Cover Page
Cover Page - shares | 3 Months Ended | |
Mar. 31, 2023 | May 05, 2023 | |
Cover [Abstract] | ||
Document Type | 10-Q | |
Document Quarterly Report | true | |
Document Period End Date | Mar. 31, 2023 | |
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 2H1 | |
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) | 380,815,921 | |
Amendment Flag | false | |
Document Fiscal Year Focus | 2023 | |
Document Fiscal Period Focus | Q1 | |
Entity Central Index Key | 0001656472 | |
Current Fiscal Year End Date | --12-31 |
Condensed Consolidated Balance
Condensed Consolidated Balance Sheets - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 413,667 | $ 764,644 |
Short-term investments | 422,763 | 113,077 |
Accounts receivable, net | 14,855 | 23,113 |
Other receivables | 7,049 | 5,767 |
Current portion of loans receivable, net | 5,570 | 8,890 |
Inventory, net | 44,268 | 37,559 |
Prepaids and other current assets | 7,967 | 7,106 |
Total current assets | 916,139 | 960,156 |
Equity method investments, net | 18,313 | 18,755 |
Other investments | 62,833 | 70,993 |
Non-current portion of loans receivable, net | 72,051 | 72,345 |
Property, plant and equipment, net | 59,785 | 60,557 |
Right-of-use assets | 2,038 | 2,273 |
Goodwill | 1,036 | 1,033 |
Intangible assets, net | 25,897 | 26,704 |
Other | 1,483 | 193 |
Total assets | 1,159,575 | 1,213,009 |
Current liabilities | ||
Accounts payable | 12,842 | 11,163 |
Income taxes payable | 266 | 32,956 |
Accrued liabilities | 14,332 | 22,268 |
Current portion of lease obligation | 1,236 | 1,330 |
Derivative liabilities | 80 | 15 |
Current portion due to non-controlling interests | 375 | 384 |
Total current liabilities | 29,131 | 68,116 |
Non-current portion due to non-controlling interests | 1,370 | 1,383 |
Non-current portion of lease obligation | 2,296 | 2,546 |
Deferred income tax liability | 378 | 0 |
Total liabilities | 33,175 | 72,045 |
Shareholders’ equity | ||
Share capital (authorized for issue as of March 31, 2023 and December 31, 2022: unlimited; shares outstanding as of March 31, 2023 and December 31, 2022: 380,815,921 and 380,575,403, respectively) | 612,235 | 611,318 |
Additional paid-in capital | 44,044 | 42,682 |
Retained earnings | 471,513 | 490,682 |
Accumulated other comprehensive income (loss) | 1,537 | (797) |
Total equity attributable to shareholders of Cronos Group | 1,129,329 | 1,143,885 |
Non-controlling interests | (2,929) | (2,921) |
Total shareholders’ equity | 1,126,400 | 1,140,964 |
Total liabilities and shareholders’ equity | $ 1,159,575 | $ 1,213,009 |
Condensed Consolidated Balanc_2
Condensed Consolidated Balance Sheets (Parenthetical) - shares | Mar. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, shares issued (in shares) | 380,815,921 | 380,575,403 |
Common stock, shares outstanding (in shares) | 380,815,921 | 380,575,403 |
Condensed Consolidated Statemen
Condensed Consolidated Statements of Net Loss and Comprehensive Loss - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Income Statement [Abstract] | ||
Net revenue, before excise taxes | $ 27,203 | $ 29,406 |
Excise taxes | (7,059) | (4,373) |
Net revenue | 20,144 | 25,033 |
Cost of sales | 17,764 | 18,107 |
Gross profit | 2,380 | 6,926 |
Operating expenses | ||
Sales and marketing | 5,872 | 5,012 |
Research and development | 2,041 | 4,039 |
General and administrative | 12,379 | 22,368 |
Restructuring costs | 0 | 3,084 |
Share-based compensation | 2,551 | 3,686 |
Depreciation and amortization | 1,533 | 1,293 |
Impairment loss on long-lived assets | 0 | 3,493 |
Total operating expenses | 24,376 | 42,975 |
Operating loss | (21,996) | (36,049) |
Other income | ||
Interest income, net | 11,180 | 2,046 |
Gain (loss) on revaluation of derivative liabilities | (65) | 10,419 |
Share of loss from equity method investments | (496) | 0 |
Gain (loss) on revaluation of financial instruments | (7,758) | 4,268 |
Impairment loss on other investments | 0 | (11,238) |
Foreign currency transaction loss | (1,643) | (1,872) |
Other, net | 85 | 135 |
Total other income | 1,303 | 3,758 |
Loss before income taxes | (20,693) | (32,291) |
Income tax expense (benefit) | (1,436) | 362 |
Net loss | (19,257) | (32,653) |
Net loss attributable to non-controlling interest | (88) | (15) |
Net loss attributable to Cronos Group | (19,169) | (32,638) |
Comprehensive loss | ||
Net loss | (19,257) | (32,653) |
Other comprehensive income | ||
Foreign exchange gain on translation | 2,414 | 15,977 |
Comprehensive loss | (16,843) | (16,676) |
Comprehensive loss attributable to non-controlling interests | (8) | (261) |
Comprehensive loss attributable to Cronos Group | $ (16,835) | $ (16,415) |
Net loss from continuing operations per share | ||
Basic - continuing operations (in dollars per share) | $ (0.05) | $ (0.09) |
Diluted - continuing operations (in dollars per share) | $ (0.05) | $ (0.09) |
Condensed Consolidated Statem_2
Condensed Consolidated Statements of Changes in Equity - 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, 2021 | 374,952,693 | |||||
Beginning balance at Dec. 31, 2021 | $ 1,334,276 | $ 595,497 | $ 32,465 | $ 659,416 | $ 49,865 | $ (2,967) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Activities relating to share-based compensation (in shares) | 347,287 | |||||
Activities relating to share-based compensation | 3,771 | $ 871 | 2,900 | |||
Net loss | (32,653) | (32,638) | (15) | |||
Foreign exchange gain on translation | 15,977 | 16,223 | (246) | |||
Ending balance (in shares) at Mar. 31, 2022 | 375,299,980 | |||||
Ending balance at Mar. 31, 2022 | $ 1,321,371 | $ 596,368 | 35,365 | 626,778 | 66,088 | (3,228) |
Beginning balance (in shares) at Dec. 31, 2022 | 380,575,403 | 380,575,403 | ||||
Beginning balance at Dec. 31, 2022 | $ 1,140,964 | $ 611,318 | 42,682 | 490,682 | (797) | (2,921) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Activities relating to share-based compensation (in shares) | 240,518 | |||||
Activities relating to share-based compensation | 2,279 | $ 917 | 1,362 | |||
Net loss | (19,257) | (19,169) | (88) | |||
Foreign exchange gain on translation | $ 2,414 | 2,334 | 80 | |||
Ending balance (in shares) at Mar. 31, 2023 | 380,815,921 | 380,815,921 | ||||
Ending balance at Mar. 31, 2023 | $ 1,126,400 | $ 612,235 | $ 44,044 | $ 471,513 | $ 1,537 | $ (2,929) |
Condensed Consolidated Statem_3
Condensed Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Operating activities | ||
Net loss | $ (19,257) | $ (32,653) |
Adjustments to reconcile net loss to cash used in operating activities: | ||
Share-based compensation | 2,551 | 3,686 |
Depreciation and amortization | 2,405 | 2,824 |
Impairment loss on long-lived assets | 0 | 3,493 |
Impairment loss on other investments | 0 | 11,238 |
Loss (gain) from investments | 8,419 | (4,196) |
Loss (gain) on revaluation of derivative liabilities | 65 | (10,419) |
Changes in expected credit losses on long-term financial assets | (764) | 0 |
Foreign currency transaction loss | 1,643 | 1,872 |
Other non-cash operating activities, net | (2,850) | (271) |
Changes in operating assets and liabilities: | ||
Accounts receivable, net | 8,201 | (3,530) |
Other receivables | (1,282) | 2,435 |
Prepaids and other current assets | (848) | (1,195) |
Inventory | (6,824) | (3,867) |
Accounts payable | 1,555 | (178) |
Income taxes payable | (32,813) | 0 |
Accrued liabilities | (7,894) | (3,150) |
Cash flows used in operating activities | (47,693) | (33,911) |
Investing activities | ||
Purchase of short-term investments | (422,612) | 0 |
Proceeds from short-term investments | 113,355 | 0 |
Proceeds from repayment on loan receivables | 6,249 | 790 |
Purchase of property, plant and equipment | (804) | (711) |
Purchase of intangible assets | 0 | (23) |
Other investing activities | 0 | 44 |
Cash flows provided by (used in) investing activities | (303,812) | 100 |
Financing activities | ||
Withholding taxes paid on share-based awards | (743) | (534) |
Other financing activities, net | 0 | 70 |
Cash flows used in financing activities | (743) | (464) |
Effect of foreign currency translation on cash and cash equivalents | 1,271 | 8,837 |
Net change in cash and cash equivalents | (350,977) | (25,438) |
Cash and cash equivalents, beginning of period | 764,644 | 886,973 |
Cash and cash equivalents, end of period | 413,667 | 861,535 |
Supplemental cash flow information | ||
Interest paid | 0 | 0 |
Interest received | 7,558 | 822 |
Income taxes paid | $ 32,932 | $ 66 |
Background, Basis of Presentati
Background, Basis of Presentation, and Summary of Significant Accounting Policies | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Background, Basis of Presentation, and Summary of Significant Accounting Policies | Background, Basis of Presentation, and Summary of Significant Accounting Policies (a) Background Cronos Group Inc. (“Cronos” or the “Company”) is incorporated in the province of British Columbia and under the Business Corporations Act (British Columbia) with principal executive offices at 111 Peter St., Suite 300, Toronto, Ontario, M5V 2H1. 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 is an innovative global cannabinoid company committed to building disruptive intellectual property by advancing cannabis research, technology and product development. With a passion to responsibly elevate the consumer experience, Cronos is building an iconic brand portfolio. Cronos’ diverse international brand portfolio includes Spinach ® , PEACE NATURALS ® and Lord Jones ® . (b) Basis of presentation These condensed consolidated interim 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 months ended March 31, 2023 are not necessarily indicative of the results that may be expected for any other reporting period. These condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”). Certain prior period amounts have been reclassified to conform to the current year presentation of our condensed consolidated interim financial statements. These reclassifications had no effect on the reported results of operations and ending shareholders’ equity. (c) Segment information Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”) manages the business, makes operating decisions and assesses the Company’s performance. The Company determined that it has the following two reportable segments: U.S. (the “U.S. segment”) and ROW (the “ROW segment”). The U.S. operating segment consists of the manufacture and distribution of U.S. hemp-derived cannabinoid infused products. The ROW operating segment, which is predominantly composed of operations in Canada and Israel, 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 CODM to assess the performance of the segment and make decisions regarding the allocation of resources using Adjusted EBITDA (as defined below) as the measure of segment profit or loss. Adjusted EBITDA is defined as earnings before interest, tax, depreciation, non-cash items and items that do not reflect management’s assessment of ongoing business performance. (d) Concentration of 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 and loans receivable. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $935,955 and $987,442 as of March 31, 2023 and December 31, 2022, respectively. 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, amongst 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. As of March 31, 2023 and December 31, 2022, the Company had $4 and $2, respectively, in expected credit losses that have been recognized on receivables from contracts with customers in the ROW segment. As of March 31, 2023 and December 31, 2022, the Company had $237 and $217, respectively, in expected credit losses that have been recognized on receivables from contracts with customers in the U.S. segment. As of March 31, 2023, the Company assessed that there is a concentration of credit risk, as 43% of the Company’s accounts receivable were due from two customers with an established credit history with the Company. As of December 31, 2022, 55% of the Company’s accounts receivable were due from three customers with an established credit history with the Company. The Company sells products to a limited number of major customers. Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s revenue. During the three months ended March 31, 2023, the Company earned a total net revenue before excise taxes of $15,168 from two major customers in the ROW segment, together accounting for 56% of the Company’s total net revenues before excise taxes. During the three months ended March 31, 2022, the ROW segment earned a total net revenue before excise taxes of $9,833 from two major customers, together accounting for 33% of the Company’s total net revenues before excise taxes. During the three months ended March 31, 2023 and 2022, the U.S. segment had no major customers. (e) Adoption of new accounting pronouncements On January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU No. 2022-02”). ASU No. 2022-02 eliminates the existing troubled debt restructuring recognition and measurement guidance, and instead aligns the accounting treatment to that of other loan modifications. The amendments enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU No. 2022-02 also requires that entities disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The adoption of ASU No. 2022-02 did not have a material impact on the Company’s condensed consolidated interim financial statements. (f) New accounting pronouncements not yet adopted In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU No. 2022-03”). ASU No. 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered in measuring fair value. The amendments also require additional disclosures for equity securities subject to contractual sale restrictions. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, and we expect to adopt ASU 2022-03 prospectively. The Company does not expect the adoption of ASU No. 2022-03 to have a material impact on its condensed consolidated interim financial statements. |
Inventory, net
Inventory, net | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory, net | Inventory, net Inventory, net is comprised of the following items: As of March 31, 2023 As of December 31, 2022 Raw materials $ 8,540 $ 7,421 Work-in-progress 15,263 15,646 Finished goods 19,719 13,503 Supplies and consumables 746 989 Total $ 44,268 $ 37,559 |
Investments
Investments | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments (a) Equity method investments, net A reconciliation of the carrying amount of the investments in equity method investees, net is as follows: Ownership interest As of March 31, 2023 As of December 31, 2022 Cronos Growing Company Inc. (“Cronos GrowCo”) 50% $ 18,313 $ 18,755 $ 18,313 $ 18,755 The following is a summary of the Company’s share of net loss from equity method investments: For the three months ended March 31, 2023 2022 Cronos GrowCo $ (496) $ — $ (496) $ — (b) Other investments Other investments consist of investments in common shares and options of two companies in the cannabis industry. PharmaCann, Inc. In 2021, the Company purchased an option (the “PharmaCann Option”) to acquire 473,787 shares of Class A Common Stock of PharmaCann, Inc. (“PharmaCann”), a vertically integrated cannabis company in the United States, which represented an ownership interest of approximately 10.5% as of the purchase date of the PharmaCann Option, for an aggregate purchase price of approximately $110,392. The PharmaCann Option is classified as an equity security without a readily determinable fair value. The Company has elected to measure the fair value of the PharmaCann Option at cost less impairment, if any, and subsequently adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. As of March 31, 2023, the Company’s proforma ownership percentage in PharmaCann on a fully-diluted basis was approximately 6.3%. The decrease in the Company’s ownership percentage since acquisition does not materially affect the Company’s rights under the PharmaCann Option. Vitura Health Limited (formerly known as Cronos Australia) The Company owns approximately 10% of the outstanding common shares of Vitura Health Limited (“Vitura”). The investment is considered an equity security with a readily determinable fair value. Changes in the fair value of the investment are recorded as gain (loss) on revaluation of financial instruments on the condensed consolidated statements of net loss and comprehensive loss. The following table summarizes the Company’s other investments activity: As of January 1, 2023 Unrealized loss Impairment charges Foreign exchange effect As of March 31, 2023 PharmaCann $ 49,000 $ — $ — $ — $ 49,000 Vitura 21,993 (7,923) — (237) 13,833 $ 70,993 $ (7,923) $ — $ (237) $ 62,833 As of January 1, 2022 Unrealized gain Impairment charges Foreign exchange effect As of March 31, 2022 PharmaCann $ 110,392 $ — $ (11,238) $ — $ 99,154 Vitura 8,000 4,196 — 411 12,607 $ 118,392 $ 4,196 $ (11,238) $ 411 $ 111,761 During the three months ended March 31, 2022, the Company identified adverse forecast changes in the financial performance of PharmaCann as indicators of impairment related to the PharmaCann Option and conducted analyses comparing the PharmaCann Option’s carrying amount to its estimated fair value. The fair value was estimated using a combination of the market and income approaches. Under the income approach, significant inputs used in the discounted cash flow method were the discount rate, growth rates, cash flow projections, and the timing of federal legalization of cannabis in the U.S. Under the market valuation approach, the key assumptions that require judgment under the Guideline Public Companies method are cash flow projections, selected multiples and the discount for lack of marketability. As a result of this analysis, the Company recorded a non-cash impairment charge of $11,238 during the three months ended March 31, 2022, as the difference between the carrying amount of the PharmaCann Option and its estimated fair value in the condensed consolidated statements of net loss and comprehensive loss. |
Loans Receivable, net
Loans Receivable, net | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Loans Receivable, net | Loans Receivable, net Loans receivable, net consists of the following: As of March 31, 2023 As of December 31, 2022 GrowCo Credit Facility $ 4,933 $ 4,427 Add: Current portion of accrued interest 637 4,463 Total current portion of loans receivable 5,570 8,890 GrowCo Credit Facility 56,594 56,898 Mucci Promissory Note 13,474 13,438 Cannasoul Collaboration Loan 1,793 1,837 Add: Long-term portion of accrued interest 190 172 Total long-term portion of loans receivable 72,051 72,345 Total loans receivable, net $ 77,621 $ 81,235 Cronos GrowCo Credit Facility On August 23, 2019, the Company, as lender, and Cronos GrowCo, as borrower, entered into a senior secured credit agreement for an aggregate principal amount of C$100,000 (the “GrowCo Credit Facility”). In August 2021, the GrowCo Credit Facility was amended to increase the aggregate principal amount available to C$105,000. As of March 31, 2023 and December 31, 2022, Cronos GrowCo had drawn C$104,000 ($76,946) and C$104,000 ($76,730), respectively, from the GrowCo Credit Facility. The interest rate on the outstanding borrowings is the Canadian Prime Rate plus 1.25%, with interest payments due on December 2021, December 2022, and quarterly thereafter. Principal payments of C$1,000 commenced in March 2022 and are due quarterly thereafter. As of March 31, 2023, Cronos GrowCo had repaid C$5,000 ($3,699) and C$14,465 ($10,702) in principal and interest, respectively, under the terms of the GrowCo Credit Facility. Mucci Promissory Note On June 28, 2019, the Company entered into a promissory note receivable agreement (the “Mucci Promissory Note”) for C$16,350 (approximately $12,097) with the Cronos GrowCo joint venture partner (“Mucci”). The Mucci Promissory Note is secured by a general security agreement covering all the assets of Mucci. On September 30, 2022, the Mucci Promissory Note was amended and restated to increase the interest rate from 3.95% to the Canadian Prime Rate plus 1.25%, change the interest payments from quarterly to annual, and defer Mucci’s initial cash interest payment from September 30, 2022 to July 1, 2023. Prior to July 1, 2022, interest accrued on the Mucci Promissory Note was capitalized as part of the principal balance. As of July 1, 2023, interest is to be paid in cash. Cannasoul Collaboration Loan As of both March 31, 2023 and December 31, 2022, Cannasoul Lab Services Ltd. has received ILS 8,297 (approximately $2,307 and $2,359, respectively), from the Cannasoul Collaboration Loan. Expected credit loss allowances on the Company’s long-term financial assets for the three ended March 31, 2023 and 2022 were comprised of the following items: As of January 1, 2023 Increase (decrease) (i) Foreign exchange effect As of March 31, 2023 GrowCo Credit Facility $ 12,455 $ (770) $ 34 $ 11,719 Mucci Promissory Note 89 2 — 91 Cannasoul Collaboration Loan 522 4 (12) 514 $ 13,066 $ (764) $ 22 $ 12,324 As of January 1, 2022 Increase (decrease) Foreign exchange effect As of March 31, 2022 GrowCo Credit Facility $ 14,089 $ (4) $ 269 $ 14,354 Mucci Promissory Note 90 1 2 93 Cannasoul Collaboration Loan 415 3 (9) 409 $ 14,594 $ — $ 262 $ 14,856 (i) During the three months ended March 31, 2023, $764 was recorded as a decrease to general and administrative expenses on the condensed consolidated statements of net loss and comprehensive loss as a result of principal and interest payments made by Cronos GrowCo reducing our expected credit losses on loans receivable. |
Derivative Liabilities
Derivative Liabilities | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | Derivative Liabilities Pursuant to the investor rights agreement (the “Investor Rights Agreement”) between the Company and Altria Group Inc. (“Altria”), 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. a. 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 research and development (“R&D”) partnership with Ginkgo Bioworks Holdings, Inc. (“Ginkgo”), 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; provided that if the consideration paid in connection with any such issuance is non-cash, the price per common share of the Company that would have been received had such common shares been issued for cash consideration will be determined by an independent committee (acting reasonably and in good faith); provided further that 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 Collaboration Agreement 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%. b. 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 10 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 Pre-emptive Rights, and fixed price Top-up Rights have been classified as derivative liabilities on the Company’s consolidated balance sheet. As of March 31, 2023, Altria beneficially held 156,573,537 of the Company’s common shares, an approximate 41% ownership interest in the Company (calculated on a non-diluted basis). Reconciliation of the Company’s derivative liabilities activity are as follows: As of January 1, 2023 Revaluation (gain) loss Foreign exchange effect As of March 31, 2023 Pre-emptive Rights $ — $ 79 $ — $ 79 Top-up Rights 15 (14) — 1 $ 15 $ 65 $ — $ 80 As of January 1, 2022 Revaluation gain Foreign exchange effect As of March 31, 2022 Altria Warrant $ 13,720 $ (10,011) $ 136 $ 3,845 Pre-emptive Rights 180 (115) 2 67 Top-up Rights 475 (293) 5 187 $ 14,375 $ (10,419) $ 143 $ 4,099 Fluctuations in the expected life of the derivative instruments and the Company’s share price are primary drivers for the changes in the derivative valuations during each reporting period. As the period of time that the derivative liability is expected to be outstanding decreases and the share price decreases, the fair value typically decreases for each related derivative instrument. Weighted-average expected life and share price are two of the significant observable inputs used in the fair value measurement of each of the Company’s derivative instruments. The fair values of the derivative liabilities were determined using the Black-Scholes pricing model using the following inputs: As of March 31, 2023 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $2.60 $2.60 Subscription price (per share in C$) $16.25 $16.25 Weighted-average risk-free interest rate (i) 3.81% 4.18% Weighted-average expected life (in years) (ii) 1.75 0.46 Expected annualized volatility (iii) 60% 50% Expected dividend yield —% —% As of December 31, 2022 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $3.44 $3.44 Subscription price (per share in C$) $16.25 $16.25 Weighted-average risk-free interest rate (i) 4.14% 4.28% Weighted-average expected life (in years) (ii) 0.25 0.59 Expected annualized volatility (iii) 73% 73% 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. As of March 31, 2023 and December 31, 2022, the risk-free interest rate uses a range of approximately 3.56% to 4.21% and 3.81% to 4.37%, respectively, for the Pre-emptive Rights and Top-up Rights. (ii) The expected life represents the period of time, in years, 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. As of March 31, 2023 and December 31, 2022, the expected life uses a range of approximately 0.25 years to 2.50 years and 0.25 years to 2.75 years, respectively, for the Pre-emptive Rights and Top-up Rights. (iii) Volatility was based on an equally weighted blended historical and implied volatility level of the underlying equity securities of the Company. |
Restructuring
Restructuring | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Restructuring | Restructuring In the first quarter of 2022, the Company initiated a strategic plan to realign the business around its brands, centralize functions and evaluate the Company’s supply chain (the “Realignment”). As part of the Realignment, on February 28, 2022, the Board approved plans to leverage the Company’s strategic partnerships to improve supply chain efficiencies and reduce manufacturing overhead by exiting its production facility in Stayner, Ontario, Canada (the “Peace Naturals Campus”). On February 27, 2023, the Board approved revisions to the Realignment, which are expected to result in the Company maintaining select components of its operations at the Peace Naturals Campus, namely distribution warehousing, certain research and development activities and manufacturing of certain of the Company’s products, while seeking to sell and lease back all or some of the Peace Naturals Campus or to lease certain portions of the Peace Naturals Campus to third parties. The Realignment initiatives were intended to position the Company to drive profitable and sustainable growth over time. During the three months ended March 31, 2022, the Company recognized $3,084 of restructuring costs in connection with the Realignment, including the change in the nature of operations at the Peace Naturals Campus. Charges related thereto include employee-related costs such as severance, relocation and other termination benefits, as well as contract termination and other related costs. The Company incurred no restructuring costs during the three months ended March 31, 2023. The Company incurred the following restructuring costs by reportable segment: Three ended March 31, 2023 2022 Rest of World $ — $ 2,031 United States — 1,053 Total $ — $ 3,084 The following table summarizes the Company’s restructuring activity for the three months ended March 31, 2023: As of January 1, 2023 Expenses Payments/Write-offs As of March 31, 2023 Employee termination benefits $ 403 $ — $ (295) $ 108 Other restructuring costs 21 — (21) — Total $ 424 $ — $ (316) $ 108 The following table summarizes the Company’s restructuring activity for the three months ended March 31, 2022: As of January 1, 2022 Expenses Payments/Write-offs As of March 31, 2022 Employee termination benefits $ — $ 2,503 $ (1,249) $ 1,254 Other restructuring costs — 581 (437) 144 Total $ — $ 3,084 $ (1,686) $ 1,398 |
Share-based Compensation
Share-based Compensation | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation (a) Share-based award plans The Company has granted stock options, restricted share units (“RSUs”) and deferred share units (“DSUs”) to employees and non-employee directors under the Stock Option Plan dated May 26, 2015 (the “2015 Stock Option Plan”), the 2018 Stock Option Plan dated June 28, 2018 (the “2018 Stock Option Plan” and, together with the 2015 Stock Option Plan, the “Prior Option Plans”), the Employment Inducement Award Plan #1 (the “Employment Inducement Award Plan”), the 2020 Omnibus Equity Incentive Plan dated March 29, 2020 (the “2020 Omnibus Plan”) and the DSU Plan dated August 10, 2019 (the “DSU Plan”). The Company can no longer make grants under the Prior Option Plans or the Employment Inducement Award Plan. The following table summarizes the total share-based compensation expense associated with the Company’s stock options, RSUs and liability-classified awards for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 Stock options $ 734 $ 1,729 RSUs 1,817 1,957 Total share-based compensation $ 2,551 $ 3,686 (b) Stock options Vesting conditions for grants of options are determined by the Compensation Committee. The typical vesting for stock option grants made under the 2020 Omnibus Plan is annual vesting over three three The following is a summary of the changes in stock options for the three months ended March 31, 2023 and 2022: Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of January 1, 2023 $ 10.57 5,350,600 0.73 Issuance of options 2.96 188,317 Cancellation, forfeiture and expiry of options 9.05 (335,091) Balance as of March 31, 2023 $ 10.40 5,203,826 0.75 Exercisable as of March 31, 2023 $ 11.88 3,624,498 0.48 Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of January 1, 2022 $ 7.75 8,939,330 2.70 Exercise of options 3.14 (1,356,875) Cancellation, forfeiture and expiry of options 12.46 (55,791) Balance as of March 31, 2022 $ 8.55 7,526,664 1.72 Exercisable as of March 31, 2022 $ 7.96 4,654,574 1.14 (i) The weighted-average exercise price reflects the conversion of foreign currency-denominated stock options translated into C$ using the average foreign exchange rate as of the date of issuance. For the three months ended March 31, 2023, the weighted-average fair value per option at grant date was C$2.07. The fair value of the options issued during the period was determined using the Black-Scholes option pricing model, using the following inputs: 2023 Share price at grant date (per share) C$2.96 Exercise price (per option) C$2.96 Risk-free interest rate 3.22% Expected life of options (in years) 7 Expected annualized volatility 72.68% Expected dividend yield — Weighted average Black-Scholes value at grant date (per option) C$2.07 Forfeiture rate — The following table summarizes stock options outstanding: As of March 31, 2023 As of December 31, 2022 2020 Omnibus Plan 2,977,264 2,788,947 2018 Stock Option Plan 1,400,937 1,422,069 2015 Stock Option Plan 825,625 1,139,584 Total stock options outstanding 5,203,826 5,350,600 (c) Restricted share units The following is a summary of the changes in RSUs for the three months ended March 31, 2023 and 2022: Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of January 1, 2023 $ 4.63 5,725,470 Granted (i) 2.74 1,927,487 Vested and issued 4.98 (345,433) Cancellation and forfeitures 4.19 (70,108) Balance as of March 31, 2023 $ 4.11 7,237,416 Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of January 1, 2022 $ 9.22 1,225,870 Granted (i) 3.52 3,950,334 Vested and issued 10.81 (78,631) Cancellation and forfeitures 7.92 (55,479) Balance as of March 31, 2022 $ 4.74 5,042,094 (i) RSUs granted in the period vest annually in equal installments over a three-year period from either the grant date or after a three (ii) The weighted-average grant date fair value reflects the conversion of foreign currency-denominated RSUs translated into C$ using the foreign exchange rate as of the date of issuance. (d) Deferred share units The following is a summary of the changes in DSUs for the three months ended March 31, 2023 and 2022: Financial liability Number of DSUs Balance as of January 1, 2023 $ 674 265,732 Gain on revaluation (163) — Balance as of March 31, 2023 $ 511 265,732 Financial liability Number of DSUs Balance as of January 1, 2022 $ 408 104,442 Gain on revaluation (66) — Balance as of March 31, 2022 $ 342 104,442 |
Loss Per Share
Loss Per Share | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Loss Per Share | Loss Per Share Basic and diluted earnings (loss) per share from continuing and discontinued operations are calculated as follows (in thousands, except share and per share amounts): Three months ended March 31, 2023 2022 Basic and diluted loss per share computation Net loss from continuing operations attributable to the shareholders of Cronos Group $ (19,169) $ (32,638) Weighted-average number of common shares outstanding for computation for basic and diluted loss per share (i) 380,634,208 375,022,724 Basic loss from continuing operations per share $ (0.05) $ (0.09) Diluted loss from continuing operations per share $ (0.05) $ (0.09) (i) In computing diluted loss 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. For the three months ended March 31, 2023 and 2022, total securities of 30,086,428 and 118,224,080, respectively, were not included in the computation of diluted shares outstanding, because the effect would be anti-dilutive. |
Segment Information
Segment Information | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Segment Information | Segment Information The tables below set forth our condensed consolidated results of operations by segment. The Company’s condensed consolidated financial results for these periods are not necessarily indicative of the consolidated financial results that the Company will achieve in future periods . Segment data was as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 United States Rest of World Corporate Total Cannabis flower $ — $ 13,128 $ — $ 13,128 Cannabis extracts 649 6,301 — 6,950 Other — 66 — 66 Net revenue $ 649 $ 19,495 $ — $ 20,144 Share of loss from equity method investments $ — $ (496) $ — $ (496) Total assets $ 267,513 $ 276,094 $ 615,968 $ 1,159,575 Depreciation and amortization 78 1,455 — 1,533 Adjusted EBITDA (2,857) (10,028) (3,879) (16,764) Three Months Ended March 31, 2022 United States Rest of World Corporate Total Cannabis flower $ — $ 18,625 $ — $ 18,625 Cannabis extracts 2,328 3,988 — 6,316 Other — 92 — 92 Net revenue $ 2,328 $ 22,705 $ — $ 25,033 Share of loss from equity method investments $ — $ — $ — $ — Total assets $ 441,064 $ 283,182 $ 646,755 $ 1,371,001 Depreciation and amortization 96 1,197 — 1,293 Adjusted EBITDA (7,086) (3,425) (8,389) (18,900) The following tables set forth a reconciliation of net income (loss) as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated: Three months ended March 31, 2023 United States Rest of World Corporate Total Net income (loss) $ 337 $ (15,439) $ (4,155) $ (19,257) Interest income, net (3,399) (7,781) — (11,180) Income tax benefit — (1,436) — (1,436) Depreciation and amortization 200 2,205 — 2,405 EBITDA (2,862) (22,451) (4,155) (29,468) Share of loss from equity method investments — 496 — 496 Loss on revaluation of derivative liabilities (ii) — 65 — 65 Loss on revaluation of financial instruments (iii) — 7,758 — 7,758 Foreign currency transaction loss — 1,643 — 1,643 Other, net (v) — (85) — (85) Share-based compensation (vii) 5 2,546 — 2,551 Financial statement review costs (viii) — — 276 276 Adjusted EBITDA $ (2,857) $ (10,028) $ (3,879) $ (16,764) Three Months Ended March 31, 2022 United States Rest of World Corporate Total Net income (loss) $ (22,216) $ 2,014 $ (12,451) $ (32,653) Interest income, net (29) (2,017) — (2,046) Income tax expense — 362 — 362 Depreciation and amortization 432 2,392 — 2,824 EBITDA (21,813) 2,751 (12,451) (31,513) Impairment loss on long-lived assets (i) — 3,493 — 3,493 Gain on revaluation of derivative liabilities (ii) — (10,419) — (10,419) Gain on revaluation of financial instruments (iii) — (4,268) — (4,268) Impairment loss on other investments (iv) 11,238 — — 11,238 Foreign currency transaction loss — 1,872 — 1,872 Other, net (v) — (135) — (135) Restructuring costs (vi) 1,053 2,031 — 3,084 Share-based compensation (vii) 2,436 1,250 — 3,686 Financial statement review costs (viii) — — 4,062 4,062 Adjusted EBITDA $ (7,086) $ (3,425) $ (8,389) $ (18,900) (i) For the three months ended March 31, 2022, impairment loss on long-lived assets related to the Company’s decision to seek a sublease for leased office space in Toronto, Ontario, Canada during the first quarter of 2022. See Note 12 “ Impairment Loss on Long-lived Assets. ” (ii) For the three months ended March 31, 2023 and 2022, gain (loss) on revaluation of derivative liabilities represents the fair value changes on the derivative liabilities. See Note 5 “ Derivative Liabilities. ” (iii) For the three months ended March 31, 2023 and 2022, gain (loss) on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura. See Note 3 “ Investments. ” (iv) For the three months ended March 31, 2022, impairment loss on other investments related to the PharmaCann Option for the difference between its fair value and carrying amount. See Note 3 “ Investments. ” (v) For the three months ended March 31, 2023 and 2022, other, net related to gain on disposal of assets. (vi) For the three months ended March 31, 2022, restructuring costs related to the employee-related severance costs and other restructuring costs associated with the Realignment, including the change in the nature of operations at the Peace Naturals Campus. (vii) For the three months ended March 31, 2023 and 2022, share-based compensation related to the vesting expenses of share-based compensation awarded to employees under the Company’s share-based award plans as described in Note 7 “ Share-based Compensation. ” (viii) For the three months ended March 31, 2023 and 2022, financial statement review costs include costs and reserves taken related to the restatements of the Company’s 2019 and second quarter 2021 interim financial statements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to such restatements and legal costs defending shareholder class action complaints brought against the Company as a result of the 2019 restatement. Net revenue attributed to a geographic region based on the location of the customer were as follows: Three months ended March 31, 2023 2022 Canada $ 14,434 $ 13,576 Israel 5,061 9,128 United States 649 2,329 Net revenue $ 20,144 $ 25,033 |
Commitments and Contingencies
Commitments and Contingencies | 3 Months Ended |
Mar. 31, 2023 | |
Loss Contingency [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Commitments There have been no material changes in the information regarding commitments as disclosed in the Company’s Annual Report. (b) 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 its financial condition but could be material to its results of operations for a quarterly period depending, in part, on its results for that quarter. (i) Class action complaints relating to restatement of 2019 interim financial statements On March 11 and 12, 2020, two alleged shareholders of the Company separately filed two putative class action complaints in the U.S. District Court for the Eastern District of New York against the Company and its Chief Executive Officer and now former Chief Financial Officer. The court has consolidated the cases, and the consolidated amended complaint alleges 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 consolidated amended complaint generally alleges that certain of the Company’s prior public statements about revenues and internal control were incorrect based on the Company’s disclosures relating to the Audit Committee of the Board’s review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel. The consolidated amended complaint does not quantify a damage request. Defendants moved to dismiss on February 8, 2021. On June 3, 2020, an alleged shareholder filed a Statement of Claim, as amended on August 12, 2020, 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 Amended Statement of Claim names (i) the Company, (ii) its Chief Executive Officer, (iii) now former Chief Financial Officer, (iv) former Chief Financial Officer and Chief Commercial Officer, and (v) current and former members of the Board as defendants and alleges breaches of the Ontario Securities Act, oppression under the Ontario Business Corporations Act and common law misrepresentation. The Amended Statement of Claim generally alleges that certain of the Company’s prior public statements about revenues and internal control were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of the Board 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 Amended Statement of Claim does not quantify a damage request. On June 28, 2021, the Court dismissed motions brought by the plaintiff for leave to commence a claim for misrepresentation under the Ontario Securities Act and for certification of the action as a class action. The plaintiff appealed the Court’s dismissal of the motions only with respect to the Company, the Chief Executive Officer, and the now former Chief Financial Officer; the remaining defendants were dismissed from the matter with prejudice, and the Company and all individual defendants agreed not to seek costs from plaintiff in connection with the dismissal of the motions. On September 26, 2022, the Court of Appeal for Ontario reversed the Superior Court’s dismissal of the leave and certification motions, granted the plaintiff leave to proceed to bring a claim for misrepresentation under the Ontario Securities Act, and remitted the certification motion back to the Superior Court. (ii) Regulatory reviews relating to restatements The Company has been responding to requests for information from various regulatory authorities relating to its previously disclosed restatement of its financial statements for the first three quarters of 2019 as well as the previously disclosed restatement of the second quarter of 2021 interim financial statements (collectively, the “Restatements”). The Company has been responding to all such requests for information and cooperating with all regulatory authorities. SEC Settlement On October 24, 2022, the SEC issued an Order Instituting Cease-and-Desist Proceedings Pursuant to Section 8(a) of the Securities Act of 1933 (the “Securities Act”) and Section 21(c) of the Exchange Act, Making Findings, and Imposing a Cease-and-Desist Order (the “Settlement Order”) resolving the Restatements. The Company has agreed to settle with the SEC, without admitting or denying the allegations described in the Settlement Order. The Settlement Order fully and finally disposes of the investigation of the Company by the SEC into the Restatements without the payment of any civil penalty or other amount. The Settlement Order required the Company to cease and desist from committing or causing any violations and any future violations of Section 17(a) of the Securities Act, Sections 10(b), 13(a), 13(b)(2)(B) of the Exchange Act and Rules 10b-5, 13a-13, 13a-15(a), 13a-16 and 12b-20 thereunder. Additionally, the Company agreed to certain undertakings, which include, among other things, retaining a qualified independent consultant (the “Consultant”) to engage in a review of, and make recommendations with respect to, certain of the Company’s internal accounting controls and internal control over financing reporting. As a result of the Settlement Order, the Company (i) lost its status as a well-known seasoned issuer for a period of three years, (ii) is unable to rely on the private offering exemptions provided by Regulations A and D under the Securities Act for a period of five years and (iii) is unable to rely on the safe harbor provisions of the U.S. Private Securities Litigation Reform Act of 1995 for a period of three years. OSC Settlement On October 24, 2022, the Ontario Capital Markets Tribunal approved a settlement agreement (the “Settlement Agreement”) between the Company and the staff of the OSC, resolving the Restatements. Pursuant to the terms of the Settlement Agreement, which fully and finally disposed the investigation of the Company by the OSC, Cronos agreed to pay a total of C$1.34 million to fully settle the matter, and acknowledged that it had failed to comply with the requirement under Section 77 of the Securities Act (Ontario) to file interim financial reports in the manner set out therein and had acted in a manner contrary to the public interest. Additionally, the Company agreed to retain the Consultant to engage in a review of, and make recommendations with respect to, certain of the Company’s internal accounting controls and internal control over financing reporting, on substantially the same terms as were required by the SEC pursuant the Settlement Agreement. (iii) Litigation relating to marketing, distribution and sale of products On April 17, 2023, a group of plaintiffs led by the Green Leaf (Ale Yarok) political party filed a Statement of Claim and Request for Approval of a Class Action on behalf of a purported class of Israeli cannabis consumers in the District Court of Tel Aviv, Israel against 26 cannabis-related parties, including three Cronos Israel entities. The Statement of Claim alleges that the defendants violated certain laws relating to the marketing of medical cannabis products, including marketing to unlicensed cannabis consumers. The lawsuit seeks a total of ILS 420 million. |
Fair Value Measurements
Fair Value Measurements | 3 Months Ended |
Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Fair Value Measurements | Fair Value Measurements 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 include situations where there is little, if any, market activity for the asset or liability. The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis: March 31, 2023 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 413,667 $ — $ — $ 413,667 Short-term investments 422,763 — — 422,763 Other investments (i) 13,833 — — 13,833 Derivative liabilities — — 80 80 December 31, 2022 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 764,644 $ — $ — $ 764,644 Short-term investments 113,077 — — 113,077 Other investments (i) 21,993 — — 21,993 Derivative liabilities — — 15 15 (i) As of March 31, 2023 and December 31, 2022, the Company’s influence on Vitura is deemed non-significant and the investment is considered an equity security with a readily determinable fair value. See Note 3 “Investments” for additional information. There were no transfers between fair value categories during the periods presented. |
Impairment Loss on Long-lived A
Impairment Loss on Long-lived Assets | 3 Months Ended |
Mar. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Impairment Loss on Long-lived Assets | Impairment Loss on Long-lived Assets (a) Right-of-use assets and property, plant, and equipment, net During the three months ended March 31, 2022, the Company recognized an impairment charge of $1,986 related to the right-of-use lease asset associated with the Company’s corporate headquarters, encompassing approximately 29,000 square feet, in Toronto, Ontario, Canada, for which the Company determined it would seek a sublease. In addition, the Company recognized an impairment charge of $1,507 during the three months ended March 31, 2022 related to leasehold improvements and other office equipment that it plans to include in any potential sublease agreement. The determination to seek a sublease of the property and include leasehold improvements and other office equipment in any potential sublease agreement triggered the impairment charges. Both of the impairment charges are recognized as impairment loss on long-lived assets on the condensed consolidated statements of net loss and comprehensive loss. |
Related Party Transactions
Related Party Transactions | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions (a) Cronos GrowCo The Company holds a variable interest in Cronos GrowCo through its ownership of 50% of Cronos GrowCo’s common shares and senior secured debt in Cronos GrowCo. See Note 3 “ Investments ” for additional information. The Company made the following purchases of cannabis products from Cronos GrowCo: Three months ended March 31, 2023 2022 Cronos GrowCo - purchases $ 7,466 $ 3,218 As of March 31, 2023, and December 31, 2022, the Company had payables outstanding to Cronos GrowCo of $3,087 and $2,519, respectively. Additionally, on August 23, 2019, the Company, as lender, and Cronos GrowCo, as borrower, entered into the GrowCo Facility. See Note 4 “ Loans Receivable, net ” for additional information. (b) Vendor Agreement In November 2022, the Company entered into an agreement with an external vendor whereby the vendor would provide certain manufacturing services to the Company. The vendor then subcontracted out a portion of those services to another company whose chief executive officer is an immediate family member of an executive of the Company. The Company has no direct contractual relationship with the related party. During the three months ended March 31, 2023, the Company purchased $833 of products and services under this agreement and had outstanding accounts payable related to the agreement of $437 and $nil as of March 31, 2023 and December 31, 2022, respectively. |
Background, Basis of Presenta_2
Background, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 3 Months Ended |
Mar. 31, 2023 | |
Organization, Consolidation and Presentation of Financial Statements [Abstract] | |
Basis of presentation | Basis of presentation These condensed consolidated interim 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 months ended March 31, 2023 are not necessarily indicative of the results that may be expected for any other reporting period. These condensed consolidated interim financial statements should be read in conjunction with the Company’s audited consolidated financial statements and related notes included in its Annual Report on Form 10-K for the year ended December 31, 2022 (the “Annual Report”). Certain prior period amounts have been reclassified to conform to the current year presentation of our condensed consolidated interim financial statements. These reclassifications had no effect on the reported results of operations and ending shareholders’ equity. |
Segment information | Segment information Segment reporting is prepared on the same basis that the Company’s chief operating decision maker (the “CODM”) manages the business, makes operating decisions and assesses the Company’s performance. The Company determined that it has the following two reportable segments: U.S. (the “U.S. segment”) and ROW (the “ROW segment”). The U.S. operating segment consists of the manufacture and distribution of U.S. hemp-derived cannabinoid infused products. The ROW operating segment, which is predominantly composed of operations in Canada and Israel, is involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets . |
Concentration of risk | Concentration of riskCredit 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 and loans receivable. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $935,955 and $987,442 as of March 31, 2023 and December 31, 2022, respectively.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, amongst 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. |
Adoption of new accounting pronouncements and New accounting pronouncements not yet adopted | Adoption of new accounting pronouncements On January 1, 2023, the Company adopted ASU 2022-02, Financial Instruments – Credit Losses (Topic 326): Troubled Debt Restructurings and Vintage Disclosures (“ASU No. 2022-02”). ASU No. 2022-02 eliminates the existing troubled debt restructuring recognition and measurement guidance, and instead aligns the accounting treatment to that of other loan modifications. The amendments enhance existing disclosure requirements and introduce new requirements related to certain modifications of receivables made to borrowers experiencing financial difficulty. ASU No. 2022-02 also requires that entities disclose current-period gross write-offs by year of origination for financing receivables and net investments in leases. The adoption of ASU No. 2022-02 did not have a material impact on the Company’s condensed consolidated interim financial statements. (f) New accounting pronouncements not yet adopted In June 2022, the Financial Accounting Standards Board (“FASB”) issued ASU 2022-03, Fair Value Measurement (Topic 820): Fair Value Measurement of Equity Securities Subject to Contractual Sale Restrictions (“ASU No. 2022-03”). ASU No. 2022-03 clarifies that a contractual restriction on the sale of an equity security is not considered in measuring fair value. The amendments also require additional disclosures for equity securities subject to contractual sale restrictions. ASU 2022-03 is effective for fiscal years beginning after December 15, 2023, and interim periods within those fiscal years, and we expect to adopt ASU 2022-03 prospectively. The Company does not expect the adoption of ASU No. 2022-03 to have a material impact on its condensed consolidated interim financial statements. |
Inventory, net (Tables)
Inventory, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory, net | Inventory, net is comprised of the following items: As of March 31, 2023 As of December 31, 2022 Raw materials $ 8,540 $ 7,421 Work-in-progress 15,263 15,646 Finished goods 19,719 13,503 Supplies and consumables 746 989 Total $ 44,268 $ 37,559 |
Investments (Tables)
Investments (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments in Associates and Joint Ventures | A reconciliation of the carrying amount of the investments in equity method investees, net is as follows: Ownership interest As of March 31, 2023 As of December 31, 2022 Cronos Growing Company Inc. (“Cronos GrowCo”) 50% $ 18,313 $ 18,755 $ 18,313 $ 18,755 The following is a summary of the Company’s share of net loss from equity method investments: For the three months ended March 31, 2023 2022 Cronos GrowCo $ (496) $ — $ (496) $ — |
Summary of Gain on Revaluation of Other Investments | The following table summarizes the Company’s other investments activity: As of January 1, 2023 Unrealized loss Impairment charges Foreign exchange effect As of March 31, 2023 PharmaCann $ 49,000 $ — $ — $ — $ 49,000 Vitura 21,993 (7,923) — (237) 13,833 $ 70,993 $ (7,923) $ — $ (237) $ 62,833 As of January 1, 2022 Unrealized gain Impairment charges Foreign exchange effect As of March 31, 2022 PharmaCann $ 110,392 $ — $ (11,238) $ — $ 99,154 Vitura 8,000 4,196 — 411 12,607 $ 118,392 $ 4,196 $ (11,238) $ 411 $ 111,761 |
Loans Receivable, net (Tables)
Loans Receivable, net (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Loans Receivable | Loans receivable, net consists of the following: As of March 31, 2023 As of December 31, 2022 GrowCo Credit Facility $ 4,933 $ 4,427 Add: Current portion of accrued interest 637 4,463 Total current portion of loans receivable 5,570 8,890 GrowCo Credit Facility 56,594 56,898 Mucci Promissory Note 13,474 13,438 Cannasoul Collaboration Loan 1,793 1,837 Add: Long-term portion of accrued interest 190 172 Total long-term portion of loans receivable 72,051 72,345 Total loans receivable, net $ 77,621 $ 81,235 |
Schedule of Expected Credit Loss Allowances | Expected credit loss allowances on the Company’s long-term financial assets for the three ended March 31, 2023 and 2022 were comprised of the following items: As of January 1, 2023 Increase (decrease) (i) Foreign exchange effect As of March 31, 2023 GrowCo Credit Facility $ 12,455 $ (770) $ 34 $ 11,719 Mucci Promissory Note 89 2 — 91 Cannasoul Collaboration Loan 522 4 (12) 514 $ 13,066 $ (764) $ 22 $ 12,324 As of January 1, 2022 Increase (decrease) Foreign exchange effect As of March 31, 2022 GrowCo Credit Facility $ 14,089 $ (4) $ 269 $ 14,354 Mucci Promissory Note 90 1 2 93 Cannasoul Collaboration Loan 415 3 (9) 409 $ 14,594 $ — $ 262 $ 14,856 (i) During the three months ended March 31, 2023, $764 was recorded as a decrease to general and administrative expenses on the condensed consolidated statements of net loss and comprehensive loss as a result of principal and interest payments made by Cronos GrowCo reducing our expected credit losses on loans receivable. |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Reconciliation of Derivative Liabilities Activity | Reconciliation of the Company’s derivative liabilities activity are as follows: As of January 1, 2023 Revaluation (gain) loss Foreign exchange effect As of March 31, 2023 Pre-emptive Rights $ — $ 79 $ — $ 79 Top-up Rights 15 (14) — 1 $ 15 $ 65 $ — $ 80 As of January 1, 2022 Revaluation gain Foreign exchange effect As of March 31, 2022 Altria Warrant $ 13,720 $ (10,011) $ 136 $ 3,845 Pre-emptive Rights 180 (115) 2 67 Top-up Rights 475 (293) 5 187 $ 14,375 $ (10,419) $ 143 $ 4,099 Fluctuations in the expected life of the derivative instruments and the Company’s share price are primary drivers for the changes in the derivative valuations during each reporting period. As the period of time that the derivative liability is expected to be outstanding decreases and the share price decreases, the fair value typically decreases for each related derivative instrument. Weighted-average expected life and share price are two of the significant observable inputs used in the fair value measurement of each of the Company’s derivative instruments. |
Schedule of Fair Values of Derivative Liabilities | The fair values of the derivative liabilities were determined using the Black-Scholes pricing model using the following inputs: As of March 31, 2023 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $2.60 $2.60 Subscription price (per share in C$) $16.25 $16.25 Weighted-average risk-free interest rate (i) 3.81% 4.18% Weighted-average expected life (in years) (ii) 1.75 0.46 Expected annualized volatility (iii) 60% 50% Expected dividend yield —% —% As of December 31, 2022 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $3.44 $3.44 Subscription price (per share in C$) $16.25 $16.25 Weighted-average risk-free interest rate (i) 4.14% 4.28% Weighted-average expected life (in years) (ii) 0.25 0.59 Expected annualized volatility (iii) 73% 73% 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. As of March 31, 2023 and December 31, 2022, the risk-free interest rate uses a range of approximately 3.56% to 4.21% and 3.81% to 4.37%, respectively, for the Pre-emptive Rights and Top-up Rights. (ii) The expected life represents the period of time, in years, 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. As of March 31, 2023 and December 31, 2022, the expected life uses a range of approximately 0.25 years to 2.50 years and 0.25 years to 2.75 years, respectively, for the Pre-emptive Rights and Top-up Rights. (iii) Volatility was based on an equally weighted blended historical and implied volatility level of the underlying equity securities of the Company. |
Restructuring (Tables)
Restructuring (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Plan Information and Restructuring-Related Costs | The Company incurred the following restructuring costs by reportable segment: Three ended March 31, 2023 2022 Rest of World $ — $ 2,031 United States — 1,053 Total $ — $ 3,084 The following table summarizes the Company’s restructuring activity for the three months ended March 31, 2023: As of January 1, 2023 Expenses Payments/Write-offs As of March 31, 2023 Employee termination benefits $ 403 $ — $ (295) $ 108 Other restructuring costs 21 — (21) — Total $ 424 $ — $ (316) $ 108 The following table summarizes the Company’s restructuring activity for the three months ended March 31, 2022: As of January 1, 2022 Expenses Payments/Write-offs As of March 31, 2022 Employee termination benefits $ — $ 2,503 $ (1,249) $ 1,254 Other restructuring costs — 581 (437) 144 Total $ — $ 3,084 $ (1,686) $ 1,398 |
Share-based Compensation (Table
Share-based Compensation (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock-based Compensation Expense | The following table summarizes the total share-based compensation expense associated with the Company’s stock options, RSUs and liability-classified awards for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 2022 Stock options $ 734 $ 1,729 RSUs 1,817 1,957 Total share-based compensation $ 2,551 $ 3,686 |
Summary of the Changes in Options and Options Outstanding | The following is a summary of the changes in stock options for the three months ended March 31, 2023 and 2022: Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of January 1, 2023 $ 10.57 5,350,600 0.73 Issuance of options 2.96 188,317 Cancellation, forfeiture and expiry of options 9.05 (335,091) Balance as of March 31, 2023 $ 10.40 5,203,826 0.75 Exercisable as of March 31, 2023 $ 11.88 3,624,498 0.48 Weighted-average exercise price (C$) (i) Number of options Weighted-average remaining contractual term (years) Balance as of January 1, 2022 $ 7.75 8,939,330 2.70 Exercise of options 3.14 (1,356,875) Cancellation, forfeiture and expiry of options 12.46 (55,791) Balance as of March 31, 2022 $ 8.55 7,526,664 1.72 Exercisable as of March 31, 2022 $ 7.96 4,654,574 1.14 (i) The weighted-average exercise price reflects the conversion of foreign currency-denominated stock options translated into C$ using the average foreign exchange rate as of the date of issuance. The following table summarizes stock options outstanding: As of March 31, 2023 As of December 31, 2022 2020 Omnibus Plan 2,977,264 2,788,947 2018 Stock Option Plan 1,400,937 1,422,069 2015 Stock Option Plan 825,625 1,139,584 Total stock options outstanding 5,203,826 5,350,600 |
Summary of Fair Value of Options Issued | The fair value of the options issued during the period was determined using the Black-Scholes option pricing model, using the following inputs: 2023 Share price at grant date (per share) C$2.96 Exercise price (per option) C$2.96 Risk-free interest rate 3.22% Expected life of options (in years) 7 Expected annualized volatility 72.68% Expected dividend yield — Weighted average Black-Scholes value at grant date (per option) C$2.07 Forfeiture rate — |
Summary of Changes in RSUs | The following is a summary of the changes in RSUs for the three months ended March 31, 2023 and 2022: Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of January 1, 2023 $ 4.63 5,725,470 Granted (i) 2.74 1,927,487 Vested and issued 4.98 (345,433) Cancellation and forfeitures 4.19 (70,108) Balance as of March 31, 2023 $ 4.11 7,237,416 Weighted-average grant date fair value (C$) (ii) Number of RSUs Balance as of January 1, 2022 $ 9.22 1,225,870 Granted (i) 3.52 3,950,334 Vested and issued 10.81 (78,631) Cancellation and forfeitures 7.92 (55,479) Balance as of March 31, 2022 $ 4.74 5,042,094 (i) RSUs granted in the period vest annually in equal installments over a three-year period from either the grant date or after a three |
Summary of Changes in DSUs and Warrants | The following is a summary of the changes in DSUs for the three months ended March 31, 2023 and 2022: Financial liability Number of DSUs Balance as of January 1, 2023 $ 674 265,732 Gain on revaluation (163) — Balance as of March 31, 2023 $ 511 265,732 Financial liability Number of DSUs Balance as of January 1, 2022 $ 408 104,442 Gain on revaluation (66) — Balance as of March 31, 2022 $ 342 104,442 |
Loss Per Share (Tables)
Loss Per Share (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | Basic and diluted earnings (loss) per share from continuing and discontinued operations are calculated as follows (in thousands, except share and per share amounts): Three months ended March 31, 2023 2022 Basic and diluted loss per share computation Net loss from continuing operations attributable to the shareholders of Cronos Group $ (19,169) $ (32,638) Weighted-average number of common shares outstanding for computation for basic and diluted loss per share (i) 380,634,208 375,022,724 Basic loss from continuing operations per share $ (0.05) $ (0.09) Diluted loss from continuing operations per share $ (0.05) $ (0.09) (i) In computing diluted loss 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. |
Segment Information (Tables)
Segment Information (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Segment Reporting [Abstract] | |
Schedule of Segment Data and Adjusted EBITDA | Segment data was as follows for the three months ended March 31, 2023 and 2022: Three months ended March 31, 2023 United States Rest of World Corporate Total Cannabis flower $ — $ 13,128 $ — $ 13,128 Cannabis extracts 649 6,301 — 6,950 Other — 66 — 66 Net revenue $ 649 $ 19,495 $ — $ 20,144 Share of loss from equity method investments $ — $ (496) $ — $ (496) Total assets $ 267,513 $ 276,094 $ 615,968 $ 1,159,575 Depreciation and amortization 78 1,455 — 1,533 Adjusted EBITDA (2,857) (10,028) (3,879) (16,764) Three Months Ended March 31, 2022 United States Rest of World Corporate Total Cannabis flower $ — $ 18,625 $ — $ 18,625 Cannabis extracts 2,328 3,988 — 6,316 Other — 92 — 92 Net revenue $ 2,328 $ 22,705 $ — $ 25,033 Share of loss from equity method investments $ — $ — $ — $ — Total assets $ 441,064 $ 283,182 $ 646,755 $ 1,371,001 Depreciation and amortization 96 1,197 — 1,293 Adjusted EBITDA (7,086) (3,425) (8,389) (18,900) The following tables set forth a reconciliation of net income (loss) as determined in accordance with U.S. GAAP to Adjusted EBITDA for the periods indicated: Three months ended March 31, 2023 United States Rest of World Corporate Total Net income (loss) $ 337 $ (15,439) $ (4,155) $ (19,257) Interest income, net (3,399) (7,781) — (11,180) Income tax benefit — (1,436) — (1,436) Depreciation and amortization 200 2,205 — 2,405 EBITDA (2,862) (22,451) (4,155) (29,468) Share of loss from equity method investments — 496 — 496 Loss on revaluation of derivative liabilities (ii) — 65 — 65 Loss on revaluation of financial instruments (iii) — 7,758 — 7,758 Foreign currency transaction loss — 1,643 — 1,643 Other, net (v) — (85) — (85) Share-based compensation (vii) 5 2,546 — 2,551 Financial statement review costs (viii) — — 276 276 Adjusted EBITDA $ (2,857) $ (10,028) $ (3,879) $ (16,764) Three Months Ended March 31, 2022 United States Rest of World Corporate Total Net income (loss) $ (22,216) $ 2,014 $ (12,451) $ (32,653) Interest income, net (29) (2,017) — (2,046) Income tax expense — 362 — 362 Depreciation and amortization 432 2,392 — 2,824 EBITDA (21,813) 2,751 (12,451) (31,513) Impairment loss on long-lived assets (i) — 3,493 — 3,493 Gain on revaluation of derivative liabilities (ii) — (10,419) — (10,419) Gain on revaluation of financial instruments (iii) — (4,268) — (4,268) Impairment loss on other investments (iv) 11,238 — — 11,238 Foreign currency transaction loss — 1,872 — 1,872 Other, net (v) — (135) — (135) Restructuring costs (vi) 1,053 2,031 — 3,084 Share-based compensation (vii) 2,436 1,250 — 3,686 Financial statement review costs (viii) — — 4,062 4,062 Adjusted EBITDA $ (7,086) $ (3,425) $ (8,389) $ (18,900) (i) For the three months ended March 31, 2022, impairment loss on long-lived assets related to the Company’s decision to seek a sublease for leased office space in Toronto, Ontario, Canada during the first quarter of 2022. See Note 12 “ Impairment Loss on Long-lived Assets. ” (ii) For the three months ended March 31, 2023 and 2022, gain (loss) on revaluation of derivative liabilities represents the fair value changes on the derivative liabilities. See Note 5 “ Derivative Liabilities. ” (iii) For the three months ended March 31, 2023 and 2022, gain (loss) on revaluation of financial instruments related primarily to the Company’s equity securities in Vitura. See Note 3 “ Investments. ” (iv) For the three months ended March 31, 2022, impairment loss on other investments related to the PharmaCann Option for the difference between its fair value and carrying amount. See Note 3 “ Investments. ” (v) For the three months ended March 31, 2023 and 2022, other, net related to gain on disposal of assets. (vi) For the three months ended March 31, 2022, restructuring costs related to the employee-related severance costs and other restructuring costs associated with the Realignment, including the change in the nature of operations at the Peace Naturals Campus. (vii) For the three months ended March 31, 2023 and 2022, share-based compensation related to the vesting expenses of share-based compensation awarded to employees under the Company’s share-based award plans as described in Note 7 “ Share-based Compensation. ” (viii) For the three months ended March 31, 2023 and 2022, financial statement review costs include costs and reserves taken related to the restatements of the Company’s 2019 and second quarter 2021 interim financial statements, costs related to the Company’s responses to requests for information from various regulatory authorities relating to such restatements and legal costs defending shareholder class action complaints brought against the Company as a result of the 2019 restatement. |
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 March 31, 2023 2022 Canada $ 14,434 $ 13,576 Israel 5,061 9,128 United States 649 2,329 Net revenue $ 20,144 $ 25,033 |
Fair Value Measurements (Tables
Fair Value Measurements (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedule of Fair Value of Assets Measured on Recurring Basis | The following tables present information about the Company’s assets and liabilities that are measured at fair value on a recurring basis: March 31, 2023 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 413,667 $ — $ — $ 413,667 Short-term investments 422,763 — — 422,763 Other investments (i) 13,833 — — 13,833 Derivative liabilities — — 80 80 December 31, 2022 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 764,644 $ — $ — $ 764,644 Short-term investments 113,077 — — 113,077 Other investments (i) 21,993 — — 21,993 Derivative liabilities — — 15 15 (i) As of March 31, 2023 and December 31, 2022, the Company’s influence on Vitura is deemed non-significant and the investment is considered an equity security with a readily determinable fair value. See Note 3 “Investments” for additional information. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 3 Months Ended |
Mar. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The Company made the following purchases of cannabis products from Cronos GrowCo: Three months ended March 31, 2023 2022 Cronos GrowCo - purchases $ 7,466 $ 3,218 |
Background, Basis of Presenta_3
Background, Basis of Presentation, and Summary of Significant Accounting Policies (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Concentration Risk [Line Items] | |||
Maximum exposure to credit risk | $ 935,955 | $ 987,442 | |
Net revenue, before excise taxes | $ 27,203 | $ 29,406 | |
Accounts Receivable | Two Customers | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 43% | ||
Accounts Receivable | Three Customers | Credit Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 55% | ||
Rest of World | |||
Concentration Risk [Line Items] | |||
Current expected credit loss allowance on accounts receivable | $ 4 | $ 2 | |
Rest of World | Two Major Customers | |||
Concentration Risk [Line Items] | |||
Net revenue, before excise taxes | $ 15,168 | ||
Rest of World | Revenue Benchmark | Two Major Customers | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 56% | 33% | |
Net revenue, before excise taxes | $ 9,833 | ||
United States | |||
Concentration Risk [Line Items] | |||
Current expected credit loss allowance on accounts receivable | $ 237 | $ 217 |
Inventory, net (Details)
Inventory, net (Details) - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 8,540 | $ 7,421 |
Work-in-progress | 15,263 | 15,646 |
Finished goods | 19,719 | 13,503 |
Supplies and consumables | 746 | 989 |
Inventory, net | $ 44,268 | $ 37,559 |
Investments - Schedule of Inves
Investments - Schedule of Investments in Associates and Joint Ventures (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Schedule of Equity Method Investments [Line Items] | |||
Equity method investments, net | $ 18,313 | $ 18,755 | |
Share of loss from equity method investments | $ (496) | $ 0 | |
Cronos GrowCo | |||
Schedule of Equity Method Investments [Line Items] | |||
Ownership interest | 50% | ||
Equity method investments, net | $ 18,313 | $ 18,755 | |
Share of loss from equity method investments | $ (496) | $ 0 |
Investments - Narrative (Detail
Investments - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2021 | |
Variable Interest Entity [Line Items] | |||
Purchase of other investments | $ 110,392 | ||
Impairment loss on other investments | $ 0 | $ 11,238 | |
PharmaCann | |||
Variable Interest Entity [Line Items] | |||
Impairment loss on other investments | $ 0 | $ 11,238 | |
PharmaCann | |||
Variable Interest Entity [Line Items] | |||
Ownership interest | 6.30% | 10.50% | |
Vitura | |||
Variable Interest Entity [Line Items] | |||
Ownership interest | 10% | ||
PharmaCann | |||
Variable Interest Entity [Line Items] | |||
Sale of stock, number of shares issued in transaction (in shares) | 473,787 |
Investments - Revaluation of Ot
Investments - Revaluation of Other Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Other Investments [Roll Forward] | ||
Other investments, beginning balance | $ 70,993 | $ 118,392 |
Unrealized gain (loss) | (7,923) | 4,196 |
Impairment charges | 0 | (11,238) |
Foreign exchange effect | (237) | 411 |
Other investments, ending balance | 62,833 | 111,761 |
PharmaCann | ||
Other Investments [Roll Forward] | ||
Other investments, beginning balance | 49,000 | 110,392 |
Unrealized gain (loss) | 0 | 0 |
Impairment charges | 0 | (11,238) |
Foreign exchange effect | 0 | 0 |
Other investments, ending balance | 49,000 | 99,154 |
Vitura | ||
Other Investments [Roll Forward] | ||
Other investments, beginning balance | 21,993 | 8,000 |
Unrealized gain (loss) | (7,923) | 4,196 |
Impairment charges | 0 | 0 |
Foreign exchange effect | (237) | 411 |
Other investments, ending balance | $ 13,833 | $ 12,607 |
Loans Receivable, net - Schedul
Loans Receivable, net - Schedule of Loan Receivable (Details) ₪ in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | ||||||||||
Mar. 31, 2023 USD ($) | Mar. 31, 2023 CAD ($) | Mar. 31, 2022 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CAD ($) | Mar. 31, 2023 ILS (₪) | Dec. 31, 2022 ILS (₪) | Sep. 30, 2022 | Aug. 31, 2021 CAD ($) | Aug. 23, 2019 CAD ($) | Jun. 28, 2019 USD ($) | Jun. 28, 2019 CAD ($) | |
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Total current portion of loans receivable | $ 5,570 | $ 8,890 | ||||||||||
Total long-term portion of loans receivable | 72,051 | 72,345 | ||||||||||
Total loans receivable, net | 77,621 | 81,235 | ||||||||||
Proceeds from repayment on loan receivables | 6,249 | $ 790 | ||||||||||
Loans Receivable | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Add: Current portion of accrued interest | 637 | 4,463 | ||||||||||
Add: Long-term portion of accrued interest | 190 | 172 | ||||||||||
GrowCo Credit Facility | Loans Receivable | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Current portion of loans receivable, before accrued interest | 4,933 | 4,427 | ||||||||||
Long term portion of loans receivable, before accrued interest | 56,594 | 56,898 | ||||||||||
Face amount | $ 105,000,000 | $ 100,000,000 | ||||||||||
Draw downs | 76,946 | $ 104,000 | 76,730 | $ 104,000,000 | ||||||||
Principal payments | 1,000 | |||||||||||
Proceeds from repayment on loan receivables | 3,699 | 5,000,000 | ||||||||||
Proceeds from interest on loan receivables | $ 10,702 | $ 14,465,000 | ||||||||||
GrowCo Credit Facility | Loans Receivable | Canadian Prime Rate | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Basis spread on interest rate | 1.25% | 1.25% | ||||||||||
Mucci Promissory Note | Loans Receivable | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Long term portion of loans receivable, before accrued interest | $ 13,474 | 13,438 | ||||||||||
Face amount | $ 12,097 | $ 16,350,000 | ||||||||||
Stated interest rate | 3.95% | 3.95% | ||||||||||
Mucci Promissory Note | Loans Receivable | Canadian Prime Rate | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Basis spread on interest rate | 1.25% | |||||||||||
Cannasoul Collaboration Loan | Loans Receivable | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Long term portion of loans receivable, before accrued interest | 1,793 | 1,837 | ||||||||||
Cannasoul Collaboration Loan | Loans Receivable | Establishment of a Commercial Cannabis Analytical Testing Laboratory | Cannasoul | Variable Interest Entity, Not Primary Beneficiary | ||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||
Collaborative arrangement, installment received | $ 2,307 | $ 2,359 | ₪ 8,297 | ₪ 8,297 |
Loans Receivable, net - Sched_2
Loans Receivable, net - Schedule of Expected Credit Loss Allowances (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | $ 13,066 | $ 14,594 |
Increase (decrease) | (764) | 0 |
Foreign exchange effect | 22 | 262 |
Ending balance | 12,324 | 14,856 |
GrowCo Credit Facility | Loans Receivable | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 12,455 | 14,089 |
Increase (decrease) | (770) | (4) |
Foreign exchange effect | 34 | 269 |
Ending balance | 11,719 | 14,354 |
Mucci Promissory Note | Loans Receivable | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 89 | 90 |
Increase (decrease) | 2 | 1 |
Foreign exchange effect | 0 | 2 |
Ending balance | 91 | 93 |
Cannasoul Collaboration Loan | Loans Receivable | ||
Allowance for Loan and Lease Losses [Roll Forward] | ||
Beginning balance | 522 | 415 |
Increase (decrease) | 4 | 3 |
Foreign exchange effect | (12) | (9) |
Ending balance | $ 514 | $ 409 |
Derivative Liabilities - Narrat
Derivative Liabilities - Narrative (Details) - $ / shares | Mar. 08, 2019 | Mar. 31, 2023 |
Altria Group, Inc. | Cronos Group, Inc. | ||
Derivative [Line Items] | ||
Balance held (in shares) | 156,573,537 | |
Ownership interest | 41% | |
Pre-emptive Rights | ||
Derivative [Line Items] | ||
Exercise price (in dollars per share) | $ 16.25 | |
Exercise rights, minimum ownership percentage | 20% | |
Top-up Rights | ||
Derivative [Line Items] | ||
Exercise price (in dollars per share) | $ 16.25 | |
Exercise rights, minimum ownership percentage | 20% | |
Exercise price, volume-weighted average price, measurement period | 10 days | |
Exercise price, volume-weighted average price, measurement period, days preceding exercise | 10 days |
Derivative Liabilities - Schedu
Derivative Liabilities - Schedule of Reconciliation of Carrying Amounts (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Derivative Instruments [Roll Forward] | ||
Beginning balance | $ 15 | $ 14,375 |
Revaluation (gain) loss | 65 | (10,419) |
Foreign exchange effect | 0 | 143 |
Ending balance | 80 | 4,099 |
Altria Warrant | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 13,720 | |
Revaluation (gain) loss | (10,011) | |
Foreign exchange effect | 136 | |
Ending balance | 3,845 | |
Pre-emptive Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 0 | 180 |
Revaluation (gain) loss | 79 | (115) |
Foreign exchange effect | 0 | 2 |
Ending balance | 79 | 67 |
Top-up Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 15 | 475 |
Revaluation (gain) loss | (14) | (293) |
Foreign exchange effect | 0 | 5 |
Ending balance | $ 1 | $ 187 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Fair Values of Derivative Liabilities (Details) | 3 Months Ended | 12 Months Ended |
Mar. 31, 2023 $ / shares | Dec. 31, 2022 $ / shares | |
Pre-emptive Rights | Share price at valuation date | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 2.60 | 3.44 |
Pre-emptive Rights | Subscription price | ||
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 | 0.60 | 0.73 |
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 | 0.0381 | 0.0414 |
Pre-emptive Rights | Weighted Average | Weight-average expected life | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 1 year 9 months | 3 months |
Top-up Rights | Share price at valuation date | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 2.60 | 3.44 |
Top-up Rights | Subscription price | ||
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 | 0.50 | 0.73 |
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 | 0.0418 | 0.0428 |
Top-up Rights | Weighted Average | Weight-average expected life | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 5 months 15 days | 7 months 2 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 | 0.0356 | 0.0381 |
Pre-emptive Rights and Top-up Rights | Minimum | Weight-average expected life | ||
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 | 0.0421 | 0.0437 |
Pre-emptive Rights and Top-up Rights | Maximum | Weight-average expected life | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 2 years 6 months | 2 years 9 months |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 0 | $ 3,084 |
Realignment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 0 | $ 3,084 |
Restructuring - Costs by Segmen
Restructuring - Costs by Segment (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 0 | $ 3,084 |
Realignment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 0 | 3,084 |
Rest of World | Realignment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | 0 | 2,031 |
United States | Realignment | ||
Restructuring Cost and Reserve [Line Items] | ||
Restructuring costs | $ 0 | $ 1,053 |
Restructuring - Restructuring A
Restructuring - Restructuring Activity (Details) - Realignment - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Restructuring Reserve [Roll Forward] | ||
Accrual, Beginning Balance | $ 424 | $ 0 |
Expenses | 0 | 3,084 |
Payments/Write-offs | (316) | (1,686) |
Accrual, Ending Balance | 108 | 1,398 |
Employee termination benefits | ||
Restructuring Reserve [Roll Forward] | ||
Accrual, Beginning Balance | 403 | 0 |
Expenses | 0 | 2,503 |
Payments/Write-offs | (295) | (1,249) |
Accrual, Ending Balance | 108 | 1,254 |
Other restructuring costs | ||
Restructuring Reserve [Roll Forward] | ||
Accrual, Beginning Balance | 21 | 0 |
Expenses | 0 | 581 |
Payments/Write-offs | (21) | (437) |
Accrual, Ending Balance | $ 0 | $ 144 |
Share-based Compensation - Summ
Share-based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 2,551 | $ 3,686 |
Stock options | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | 734 | 1,729 |
Restricted share units | ||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | ||
Share-based compensation | $ 1,817 | $ 1,957 |
Share-based Compensation - Stoc
Share-based Compensation - Stock Options Narrative (Details) - Stock options | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price at grant date (in dollars per share) | $ 2.96 |
2020 Omnibus Plan | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period | 10 years |
Prior Option Plans | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Expiration period | 7 years |
Minimum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Maximum | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 5 years |
Weighted Average | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price at grant date (in dollars per share) | $ 2.07 |
Share-based Compensation - Su_2
Share-based Compensation - Summary of Fair Value of Options Issued (Details) - Stock options | 3 Months Ended |
Mar. 31, 2023 $ / shares | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Share price at grant date (in dollars per share) | $ 2.96 |
Exercise price (per option) (in dollars per share) | $ 2.96 |
Risk-free interest rate | 3.22% |
Expected life of options (in years) | 7 years |
Expected annualized volatility | 72.68% |
Expected dividend yield | 0% |
Black-Scholes value at grant date (per option) (in dollars per share) | $ 2.07 |
Forfeiture rate | 0% |
Share-based Compensation - Su_3
Share-based Compensation - Summary of the Changes in Options (Details) - $ / shares | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average exercise price | ||||
Balance at beginning of period (in dollars per share) | $ 10.57 | $ 7.75 | $ 7.75 | |
Issuance of options (in dollars per share) | 2.96 | |||
Exercise of options (in dollars per share) | 3.14 | |||
Cancellation, forfeiture and expiry of options (in dollars per share) | 9.05 | 12.46 | ||
Balance at end of period (in dollars per share) | 10.40 | 8.55 | $ 10.57 | $ 7.75 |
Weighted average exercise price of options exercisable (in dollars per share) | $ 11.88 | $ 7.96 | ||
Number of options | ||||
Balance at beginning of period (in shares) | 5,350,600 | 8,939,330 | 8,939,330 | |
Issuance of options (in shares) | 188,317 | |||
Exercise of options (in shares) | (1,356,875) | |||
Cancellation, forfeiture and expiry of options (in shares) | (335,091) | (55,791) | ||
Balance at end of period (in shares) | 5,203,826 | 7,526,664 | 5,350,600 | 8,939,330 |
Exercisable (in shares) | 3,624,498 | 4,654,574 | ||
Weighted-average remaining contractual term (years) | ||||
Outstanding | 9 months | 1 year 8 months 19 days | 8 months 23 days | 2 years 8 months 12 days |
Exercisable | 5 months 23 days | 1 year 1 month 20 days |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Stock Options Outstanding (Details) - shares | Mar. 31, 2023 | Dec. 31, 2022 | Mar. 31, 2022 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options outstanding (in shares) | 5,203,826 | 5,350,600 | 7,526,664 | 8,939,330 |
2020 Omnibus Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options outstanding (in shares) | 2,977,264 | 2,788,947 | ||
2018 Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options outstanding (in shares) | 1,400,937 | 1,422,069 | ||
2015 Stock Option Plan | ||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||||
Number of options outstanding (in shares) | 825,625 | 1,139,584 |
Share-based Compensation - Su_4
Share-based Compensation - Summary of Changes in RSUs (Details) - Restricted share units - $ / shares | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Weighted-average grant date fair value | ||
Balance at beginning of period (in dollars per share) | $ 4.63 | $ 9.22 |
Granted (in dollars per share) | 2.74 | 3.52 |
Vested and issued (in dollars per share) | 4.98 | 10.81 |
Cancellation and forfeitures (in dollars per share) | 4.19 | 7.92 |
Balance at end of period (in dollars per share) | $ 4.11 | $ 4.74 |
Number of awards | ||
Balance at beginning of period (in shares) | 5,725,470 | 1,225,870 |
Granted (in shares) | 1,927,487 | 3,950,334 |
Vested and issued (in shares) | (345,433) | (78,631) |
Cancellation and forfeitures (in shares) | (70,108) | (55,479) |
Balance at end of period (in shares) | 7,237,416 | 5,042,094 |
Vesting period | 3 years | |
Minimum | ||
Number of awards | ||
Cliff period | 3 years | |
Maximum | ||
Number of awards | ||
Cliff period | 5 years |
Share-based Compensation - Su_5
Share-based Compensation - Summary of DSU Activity (Details) - Deferred Share Units (DSUs) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Financial liability | ||
Balance at beginning of period | $ 674 | $ 408 |
Gain on revaluation | (163) | (66) |
Balance at end of period | $ 511 | $ 342 |
Number of awards | ||
Balance at beginning of period (in shares) | 265,732 | 104,442 |
Balance at end of period (in shares) | 265,732 | 104,442 |
Loss Per Share - Schedule of Ea
Loss Per Share - Schedule of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Basic and diluted loss per share computation | ||
Net loss from continuing operations attributable to the shareholders of Cronos Group | $ (19,169) | $ (32,638) |
Weighted-average number of common shares outstanding for computation for basic loss per share (in shares) | 380,634,208 | 375,022,724 |
Weighted-average number of common shares outstanding for computation for diluted loss per share (in shares) | 380,634,208 | 375,022,724 |
Basic loss from continuing operations per share (in dollars per share) | $ (0.05) | $ (0.09) |
Diluted loss per share from continuing operations (in dollars per share) | $ (0.05) | $ (0.09) |
Total anti-dilutive securities (in shares) | 30,086,428 | 118,224,080 |
Segment Information - Schedule
Segment Information - Schedule of Segment Data (Details) - USD ($) $ in Thousands | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Segment Reporting Information [Line Items] | |||
Net revenue | $ 20,144 | $ 25,033 | |
Share of loss from equity method investments | (496) | 0 | |
Total assets | 1,159,575 | 1,371,001 | $ 1,213,009 |
Depreciation and amortization | 1,533 | 1,293 | |
Adjusted EBITDA | (16,764) | (18,900) | |
Operating Segments | United States | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 649 | 2,328 | |
Share of loss from equity method investments | 0 | 0 | |
Total assets | 267,513 | 441,064 | |
Depreciation and amortization | 78 | 96 | |
Adjusted EBITDA | (2,857) | (7,086) | |
Operating Segments | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 19,495 | 22,705 | |
Share of loss from equity method investments | (496) | 0 | |
Total assets | 276,094 | 283,182 | |
Depreciation and amortization | 1,455 | 1,197 | |
Adjusted EBITDA | (10,028) | (3,425) | |
Corporate | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 0 | 0 | |
Share of loss from equity method investments | 0 | 0 | |
Total assets | 615,968 | 646,755 | |
Depreciation and amortization | 0 | 0 | |
Adjusted EBITDA | (3,879) | (8,389) | |
Cannabis flower | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 13,128 | 18,625 | |
Cannabis flower | Operating Segments | United States | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 0 | 0 | |
Cannabis flower | Operating Segments | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 13,128 | 18,625 | |
Cannabis flower | Corporate | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 0 | 0 | |
Cannabis extracts | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 6,950 | 6,316 | |
Cannabis extracts | Operating Segments | United States | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 649 | 2,328 | |
Cannabis extracts | Operating Segments | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 6,301 | 3,988 | |
Cannabis extracts | Corporate | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 0 | 0 | |
Other | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 66 | 92 | |
Other | Operating Segments | United States | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 0 | 0 | |
Other | Operating Segments | Rest of World | |||
Segment Reporting Information [Line Items] | |||
Net revenue | 66 | 92 | |
Other | Corporate | |||
Segment Reporting Information [Line Items] | |||
Net revenue | $ 0 | $ 0 |
Segment Information - Schedul_2
Segment Information - Schedule of Adjusted EBITDA (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Segment Reporting Information [Line Items] | ||
Net income (loss) | $ (19,257) | $ (32,653) |
Interest income, net | (11,180) | (2,046) |
Income tax expense (benefit) | (1,436) | 362 |
Depreciation and amortization | 2,405 | 2,824 |
EBITDA | (29,468) | (31,513) |
Share of loss from equity method investments | 496 | 0 |
Impairment loss on long-lived assets | 0 | 3,493 |
Loss (gain) on revaluation of derivative liabilities | 65 | (10,419) |
Loss (gain) on revaluation of financial instruments | 7,758 | (4,268) |
Impairment loss on other investments | 0 | 11,238 |
Foreign currency transaction loss | 1,643 | 1,872 |
Other, net | (85) | (135) |
Restructuring costs | 0 | 3,084 |
Share-based compensation | 2,551 | 3,686 |
Financial statement review costs | 276 | 4,062 |
Adjusted EBITDA | (16,764) | (18,900) |
Operating Segments | United States | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | 337 | (22,216) |
Interest income, net | (3,399) | (29) |
Income tax expense (benefit) | 0 | 0 |
Depreciation and amortization | 200 | 432 |
EBITDA | (2,862) | (21,813) |
Share of loss from equity method investments | 0 | 0 |
Impairment loss on long-lived assets | 0 | |
Loss (gain) on revaluation of derivative liabilities | 0 | 0 |
Loss (gain) on revaluation of financial instruments | 0 | 0 |
Impairment loss on other investments | 11,238 | |
Foreign currency transaction loss | 0 | 0 |
Other, net | 0 | 0 |
Restructuring costs | 1,053 | |
Share-based compensation | 5 | 2,436 |
Financial statement review costs | 0 | 0 |
Adjusted EBITDA | (2,857) | (7,086) |
Operating Segments | Rest of World | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | (15,439) | 2,014 |
Interest income, net | (7,781) | (2,017) |
Income tax expense (benefit) | (1,436) | 362 |
Depreciation and amortization | 2,205 | 2,392 |
EBITDA | (22,451) | 2,751 |
Share of loss from equity method investments | 496 | 0 |
Impairment loss on long-lived assets | 3,493 | |
Loss (gain) on revaluation of derivative liabilities | 65 | (10,419) |
Loss (gain) on revaluation of financial instruments | 7,758 | (4,268) |
Impairment loss on other investments | 0 | |
Foreign currency transaction loss | 1,643 | 1,872 |
Other, net | (85) | (135) |
Restructuring costs | 2,031 | |
Share-based compensation | 2,546 | 1,250 |
Financial statement review costs | 0 | 0 |
Adjusted EBITDA | (10,028) | (3,425) |
Corporate | ||
Segment Reporting Information [Line Items] | ||
Net income (loss) | (4,155) | (12,451) |
Interest income, net | 0 | 0 |
Income tax expense (benefit) | 0 | 0 |
Depreciation and amortization | 0 | 0 |
EBITDA | (4,155) | (12,451) |
Share of loss from equity method investments | 0 | 0 |
Impairment loss on long-lived assets | 0 | |
Loss (gain) on revaluation of derivative liabilities | 0 | 0 |
Loss (gain) on revaluation of financial instruments | 0 | 0 |
Impairment loss on other investments | 0 | |
Foreign currency transaction loss | 0 | 0 |
Other, net | 0 | 0 |
Restructuring costs | 0 | |
Share-based compensation | 0 | 0 |
Financial statement review costs | 276 | 4,062 |
Adjusted EBITDA | $ (3,879) | $ (8,389) |
Segment Information - Schedul_3
Segment Information - Schedule of Revenue from External Customers by Geographic Areas (Details) - USD ($) $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 | Mar. 31, 2022 | |
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 20,144 | $ 25,033 |
Canada | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 14,434 | 13,576 |
Israel | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | 5,061 | 9,128 |
United States | ||
Revenues from External Customers and Long-Lived Assets [Line Items] | ||
Net revenue | $ 649 | $ 2,329 |
Commitments and Contingencies (
Commitments and Contingencies (Details) $ in Thousands, ₪ in Millions | Apr. 17, 2023 ILS (₪) defendant | Oct. 24, 2022 CAD ($) | Mar. 12, 2020 shareholder complaint |
U.S. District Court of Eastern District of New York Vs. Cronos | Pending Litigation | |||
Loss Contingencies [Line Items] | |||
Number of alleged shareholders | shareholder | 2 | ||
Number of putative class action complaints | complaint | 2 | ||
OSC Settlement | Settled Litigation | |||
Loss Contingencies [Line Items] | |||
Payments for legal settlements | $ | $ 1,340 | ||
Green Leaf Vs. Cronos | Subsequent Event | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 26 | ||
Damages sought | ₪ | ₪ 420 | ||
Green Leaf Vs. Cronos | Subsequent Event | Cronos Group, Inc. | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 3 |
Fair Value Measurements - Sched
Fair Value Measurements - Schedule of Fair Value of Assets Measured on Recurring Basis (Details) - Fair Value, Recurring - USD ($) $ in Thousands | Mar. 31, 2023 | Dec. 31, 2022 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | $ 413,667 | $ 764,644 |
Short-term investments | 422,763 | 113,077 |
Other investments | 13,833 | 21,993 |
Derivative liabilities | 80 | 15 |
Level 1 | ||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | ||
Cash and cash equivalents | 413,667 | 764,644 |
Short-term investments | 422,763 | 113,077 |
Other investments | 13,833 | 21,993 |
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 |
Other 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 |
Other investments | 0 | 0 |
Derivative liabilities | $ 80 | $ 15 |
Impairment Loss on Long-lived_2
Impairment Loss on Long-lived Assets (Details) ft² in Thousands, $ in Thousands | 3 Months Ended | |
Mar. 31, 2023 USD ($) ft² | Mar. 31, 2022 USD ($) | |
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment charge related to right-of-use lease asset | $ 1,986 | |
Lease impairment, area of land (in sq ft) | ft² | 29 | |
Impairment loss on long-lived assets | $ 0 | $ 3,493 |
Leasehold Improvements | ||
Impaired Long-Lived Assets Held and Used [Line Items] | ||
Impairment loss on long-lived assets | $ 1,507 |
Related Party Transactions (Det
Related Party Transactions (Details) - USD ($) | 3 Months Ended | ||
Mar. 31, 2023 | Mar. 31, 2022 | Dec. 31, 2022 | |
Cannabis Purchases | Cronos GrowCo | |||
Related Party Transaction [Line Items] | |||
Purchases | $ 7,466,000 | $ 3,218,000 | |
Amounts payable | 3,087,000 | $ 2,519,000 | |
Manufacturing Services | Vendor | |||
Related Party Transaction [Line Items] | |||
Amounts payable | 437,000 | $ 0 | |
Expense | $ 833,000 | ||
Cronos GrowCo | |||
Related Party Transaction [Line Items] | |||
Ownership interest | 50% |