interest expense | 0 | 0 | |||
Interest income, net | 3,000 | 16,000 | |||
Impairment loss on goodwill and intangible assets | 0 | 40,000,000 | |||
Depreciation and amortization | 35,000 | 104,000 | |||
Income tax expense | 143,000 | 143,000 | |||
Income (loss) from discontinued operations | 0 | 0 | |||
Net income (loss) | (14,004,000) | (71,571,000) | |||
Consolidated balance sheets | |||||
Total assets | 251,835,000 | 251,835,000 | |||
Investments in equity accounted investees | 0 | 0 | |||
Goodwill | 178,414,000 | 178,414,000 | |||
Purchase of property, plant and equipment, net | 294,000 | ||||
Operating Segments | Rest of World | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 9,719,000 | 23,684,000 | |||
Share of loss from investments in equity accounted investees | 1,327,000 | 3,293,000 | |||
Interest income | 3,844,000 | 15,406,000 | |||
Interest expense | (66,000) | (156,000) | |||
Interest income, net | 3,778,000 | 15,250,000 | |||
Impairment loss on goodwill and intangible assets | 0 | 0 | |||
Depreciation and amortization | 851,000 | 2,148,000 | |||
Income tax expense | 845,000 | 845,000 | |||
Income (loss) from discontinued operations | (473,000) | (519,000) | |||
Net income (loss) | 93,447,000 | 132,704,000 | |||
Consolidated balance sheets | |||||
Total assets | 369,621,000 | 369,621,000 | |||
Investments in equity accounted investees | 19,059,000 | 19,059,000 | |||
Goodwill | 1,045,000 | 1,045,000 | |||
Purchase of property, plant and equipment, net | 21,040,000 | ||||
Corporate expenses | |||||
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 | 0 | 0 | |||
Interest expense | 0 | 0 | |||
Interest income, net | 0 | 0 | |||
Impairment loss on goodwill and intangible assets | 0 | 0 | |||
Depreciation and amortization | 0 | 0 | |||
Income tax expense | 0 | 0 | |||
Income (loss) from discontinued operations | 0 | 0 | |||
Net income (loss) | (10,979,000) | (24,691,000) | |||
Consolidated balance sheets | |||||
Total assets | 1,297,473,000 | 1,297,473,000 | |||
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 | 7,958,000 | 4,266,000 | 16,373,000 | 12,187,000 | |
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 | 7,958,000 | 16,373,000 | |||
Cannabis flower | Corporate expenses | |||||
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 | 3,143,000 | 1,500,000 | 12,810,000 | 4,138,000 | |
Cannabis extracts | Operating Segments | United States | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 1,639,000 | 5,989,000 | |||
Cannabis extracts | Operating Segments | Rest of World | |||||
Consolidated statements of net income (loss) and comprehensive income (loss) | |||||
Net revenue | 1,504,000 | 6,821,000 | |||
Cannabis extracts | Corporate expenses | |||||
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 | 257,000 | $ 19,000 | 490,000 | $ 117,000 | |
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 | 257,000 | 490,000 | |||
Other | Corporate expenses | |||||
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | $ 11,358 | $ 5,785 | $ 29,673 | $ 16,442 |
Canada | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 9,205 | 5,093 | 22,712 | 15,416 |
United States | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | 1,639 | 675 | 5,989 | 675 |
Other countries | ||||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||||
Net revenue | $ 514 | $ 17 | $ 972 | $ 351 |
Segment Information - Schedul_3
Segment Information - Schedule of Long-lived Assets by Geographic Areas (Details) - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 171,404 | $ 159,948 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 146,292 | 139,160 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | 2,302 | 2,103 |
Other countries | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Long-lived assets | $ 22,810 | $ 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 | Sep. 30, 2019shares | Sep. 30, 2019shares |
Subsidiary, Sale of Stock [Line Items] | ||||||
Shares issued (in shares) | shares | 5,086,586 | 154,917,740 | ||||
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% |
Contingencies (Details)
Contingencies (Details) - Pending Litigation | Jun. 16, 2020CAD ($) | Mar. 12, 2020shareholdercomplaint |
Litigation Relating to Marketing, Distribution and Sale of Products | ||
Loss Contingencies [Line Items] | ||
Damages sought | $ 500,000,000 | |
Punitive damages sought | $ 5,000,000 | |
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 ($) | 9 Months Ended | 12 Months Ended |
Sep. 30, 2020 | Dec. 31, 2019 | |
Concentration Risk [Line Items] | ||
Maximum exposure to credit risk | $ 1,401,606,000 | $ 1,586,978,000 |
Accounts receivable, threshold period past due, writeoff | 120 days | |
Current expected credit loss | $ 64,000 | 136,000 |
Cash and cash equivalents | 1,097,846,000 | 1,199,693,000 |
Short-term investments | 202,883,000 | 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 | 59.00% | |
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) | 12 Months Ended |
Dec. 31, 2019 | |
Three Vendors | Accounts Payable | Supplier Concentration Risk | |
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 | 9 Months Ended | ||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | |
Investments, All Other Investments [Abstract] | ||||
Interest income, net | $ 3,781 | $ 8,939 | $ 15,266 | $ 20,455 |
Impact of change in average variable rate, percent | 0.03% | 1.44% | ||
Impact of change in average variable rate, amount | $ 303 | $ 15,214 |
Financial Instruments - Currenc
Financial Instruments - Currency Rate Risk Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Mar. 31, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Dec. 31, 2019 | |
Risks and Uncertainties [Abstract] | |||||
Foreign exchange gain (loss) on translation | $ 26,167 | $ 9,424 | $ (12,422) | $ (35,654) | |
Impact of ten percent change in exchange rate | $ 176,449 | $ 176,449 | $ 174,902 |
Fair Value Measurement (Details
Fair Value Measurement (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Sep. 30, 2020 | Dec. 31, 2019 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 1,097,846 | $ 1,199,693 |
Short-term investments | 202,883 | 306,347 |
Derivative liabilities | 102,655 | 297,160 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 1,097,846 | 1,199,693 |
Short-term investments | 202,883 | 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 | $ 102,655 | $ 297,160 |
Supplementary Cash Flow Infor_3
Supplementary Cash Flow Information (Details) - USD ($) $ in Thousands | 9 Months Ended | |
Sep. 30, 2020 | Sep. 30, 2019 | |
Increase (Decrease) in Operating Capital [Abstract] | ||
Accounts receivable | $ (1,448) | $ (1,991) |
Other receivables | (3,169) | (3,315) |
Prepaids and other assets | (1,137) | (5,930) |
Current portion of loans receivable | 0 | (4,607) |
Inventory, net | (18,316) | (33,903) |
Accounts payable and other liabilities | 3,711 | 23,676 |
Cumulative effect from foreign exchange | (8,764) | 0 |
Add back: net working capital assumed on acquisition | 0 | 972 |
Total | $ (29,123) | $ (25,098) |
Held-For-Sale Assets and Disc_3
Held-For-Sale Assets and Discontinued Operations (Details) - USD ($) $ in Thousands | 3 Months Ended | 9 Months Ended | |||
Sep. 30, 2020 | Sep. 30, 2019 | Sep. 30, 2020 | Sep. 30, 2019 | Dec. 31, 2019 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Valuation allowance recorded upon reclassification of assets as held-for-sale | $ (919) | $ (919) | |||
Discontinued Operations, Held-for-sale | OGBC | |||||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||||
Valuation allowance recorded upon reclassification of assets as held-for-sale | |||||
OGBC income from discontinued operations, net of income taxes | (473) | $ (36) | (519) | $ (63) | |
Long-term assets classified as discontinued operations | $ 2,066 | $ 2,066 | $ 3,248 |
Non-monetary Transactions (Deta
Non-monetary Transactions (Details) | Mar. 28, 2019USD ($)transaction | Sep. 30, 2019USD ($)transaction | Sep. 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 | 3 | |
Revenue recognized | $ | $ 0 | $ 2,300,000 | |
Gain (loss) recognized on transfer | $ | $ 0 | $ 0 |