Cover Page
Cover Page - USD ($) | 12 Months Ended | ||
Dec. 31, 2023 | Feb. 23, 2024 | Jun. 30, 2023 | |
Cover [Abstract] | |||
Document Type | 10-K | ||
Document Annual Report | true | ||
Document Period End Date | Dec. 31, 2023 | ||
Current Fiscal Year End Date | --12-31 | ||
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 Well-known Seasoned Issuer | No | ||
Entity Voluntary Filers | No | ||
Entity Current Reporting Status | Yes | ||
Entity Interactive Data Current | Yes | ||
Entity Filer Category | Accelerated Filer | ||
Entity Small Business | false | ||
Entity Emerging Growth Company | false | ||
Document Financial Statement Error Correction [Flag] | false | ||
ICFR Auditor Attestation Flag | true | ||
Entity Shell Company | false | ||
Entity Public Float | $ 391,676,759 | ||
Entity Common Stock, Shares Outstanding (in shares) | 381,298,853 | ||
Documents Incorporated by Reference | Certain information required by Part III of this Annual Report on Form 10-K will either be incorporated into this Annual Report on Form 10-K by reference to the registrant’s definitive proxy statement for its 2024 Annual Meeting of Shareholders, or will be included in an amendment to this Annual Report on Form 10-K to be filed no later than 120 days after the registrant's fiscal year ended December 31, 2023. | ||
Amendment Flag | false | ||
Document Fiscal Year Focus | 2023 | ||
Document Fiscal Period Focus | FY | ||
Entity Central Index Key | 0001656472 |
Audit Information
Audit Information | 12 Months Ended |
Dec. 31, 2023 | |
Audit Information [Abstract] | |
Auditor Name | KPMG LLP |
Auditor Location | Vaughan, Ontario, Canada |
Auditor Firm ID | 85 |
Consolidated Balance Sheet
Consolidated Balance Sheet - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 669,291 | $ 764,644 |
Short-term investments | 192,237 | 113,077 |
Accounts receivable, net | 13,984 | 23,113 |
Interest receivable | 10,012 | 2,469 |
Other receivables | 6,341 | 3,298 |
Current portion of loans receivable, net | 5,541 | 8,890 |
Inventory, net | 30,495 | 37,559 |
Prepaids and other current assets | 5,405 | 7,106 |
Total current assets | 933,306 | 960,156 |
Equity method investments, net | 19,488 | 18,755 |
Other investments | 35,251 | 70,993 |
Non-current portion of loans receivable, net | 69,036 | 72,345 |
Property, plant and equipment, net | 59,468 | 60,557 |
Right-of-use assets | 1,356 | 2,273 |
Goodwill | 1,057 | 1,033 |
Intangible assets, net | 21,078 | 26,704 |
Other | 45 | 193 |
Total assets | 1,140,085 | 1,213,009 |
Current liabilities | ||
Accounts payable | 12,130 | 11,163 |
Income taxes payable | 64 | 32,956 |
Accrued liabilities | 27,736 | 22,268 |
Current portion of lease obligation | 994 | 1,330 |
Derivative liabilities | 102 | 15 |
Current portion due to non-controlling interests | 373 | 384 |
Total current liabilities | 41,399 | 68,116 |
Non-current portion due to non-controlling interests | 1,003 | 1,383 |
Non-current portion of lease obligation | 1,559 | 2,546 |
Total liabilities | 43,961 | 72,045 |
Shareholders’ equity | ||
Share capital (authorized for issue as of December 31, 2023 and 2022: unlimited; shares outstanding as of December 31, 2023 and 2022: 381,298,853 and 380,575,403, respectively) | 613,725 | 611,318 |
Additional paid-in capital | 48,449 | 42,682 |
Retained earnings | 416,719 | 490,682 |
Accumulated other comprehensive income (loss) | 20,678 | (797) |
Total equity attributable to shareholders of Cronos Group | 1,099,571 | 1,143,885 |
Non-controlling interests | (3,447) | (2,921) |
Total shareholders’ equity | 1,096,124 | 1,140,964 |
Total liabilities and shareholders’ equity | $ 1,140,085 | $ 1,213,009 |
Consolidated Balance Sheet (Par
Consolidated Balance Sheet (Parenthetical) - shares | Dec. 31, 2023 | Dec. 31, 2022 |
Statement of Financial Position [Abstract] | ||
Common stock, shares issued (in shares) | 381,298,853 | 380,575,403 |
Common stock, shares outstanding (in shares) | 381,298,853 | 380,575,403 |
Consolidated Statements of Net
Consolidated Statements of Net Loss and Comprehensive Loss - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement [Abstract] | |||
Net revenue, before excise taxes | $ 120,270 | $ 109,301 | $ 79,612 |
Excise taxes | (33,029) | (22,552) | (15,051) |
Net revenue | 87,241 | 86,749 | 64,561 |
Cost of sales | 74,527 | 71,313 | 70,193 |
Inventory write-down | 805 | 0 | 11,961 |
Gross profit | 11,909 | 15,436 | (17,593) |
Operating expenses | |||
Sales and marketing | 22,701 | 18,046 | 20,917 |
Research and development | 5,843 | 13,131 | 21,841 |
General and administrative | 49,475 | 67,674 | 90,919 |
Restructuring costs | 1,524 | 3,545 | 0 |
Share-based compensation | 8,756 | 15,008 | 9,844 |
Depreciation and amortization | 5,044 | 5,967 | 4,413 |
Impairment loss on goodwill and indefinite-lived intangible assets | 0 | 0 | 37 |
Impairment loss on long-lived assets | 3,366 | 3,493 | 126,405 |
Total operating expenses | 96,709 | 126,864 | 274,376 |
Operating loss | (84,800) | (111,428) | (291,969) |
Other income (expense) | |||
Interest income, net | 51,235 | 22,514 | 9,068 |
Gain (loss) on revaluation of derivative liabilities | (85) | 14,060 | 151,360 |
Share of income (loss) from equity method investments | 1,583 | 3,114 | (6,313) |
Gain (loss) on revaluation of financial instruments | (12,042) | 14,739 | 8,611 |
Impairment loss on other investments | (23,350) | (61,392) | 0 |
Foreign currency transaction loss | (7,324) | (2,286) | 0 |
Other, net | 1,114 | (324) | 733 |
Total other income (expense) | 11,131 | (9,575) | 163,459 |
Loss before income taxes | (73,669) | (121,003) | (128,510) |
Income tax expense (benefit) | (3,230) | 34,175 | (431) |
Loss from continuing operations | (70,439) | (155,178) | (128,079) |
Loss from discontinued operations | (4,114) | (13,556) | (269,125) |
Net loss | (74,553) | (168,734) | (397,204) |
Net loss attributable to non-controlling interest | (590) | 0 | (1,097) |
Net loss attributable to Cronos Group | (73,963) | (168,734) | (396,107) |
Comprehensive income (loss) | |||
Net loss | (74,553) | (168,734) | (397,204) |
Foreign exchange gain (loss) on translation | 21,539 | (50,616) | 8,192 |
Comprehensive loss | (53,014) | (219,350) | (389,012) |
Comprehensive income (loss) attributable to non-controlling interest | (526) | 46 | 229 |
Comprehensive loss attributable to Cronos Group | $ (52,488) | $ (219,396) | $ (389,241) |
Net loss per share | |||
Basic - continuing operations (in dollars per share) | $ (0.18) | $ (0.41) | $ (0.34) |
Diluted - continuing operations (in dollars per share) | (0.18) | (0.41) | (0.34) |
Basic - discontinued operations (in dollars per share) | (0.01) | (0.04) | (0.73) |
Diluted - discontinued operations (in dollars per share) | (0.01) | (0.04) | (0.73) |
Basic - total (in dollars per share) | (0.19) | (0.45) | (1.07) |
Diluted - total (in dollars per share) | $ (0.19) | $ (0.45) | $ (1.07) |
Consolidated Statements of Chan
Consolidated Statements of Changes in Shareholders’ Equity - USD ($) $ in Thousands | Total | Common Shares | Additional paid-in capital | Retained earnings | Accumulated other comprehensive income (loss) | Non-controlling interests |
Beginning balance (in shares) at Dec. 31, 2020 | 360,253,332 | |||||
Beginning balance at Dec. 31, 2020 | $ 1,708,168 | $ 569,260 | $ 34,596 | $ 1,064,509 | $ 42,999 | $ (3,196) |
Increase (Decrease) in Stockholders' Equity [Roll Forward] | ||||||
Activities relating to share-based compensation (in shares) | 11,764,381 | |||||
Activities relating to share-based compensation | (2,254) | $ 7,288 | 2,671 | (12,213) | ||
Share issuance pursuant to research and development milestone (in shares) | 2,934,980 | |||||
Share issuance pursuant to research and development milestones | 17,374 | $ 17,374 | ||||
Accelerated restricted share units vesting out-of-period adjustment | 0 | 4,802 | (4,802) | |||
Top-up rights out-of-period adjustment | 0 | $ (3,227) | 3,227 | |||
Net loss | (397,204) | (396,107) | (1,097) | |||
Foreign exchange gain on translation | 8,192 | 6,866 | 1,326 | |||
Ending balance (in shares) at Dec. 31, 2021 | 374,952,693 | |||||
Ending 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) | 1,464,822 | |||||
Activities relating to share-based compensation | 14,834 | $ 4,617 | 10,217 | |||
Share issuance pursuant to research and development milestone (in shares) | 4,157,888 | |||||
Share issuance pursuant to research and development milestones | 11,204 | $ 11,204 | ||||
Net loss | (168,734) | (168,734) | ||||
Foreign exchange gain on translation | $ (50,616) | (50,662) | 46 | |||
Ending balance (in shares) at Dec. 31, 2022 | 380,575,403 | 380,575,403 | ||||
Ending 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) | 723,450 | |||||
Activities relating to share-based compensation | 8,174 | $ 2,407 | 5,767 | |||
Net loss | (74,553) | (73,963) | (590) | |||
Foreign exchange gain on translation | $ 21,539 | 21,475 | 64 | |||
Ending balance (in shares) at Dec. 31, 2023 | 381,298,853 | 381,298,853 | ||||
Ending balance at Dec. 31, 2023 | $ 1,096,124 | $ 613,725 | $ 48,449 | $ 416,719 | $ 20,678 | $ (3,447) |
Consolidated Statements of Cash
Consolidated Statements of Cash Flows - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating activities | |||
Net loss | $ (74,553) | $ (168,734) | $ (397,204) |
Adjustments to reconcile net loss to net cash used in operating activities: | |||
Share-based compensation | 8,769 | 15,115 | 10,151 |
Depreciation and amortization | 8,110 | 13,122 | 15,402 |
Impairment loss on goodwill and indefinite-lived intangible assets | 0 | 0 | 236,056 |
Impairment loss on long-lived assets | 3,571 | 3,493 | 127,619 |
Impairment loss on other investments | 23,350 | 61,392 | 0 |
Income from investments | 10,513 | (17,853) | (1,974) |
Loss (gain) on revaluation of derivative liabilities | 85 | (14,060) | (151,360) |
Changes in expected credit losses on long-term financial assets | (1,528) | (662) | 12,202 |
Foreign currency transaction loss | 7,324 | 2,286 | 0 |
Other non-cash operating activities, net | (2,008) | 1,294 | 335 |
Changes in operating assets and liabilities: | |||
Accounts receivable, net | 9,206 | (2,711) | (13,163) |
Interest receivable | (14,344) | (6,985) | (2,497) |
Other receivables | (1,449) | 1,148 | 3,497 |
Prepaids and other current assets | 1,437 | 996 | 3,102 |
Inventory, net | 7,399 | (7,217) | 11,565 |
Accounts payable | (773) | (863) | (1,597) |
Income taxes payable | (33,104) | 34,212 | (776) |
Accrued liabilities | 5,160 | (2,921) | (4,974) |
Net cash used in operating activities | (42,835) | (88,948) | (153,616) |
Investing activities | |||
Proceeds from short-term investments | 532,838 | 268,870 | 215,303 |
Purchase of short-term investments | (608,247) | (271,378) | (119,610) |
Dividends received from equity method investee | 1,297 | 0 | 0 |
Purchase of investments | 0 | 0 | (110,392) |
Dividend proceeds | 345 | 384 | 0 |
Repayments (advances) on loan receivables | 16,831 | 5,246 | (4,967) |
Purchase of property, plant and equipment, net of disposals | (2,505) | (3,451) | (11,144) |
Purchase of intangible assets, net of disposals | (918) | (1,581) | (1,118) |
Other investing activities | 860 | 68 | 3,030 |
Net cash used in investing activities | (59,499) | (1,842) | (28,898) |
Financing activities | |||
Withholding taxes paid on equity awards | (1,030) | (2,829) | (13,458) |
Other financing activities, net | 0 | (68) | 16 |
Net cash used in financing activities | (1,030) | (2,897) | (13,442) |
Effect of foreign currency translation on cash and cash equivalents | 8,011 | (28,642) | 4,906 |
Net change in cash and cash equivalents | (95,353) | (122,329) | (191,050) |
Cash and cash equivalents, beginning of period | 764,644 | 886,973 | 1,078,023 |
Cash and cash equivalents, end of period | 669,291 | 764,644 | 886,973 |
Supplementary cash flow information(i): | |||
Interest Paid, Excluding Capitalized Interest, Operating Activities | 0 | 0 | 0 |
Interest received | 36,501 | 15,548 | 8,988 |
Taxes paid | $ 33,013 | $ 177 | $ 892 |
Background, Basis of Presentati
Background, Basis of Presentation, and Summary of Significant Accounting Policies | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [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 The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain prior year amounts have been reclassified to conform to the current year presentation of our consolidated financial statements, which includes discontinued operations. These reclassifications had no effect on reported results of operations and ending shareholders’ equity. (c) Basis of consolidation The accompanying consolidated financial statements include the accounts of the Company, and all entities in which the Company has a controlling voting interest or is the primary beneficiary of a variable interest as of and for the reporting periods. The Company assesses control under the variable interest entity (“VIE”) model to determine whether the Company is the primary beneficiary of that entity’s operations. If an entity is not deemed to be a VIE, the Company consolidates the entity if the Company has a controlling voting interest. Subsidiaries are fully consolidated from the date on which control is transferred to the Company. They are deconsolidated from the date that control ceases. Investments in which the Company has the ability to exercise significant influence over the operating and financial policies of the investee, but does not have control, are accounted for under the equity method of accounting. The Company consolidates the financial results of the following entities, which the Company controls but does not wholly own: Subsidiaries Jurisdiction of incorporation Incorporation date Ownership interest (ii) Cronos Israel G.S. Cultivation Ltd. (i) Israel February 4, 2018 70% Cronos Israel G.S. Manufacturing Ltd. (i) Israel September 4, 2018 90% Cronos Israel G.S. Store Ltd. (i) Israel June 28, 2018 90% Cronos Israel G.S. Pharmacy Ltd. (i) Israel February 15, 2018 90% (i) These Israeli entities are collectively referred to as “Cronos Israel.” (ii) “Ownership interest” is defined as the proportionate share of net income to which the Company is entitled; equity interest may differ from ownership interest as described herein. In the consolidated statements of net loss and comprehensive loss, net loss and comprehensive loss are attributed to the equity holders of the Company and to the non-controlling interests. Non-controlling interests in the equity of Cronos Israel are presented separately in the shareholders’ equity section of the consolidated balance sheets and consolidated statements of shareholders’ equity. All intercompany transactions and balances are eliminated upon consolidation. (d) Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include, among other things, valuation of derivative liabilities, expected credit losses on long-term financial assets, impairment losses on goodwill and indefinite-lived intangible assets, impairment losses on long-lived assets, inventory write-downs, share-bared payments, valuation allowance on deferred income tax assets and uncertain tax liabilities. Actual results could differ from those estimates. (e) Cash and cash equivalents and short-term investments Cash and cash equivalents are comprised of cash and highly liquid short-term investments that are readily convertible into known amounts of cash, generally with original maturities of three months or less. Cash and cash equivalents include amounts held in dollars, C$, and ILS and security deposits. Short-term investments consist of debt securities that (i) generally have original maturities of greater than three months and (ii) the Company has the ability to convert into cash within one year. Short-term investments are classified as held-to-maturity and recorded at cost. Interest earned on short-term investments is recorded in other receivables on the consolidated balance sheets and interest income, net on the consolidated statements of net loss and comprehensive loss. Cash inflows and outflows related to the purchase and maturity of short-term investments are classified as investing activities in the Company’s consolidated statements of cash flows. (f) Inventory Inventory is comprised of raw materials, finished goods and work-in-progress, such as pre-harvested cannabis plants, dried flower, by-products to be extracted, cannabis extracts and by-products, dry cannabis and cannabis extract containers, and boxes. When the Company cultivated cannabis, costs capitalized into inventory until the time of harvest included, but were not limited to, labor, utilities, nutrition and irrigation. Inventory is stated at the lower of cost and net realizable value, determined using weighted average cost. Cost includes expenditures directly related to manufacturing and distribution of the products. Primary costs include consumables (insect control, fertilizers, soil), packaging, shipping, direct labor, contract manufacturer fees, overhead, supplies and small tools, and the depreciation of manufacturing equipment and production facilities determined at normal capacity. Manufacturing overhead and related expenses include salaries, wages, employee benefits, rent, utilities, security, and property taxes. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment to measure inventory at the lower of cost and net realizable value. Factors considered in the determination of net realizable value include slow-moving or non-marketable products. (g) Investments Variable interest entities A variable interest entity is an entity having either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or equity investors at risk that lack the ability to control the entity’s activities. Variable interests are investments or other interests that will absorb portions of a VIE’s expected losses or receive portions of the VIE’s expected residual returns. The Company evaluates whether it is the primary beneficiary of each VIE it identifies on a periodic basis and considers the impact of any reconsideration events. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE and holds a variable interest that could potentially be significant to the VIE. To make this determination, the Company considers both quantitative and qualitative factors regarding the nature, size and form of its involvement with the VIE. The Company consolidates a VIE when it is determined that it is the primary beneficiary of the VIE. Equity method investments The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling financial interest using the equity method. Under the equity method, the Company records its proportionate share of income or loss in share of income (loss) from equity method investments within the consolidated statements of net loss and comprehensive loss. Cash payments to equity method investees such as additional investments or expenses incurred on behalf of investees, as well as income earned and payments from equity method investees such as dividends and distributions are recorded as adjustments to investment balances. If the current fair value of an investment falls below its carrying amount, this may indicate that an impairment loss should be recorded. Any impairment losses recognized in one period cannot be reversed in subsequent periods. Other investments Other investments include common stock and options in third-party entities in which the Company’s influence is deemed non-significant. The Company holds other investments with and without readily determinable fair values. Other investments with readily determinable fair values are recorded using the fair value method of accounting as of period-end on the consolidated balance sheets. Other investments without readily determinable fair values are recorded using the cost method of accounting on the consolidated balance sheets. Other investments without readily determinable fair values are assessed for observable price changes and other than temporary impairment on a periodic basis. Changes in the reported value of other investments are reported in the consolidated statements of net loss and comprehensive loss. (h) Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Rate Building and leasehold improvements 15 to 20 years Machinery and equipment 5 to 7 years Furniture and fixtures 5 years When assets are disposed of, the cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Maintenance and repairs are charged to expense as incurred. Significant expenditures, which increase productivity or extend the useful life of the asset, are capitalized. Available for use is defined as the point at which the related property, plant and equipment is operational, including the possession of any requisite licenses. Depreciation commences at the point the assets are available for use. (i) Definite-lived intangible assets Intangible assets are recorded at cost less any accumulated amortization and accumulated impairment losses. Intangible assets acquired through a business combination are measured at fair value at the acquisition date. The Company capitalizes certain costs incurred in connection with its enterprise software, which include external direct costs of materials and services consumed in developing or obtaining internal-use software and payroll and payroll-related costs for employees who are directly associated with and who devote time to the development of the software for the function intended. All other costs are expensed as incurred. Intangible assets with definite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Ginkgo exclusive licenses Straight-line 10 years Israeli codes (i) Straight-line Useful life of corresponding facilities (i) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli codes”) were transferred by non-controlling interests to Cronos Israel in exchange for equity interests in the Cronos Israel entities specified above. Amortization begins when assets become available for use. The estimated useful life, amortization method, and rate are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets originating from the strategic partnership (the “Ginkgo Strategic Partnership”) with Ginkgo Bioworks Holdings, Inc. (“Ginkgo”) are accounted for in accordance with the acquisition method of accounting. Equity interests issued in exchange for an asset are initially recognized and measured at the date of acquisition at fair value. We estimate fair value using the relief-from-royalty method and key assumptions include the discount rate and estimated life. Definite-lived intangible assets, including intangible assets originating from the Ginkgo Strategic Partnership, are subject to amortization and reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value has been reduced to less than its carrying amount. (j) Accrued liabilities Accrued liabilities consist of the following: As of December 31, 2023 2022 Accrued payroll and related expenses $ 8,970 $ 11,492 Accrued professional fees 2,525 2,414 Accrued taxes 11,695 4,132 Other accrued expenses 4,546 4,230 Total accrued liabilities $ 27,736 $ 22,268 Accrued payroll and related expenses include salaries and wages, bonuses, and other related payroll expenses associated with the Company’s employees. Accrued professional fees include fees for legal expenses, litigation, consulting, marketing, and other related expenses. Accrued taxes include sales, excise and other taxes owed. Other accrued expenses include the fair value of deferred share units outstanding to directors and other general expenses. (k) Leases The Company enters into leases in the normal course of business, primarily for the land-use rights, office premises, and equipment used in the production of its products. At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company performs an analysis over the classification of the lease agreement as either an operating lease or finance lease. A right-of-use asset and the related lease obligation associated with the lease are recorded at the inception of the lease. The right-of-use asset’s recorded amount is based on the present value of future lease payments over the lease term at the commencement date plus any initial direct costs incurred. If the rate implicit in the lease is not readily determinable for the Company’s operating leases, an incremental borrowing rate is generally used based on information available at the lease commencement date to determine the present value of future lease payments. Subsequent changes to these lease payments due to rate updates are recorded as lease expense in the period incurred. Leases with a term of 12 months or less are not recorded on the balance sheet as a lease. The right-of-use asset is subject to impairment testing whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The Company’s lease agreements generally exclude non-lease components. As a result, non-lease components are accounted for separately for all classes of assets and expensed as incurred. In addition, the Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. For finance leases, from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, the right-of-use asset is amortized on a straight-line basis and the interest expense is recognized on the lease liability using the effective interest method. For operating leases, lease expense is recognized on a straight-line basis over the term of the lease and presented as a single charge in the consolidated statements of net loss and comprehensive loss. (l) Derivative liabilities For financial instruments classified as derivatives that are not designated as hedging instruments or do not qualify for hedge accounting, changes in fair value are recorded in the consolidated statements of net loss and comprehensive loss each period. The Company does not enter into or hold derivative financial instruments for trading or speculative purposes. Derivative liabilities are initially recognized at fair value at the date on which the derivative contract was entered into. Any attributable transaction costs are recognized in net loss as incurred. Subsequent to initial recognition, derivative liabilities are measured at fair value at each reporting date until settlement with the re-measurement gain or loss being recognized immediately in net loss and comprehensive loss. For more details on derivative liabilities consisting of the Altria Warrant, Pre-emptive Rights, and certain Top-up Rights, see Note 9 “Derivative Liabilities.” (m) Capital stock Capital stock is presented at the fair value at the time of issuance of the shares issued. Costs related to the issuance of shares are reported in equity, net of tax, as a deduction from the issuance proceeds. (n) Revenue recognition Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company’s contracts with customers for the sale of dried flower, cannabis oil, cannabinoid-derived products and “hemp” (as defined in the U.S. Agricultural Improvement Act of 2018 “U.S. hemp”) derived products consist of a single performance obligation. The Company has concluded that revenue from the sale of these products should be recognized at the point in time when control is transferred to the customer, depending on the specific contractual terms. The Company has determined that the most definitive demonstration that control has transferred to a customer is physical shipment or delivery, depending on the contractual shipping terms, except for consignment transactions. Consignment transactions are arrangements where the Company transfers product to a customer or third-party location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon the customer’s usage. Revenue is recognized at the transaction price, which is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. Net revenue before excise taxes from sale of goods, as presented in the consolidated statements of net loss and comprehensive loss, represents revenue from the sale of goods less expected price discounts, allowances for customer returns and other forms of variable consideration. If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated using either the expected value or most likely amount method, based on the Company’s historical information, at contract inception. The Company’s payment terms vary by customer and product type. The Company treats shipping and handling activities as a fulfillment cost, classified as cost of sales. Accordingly, the Company accrues all fulfillment costs related to the shipping and handling of consumer goods at the time of shipment. The following table presents the Company's revenue by major product category for continuing operations: Year ended December 31, 2023 2022 2021 Cannabis flower $ 62,070 $ 63,593 $ 55,194 Cannabis extracts 24,569 22,522 8,807 Other 602 634 560 Net revenue $ 87,241 $ 86,749 $ 64,561 Net revenue attributed to a geographic region based on the location of the customer was as follows: Year ended December 31, 2023 2022 2021 Canada $ 64,702 $ 56,233 $ 50,294 Israel 21,134 30,516 13,376 Other countries 1,405 — 891 Net revenue $ 87,241 $ 86,749 $ 64,561 (o) Research and development The Company has a research and development center in Canada that performs scientific research on the interaction of cannabinoids as well as strain development, growing conditions and extraction technology. In 2023, fermentation and production related research was performed to further strategic initiatives around rare cannabinoids. In addition, the Company has a collaboration and license agreement with Ginkgo (the “Ginkgo Collaboration Agreement”) to research, produce, and commercialize cultured cannabinoids. Technological feasibility is considered to be established once productivity targets or commercialization are achieved, at which point the exclusive license is recognized at cost less impairment charges. As of the acquisition date of each exclusive license, cost less impairment charges is equal to the fair value. Refer to Note 7 “ Goodwill and Intangible Assets, net ” for more information on the Ginkgo Collaboration Arrangement. Research and development costs associated with these collective efforts are expensed as incurred as part of operating expenses in the Company’s consolidated statements of net loss and comprehensive loss. (p) Advertising costs Advertising costs include costs to sell the Company’s products and are expensed as incurred through sales and marketing expenses in the consolidated statements of net loss and comprehensive loss. Advertising costs were $1,382, $889 and $2,229 for the years ended December 31, 2023, 2022, and 2021, respectively. (q) Share-based compensation The Company has five share-based compensation plans under which awards have been made: the 2020 Omnibus Plan, the 2018 Stock Option Plan, the 2015 Stock Option Plan, the Employment Inducement Award Plan and the DSU Plan (each as defined below). Share-based awards consists of equity-settled share-based awards such as stock options and restricted share units (“RSUs”) that are issued to eligible employees, non-executive directors, and non-employees. Cash-settled deferred share units (“DSUs”) that are issued to non-executive directors under the DSU Plan are recorded in accrued liabilities with the fair value adjustment recorded in other income. Equity instruments granted are initially measured at fair value on the grant date. The fair value of stock options is determined using the Black-Scholes option pricing model. The fair value of RSUs and DSUs are determined using the market price of the Company’s common shares. Compensation expense related to options and RSUs is recognized on a straight-line basis in the consolidated statements of net loss and comprehensive loss over the vesting period for employees, and over the contractual term for non-employees. The fair value of the payout of cash-settled DSUs is determined at each reporting date based on the fair value of the Company’s common shares at the reporting date and is recorded within other liabilities. The related costs for all equity-settled share-based awards are reflected in additional paid-in capital until the awards are settled or exercised. Upon settlement or exercise, shares are issued and the amount previously reflected in additional paid-in capital is, along with any proceeds paid upon settlement or exercise, credited to a combination of share capital and additional paid-in capital. Forfeitures of share-based compensation awards are accounted for as reductions to share-based compensation and additional paid-in capital as they occur. (r) Impairment of long-lived assets The Company reviews its long-lived assets, such as property, plant and equipment and definite-lived intangible assets, for impairment in accordance with Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment . In accordance with ASC Topic 360, long-lived assets to be held are reviewed for events or changes in circumstances that indicate that their carrying amount may not be recoverable. The Company periodically reviews for indicators and, if indicators are present, tests the carrying amount of long-lived assets, assessing their recoverable value based on estimated undiscounted cash flows over their remaining estimated useful lives. The Company groups assets at the lowest level for which cash flows are separately identifiable, referred to as an asset group. If the carrying amount of an asset (or asset group) exceeds its estimated undiscounted future cash flows, an impairment charge is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset group, based on discounted cash flows. (s) Assets held for sale and discontinued operations In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations , a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meet the criteria in paragraph ASC 205-20-45-10. In the period in which the component meets held-for-sale or discontinued operations criteria, the major current assets, other assets, current liabilities, and other liabilities are reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), are reported as components of net loss separate from the net loss of continuing operations. The Company periodically evaluates its long-lived assets that it plans to dispose of through sale for held-for-sale classification. To be classified as held-for-sale, management must have committed to a plan to sell, the asset (or asset group) must be available for immediate sale in its present condition, an active program to locate a buyer must have been initiated, the sale must be probable to close within one year, the asset (or asset group) must be marketed at a reasonable sales price, and it must be unlikely that significant changes to the plan will be made. Once an asset (or asset group) meets all of the above criteria, it is reclassified as assets held for sale on the consolidated balance sheet, and the asset(s) cease depreciation and are written down to their fair value, less costs to sell, if applicable. The Company completed a review of its global supply chain and determined that it would wind down its Winnipeg, Manitoba facility (“Cronos Fermentation”) and list it for sale. This review involves significant complexities and judgments in making the accounting treatment determination. There are subjective and complex judgments in the determination of whether the Cronos Fermentation facility meets the criteria to be classified as held for sale, including: (1) whether the Cronos Fermentation facility is available for sale in its present condition subject only to terms that are usual and customary for sales of such businesses, (2) whether the sale of the Cronos Fermentation facility is probable and that the transfer of assets will be a completed sale within one year from period end, and (3) whether the Cronos Fermentation facility is being actively marketed at a reasonable price. See Note 6 “Property, plant and equipment, net” for discussion regarding our evaluation of the Peace Naturals Campus and the Cronos Fermentation facility for held-for-sale classification as of December 31, 2023. (t) Impairment of goodwill and indefinite-lived intangible assets Goodwill and indefinite-lived intangible assets are not amortized. Goodwill and indefinite-lived intangible assets are reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying amount in accordance with the provisions of ASC Topic 350, Intangibles—Goodwill and Other . The Company performs an impairment test annually in the fourth quarter by comparing the fair value of the reporting unit with its carrying amount, including goodwill. If the fair value of the reporting unit exceeds its carrying amount, goodwill is not considered to be impaired. An impairment charge would be recognized for the amount by which the carrying amount exceeds the reporting unit’s fair value. (u) Income taxes The Company uses the liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when such assets and liabilities are recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the year that includes the enactment date. The Company determines deferred tax assets including net operating losses and liabilities, based on temporary differences between the book and tax bases of assets and liabilities. A valuation allowance is established to reduce some or all net deferred tax assets to amounts that are more likely than not to be realized. The Company considers all available evidence, both positive and negative, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies, in assessing the need for a valuation allowance. A valuation allowance against some or all of the net deferred tax assets does not in any way impact the Company’s ability to use future tax deductions such as the Company’s net operating loss carryforwards; rather, the valuation allowance indicates, according to the provisions of ASC 740, Income Taxes , it is more likely than not that the deferred tax assets will not be realized. The valuation allowance that was established will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that the net deferred tax assets will be realized. The Company’s income tax expense for future periods will be reduced to the extent of corresponding decreases in our valuation allowance. There is uncertainty regarding any future realization of the benefit by the Company of all or part of our net deferred tax assets. Judgment is required to determine the recognition and measurement attributes prescribed in the accounting guidance for uncertainty in income taxes. The Company uses a two-step approach for evaluating uncertain tax positions. Step one, recognition, requires us to determine whether the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. If a tax position is not considered “more likely than not” to be sustained, no benefits of the position are recognized. If we determine that a position is “more likely than not” to be sustained, then we proceed to step two, measurement, which is based on the largest amount of benefit which is more likely than not to be realized on effective settlement. This process involves estimating our actual current tax exposure, including assessing the risks associated with income tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and financial reporting purposes. If actual results differ from our estimates, our net operating loss and credit carryforwards, to the extent not covered by a valuation allowance, could be materially impacted in the period which such determination is made. The Company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon examination by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Any interest and penalties related to unrecognized tax liabilities are presented within income tax expense in the consolidated statements of net loss and comprehensive loss. Accrued interest and penalties are included in accounts pay |
Discontinued Operations
Discontinued Operations | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Discontinued Operations | Discontinued Operations In the second quarter of 2023, the Company exited its then-existing U.S. hemp-derived cannabinoid product operations. The exit of the U.S. operations represented a strategic shift that has a major effect on the Company’s operations and financial results, and as such, qualifies for reporting as discontinued operations in our consolidated statements of net loss and comprehensive loss. Prior period amounts have been reclassified to reflect the discontinued operations classification of the U.S. operations. The following table presents the major components comprising loss from discontinued operations in the consolidated statements of operations for the years ended December 31, 2023, 2022, and 2021: Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 (iv) Net revenue $ 1,029 $ 5,155 $ 9,874 Cost of sales 2,164 8,622 9,850 Inventory write-down (i) 839 — — Gross profit (1,974) (3,467) 24 Operating expenses Sales and marketing 578 4,236 24,020 Research and development 32 250 1,490 General and administrative 668 3,504 6,133 Restructuring costs 523 1,788 — Share-based compensation 13 107 307 Depreciation and amortization 13 58 71 Impairment loss on goodwill and indefinite-lived intangible assets — — 236,019 Impairment loss on long-lived assets (ii) 205 — 1,214 Total operating expenses 2,032 9,943 269,254 Interest income 10 23 4 Other, net (iii) (118) (169) 101 Total other loss (108) (146) 105 Loss before income taxes (4,114) (13,556) (269,125) Income tax expense (benefit) — — — Net loss from discontinued operations (4,114) (13,556) (269,125) (i) For the year ended December 31, 2023, Inventory write-down relates to the disposal of obsolete inventory as a result of the exit of the U.S. operations. (ii) During the year ended December 31, 2023, as a result of the exit of the U.S. operations, the Company recognized an impairment charge of $205 related to the right-of-use lease assets associated with the Company’s former U.S. manufacturing facility in Los Angeles, California. For the year ended December 31, 2021, the Company concluded that the carrying amount of the U.S. reporting unit exceeded its fair value, which resulted in the recognition of an impairment charge of $178,414 on goodwill and concluded the carrying amount of the Lord Jones® brand exceeded its fair value, which resulted in impairment charges of $57,500 on its Lord Jones® brand intangible asset. (iii) For the years ended December 31, 2023 and December 31, 2022, Other, net related to loss on disposal of assets that were part of the U.S. operations. For the year ended December 31, 2021, Other, net includes a gain on disposal of assets related to Original B.C. Ltd. (“OGBC”) as well as a loss from disposal of assets that were part of the U.S. operations. (iv) 2021 loss from discontinued operations includes amounts related to the discontinuance of OGBC. The following tables present the Company’s discontinued operations revenue by major product category: 2023 2022 2021 Cannabis extracts 1,029 5,155 9,874 Net revenue $ 1,029 $ 5,155 $ 9,874 The following tables summarize the Company’s discontinued operations restructuring activity for the years ended December 31, 2023 and 2022: Accrual as of January 1, 2023 Expenses Payments/Write-offs Accrual as of December 31, 2023 Employee Termination Benefits $ — $ 431 $ (431) $ — Other Restructuring Costs — 92 (92) — Total $ — $ 523 $ (523) $ — Accrual as of January 1, 2022 Expenses Payments/Write-offs Accrual as of December 31, 2022 Employee Termination Benefits $ — $ 1,788 $ (1,788) $ — Total $ — $ 1,788 $ (1,788) $ — The Company’s discontinued operations incurred no restructuring costs for the year ended December 31, 2021. The following table presents a reconciliation of assets and liabilities of the discontinued operations presented in the consolidated balance sheets: As of December 31, 2023 As of December 31, 2022 Assets Current assets Cash and cash equivalents $ — $ 2,300 Accounts receivable, net — 253 Other receivables — 775 Prepaids and other current assets — 464 Inventory, net — 934 Current assets of discontinued operations — 4,726 Non-current assets Property, plant and equipment, net — 254 Right-of-use assets — 430 Intangible assets, net — 1,594 Non-current assets of discontinued operations — 2,278 Liabilities Current liabilities Accounts payable — 166 Accrued liabilities — 807 Current portion of lease obligation — 415 Current liabilities of discontinued operations $ — $ 1,388 For the years ended December 31, 2023, 2022 and 2021, purchases of property plant and equipment related to discontinued operations were $67, $183 and $971, respectively. The following table presents information related to leases associated with the Company’s U.S. discontinued operations. As of December 31, 2023, the Company has no right-of-use assets or lease obligations associated with its U.S. discontinued operations. For the years ended December 31, 2023, 2022 and 2021, the aggregate depreciation expense on right-of-use assets associated with the Company’s U.S. discontinued operations was $198, $865 and $548, respectively, and was included in loss from discontinued operations on the consolidated statements of net loss and comprehensive loss. As of December 31, 2023 2022 2021 Lease cost Operating lease cost $ 213 $ 1,102 $ 837 Short-term lease cost — — — Total lease cost $ 213 $ 1,102 $ 837 Supplemental cash flow and other information Operating cash flows - cash paid for operating lease obligations $ 525 $ 1,050 $ 752 Non-cash activity - right-of-use assets obtained in exchange for lease obligations — 443 3,277 Weighted-average remaining lease term (years) – operating leases 0.0 1.0 3.8 Weighted-average discount rate – operating leases — % 5.62 % 7.65 % |
Inventory, net
Inventory, net | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Inventory, net | Inventory, net Inventory, net is comprised of the following items: As of December 31, 2023 2022 Raw materials $ 4,795 $ 7,421 Work-in-progress 10,593 15,646 Finished goods 14,819 13,503 Supplies and consumables 288 989 Total $ 30,495 $ 37,559 |
Investments
Investments | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Investments | Investments (a) Variable interest entities and investments in equity method investments, net The Company holds variable interests in Cronos Growing Company Inc. (“Cronos GrowCo”) and Cannasoul Lab Services Ltd. (“CLS”). The Company’s investment in Cronos GrowCo is exposed to economic variability based on the entity’s performance; however, the Company does not consolidate the entity as it does not have the power to direct the activities that most significantly impact the entity’s economic performance. Thus, the Company is not considered the primary beneficiary of the entity. The investment in Cronos GrowCo is accounted for as an equity method investment classified as “Equity method investments, net” in the consolidated balance sheets. Cronos GrowCo Cronos GrowCo is a joint venture incorporated under the Canada Business Corporations Act on June 14, 2018, with the objective of cultivating and commercializing cannabis and cannabis products. Cronos GrowCo’s economic performance is driven by the day-to-day operations of Cronos GrowCo, which are controlled by 2645485 Ontario Inc. (“Mucci”), the Company’s joint venture partner. During the year ended December 31, 2021, the Company concluded that lower than expected sales forecasts combined with the increase to the aggregate principal amount of the GrowCo Credit Facility (as defined below) were indicators of impairment for the Company’s equity method investment in Cronos GrowCo. Accordingly, the Company performed a quantitative impairment assessment in the third quarter of 2021 to compare the fair value of the investment in Cronos GrowCo to its carrying amount. The fair value was estimated using the discounted cash flow method. Significant inputs included discount rate, growth rates, and cash flow projections. As a result of this analysis, the Company concluded that as of September 30, 2021, the estimated fair value was higher than the carrying amount and no impairment charges were recorded. There were no such indicators of impairment present for the years ended December 31, 2023 and 2022. CLS CLS is a wholly owned subsidiary of Cannasoul Analytics Ltd., incorporated with the purpose of establishing a commercial cannabis analytical testing laboratory located on the premises of Cronos Israel (the “Cannasoul Collaboration”). Cronos Israel agreed to advance up to ILS 8,297 ($2,664) by a non-recourse loan (the “Cannasoul Collaboration Loan”) to CLS over a period of two years from April 1, 2020 for the capital and operating expenditures of the laboratory. The loan bears interest at 3.5% annually. Cronos Israel will receive 70% of the profits of the laboratory until such time as it has recovered 150% of the amounts advanced to CLS, after which time it will receive 50% of the laboratory profits. As a result, the Company is exposed to economic variability from CLS’s performance. The Company does not consolidate CLS as it does not have the power to direct the activities that most significantly impact the entity’s economic performance; thus, the Company is not considered the primary beneficiary of the entity. The carrying amount of the non-recourse loan is recorded under loans receivable and the full loan amount, ILS 8,297, represents the Company’s maximum potential exposure to losses through the Cannasoul Collaboration. See Note 5 “ Loans Receivable, net ” for further information regarding loans receivable. A reconciliation of the carrying amount of the investments in equity method investments, net is as follows: Ownership interest As of December 31, 2023 2022 Cronos GrowCo 50% $ 19,488 $ 18,755 The following is a summary of the Company’s share of net income (losses) from equity investments accounted for under the equity method of accounting: Year ended December 31, 2023 2022 2021 Vitura (i) N/A N/A $ (48) Cronos GrowCo 1,583 3,114 (2,518) Natuera (ii) N/A N/A (3,747) $ 1,583 $ 3,114 $ (6,313) (i) As of December 31, 2023 and December 31, 2022, the Company held a 9.6% and 9.9% ownership interest, respectively, in Vitura, and Vitura was no longer considered an equity-method investment. As of and up to December 16, 2021, the Company held a 31% ownership interest in Vitura and was considered an equity-method investment. (ii) As of December 31, 2021, the combination of the Company’s share of accumulated net losses and impairment charges was in excess of its equity investment in Natuera, and the net book value of the investment was zero. The following is a summary of financial information for the Company’s equity method investments: As of December 31, 2023 2022 2021 Current assets $ 19,600 $ 21,158 $ 5,660 Non-current assets 99,227 104,227 125,777 Current liabilities 9,707 5,593 13,457 Non-current liabilities 64,814 73,779 81,594 Year ended December 31, 2023 2022 2021 Revenue $ 40,604 $ 39,110 $ 8,186 Gross profit 21,565 24,379 (5,059) Net income (loss) 3,051 6,569 (12,603) The following is a summary of the maximum exposure to loss from the Company’s investments in equity method investments: Ownership interest Other Net Assets (Liabilities) Maximum Exposure to Loss Cronos GrowCo 50% $ 44,306 $ 19,488 Balance as of December 31, 2023 $ 44,306 $ 19,488 Ownership interest Other Net Assets (Liabilities) Maximum Exposure to Loss Cronos GrowCo 50% $ 46,013 $ 18,755 Balance as of December 31, 2022 $ 46,013 $ 18,755 The Company’s maximum exposure to loss is equal to the carrying amount of the investment. (b) Other investments Other investments consist of investments in common shares and options of two companies in the cannabis industry. PharmaCann Option On June 14, 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, at an exercise price of $0.0001 per share, representing approximately 10.5% of PharmaCann’s issued and outstanding capital stock on a fully diluted basis as of the date of the PharmaCann Option, for an aggregate purchase price of approximately $110,392. The option exercise will be based upon various factors, including the status of U.S. federal cannabis legalization, as well as regulatory approvals, including in the states where PharmaCann operates that may be required upon exercise. The Company has deemed its influence in PharmaCann to be non-significant. The PharmaCann Option is classified as an investment in an equity security without a readily determinable fair value. The Company measures the PharmaCann Option at cost less accumulated impairment charges, if any, and subsequently adjusted for observable price changes in orderly transactions for the identical or a similar investment of the same issuer. The PharmaCann Option is reported as Other investments on the consolidated balance sheet for the periods ended December 31, 2023 and 2022. As of December 31, 2021, the Company performed an assessment on the existence of impairment indicators on the PharmaCann Option and noted no indicators of impairment existed. As such, no impairment loss on the investment was recorded during the year ended December 31, 2021. On February 28, 2022, PharmaCann closed its previously announced transaction with LivWell Holdings, Inc. (“LivWell”) pursuant to which PharmaCann acquired LivWell (the “LivWell Transaction”). As a result of the LivWell Transaction, the Company’s ownership percentage in PharmaCann on a fully diluted basis decreased to approximately 6.4%. As of December 31, 2023 and 2022, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 5.9% and 6.3%, respectively. Under the terms of the Company’s investment in PharmaCann, the Company’s rights to nominate an observer or a director to the PharmaCann board of directors could be lost if the Company’s ownership drops below 6% on a fully diluted basis and it sells or transfer all or any portion of the option (subject to certain exceptions). The decrease in the Company’s ownership percentage since acquisition does not materially affect the Company’s rights under the PharmaCann Option. During the first, third and fourth quarters of 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 income approach and the market approach. Under the income approach, significant inputs used in the discounted cash flow method include discount rate, growth rates, cash flow projections, and the expectation of federal rescheduling and individual state legalization of cannabis in the U.S. Under the market valuation approach, the key assumptions are the selected multiples and the discount for lack of marketability. As a result of these analyses, the Company recorded non-cash impairment charges of $11,238, $28,972 and $21,182 in the first, third and fourth quarters of 2022, respectively, as the difference between the carrying amount of the PharmaCann Option and its estimated fair value, in the consolidated statements of net loss and comprehensive loss. During the fourth quarter of 2023, the Company identified adverse forecast changes in the financial performance of PharmaCann as an indicator of impairment related to the PharmaCann Option and conducted an analysis comparing the PharmaCann Option’s carrying amount to its estimated fair value. The fair value was estimated using a combination of the income approach and the market approach. Under the income approach, significant inputs used in the discounted cash flow method include discount rate, growth rates, cash flow projections, and the expectation of federal rescheduling and individual state legalization of cannabis in the U.S. Under the market valuation approach, the key assumptions are the selected multiples and the discount for lack of marketability. As a result of this analysis, the Company recorded a non-cash impairment charge of $23,350 in the fourth quarter of 2023 as the difference between the carrying amount of the PharmaCann Option and its estimated fair value, in the consolidated statements of net loss and comprehensive loss for the year ended December 31, 2023. Vitura (formerly known as Cronos Australia) On September 14, 2021, Cronos Australia (now, Vitura Health Limited) entered into a merger agreement to acquire 100% of the issued shares of CDA Health Pty Ltd, an Australian medicinal cannabis company, subject to customary closing conditions, including shareholder approval (the “Cronos Australia Merger”). The Cronos Australia Merger closed on December 16, 2021. In connection with the closing of the Cronos Australia Merger, all advances made under the Company’s A$1,500 unsecured loan to Cronos Australia, plus accrued interest and certain royalties payable, were converted into ordinary shares of Cronos Australia. In addition, the Company’s ownership interest in Cronos Australia decreased to approximately 10% and the Company’s number of Cronos Australia board seats was reduced from two to zero. On November 29, 2022, the shareholders of Cronos Australia approved the proposal to change the name of the company to “Vitura Health Limited” (the “CAU Name Change”). On December 2, 2022, in connection with the CAU Name Change, Vitura and the Company mutually agreed to terminate the intellectual property license that granted Vitura the right to use certain intellectual property of the Company, including, but not limited to, the “Cronos” name and the PEACE NATURALS ® brand. The reduction in ownership interest and loss of all board seats constituted a loss of significant influence and resulted in a reclassification on the consolidated balance sheet from investments in equity method investments using the equity method of accounting to other investments using the fair value method of accounting, with unrealized holding gains and losses included in net loss on the consolidated statements of net loss and comprehensive loss. The Company recorded a loss on revaluation of other investments of $12,096 for the year ended December 31, 2023, and a gain on revaluation of other investments of $14,739 for the year ended December 31, 2022, included in the gain on revaluation of financial instruments on the statements of net loss and comprehensive loss. The Company’s investment in Vitura was $9,601 and $21,993 as of December 31, 2023 and 2022, respectively, and is included in other investments on the consolidated balance sheets. The following table summarizes the Company’s other investments activity: As of January 1, 2023 Unrealized loss Impairment charges Foreign exchange effect As of December 31, 2023 PharmaCann $ 49,000 $ — $ (23,350) $ — $ 25,650 Vitura 21,993 (12,096) — (296) 9,601 $ 70,993 $ (12,096) $ (23,350) $ (296) $ 35,251 As of January 1, 2022 Unrealized gain Impairment charges Foreign exchange effect As of December 31, 2022 PharmaCann $ 110,392 $ — $ (61,392) $ — $ 49,000 Vitura 8,000 14,739 — (746) 21,993 $ 118,392 $ 14,739 $ (61,392) $ (746) $ 70,993 |
Loans Receivable, net
Loans Receivable, net | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Loans Receivable, net | Loans Receivable, net Loans receivable, net consists of the following: As of December 31, 2023 2022 GrowCo Credit Facility $ 5,034 $ 4,427 Add: Accrued interest 507 4,463 Total current portion of loans receivable 5,541 8,890 GrowCo Credit Facility 53,638 56,898 Mucci Promissory Note 13,379 13,438 Cannasoul Collaboration Loan 1,771 1,837 Add: Long-term portion of accrued interest 248 172 Total long-term portion of loans receivable 69,036 72,345 Total loans receivable $ 74,577 $ 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”). The GrowCo Credit Facility is secured by substantially all present and after-acquired personal and real property of Cronos GrowCo. In August 2021, the GrowCo Credit Facility was amended to increase the aggregate principal amount available to C$105,000. As a result of the increase in the aggregate principal amount of the GrowCo Credit Facility and lower than expected sales forecasts from Cronos GrowCo, the Company revalued its allowance for credit loss on the GrowCo Credit Facility resulting in an increase in the allowance of $12,748, which was recorded in general and administrative expenses on the consolidated statements of net loss and comprehensive loss for the year ended December 31, 2021. As of both December 31, 2023 and 2022, Cronos GrowCo had drawn C$104,000 ($78,532 and $76,730), respectively, from the GrowCo Credit Facility. For the years ended December 31, 2023 and 2022, Cronos GrowCo repaid C$7,500 ($5,612) and C$4,000 ($3,073) in principal and C$13,462 ($10,287) and C$7,060 ($5,209) in interest, respectively. As of December 31, 2023, Cronos GrowCo had repaid, in the aggregate, C$11,500 ($8,685) and C$20,522 ($15,496) 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 $12,063) with 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, 2022, interest was accrued and to be paid in cash beginning on July 1, 2023. Prior to 2023, there were no repayments of principal or interest on the Mucci Promissory Note. For the year ended December 31, 2023, Mucci repaid C$563 ($425) in principal and C$1,187 ($897) in interest related to the Mucci Promissory Note. Cannasoul Collaboration Loan As of both December 31, 2023 and 2022, CLS has received ILS 8,297 (approximately $2,294 and $2,359, respectively), from the Cannasoul Collaboration Loan. See Note 4 “Investments” for further information regarding the Cannasoul Collaboration Loan. Expected credit loss allowances on the Company’s long-term financial assets were comprised of the following items: As of January 1, 2023 Increase (decrease) (i) Foreign exchange effect As of December 31, 2023 GrowCo Credit Facility $ 12,455 $ (1,542) $ 263 $ 11,176 Mucci Promissory Note 89 (2) 2 89 Cannasoul Collaboration Loan 522 16 (14) 524 $ 13,066 $ (1,528) $ 251 $ 11,789 As of January 1, 2022 Increase (decrease) (i) Foreign exchange effect As of December 31, 2022 GrowCo Credit Facility $ 14,089 $ (827) $ (807) $ 12,455 Mucci Promissory Note 90 4 (5) 89 Cannasoul Collaboration Loan 415 161 (54) 522 $ 14,594 $ (662) $ (866) $ 13,066 (i) During the years ended December 31, 2023 and 2022, $(1,528) and $(662), respectively, were recorded to general and administrative expenses on the consolidated statements of net loss and comprehensive loss as a result of adjustments to our expected credit losses. |
Property, Plant and Equipment,
Property, Plant and Equipment, net | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Property, Plant and Equipment, net | Property, plant and equipment, net Property, plant and equipment, net consisted of the following: As of December 31, 2023 2022 Cost Land $ 2,764 $ 2,556 Building and leasehold improvements 168,498 177,095 Machinery and equipment 21,322 19,130 Furniture and fixtures 3,385 5,345 Construction in progress 3,269 841 Less: accumulated depreciation (30,707) (35,347) Less: accumulated impairment charges (109,063) (109,063) Property, plant and equipment, net $ 59,468 $ 60,557 For the years ended December 31, 2023, 2022 and 2021, depreciation expense on property, plant and equipment was $3,913, $8,667 and $11,668, respectively, and was included in cost of sales as well as depreciation and amortization in operating expenses on the consolidated statements of net loss and comprehensive loss. Impairment of Long-lived Assets During the third quarter of 2023, as a result of the Company’s decision to wind down the operations at Cronos Fermentation, the Company performed an assessment of the recovery of the carrying value of the Canada asset group and determined the carrying value of the asset group was recoverable. During the first quarter of 2022, the Company recognized an impairment charge of $1,507 related to leasehold improvements and other office equipment that it planned to include in any potential sublease agreement of the Company’s corporate headquarters in Toronto, Ontario, Canada. 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. The impairment charge was recognized as impairment loss on long-lived assets on the consolidated statements of net loss and comprehensive loss. During the fourth quarter of 2021, the Company concluded that indicators of impairment were present with respect to its Canadian asset group in connection with the previously anticipated wind-down and closure of the Company’s facility in Stayner, Ontario. As a result, the Company compared the sum of the undiscounted future cash flows attributable to the Canadian asset group to their respective carrying amounts and recorded a non-cash impairment charge on long-lived assets of $113,917 as the difference between the carrying amount of the asset group and its estimated fair value for the year ended December 31, 2021, in the consolidated statements of net loss and comprehensive loss. Held-for-sale Assessments The Company evaluated both the Peace Naturals Campus and the Cronos Fermentation facility for held-for-sale classification as of December 31, 2023, and, as a result of the assessments, determined that neither asset group met the criteria to be classified as held-for-sale as of December 31, 2023. The Peace Naturals Campus failed the criteria, as the facility is not immediately available for sale in its present condition due to ongoing construction related to the condition the facility must be in for the proposed leaseback to occur. The Cronos Fermentation facility failed the criteria as it was determined it was not probable to sell the property within one year, and the property was not being marketed at a reasonable price in relation to its fair value, as the property is currently being marketed unpriced. |
Goodwill and Intangible Assets,
Goodwill and Intangible Assets, net | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Goodwill and Intangible Assets, net | Goodwill and Intangible Assets, net (a) Goodwill Goodwill is comprised of the following items: As of December 31, 2023 Cost Accumulated impairment charges Net Peace Naturals $ 1,057 $ — $ 1,057 $ 1,057 $ — $ 1,057 As of December 31, 2022 Cost Accumulated impairment charges Net Peace Naturals $ 1,033 $ — $ 1,033 $ 1,033 $ — $ 1,033 (b) Intangible assets, net Intangible assets, net are comprised of the following items: As of December 31, 2023 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,860 $ (3,508) $ (78) $ 3,274 Health Canada licenses 8,463 (1,813) (6,650) — Ginkgo exclusive licenses 28,326 (4,276) (7,968) 16,082 Israeli codes (i) 284 (62) — 222 Total definite-lived intangible assets 43,933 (9,659) (14,696) 19,578 Lord Jones ® brand 64,000 — (62,500) 1,500 Trademarks 142 — (142) — Total intangible assets $ 108,075 $ (9,659) $ (77,338) $ 21,078 As of December 31, 2022 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,037 $ (2,388) $ (76) $ 3,573 Health Canada licenses 8,269 (1,771) (6,498) — Ginkgo exclusive licenses 27,676 (1,854) (4,434) 21,388 Israeli codes (i) 292 (49) — 243 Total definite-lived intangible assets 42,274 (6,062) (11,008) 25,204 Lord Jones ® brand 64,000 (62,500) 1,500 Trademarks 142 (142) — Total intangible assets $ 106,416 $ (6,062) $ (73,650) $ 26,704 (i) The Israeli codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities. Ginkgo Exclusive Licenses CBGA In August 2021, the Company achieved the final productivity target in respect of cannabigerolic acid (“CBGA”), under the Ginkgo Collaboration Agreement. As a result, on August 21, 2021, the Company issued 1,467,490 common shares at a share price of C$7.90 for total consideration given of C$11,593 ($9,042) to Ginkgo for the achievement of commercialization and productivity milestones for CBGA. The estimated fair value of the exclusive license for CBGA (the “CBGA Exclusive License”) was $7,300 determined using a variation of the income approach called the relief-from-royalty method, which requires an estimate or forecast of the expected future cash flows. The definite-lived intangible asset is being amortized using the straight-line method over its estimated useful life of 10 years. The difference between the consideration paid to Ginkgo and the fair value of the exclusive license intangible asset of $1,784 was recognized as an impairment charge on the consolidated statements of net loss and comprehensive loss for the year ended December 31, 2021. CBGVA In November, 2021, the Company achieved the final productivity target in respect of cannabigerovarinic acid (“CBGVA”). As a result, on November 12, 2021, the Company issued 1,467,490 common shares at a share price of C$7.12 for total consideration given of C$10,449 ($8,150) to Ginkgo. The estimated fair value of the exclusive license for CBGVA (the “CBGVA Exclusive License”) was $5,300 determined using a variation of the income approach called the relief-from-royalty method, which requires an estimate or forecast of the expected future cash flows. The definite-lived intangible asset is being amortized using the straight-line method over its estimated useful life of 10 years. The difference between the consideration paid to Ginkgo and the fair value of the exclusive license intangible asset of $3,008 was recognized as an impairment charge on the consolidated statements of net loss and comprehensive loss for the year ended December 31, 2021. THCVA In June 2022, the Company achieved the final productivity target in respect of tetrahydrocannabivaric acid (“THCVA”) under the Ginkgo Collaboration Agreement. As a result, the Company issued 2,201,236 common shares at a share price of C$3.47, and made a cash payment of $600, for total consideration of C$8,412 ($6,522) to Ginkgo. The definite-lived intangible asset is being amortized using the straight-line method over its estimated useful life of 10 years. CBCA In November 2022, the Company achieved the early commercialization milestone in respect of cannabichromenic acid (“CBCA”) under the Ginkgo Collaboration Agreement. As a result, the Company issued 489,163 common shares at a share price of C$4.11 for total consideration of C$2,010 ($1,473) to Ginkgo. The definite-lived intangible asset is being amortized using the straight-line method over its estimated useful life of 10 years. CBCVA In December 2022, the Company achieved the final productivity target in respect of cannabichromevarinic acid (“CBCVA”) under the Ginkgo Collaboration Agreement. As a result, the Company issued 1,467,490 common shares at a share price of C$3.44 for total consideration of C$5,048 ($3,724) to Ginkgo. In December 2023, the Company determined that it had no immediate plans to monetize CBCVA and, therefore, recognized $3,366 in impairment charges on the consolidated statements of net loss and comprehensive loss for the year ended December 31, 2023, which resulted in a $nil carrying value of the intangible asset as of December 31, 2023. For the years ended December 31, 2023, 2022 and 2021, the aggregate amortization expense on intangible assets was $3,514, $2,751 and $1,800, respectively, and was included in depreciation and amortization in operating expenses on the consolidated statements of net loss and comprehensive loss. The estimated future amortization of definite-lived intangible assets is as follows: As of December 31, 2023 2024 $ 3,365 2025 3,020 2026 2,498 2027 2,297 2028 2,156 Thereafter 6,242 $ 19,578 Impairment of Intangible Assets Accumulated impairment charges on intangible assets, net consist of: As of January 1, 2023 Impairment charges Foreign exchange effect As of December 31, 2023 Software $ (76) $ — $ (2) $ (78) Health Canada licenses (6,498) — (152) (6,650) Ginkgo exclusive licenses (4,434) (3,366) (168) (7,968) Lord Jones ® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (73,650) $ (3,366) $ (322) $ (77,338) As of January 1, 2022 Impairment charges Foreign exchange effect As of December 31, 2022 Software $ (4) $ (76) $ 4 $ (76) Health Canada licenses (6,910) — 412 (6,498) Ginkgo exclusive licenses (4,752) — 318 (4,434) Lord Jones® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (74,308) $ (76) $ 734 $ (73,650) As of January 1, 2021 Impairment charges Foreign exchange effect As of December 31, 2021 Software $ — $ (4) $ — $ (4) Health Canada licenses (1,053) (5,951) 94 (6,910) Ginkgo exclusive licenses — (4,792) 40 (4,752) Lord Jones® brand (5,000) (57,500) — (62,500) Trademarks — (142) — (142) $ (6,053) $ (68,389) $ 134 $ (74,308) |
Leases
Leases | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Leases | Leases The Company has entered into leases primarily for the land-use rights, office premises and equipment used in the production of cannabis and other related products. The Company’s leases have terms that range from three years to six years, excluding land use rights, which generally extend to 15 years. These leases often include options to extend the term of the lease for up to 10 years. When it is reasonably certain that the option will be exercised, the impact of the option is included in the lease term for purposes of determining total future lease payments. Operating leases greater than one year are included in right-of-use assets and operating lease liabilities. Finance leases are included in property, plant and equipment on the Company’s consolidated balance sheet. The Company’s finance leases were not material for any of the periods presented. As of December 31, 2023 2022 2021 Lease cost Operating lease cost $ 685 $ 1,107 $ 1,693 Short-term lease cost — — 10 Total lease cost $ 685 $ 1,107 $ 1,703 Supplemental cash flow and other information Operating cash flows - cash paid for operating lease obligations $ 1,124 $ 1,441 $ 1,706 Non-cash activity - right-of-use assets obtained in exchange for lease obligations — — — Weighted-average remaining lease term (years) – operating leases 3.6 4.3 4.7 Weighted-average discount rate – operating leases 7.62 % 7.39 % 7.62 % For the years ended December 31, 2023, 2022 and 2021, the aggregate depreciation expense on right-of-use assets was $455, $839 and $1,386, respectively, and was included in general and administrative expenses on the consolidated statements of net loss and comprehensive loss. During the year ended December 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 in Toronto, Ontario, Canada, for which the Company determined it would seek a sublease. The following is a summary of the Company’s future minimum lease payments under operating leases for its premises due in future fiscal years: As of December 31, 2023 2024 $ 1,132 2025 1,006 2026 247 2027 95 2028 95 Thereafter 412 Total lease payments 2,987 Less: imputed interest (434) Present value of lease liabilities $ 2,553 In addition to the minimum lease payments, the Company is required to pay realty taxes and other occupancy costs in accordance with the terms of the lease agreements. |
Derivative Liabilities
Derivative Liabilities | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Derivative Liabilities | Derivative Liabilities On March 8, 2019, the Company closed the previously announced investment in the Company (the “Altria Investment”) by Altria Group Inc. (“Altria”), pursuant to a subscription agreement dated December 7, 2018. As of the closing date of the Altria Investment, the Altria Investment consisted of 149,831,154 common shares of the Company and one warrant of the Company (the “Altria Warrant”), issued to a wholly owned subsidiary of Altria. As of the closing date of the Altria Investment, Altria beneficially held an approximate 45% ownership interest in the Company (calculated on a non-diluted basis). On December 16, 2022, Altria notified the Company that it was irrevocably relinquishing all of its rights, title and interest in the Altria Warrant, effective immediately. As a result, the Company’s liability associated with the Altria Warrant was reduced to nil, with the change recorded to gain on revaluation of derivative liabilities for the year ended December 31, 2022. Pursuant to the investor rights agreement between the Company and Altria, entered into in connection with the closing of the Altria Investment (the “Investor Rights Agreement”), the Company granted Altria certain rights, among others, summarized in this note. The summaries below are qualified entirely by the terms and conditions fully set out in the Investor Rights Agreement and the Altria Warrant, as applicable. a. The 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, (refer to Note 10 “ Commitments and Contingencies ”), 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 Altria Warrant, Pre-emptive Rights, and fixed price Top-up Rights have been classified as derivative liabilities on the Company’s consolidated balance sheet. As of December 31, 2023, Altria beneficially held 156,573,537 of the Company’s common shares, an approximate 41.1% ownership interest in the Company (calculated on a non-diluted basis). Reconciliations of the carrying amounts of the derivative liability are presented below: As of January 1, 2023 Loss (gain) on revaluation Foreign exchange effect As of December 31, 2023 Pre-emptive Rights — 100 2 102 Top-up Rights 15 (15) — — $ 15 $ 85 $ 2 $ 102 As of January 1, 2022 Gain on revaluation Foreign exchange effect As of December 31, 2022 Altria Warrant $ 13,720 $ (13,431) $ (289) $ — Pre-emptive Rights 180 (179) (1) — Top-up Rights 475 (450) (10) 15 $ 14,375 $ (14,060) $ (300) $ 15 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 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 December 31, 2023 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $2.77 $2.77 Subscription price (per share in C$) $16.25 $16.25 Weighted average risk-free interest rate (i) 3.99% 4.76% Weight average expected life (in years) (ii) 1.75 0.60 Expected annualized volatility (iii) 60% 58% Expected dividend yield —% —% As of December 31, 2022 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $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% Weight 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 December 31, 2023 and December 31, 2022, the risk-free interest rate uses a range of approximately 3.99% to 4.82% 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 December 31, 2023 and December 31, 2022, the expected life uses a range of approximately 0.50 years to 1.75 years and 0.25 years to 2.75 years, respectively. (iii) Volatility was based on an equally weighted blended historical and implied volatility level of the underlying equity securities of the Company. |
Commitments and Contingencies
Commitments and Contingencies | 12 Months Ended |
Dec. 31, 2023 | |
Commitments and Contingencies Disclosure [Abstract] | |
Commitments and Contingencies | Commitments and Contingencies (a) Commitments R&D commitments On September 4, 2018, the Company announced an R&D partnership with Ginkgo to develop scalable and consistent production of a variety of certain common and lesser-known cannabinoids. As part of this partnership, Cronos agreed to issue up to 14,674,903 common shares of the Company (aggregate value of approximately $100,000 as of July 17, 2018 assuming all milestones are met, collectively the “Ginkgo Equity Milestones”) in tranches and $22,000 in cash subject to Ginkgo’s achievement of certain milestones and to fund certain R&D expenses, including foundry access fees. During the years ended December 31, 2022 and December 31, 2021, 4,157,888 shares and 2,934,980 shares, respectively, of the Company’s common stock were issued in conjunction with this partnership. No shares were issued for the year ended December 31, 2023. Other commitments On February 18, 2019, the Company entered into an agreement with a wholly owned subsidiary of Altria (which agreement was subsequently amended and restated to substitute Altria Pinnacle as a party thereto), to receive strategic advisory and project management services from Altria Pinnacle (the “Services Agreement”). Pursuant to the Services Agreement, the Company will pay Altria Pinnacle a monthly fee equal to the product of 105% and the sum of: (i) all costs directly associated with the services incurred during the monthly period, and (ii) a reasonable and appropriate allocation of indirect costs incurred during the monthly period. The Company will also pay all third-party direct charges incurred during the monthly period in connection with the services, including any reasonable and documented costs, fees and expenses associated with obtaining any consent, license or permit. The Services Agreement will remain in effect until terminated by either party. See Note 15 “ Related Party Transactions .” (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 consolidated financial condition but could be material to its results of operations for any particular reporting period depending, in part, on its results for that period. (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 former Chief Financial Officer. The court 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 controls were incorrect based on the Company’s disclosures relating to the Audit Committee of the Board of Directors’ 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. The defendants moved to dismiss on February 8, 2021. On November 17, 2023, the court entered an order granting the motion and dismissed the case with prejudice. On December 1, 2023, the shareholder plaintiffs sought reconsideration of the dismissal, requesting that the court instead dismiss the action without prejudice and permit the plaintiffs to seek leave to further amend the complaint. The reconsideration motion is pending. 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 named (i) the Company, (ii) its Chief Executive Officer, (iii) 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 alleged breaches of the Ontario Securities Act, oppression under the Ontario Business Corporations Act and common law misrepresentation. The Amended Statement of Claim generally alleged that certain of the Company’s prior public statements about revenues and internal controls were misrepresentations based on the Company’s March 2, 2020 disclosure that the Audit Committee of the Board of Directors was conducting a review of the appropriateness of revenue recognized in connection with certain bulk resin purchases and sales of products through the wholesale channel, and the Company’s subsequent restatement. The Amended Statement of Claim did 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. On April 11, 2023, the plaintiff filed a Fresh as Amended Statement of Claim, which reflected the dismissal of the defendants for which an appeal was not sought, the removal of the claims for oppression under the Ontario Business Corporations Act and common law misrepresentation, as well as shortening the proposed class period. On October 10, 2023, the Superior Court certified the action on behalf of a class of persons or entities who acquired shares in the secondary market, including on the TSX and Nasdaq, during the period from May 9, 2019 to March 30, 2020, other than certain excluded persons. (ii) Regulatory Settlements On October 24, 2022, the Company announced regulatory settlements as follows: 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 agreed to settle with the SEC, without admitting or denying the allegations described in the Settlement Order. The Settlement Order fully and finally disposed 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. 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 Ontario Securities Commission (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 Ontario Securities Act to file interim financial reports in the manner set out therein and had acted in a manner contrary to the public interest. (iii) Litigation and regulatory inquiries relating to marketing, distribution, import 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. The Cronos Israel defendants moved to dismiss the action on August 13, 2023. On January 18, 2024, the Company was notified that the Trade Levies Commissioner of the Israel Ministry of Economy and Industry initiated a public investigation of alleged dumping of medical cannabis imports from Canada into Israel. The Company is responding to requests for information from the Ministry. The Company cannot predict the outcome of the investigation. We expect litigation and regulatory proceedings relating to the marketing, distribution, import and sale of our products to increase. |
Share-based Compensation
Share-based Compensation | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Share-based Compensation | Share-based Compensation (a) Share-based award plans The Company has granted stock options, RSUs and 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 associated with the Company’s stock options and RSUs: Year ended December 31, 2023 2022 2021 Stock options $ 1,175 $ 6,778 $ 7,604 RSUs 7,581 7,633 2,240 Liability-classified awards (i) — 597 — Total share-based compensation $ 8,756 $ 15,008 $ 9,844 (i) Represents share-based compensation awards conditionally approved for grant to one of the Company’s former executives for a fixed monetary value, but a variable number of shares. These awards were liability-classified until the number of shares was determined. (b) Stock options The Company adopted the 2015 Stock Option Plan, which was approved by shareholders of the Company at the annual general meeting of shareholders held on June 28, 2017. The 2015 Stock Option Plan allowed the Board to award options to purchase shares to directors, officers, key employees and service providers of the Company. As of June 28, 2018, no further awards will be granted under the 2015 Stock Option Plan; as of December 31, 2023, no options issued under the 2015 Stock Option Plan remain outstanding. On June 28, 2018, the shareholders of the Company approved the 2018 Stock Option Plan, which replaced the 2015 Stock Option Plan. The 2018 Stock Option Plan terminated the Company’s ability to grant equity under the 2015 Stock Option Plan. As of June 25, 2020, the date on which the 2020 Omnibus Plan was approved by the shareholders of the Company, no further awards will be granted under the 2018 Stock Option Plan; however, shares may be purchased via option exercise by the holders of any outstanding options previously issued under the 2018 Stock Option Plan. On March 29, 2020, the Board adopted the 2020 Omnibus Plan, which was approved by the shareholders of the Company at the annual and special meeting of shareholders held on June 25, 2020. The 2020 Omnibus Plan provides for grants of stock options, share appreciation rights, restricted shares, RSUs and other share-based or cash-based awards, which are subject to terms as determined by the Compensation Committee of the Board (the “Compensation Committee”), and awards may be granted to eligible employees, non-employee directors and consultants. The 2020 Omnibus Plan terminated the Company’s ability to grant equity awards under the 2018 Stock Option Plan and RSUs under the Employment Inducement Award Plan. Options represent the right to purchase Company common shares on the date of exercise at a stated exercise price. The exercise price of an option generally must be at least equal to the fair market value of the Company common shares on the date of grant. Vesting conditions for grants of options are determined by the Compensation Committee. The typical vesting for stock option grants is quarterly vesting over three The following is a summary of the changes in options: 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 7.75 (3,435,716) Balance as of December 31, 2023 $ 14.50 2,103,201 1.84 Exercisable as of December 31, 2023 $ 15.89 1,864,732 1.29 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 Issuance of options 4.20 113,947 Exercise of options 2.79 (2,735,985) Cancellation, forfeiture and expiry of options 5.74 (966,692) Balance as of December 31, 2022 $ 10.57 5,350,600 0.73 Exercisable as of December 31, 2022 $ 11.48 3,867,887 0.66 (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 years ended December 31, 2023 and 2022, the fair value per option at grant date was C$2.07 and C$2.94, respectively. The fair value of the options issued during the year was determined using the Black-Scholes option pricing model, using the following inputs: 2023 2022 Share price at grant date (per share) C$2.96 C$4.20 Exercise price (per option) C$2.96 C$4.20 Risk-free interest rate (i) 3.22% 3.14% Expected life of options (in years) (i) 7 7 Expected annualized volatility (i) 73% 73% Expected dividend yield — — Weighted average Black-Scholes value at grant date (per option) C$2.07 C$2.94 Forfeiture rate — — (i) The expected life of the awards represents the period of time options are expected to be outstanding and is estimated considering vesting terms and employees’ and non-employees’ historical exercise and, where relevant, post-vesting employment termination behavior. Volatility was estimated by using the historical volatility of the Company’s share price, adjusted for the Company’s expectation of volatility going forward. The risk-free interest rate was based on the Bank of Canada government bonds with a remaining term equal to the expected life of the options at the grant date. The following table summarizes stock options outstanding: Options outstanding as of December 31, 2023 2022 2021 2020 Omnibus Plan 702,264 2,788,947 2,900,000 2018 Stock Option Plan 1,400,937 1,422,069 1,550,074 2015 Stock Option Plan — 1,139,584 4,489,256 Total stock options outstanding 2,103,201 5,350,600 8,939,330 (c) Restricted share units RSUs are granted under the 2020 Omnibus Plan. RSUs represent an equivalent amount of Company common shares on the date of issuance at fair value. Fair value is determined using the closing price of the trading day immediately preceding the date of grant. RSUs issued under the 2020 Omnibus Plan typically vest over a three-year period following the grant date and have no performance requirements. The following is a summary of the changes in RSUs: Weighted average grant date fair value (C$) (iii) Number of RSUs Balance as of January 1, 2023 $ 4.63 5,725,470 Granted (i) 2.64 3,292,586 Vested and issued 5.00 (1,041,097) Cancellation and forfeitures 3.60 (595,418) Balance as of December 31, 2023 $ 3.77 7,381,541 Weighted average grant date fair value (C$) (iii) Number of RSUs Balance as of January 1, 2022 $ 9.22 1,225,870 Granted (i)(ii) 4.27 6,140,492 Vested and issued 7.40 (1,151,292) Cancellation and forfeitures 5.08 (489,600) Balance as of December 31, 2022 $ 4.63 5,725,470 (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) Equity grants for 2020, 2021 and 2022 were held back for certain executives of the Company in connection with ongoing investigations by the SEC and the OSC, which were subsequently settled on October 24, 2022. On August 5, 2022, the Compensation Committee approved the release of these held-back equity grants conditioned upon settlement of the SEC and OSC investigations. These RSUs vest in equal installments over a period of three years from what would have been their original grant dates had the grants not been withheld. (iii) 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 On August 10, 2019, the Company established the DSU Plan pursuant to which its non-executive directors receive DSUs for Board services. The DSU Plan is designed to promote a greater alignment of long-term interests between non-executive directors and shareholders. The number of DSUs granted under the DSU Plan (including fractional DSUs) is determined by dividing the amount of remuneration payable by the closing price as reported by the TSX for awards made prior to 2022 and as reported by Nasdaq for awards made in 2022 and 2023 on the trading day immediately preceding the date of grant. DSUs are payable at the time a non-executive director ceases to hold the office of director for any reason and are settled by a lump-sum cash payment, in accordance with the terms of the DSU Plan, based on the fair value of the DSUs at such time. The fair value of the cash payout is determined by multiplying the number of DSUs vested at the payout date by the closing price as reported by the TSX for awards made prior to 2022 and as reported by Nasdaq for awards made in 2022 and 2023 on the trading day immediately preceding the payout date. The fair value of the cash payout is determined at each reporting date based on the fair value of the Company’s common shares at the reporting date and is recorded within other liabilities. The following is a summary of the changes in DSUs: Financial liability Number of DSUs Balance as of January 1, 2023 $ 674 265,732 Granting and vesting of DSUs 450 255,947 Gain on revaluation (32) — Balance as of December 31, 2023 $ 1,092 521,679 Financial liability Number of DSUs Balance as of January 1, 2022 $ 408 104,442 Granting and vesting of DSUs 443 161,290 Loss on revaluation (177) — Balance as of December 31, 2022 $ 674 265,732 (e) Liability-classified awards During the year ended December 31, 2022, the Compensation Committee conditionally approved the grant to one of the Company’s former executives of share-based compensation awards for a fixed monetary amount, but a variable number of common shares. These awards were liability-classified until the number of common shares was determined. Financial liability Balance as of January 1, 2022 $ — Grants 597 Transfers to equity awards (597) Balance as of December 31, 2022 $ — During the year ended December 31, 2023, there was no liability-classified award activity. |
Income Taxes
Income Taxes | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Income Taxes | Income Taxes For financial reporting purposes, loss from continuing operations before income taxes includes the following components: Year ended December 31, 2023 2022 2021 Loss before income taxes $ (73,669) $ (121,003) $ (128,510) The loss before income taxes above excludes losses from discontinued operations of $4,114, $13,556 and $269,125 for the years ended December 31, 2023, 2022 and 2021, respectively. Income tax expense (benefit) consists of the following components: Year Ended December 31, 2023 2022 2021 Current $ (3,375) $ 34,416 $ (471) Deferred 145 (241) 40 Total $ (3,230) $ 34,175 $ (431) As of December 31, 2023, 2022 and 2021, the Company’s current income taxes payable were $64, $32,956 and $105, respectively, related to current income tax expense. Included in other receivables as of December 31, 2023, 2022 and 2021 is $3,374, $40 and $543, respectively, related to current income tax benefits. Income tax differs from that computed using the combined Canadian federal and provincial statutory income tax rate of 26.5%. Reconciliation of the expected income tax to the effective tax rate in continuing operations is as follows: Year ended December 31, 2023 2022 2021 Loss before income taxes $ (73,669) $ (121,003) $ $ (128,510) Effective income tax rate 26.5 % 26.5 % 26.5 % Expected income tax benefit $ (19,522) $ (32,066) $ (34,055) Non-taxable income (loss) 1,077 (2,140) 39 Non-deductible share-based compensation 525 1,198 1,667 Non-deductible expenses 459 836 53 Non-deductible transaction costs 351 1,625 2,917 Effect of provincial tax rate difference (9) (15) (1) Effect of tax rates outside of Canada 816 1,848 (1,869) Effect of change in tax rates 4,601 11,041 — Fair value gain (loss) on financial liabilities 23 (3,726) (40,111) Changes in valuation allowance 7,930 (10,466) 70,453 Capital gain on financial liabilities 106 66,193 — Other 413 (153) 476 Income tax expense (benefit), net $ (3,230) $ 34,175 $ (431) The valuation allowance recorded against the loss on discontinued operations is not reflected in the effective tax rate reconciliation presented above for continuing operations. For the year ended December 31, 2022, the Company realized a capital gain for tax purposes of $479,800 as a result of Altria’s irrevocable relinquishment of its warrant on December 16, 2022, resulting in an increase in the total income tax expense reported for the year ended December 31, 2022. The following table summarizes the significant components of the Company’s deferred tax assets and liabilities: As of December 31, 2023 2022 Deferred assets: Tax loss carryforwards $ 111,516 $ 98,074 Interest expense carryforwards 2,688 2,533 Deferred financing costs — 1,311 Share issuance cost — 196 Finance lease obligation 519 690 Plant and equipment 36,697 37,662 Investment 19,745 13,359 Intangible asset 37,203 53,365 Inventory 556 1,287 Reserve 2,430 2,972 Unrealized foreign exchange 275 — R&D investment tax credits 567 293 Other 4,271 3,099 Total deferred tax assets 216,467 214,841 Less valuation allowance (216,241) (214,199) Net deferred tax assets 226 642 Deferred tax liabilities: Right-of-use assets (181) (365) Unrealized foreign exchange — (84) Total deferred tax liabilities (181) (449) Net deferred tax asset (liability) (i) $ 45 $ 193 (i) Net deferred tax asset (liability) is reported as Other assets within our consolidated balance sheet. The realization of deferred tax assets is dependent on the Company’s generating sufficient taxable income in the years that the temporary differences become deductible. A valuation allowance has been provided for the deferred tax assets that the Company determined did not meet the more-likely-than-not recognition threshold under U.S. GAAP. As of December 31, 2023 and 2022, the Company’s valuation allowance was $216,241 and $214,199, respectively. The valuation allowance increased by $2,042 during the year ended December 31, 2023, and decreased by $10,577 during the year ended December 31, 2022. The increase in the valuation allowance during the year ended December 31, 2023, was primarily due to an increase in net operating loss carryforwards. The decrease in the valuation allowance during the year ended December 31, 2022, was primarily due to the recognition of a portion of deferred tax assets for which a valuation allowance was recorded in the prior year. As of December 31, 2023, the Company had net operating losses in Canada, the U.S., and Israel available to offset future years’ taxable income of approximately $253,521, $144,219, $20,794, respectively. As of December 31, 2022, the Company had net operating losses in Canada, the U.S., and Israel available to offset future years’ taxable income of approximately $216,120, $134,593, and $18,739, respectively. The net operating losses in Canada will begin to expire, for purposes of carryforward, in fiscal year 2033. The net operating losses in the U.S. can be carried forward indefinitely for federal purposes. The net operating losses in Israel can be carried forward indefinitely. Utilization of the net operating loss carryforwards may be subject to limitations under the tax laws applicable in each tax jurisdiction due to ownership changes that could occur in the future. These ownership changes could limit the amount of net operating loss carryforwards and other deferred tax assets that can be utilized to offset future taxable income and tax expense. Due to the existence of the valuation allowance, limitations created by ownership changes, if any, will not impact the Company’s effective tax rate. As of December 31, 2023, the Company has various scientific research and experimental development investment tax credit carryforwards of $683 related to Canadian operations, which, if not utilized, will begin to expire in 2041. Investment tax credits are recognized when realization of the tax credits is more likely than not. The Company files federal income tax returns in Canada, Israel and the U.S. The Company has open tax years with the taxation jurisdictions. These open years contain certain matters that could be subject to differing interpretations of applicable tax laws and regulations and tax treaties, as they relate to the amount, timing, or inclusion of revenue and expense. As of December 31, 2023, Peace Naturals and Hortican Inc. are under examination with the Canadian Revenue Agency for tax years 2019 and 2020. Jurisdiction Open Years Canada 2019 – 2023 United States 2020 – 2023 Israel 2020 – 2023 Accounting guidance clarifies the accounting for uncertain tax positions and prescribes a recognition threshold and measurement process for recording in the financial statements uncertain tax positions taken or expected to be taken in a tax return. Additionally, the authoritative guidance addresses the derecognition, classification, accounting in interim periods and disclosure requirements for uncertain tax positions. Only tax positions that meet the more-likely-than-not recognition threshold may be recognized. There were no identified unrecognized tax benefits as of December 31, 2023 or December 31, 2022. As of December 31, 2023 and 2022, deferred income taxes have not been provided for any undistributed earnings from operations outside of Canada. The foreign subsidiaries have accumulated losses and as such the amount of undistributed earnings upon which income taxes have not been provided is immaterial to these consolidated financial statements. |
Loss per Share
Loss per Share | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Loss per Share | Loss per Share Basic and diluted earnings (loss) per share from continued and discontinued operations are calculated as follows: Year ended December 31, 2023 2022 2021 Basic loss per share computation Net loss from continuing operations attributable to the shareholders of Cronos Group $ (69,849) $ (155,178) $ (126,982) Weighted-average number of common shares outstanding for computation for basic and diluted earnings per share (i) 380,964,739 376,961,797 370,390,965 Basic loss from continuing operations per share $ (0.18) $ (0.41) $ (0.34) Diluted loss per share from continuing operations $ (0.18) $ (0.41) $ (0.34) Loss from discontinued operations attributable to the shareholders of Cronos Group $ (4,114) $ (13,556) $ (269,125) Weighted-average number of common shares outstanding from computation for basic and diluted earnings per share (i) 380,964,739 376,961,797 370,390,965 Basic loss from discontinued operations per share $ (0.01) $ (0.04) $ (0.73) Diluted loss from discontinued operations per share $ (0.01) $ (0.04) $ (0.73) (i) In computing diluted earnings per share, incremental common shares are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. Total securities of 25,426,119, 112,612,579 and 125,195,001 were not included in the computation of diluted shares outstanding for the years ended December 31, 2023, 2022 and 2021, respectively, because the effect would be anti-dilutive. |
Financial Instruments
Financial Instruments | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Financial Instruments | Financial Instruments (a) Fair value measurement The Company complies with ASC 820 Fair Value Measurements for its financial assets and liabilities that are re-measured and reported at fair value at each reporting period and non-financial assets and liabilities that are re-measured and reported at fair value at least annually. In general, fair values are determined by: • Level 1 inputs utilize quoted prices (unadjusted) in active markets for identical assets or liabilities. • Level 2 inputs utilize data points that are observable such as quoted prices, interest rates and yield curves. • Level 3 inputs are unobservable data points for the asset or liability, and 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 that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: As of December 31, 2023 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 669,291 $ — $ — $ 669,291 Short-term investments 192,237 — — 192,237 Other investments (i) 9,601 — — 9,601 Derivative liabilities — — 102 102 As of 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 December 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 4 “Investments” for additional information. There were no transfers between fair value categories during the periods presented. The following tables present information about the Company’s assets that are measured at fair value on a non-recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: As of December 31, 2023 Level 1 Level 2 Level 3 Total Other investments (i) — — 25,650 25,650 As of December 31, 2022 Level 1 Level 2 Level 3 Total Other investments (i) — — 49,000 49,000 (i) On June 14, 2021, the Company purchased an option to acquire 473,787 shares of Class A Common Stock of PharmaCann, a vertically integrated cannabis company in the United States, at an exercise price of $0.0001 per share, representing approximately 10.5% of PharmaCann’s issued and outstanding capital stock on a fully diluted basis as of the date of the PharmaCann Option, for an aggregate purchase price of approximately $110,392. On February 28, 2022, PharmaCann closed its previously announced transaction with LivWell pursuant to which PharmaCann acquired LivWell. As a result of the LivWell Transaction, the Company’s ownership percentage in PharmaCann on a fully diluted basis decreased to approximately 6.4%. As of December 31, 2023 and December 31, 2022, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 5.9% and 6.3%, respectively. See Note 4 “Investments”. There were no transfers between fair value categories during the periods presented. (b) Financial risks The Company’s activities expose it to a variety of financial risks, including credit risk, liquidity risk, market risk, interest rate risk, and foreign currency rate risk. Credit risk Credit risk is the risk of financial loss to the Company if a customer or counterparty to a financial instrument fails to meet its contractual obligations. The Company is exposed to credit risk from its operating activities, primarily accounts receivable and other receivables, and its investing activities, including cash held with banks and financial institutions, short term investments, loans receivable, and advances to joint ventures. The Company’s maximum exposure to this risk is equal to the carrying amount of these financial assets, which amounted to $966,442 and $987,836 as of December 31, 2023 and December 31, 2022, respectively. (i) Accounts receivable The Company had accounts receivable of $13,984 and $23,113 as of December 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 December 31, 2023 and 2022, the Company had $3 and $219, respectively, in expected credit losses on receivables from contracts with customers. As of December 31, 2023, the Company has assessed that there is a concentration of credit risk as 37% of the Company’s accounts receivable were due from one customer 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 through a limited number of major customers. Major customers are defined as customers that each individually accounted for greater than 10% of the Company’s revenues. During the year ended December 31, 2023, the Company earned a total net revenue before excise taxes of $79,503 from three major customers, together accounting for 66% of the Company’s total net revenue before excise taxes. During the year ended December 31, 2022, the Company earned a total net revenue before excise taxes of $63,509 from three major customers, together accounting for 55% of the Company’s total net revenue before excise taxes. During the year ended December 31, 2021, the Company earned a total net revenue before excise taxes of $41,603 from three major customers, accounting for 56% of the Company’s total net revenues before excise taxes. (ii) Cash and cash equivalents, short-term investments, and other receivables The Company held cash and cash equivalents of $669,291 and $764,644 as of December 31, 2023 and December 31, 2022, respectively. The short-term investments and related interest receivable of $192,237 and $113,077 as of December 31, 2023 and December 31, 2022, respectively, represent short-term investments with a maturity of less than a year and accrued interest. The cash and cash equivalents and short-term investments, including guaranteed investment certificates and bankers’ acceptances, are held with central banks and financial institutions that are highly rated. In addition to interest receivable, other receivables include sales taxes receivable from the government. As such, the Company has assessed an insignificant loss allowance on these financial instruments. Liquidity risk Liquidity risk is the risk that the Company will not be able to meet its financial obligations as they become due and arises principally from the Company’s accounts payable. The Company had trade accounts payable of $8,887 and $8,599 as of December 31, 2023 and December 31, 2022, respectively, included in accounts payable on the consolidated balance sheet. The Company’s policy is to review liquidity resources and ensure that sufficient funds are available to meet financial obligations as they become due. Further, the Company’s management is responsible for ensuring funds exist and are readily accessible to support business opportunities as they arise. As of December 31, 2023, the Company has assessed a concentration of risk of vendors as 26% of accounts payable were due to one vendor. As of December 31, 2022, the Company has assessed a concentration risk of vendors as 27% of accounts payable due to one vendor. Market risk Market risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in market prices. The value of financial instruments can be affected by changes in interest rates, market and economic conditions, and equity and commodity prices. The Company is exposed to market risk in divesting its investments, such that unfavorable market conditions could result in dispositions of investments at less than their carrying amounts. Further, the revaluation of securities classified as fair value through net income could result in significant write-downs of the Company’s investments, which would have an adverse impact on the Company’s results of operations, unless these would flow through other comprehensive income. The Company manages risk by having a portfolio of securities from multiple issuers, such that the Company was not materially exposed to any one issuer. Interest rate risk Interest rate risk is the risk that the value or yield of fixed-income investments may decline if interest rates change. Fluctuations in interest rates may impact the level of income and expense recorded on the cash equivalents and short-term investments, and the market value of all interest-earning assets, other than those that possess a short term to maturity. A 10% change in the interest rate in effect on December 31, 2023 would not have a material effect on the fair value of our cash equivalents and short-term investments as the majority of the portfolio had a maturity date of three months or less. A 10% change in the interest rate in effect for 2023 would have an effect of $5.4 million on interest income, net earned on our cash equivalents and short-term investments. A 10% change in the interest rate in effect on December 31, 2022, would not have a material effect on (i) fair value of the cash equivalents and short-term investments as the majority of the portfolio had a maturity date of three months or less, or (ii) interest income, net. Management continues to monitor external interest rates and revise the Company’s investment strategy as a result. During the years ended December 31, 2023 and December 31, 2022, the Company had net interest income of $51,235 and $22,514, respectively. During the year ended December 31, 2023, the Company’s average variable interest rate increased approximately 1.45%. During the year ended December 31, 2022, the Company’s average variable interest rate increased approximately 3.50%. Foreign currency risk Currency rate risk is the risk that the fair value of, or future cash flows from, the Company’s financial instruments will significantly fluctuate due to changes in foreign exchange rates. The Company is exposed to this risk on investments in equity investments denominated in A$ and C$, and other assets and liabilities denominated in A$ and C$. The Company is further exposed to this risk through subsidiaries operating in Israel and the U.S. as the Company’s functional currency is in Canadian dollars. The Company does not currently use foreign exchange contracts to hedge its exposure to currency rate risk. As such, the Company’s financial position and financial results may be adversely affected by the unfavorable fluctuations in currency exchange rates. As of December 31, 2023 and December 31, 2022, the Company had foreign currency gain (loss) on translation of $21,539 and $(50,616), respectively. A 10% change in the exchange rates for the foreign currencies would affect the carrying amounts of net assets by approximately $97,678 and $77,414 as of December 31, 2023 and December 31, 2022, respectively. |
Related Party Transactions
Related Party Transactions | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Related Party Transactions | Related Party Transactions (a) Altria On March 8, 2019, in connection with the Altria Investment, Altria, through certain of its wholly owned subsidiaries, purchased a 45% equity interest in the Company. As of December 31, 2023, Altria beneficially held an approximately 41.1% ownership interest in the Company (calculated on a non-diluted basis). The Company incurred the following expenses for consulting services from Altria Pinnacle LLC, a subsidiary of Altria (“Altria Pinnacle”): Year ended December 31, 2023 2022 2021 Altria Pinnacle – expense $ — $ — $ 436 There were no amounts payable related to the consulting services with Altria Pinnacle as of December 31, 2023 and 2022. Refer to Note 9 “Derivative Liabilities” for further information on the derivative liabilities related to the Altria Investment. (b) 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 4 “Investments” for further discussion. The Company made the following purchases of cannabis products from Cronos GrowCo: Year ended December 31, 2023 2022 2021 Cronos GrowCo – purchases $ 21,335 $ 18,144 $ 4,820 The Company’s outstanding payable balance to Cronos GrowCo was $2,267 and $2,519 as of December 31, 2023 and December 31, 2022, respectively. During the third quarter of 2023, the Company, as supplier, entered into a cannabis germplasm supply agreement with Cronos GrowCo as buyer. During 2023, the Company received proceeds of $1,114 in relation to this agreement. Also during 2023, the Company sold certain held for sale assets with carrying value of $332 and certain other previously expensed assets with a zero net book value to Cronos GrowCo for total proceeds of $761 and recognized a $436 gain in Other, net in the consolidated statements of net loss and comprehensive loss. Additionally, on August 23, 2019, the Company, as lender, and Cronos GrowCo, as borrower, entered into the GrowCo Credit Facility. See additional information in Note 5 “Loans Receivable, net”. (c) 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 vendor whose chief executive officer is an immediate family member of an executive of the Company. The Company purchased $2,310 and $645 of products and services under this subcontracted agreement for the years ended December 31, 2023 and December 31, 2022, respectively. The company had $28 in outstanding accounts payables related to the subcontracted agreement as of December 31, 2023 and no outstanding accounts payable related to the subcontracted agreement as of December 31, 2022. In November 2023, the Company negotiated a direct contract with the related-party vendor. During the year ended 2023, the Company purchased $42 of products and services directly from the related-party vendor and had $11 in outstanding accounts payable to the vendor as of December 31, 2023. |
Restructuring
Restructuring | 12 Months Ended |
Dec. 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. In the third quarter of 2023, the Board approved revisions to the Realignment to wind down operations at its Winnipeg, Manitoba facility (“Cronos Fermentation”), list the Cronos Fermentation facility for sale, and implement additional organization-wide cost reductions as the Company continues its Realignment initiatives. During the third quarter of 2023, the Company performed an assessment under ASC 360, Property Plant and Equipment, of the recovery of the carrying value of the Canada asset group, which includes Cronos Fermentation, and determined the carrying value of the asset group was recoverable. As of December 31, 2023, Cronos Fermentation did not meet the criteria to be classified as held-for-sale. During the year ended December 31, 2023, the Company incurred $1,524 of restructuring costs in its continuing operations in connection with the Realignment. During the year ended December 31, 2022, the Company recognized $3,545 of restructuring costs in continuing operations in connection with the Realignment. Charges related thereto include employee-related costs such as severance, relocation and other termination benefits, as well as contract termination and other related costs. During the year ended December 31, 2023, as a result of the decision to wind down operations at Cronos Fermentation, the Company recognized an inventory write-down of $805 related to certain obsolete raw materials. Restructuring costs and inventory write-downs incurred in the Company’s discontinued operations during the years ended December 31, 2023 and 2022 is presented in Note 2 “ Discontinued Operations”. The following table summarizes the Company’s restructuring activity for the years ended December 31, 2023 and 2022: As of January 1, 2023 Expenses Payments/Write-offs As of December 31, 2023 Employee Termination Benefits $ 403 $ 1,371 $ (1,624) $ 150 Other Restructuring Costs 21 153 (174) — Total $ 424 $ 1,524 $ (1,798) $ 150 As of January 1, 2022 Expenses Payments/Write-offs As of December 31, 2022 Employee Termination Benefits $ — $ 1,883 $ (1,480) $ 403 Other Restructuring Costs — 1,662 (1,641) 21 Total $ — $ 3,545 $ (3,121) $ 424 |
Background, Basis of Presenta_2
Background, Basis of Presentation, and Summary of Significant Accounting Policies (Policies) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Basis of presentation | Basis of presentation The accompanying consolidated financial statements have been prepared in accordance with accounting principles generally accepted in the United States of America (“U.S. GAAP”). Certain prior year amounts have been reclassified to conform to the current year presentation of our consolidated financial statements, which includes discontinued operations. These reclassifications had no effect on reported results of operations and ending shareholders’ equity. |
Basis of consolidation | Basis of consolidation In the consolidated statements of net loss and comprehensive loss, net loss and comprehensive loss are attributed to the equity holders of the Company and to the non-controlling interests. Non-controlling interests in the equity of Cronos Israel are presented separately in the shareholders’ equity section of the consolidated balance sheets and consolidated statements of shareholders’ equity. All intercompany transactions and balances are eliminated upon consolidation. |
Use of estimates | Use of estimates The preparation of the consolidated financial statements in conformity with U.S. GAAP requires management to make estimates, judgments and assumptions that affect the reported amounts in the consolidated financial statements and accompanying notes. Significant estimates and assumptions include, among other things, valuation of derivative liabilities, expected credit losses on long-term financial assets, impairment losses on goodwill and indefinite-lived intangible assets, impairment losses on long-lived assets, |
Cash and cash equivalents and short-term investments | Cash and cash equivalents and short-term investments Cash and cash equivalents are comprised of cash and highly liquid short-term investments that are readily convertible into known amounts of cash, generally with original maturities of three months or less. Cash and cash equivalents include amounts held in dollars, C$, and ILS and security deposits. Short-term investments consist of debt securities that (i) generally have original maturities of greater than three months and (ii) the Company has the ability to convert into cash within one year. Short-term investments are classified as held-to-maturity and recorded at cost. Interest earned on short-term investments is recorded in other receivables on the consolidated balance sheets and interest income, net on the consolidated statements of net loss and comprehensive loss. Cash inflows and outflows related to the purchase and maturity of short-term investments are classified as investing activities in the Company’s consolidated statements of cash flows. |
Inventory | Inventory Inventory is comprised of raw materials, finished goods and work-in-progress, such as pre-harvested cannabis plants, dried flower, by-products to be extracted, cannabis extracts and by-products, dry cannabis and cannabis extract containers, and boxes. When the Company cultivated cannabis, costs capitalized into inventory until the time of harvest included, but were not limited to, labor, utilities, nutrition and irrigation. Inventory is stated at the lower of cost and net realizable value, determined using weighted average cost. Cost includes expenditures directly related to manufacturing and distribution of the products. Primary costs include consumables (insect control, fertilizers, soil), packaging, shipping, direct labor, contract manufacturer fees, overhead, supplies and small tools, and the depreciation of manufacturing equipment and production facilities determined at normal capacity. Manufacturing overhead and related expenses include salaries, wages, employee benefits, rent, utilities, security, and property taxes. Net realizable value is defined as the estimated selling price in the ordinary course of business, less reasonably predictable costs of completion, disposal and transportation. At the end of each reporting period, the Company performs an assessment to measure inventory at the lower of cost and net realizable value. Factors considered in the determination of net realizable value include slow-moving or non-marketable products. |
Variable interest entities | Variable interest entities A variable interest entity is an entity having either a total equity investment that is insufficient to finance its activities without additional subordinated financial support or equity investors at risk that lack the ability to control the entity’s activities. Variable interests are investments or other interests that will absorb portions of a VIE’s expected losses or receive portions of the VIE’s expected residual returns. The Company evaluates whether it is the primary beneficiary of each VIE it identifies on a periodic basis and considers the impact of any reconsideration events. The primary beneficiary is the party that has both the power to direct the activities that most significantly impact the VIE and holds a variable interest that could potentially be significant to the VIE. To make this determination, the Company considers both quantitative and qualitative factors regarding the nature, size and form of its involvement with the VIE. The Company consolidates a VIE when it is determined that it is the primary beneficiary of the VIE. |
Equity method investments | Equity method investments The Company accounts for investments in companies over which it has the ability to exercise significant influence but does not hold a controlling financial interest using the equity method. Under the equity method, the Company records its proportionate share of income or loss in share of income (loss) from equity method investments within the consolidated statements of net loss and comprehensive loss. Cash payments to equity method investees such as additional investments or expenses incurred on behalf of investees, as well as income earned and payments from equity method investees such as dividends and distributions are recorded as adjustments to investment balances. If the current fair value of an investment falls below its carrying amount, this may indicate that an impairment loss should be recorded. Any impairment losses recognized in one period cannot be reversed in subsequent periods. |
Other investments | Other investments Other investments include common stock and options in third-party entities in which the Company’s influence is deemed non-significant. The Company holds other investments with and without readily determinable fair values. Other investments with readily determinable fair values are recorded using the fair value method of accounting as of period-end on the consolidated balance sheets. Other investments without readily determinable fair values are recorded using the cost method of accounting on the consolidated balance sheets. Other investments without readily determinable fair values are assessed for observable price changes and other than temporary impairment on a periodic basis. Changes in the reported value of other investments are reported in the consolidated statements of net loss and comprehensive loss. |
Property, plant & equipment | Property, plant and equipment Property, plant and equipment are stated at cost less accumulated depreciation and accumulated impairment losses. Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Rate Building and leasehold improvements 15 to 20 years Machinery and equipment 5 to 7 years Furniture and fixtures 5 years When assets are disposed of, the cost and accumulated depreciation are removed from the respective accounts and any related gain or loss is recognized. Maintenance and repairs are charged to expense as incurred. Significant expenditures, which increase productivity or extend the useful life of the asset, are capitalized. Available for use is defined as the point at which the related property, plant and equipment is operational, including the possession of any requisite licenses. Depreciation commences at the point the assets are available for use. |
Definite life intangible assets | Definite-lived intangible assets Intangible assets are recorded at cost less any accumulated amortization and accumulated impairment losses. Intangible assets acquired through a business combination are measured at fair value at the acquisition date. The Company capitalizes certain costs incurred in connection with its enterprise software, which include external direct costs of materials and services consumed in developing or obtaining internal-use software and payroll and payroll-related costs for employees who are directly associated with and who devote time to the development of the software for the function intended. All other costs are expensed as incurred. Intangible assets with definite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Ginkgo exclusive licenses Straight-line 10 years Israeli codes (i) Straight-line Useful life of corresponding facilities (i) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli codes”) were transferred by non-controlling interests to Cronos Israel in exchange for equity interests in the Cronos Israel entities specified above. Amortization begins when assets become available for use. The estimated useful life, amortization method, and rate are reviewed at the end of each reporting period, with the effect of any changes in estimate being accounted for on a prospective basis. Intangible assets originating from the strategic partnership (the “Ginkgo Strategic Partnership”) with Ginkgo Bioworks Holdings, Inc. (“Ginkgo”) are accounted for in accordance with the acquisition method of accounting. Equity interests issued in exchange for an asset are initially recognized and measured at the date of acquisition at fair value. We estimate fair value using the relief-from-royalty method and key assumptions include the discount rate and estimated life. Definite-lived intangible assets, including intangible assets originating from the Ginkgo Strategic Partnership, are subject to amortization and reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value has been reduced to less than its carrying amount. |
Accrued liabilities | Accrued payroll and related expenses include salaries and wages, bonuses, and other related payroll expenses associated with the Company’s employees. Accrued professional fees include fees for legal expenses, litigation, consulting, marketing, and other related expenses. Accrued taxes include sales, excise and other taxes owed. Other accrued expenses include the fair value of deferred share units outstanding to directors and other general expenses. |
Leases | Leases The Company enters into leases in the normal course of business, primarily for the land-use rights, office premises, and equipment used in the production of its products. At the inception of a contract, the Company assesses whether a contract is, or contains, a lease. A contract is, or contains, a lease if the contract conveys the right to control the use of an identified asset for a period of time in exchange for consideration. The Company performs an analysis over the classification of the lease agreement as either an operating lease or finance lease. A right-of-use asset and the related lease obligation associated with the lease are recorded at the inception of the lease. The right-of-use asset’s recorded amount is based on the present value of future lease payments over the lease term at the commencement date plus any initial direct costs incurred. If the rate implicit in the lease is not readily determinable for the Company’s operating leases, an incremental borrowing rate is generally used based on information available at the lease commencement date to determine the present value of future lease payments. Subsequent changes to these lease payments due to rate updates are recorded as lease expense in the period incurred. Leases with a term of 12 months or less are not recorded on the balance sheet as a lease. The right-of-use asset is subject to impairment testing whenever events or changes in circumstances indicate the carrying amount of the asset may not be recoverable. The leased asset is amortized over the shorter of the lease term or its estimated useful life if title does not transfer to the Company, while the leased asset is depreciated in accordance with the Company’s depreciation policy if the title is to eventually transfer to the Company. The Company’s lease agreements generally exclude non-lease components. As a result, non-lease components are accounted for separately for all classes of assets and expensed as incurred. In addition, the Company’s lease agreements do not contain any material residual value guarantees or material restrictive covenants. For finance leases, from the commencement date to the earlier of the end of the useful life of the right-of-use asset or the end of the lease term, the right-of-use asset is amortized on a straight-line basis and the interest expense is recognized on the lease liability using the effective interest method. For operating leases, lease expense is recognized on a straight-line basis over the term of the lease and presented as a single charge in the consolidated statements of net loss and comprehensive loss. |
Derivative liabilities | Derivative liabilities For financial instruments classified as derivatives that are not designated as hedging instruments or do not qualify for hedge accounting, changes in fair value are recorded in the consolidated statements of net loss and comprehensive loss each period. The Company does not enter into or hold derivative financial instruments for trading or speculative purposes. Derivative liabilities are initially recognized at fair value at the date on which the derivative contract was entered into. Any attributable transaction costs are recognized in net loss as incurred. Subsequent to initial recognition, derivative liabilities are measured at fair value at each reporting date until settlement with the re-measurement gain or loss being recognized immediately in net loss and comprehensive loss. For more details on derivative liabilities consisting of the Altria Warrant, Pre-emptive Rights, and certain Top-up Rights, see Note 9 “Derivative Liabilities.” |
Capital stock | Capital stock Capital stock is presented at the fair value at the time of issuance of the shares issued. Costs related to the issuance of shares are reported in equity, net of tax, as a deduction from the issuance proceeds. |
Revenue recognition | Revenue recognition Revenue is measured based on the consideration specified in a contract with a customer. The Company recognizes revenue when it satisfies a performance obligation by transferring control over a product or service to a customer. The Company’s contracts with customers for the sale of dried flower, cannabis oil, cannabinoid-derived products and “hemp” (as defined in the U.S. Agricultural Improvement Act of 2018 “U.S. hemp”) derived products consist of a single performance obligation. The Company has concluded that revenue from the sale of these products should be recognized at the point in time when control is transferred to the customer, depending on the specific contractual terms. The Company has determined that the most definitive demonstration that control has transferred to a customer is physical shipment or delivery, depending on the contractual shipping terms, except for consignment transactions. Consignment transactions are arrangements where the Company transfers product to a customer or third-party location but retains ownership and control of such product until it is used by the customer. Revenue for consignment arrangements is recognized upon the customer’s usage. Revenue is recognized at the transaction price, which is the amount of consideration to which the Company expects to be entitled in exchange for transferring promised goods to a customer. Net revenue before excise taxes from sale of goods, as presented in the consolidated statements of net loss and comprehensive loss, represents revenue from the sale of goods less expected price discounts, allowances for customer returns and other forms of variable consideration. If the consideration in a contract includes a variable amount, the Company estimates the amount of consideration to which it will be entitled in exchange for transferring the goods to the customer. The variable consideration is estimated using either the expected value or most likely amount method, based on the Company’s historical information, at contract inception. The Company’s payment terms vary by customer and product type. The Company treats shipping and handling activities as a fulfillment cost, classified as cost of sales. Accordingly, the Company accrues all fulfillment costs related to the shipping and handling of consumer goods at the time of shipment. |
Research and development | Research and development The Company has a research and development center in Canada that performs scientific research on the interaction of cannabinoids as well as strain development, growing conditions and extraction technology. In 2023, fermentation and production related research was performed to further strategic initiatives around rare cannabinoids. In addition, the Company has a collaboration and license agreement with Ginkgo (the “Ginkgo Collaboration Agreement”) to research, produce, and commercialize cultured cannabinoids. Technological feasibility is considered to be established once productivity targets or commercialization are achieved, at which point the exclusive license is recognized at cost less impairment charges. As of the acquisition date of each exclusive license, cost less impairment charges is equal to the fair value. Refer to Note 7 “ Goodwill and Intangible Assets, net ” for more information on the Ginkgo Collaboration Arrangement. Research and development costs associated with these collective efforts are expensed as incurred as part of operating expenses in the Company’s consolidated statements of net loss and comprehensive loss. |
Advertising costs | Advertising costs |
Share-based compensation | Share-based compensation The Company has five share-based compensation plans under which awards have been made: the 2020 Omnibus Plan, the 2018 Stock Option Plan, the 2015 Stock Option Plan, the Employment Inducement Award Plan and the DSU Plan (each as defined below). Share-based awards consists of equity-settled share-based awards such as stock options and restricted share units (“RSUs”) that are issued to eligible employees, non-executive directors, and non-employees. Cash-settled deferred share units (“DSUs”) that are issued to non-executive directors under the DSU Plan are recorded in accrued liabilities with the fair value adjustment recorded in other income. Equity instruments granted are initially measured at fair value on the grant date. The fair value of stock options is determined using the Black-Scholes option pricing model. The fair value of RSUs and DSUs are determined using the market price of the Company’s common shares. Compensation expense related to options and RSUs is recognized on a straight-line basis in the consolidated statements of net loss and comprehensive loss over the vesting period for employees, and over the contractual term for non-employees. The fair value of the payout of cash-settled DSUs is determined at each reporting date based on the fair value of the Company’s common shares at the reporting date and is recorded within other liabilities. The related costs for all equity-settled share-based awards are reflected in additional paid-in capital until the awards are settled or exercised. Upon settlement or exercise, shares are issued and the amount previously reflected in additional paid-in capital is, along with any proceeds paid upon settlement or exercise, credited to a combination of share capital and additional paid-in capital. Forfeitures of share-based compensation awards are accounted for as reductions to share-based compensation and additional paid-in capital as they occur. |
Impairment of long-lived assets | Impairment of long-lived assets The Company reviews its long-lived assets, such as property, plant and equipment and definite-lived intangible assets, for impairment in accordance with Accounting Standards Codification (“ASC”) Topic 360, Property, Plant, and Equipment . In accordance with ASC Topic 360, long-lived assets to be held are reviewed for events or changes in circumstances that indicate that their carrying amount may not be recoverable. The Company periodically reviews for indicators and, if indicators are present, tests the carrying amount of long-lived assets, assessing their recoverable value based on estimated undiscounted cash flows over their remaining estimated useful lives. The Company groups assets at the lowest level for which cash flows are separately identifiable, referred to as an asset group. If the carrying amount of an asset (or asset group) exceeds its estimated undiscounted future cash flows, an impairment charge is measured as the amount by which the carrying amount of the asset exceeds the fair value of the asset group, based on discounted cash flows. |
Assets held for sale and discontinued operations | Assets held for sale and discontinued operations In accordance with ASC 205-20 Presentation of Financial Statements: Discontinued Operations , a disposal of a component of an entity or a group of components of an entity is required to be reported as discontinued operations if the disposal represents a strategic shift that has (or will have) a major effect on an entity’s operations and financial results when the components of an entity meet the criteria in paragraph ASC 205-20-45-10. In the period in which the component meets held-for-sale or discontinued operations criteria, the major current assets, other assets, current liabilities, and other liabilities are reported as components of total assets and liabilities separate from those balances of the continuing operations. At the same time, the results of all discontinued operations, less applicable income taxes (benefit), are reported as components of net loss separate from the net loss of continuing operations. The Company periodically evaluates its long-lived assets that it plans to dispose of through sale for held-for-sale classification. To be classified as held-for-sale, management must have committed to a plan to sell, the asset (or asset group) must be available for immediate sale in its present condition, an active program to locate a buyer must have been initiated, the sale must be probable to close within one year, the asset (or asset group) must be marketed at a reasonable sales price, and it must be unlikely that significant changes to the plan will be made. Once an asset (or asset group) meets all of the above criteria, it is reclassified as assets held for sale on the consolidated balance sheet, and the asset(s) cease depreciation and are written down to their fair value, less costs to sell, if applicable. The Company completed a review of its global supply chain and determined that it would wind down its Winnipeg, Manitoba facility (“Cronos Fermentation”) and list it for sale. This review involves significant complexities and judgments in making the accounting treatment determination. There are subjective and complex judgments in the determination of whether the Cronos Fermentation facility meets the criteria to be classified as held for sale, including: (1) whether the Cronos Fermentation facility is available for sale in its present condition subject only to terms that are usual and customary for sales of such businesses, (2) whether the sale of the Cronos Fermentation facility is probable and that the transfer of assets will be a completed sale within one year from period end, and (3) whether the Cronos Fermentation facility is being actively marketed at a reasonable price. See Note 6 “Property, plant and equipment, net” for discussion regarding our evaluation of the Peace Naturals Campus and the Cronos Fermentation facility for held-for-sale classification as of December 31, 2023. |
Impairment of goodwill and indefinite-lived intangible assets | Impairment of goodwill and indefinite-lived intangible assets Goodwill and indefinite-lived intangible assets are not amortized. Goodwill and indefinite-lived intangible assets are reviewed for impairment annually or more frequently when events or changes in circumstances indicate that fair value of the reporting unit has been reduced to less than its carrying amount in accordance with the provisions of ASC Topic 350, Intangibles—Goodwill and Other |
Income taxes | Income taxes The Company uses the liability method of accounting for income taxes, under which deferred tax assets and liabilities are recognized for the future tax consequences attributable to the differences between the financial statement carrying amounts of existing assets and liabilities and their respective tax basis. Deferred tax assets and liabilities are measured using enacted tax rates expected to be in effect when such assets and liabilities are recovered or settled. The effect on deferred tax assets and liabilities of a change in tax rates is recognized in the year that includes the enactment date. The Company determines deferred tax assets including net operating losses and liabilities, based on temporary differences between the book and tax bases of assets and liabilities. A valuation allowance is established to reduce some or all net deferred tax assets to amounts that are more likely than not to be realized. The Company considers all available evidence, both positive and negative, including past operating results, estimates of future taxable income, and the feasibility of tax planning strategies, in assessing the need for a valuation allowance. A valuation allowance against some or all of the net deferred tax assets does not in any way impact the Company’s ability to use future tax deductions such as the Company’s net operating loss carryforwards; rather, the valuation allowance indicates, according to the provisions of ASC 740, Income Taxes , it is more likely than not that the deferred tax assets will not be realized. The valuation allowance that was established will be maintained until there is sufficient positive evidence to conclude that it is more likely than not that the net deferred tax assets will be realized. The Company’s income tax expense for future periods will be reduced to the extent of corresponding decreases in our valuation allowance. There is uncertainty regarding any future realization of the benefit by the Company of all or part of our net deferred tax assets. Judgment is required to determine the recognition and measurement attributes prescribed in the accounting guidance for uncertainty in income taxes. The Company uses a two-step approach for evaluating uncertain tax positions. Step one, recognition, requires us to determine whether the weight of available evidence indicates that a tax position is more likely than not to be sustained upon audit, including resolution of related appeals or litigation processes, if any. If a tax position is not considered “more likely than not” to be sustained, no benefits of the position are recognized. If we determine that a position is “more likely than not” to be sustained, then we proceed to step two, measurement, which is based on the largest amount of benefit which is more likely than not to be realized on effective settlement. This process involves estimating our actual current tax exposure, including assessing the risks associated with income tax audits, together with assessing temporary differences resulting from the different treatment of items for tax and financial reporting purposes. If actual results differ from our estimates, our net operating loss and credit carryforwards, to the extent not covered by a valuation allowance, could be materially impacted in the period which such determination is made. The Company recognizes uncertain income tax positions at the largest amount that is more-likely-than-not to be sustained upon examination by the relevant taxing authority. An uncertain income tax position will not be recognized if it has less than a 50% likelihood of being sustained. Recognition or measurement is reflected in the period in which the likelihood changes. Any interest and penalties related to unrecognized tax liabilities are presented within income tax expense in the consolidated statements of net loss and comprehensive loss. Accrued interest and penalties are included in accounts payable and other liabilities in the consolidated balance sheets. |
Foreign currency | Foreign currency The Company’s functional currency is the Canadian dollar (“C$”) and its reporting currency is the U.S. dollar. Functional currencies for the entities in these consolidated financial statements are their respective local currencies, including C$, U.S. dollar and Israeli New Shekel (“ILS”). All assets and liabilities of operations with a functional currency other than the Canadian dollar are translated into Canadian dollars at the period-end currency exchange rates and subsequently translated into U.S. dollars at period-end currency exchange rates. The resulting translation adjustments are recorded in accumulated other comprehensive income (loss), net of tax. Revenues and expenses of operations, as well as all cash flows, with a functional currency other than the Canadian dollar are translated into Canadian dollars at the average exchange rates for the period and subsequently translated into U.S. dollars at the average exchange rates for the period. Transaction gains and losses resulting from changes in foreign currency exchange rates are recorded in either cost of sales, general and administrative expenses, or foreign currency transaction gain (loss) in the consolidated statements of net loss and comprehensive loss. |
Segments | Segments 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. Historically, the Company has reported results for two reportable segments, the U.S. and Rest of World. In the second quarter of 2023, as a result of the Company’s exit of its then-existing U.S. operations, the Company determined that it has one operating segment and therefore one reportable segment. All prior period segment disclosure information has been reclassified to conform to the current reporting structure in this Annual Report. These reclassifications had no effect on our consolidated financial statements in any period presented. |
Earnings (loss) per share | Earnings (loss) per share The Company presents basic and diluted earnings (loss) per share data for its common shares. Basic earnings (loss) per share is calculated by dividing the profit or loss attributable to common shareholders of the Company by the weighted average number of common shares outstanding during the period. Diluted earnings (loss) per share is determined by adjusting the profit or loss attributable to common shareholders and the weighted average number of common shares outstanding for the effects of all potentially dilutive common shares. |
Fair value measurements | Fair value measurements The carrying amount of the Company’s cash and cash equivalents, accounts receivable, other receivables, loans receivable, accounts payable and other liabilities approximate fair value, given their short-term nature. Cronos uses a fair value hierarchy, which gives the highest priority to unadjusted quoted prices in active markets for identical assets and liabilities, noted as Level 1 measurements, and the lowest priority to unobservable inputs, noted as Level 3 measurements. The following are the three levels of inputs used to measure fair value: • Level 1 – valuation based on quoted prices (unadjusted) in active markets for identical assets and liabilities. • Level 2 – valuation techniques based on inputs other than quoted prices included in Level 1 that are observable for the asset or liability, either directly or indirectly. • Level 3 – valuation techniques using the inputs for the asset or liability that are not based on observable market data. The Company’s policy for determining when transfers between levels of the fair value hierarchy occur is based on the date of the event or changes in circumstances that caused the transfer. |
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 2022-02”). ASU 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 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 2022-02 did not have a material impact on the Company’s consolidated financial statements. (aa) 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 2022-03”). ASU 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 2022-03 to have a material impact on its consolidated financial statements. In November 2023, the FASB issued ASU 2023-07, Segment Reporting (Topic 280): Improvements to Reportable Segment Disclosures (“ASU 2023-07”). ASU 2023-07 enhances reportable segment disclosures by requiring disclosures such as significant segment expenses, information on the CODM and disclosures for entities with a single reportable segment. Additionally, the amendments enhance interim disclosure requirements, clarify circumstances in which an entity can disclose multiple segment measures of profit or loss, and contain other disclosure requirements. ASU 2023-07 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and we expect to adopt ASU 2023-07 retrospectively. The Company does not expect the adoption of ASU 2023-07 to have a material impact on its consolidated financial statements. In December 2023, the FASB issued ASU 2023-09, Income Taxes (Topic 740): Improvements to Income Tax Disclosures (“ASU 2023-09”). ASU 2023-09 enhances the existing income tax disclosures to provide additional information to better assess how an entity’s operations, related tax risks and tax planning, and operational opportunities affect its tax rate and prospects for future cash flows. ASU 2023-09 is effective for fiscal years beginning after December 15, 2023, and interim periods within fiscal years beginning after December 15, 2024, and we expect to adopt ASU 2023-09 prospectively. The Company does not expect the adoption of ASU 2023-09 to have a material impact on its consolidated financial statements. |
Background, Basis of Presenta_3
Background, Basis of Presentation, and Summary of Significant Accounting Policies (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Accounting Policies [Abstract] | |
Schedule of Consolidated Entities | The Company consolidates the financial results of the following entities, which the Company controls but does not wholly own: Subsidiaries Jurisdiction of incorporation Incorporation date Ownership interest (ii) Cronos Israel G.S. Cultivation Ltd. (i) Israel February 4, 2018 70% Cronos Israel G.S. Manufacturing Ltd. (i) Israel September 4, 2018 90% Cronos Israel G.S. Store Ltd. (i) Israel June 28, 2018 90% Cronos Israel G.S. Pharmacy Ltd. (i) Israel February 15, 2018 90% (i) These Israeli entities are collectively referred to as “Cronos Israel.” (ii) |
Schedule of Property, Plant and Equipment, Useful Lives | Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Rate Building and leasehold improvements 15 to 20 years Machinery and equipment 5 to 7 years Furniture and fixtures 5 years Property, plant and equipment, net consisted of the following: As of December 31, 2023 2022 Cost Land $ 2,764 $ 2,556 Building and leasehold improvements 168,498 177,095 Machinery and equipment 21,322 19,130 Furniture and fixtures 3,385 5,345 Construction in progress 3,269 841 Less: accumulated depreciation (30,707) (35,347) Less: accumulated impairment charges (109,063) (109,063) Property, plant and equipment, net $ 59,468 $ 60,557 |
Schedule of Intangible Assets Amortization Methods and Rates | Intangible assets with definite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Ginkgo exclusive licenses Straight-line 10 years Israeli codes (i) Straight-line Useful life of corresponding facilities (i) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli codes”) were transferred by non-controlling interests to Cronos Israel in exchange for equity interests in the Cronos Israel entities specified above. Intangible assets, net are comprised of the following items: As of December 31, 2023 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,860 $ (3,508) $ (78) $ 3,274 Health Canada licenses 8,463 (1,813) (6,650) — Ginkgo exclusive licenses 28,326 (4,276) (7,968) 16,082 Israeli codes (i) 284 (62) — 222 Total definite-lived intangible assets 43,933 (9,659) (14,696) 19,578 Lord Jones ® brand 64,000 — (62,500) 1,500 Trademarks 142 — (142) — Total intangible assets $ 108,075 $ (9,659) $ (77,338) $ 21,078 As of December 31, 2022 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,037 $ (2,388) $ (76) $ 3,573 Health Canada licenses 8,269 (1,771) (6,498) — Ginkgo exclusive licenses 27,676 (1,854) (4,434) 21,388 Israeli codes (i) 292 (49) — 243 Total definite-lived intangible assets 42,274 (6,062) (11,008) 25,204 Lord Jones ® brand 64,000 (62,500) 1,500 Trademarks 142 (142) — Total intangible assets $ 106,416 $ (6,062) $ (73,650) $ 26,704 (i) The Israeli codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities. Accumulated impairment charges on intangible assets, net consist of: As of January 1, 2023 Impairment charges Foreign exchange effect As of December 31, 2023 Software $ (76) $ — $ (2) $ (78) Health Canada licenses (6,498) — (152) (6,650) Ginkgo exclusive licenses (4,434) (3,366) (168) (7,968) Lord Jones ® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (73,650) $ (3,366) $ (322) $ (77,338) As of January 1, 2022 Impairment charges Foreign exchange effect As of December 31, 2022 Software $ (4) $ (76) $ 4 $ (76) Health Canada licenses (6,910) — 412 (6,498) Ginkgo exclusive licenses (4,752) — 318 (4,434) Lord Jones® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (74,308) $ (76) $ 734 $ (73,650) As of January 1, 2021 Impairment charges Foreign exchange effect As of December 31, 2021 Software $ — $ (4) $ — $ (4) Health Canada licenses (1,053) (5,951) 94 (6,910) Ginkgo exclusive licenses — (4,792) 40 (4,752) Lord Jones® brand (5,000) (57,500) — (62,500) Trademarks — (142) — (142) $ (6,053) $ (68,389) $ 134 $ (74,308) |
Schedule of Accrued Liabilities | Accrued liabilities consist of the following: As of December 31, 2023 2022 Accrued payroll and related expenses $ 8,970 $ 11,492 Accrued professional fees 2,525 2,414 Accrued taxes 11,695 4,132 Other accrued expenses 4,546 4,230 Total accrued liabilities $ 27,736 $ 22,268 |
Revenue from External Customers by Products and Services | The following table presents the Company's revenue by major product category for continuing operations: Year ended December 31, 2023 2022 2021 Cannabis flower $ 62,070 $ 63,593 $ 55,194 Cannabis extracts 24,569 22,522 8,807 Other 602 634 560 Net revenue $ 87,241 $ 86,749 $ 64,561 |
Schedule of Revenue from External Customers by Geographic Areas | Net revenue attributed to a geographic region based on the location of the customer was as follows: Year ended December 31, 2023 2022 2021 Canada $ 64,702 $ 56,233 $ 50,294 Israel 21,134 30,516 13,376 Other countries 1,405 — 891 Net revenue $ 87,241 $ 86,749 $ 64,561 |
Discontinued Operations (Tables
Discontinued Operations (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Discontinued Operations and Disposal Groups [Abstract] | |
Summary of Discontinued Operations | The following table presents the major components comprising loss from discontinued operations in the consolidated statements of operations for the years ended December 31, 2023, 2022, and 2021: Year ended December 31, 2023 Year ended December 31, 2022 Year ended December 31, 2021 (iv) Net revenue $ 1,029 $ 5,155 $ 9,874 Cost of sales 2,164 8,622 9,850 Inventory write-down (i) 839 — — Gross profit (1,974) (3,467) 24 Operating expenses Sales and marketing 578 4,236 24,020 Research and development 32 250 1,490 General and administrative 668 3,504 6,133 Restructuring costs 523 1,788 — Share-based compensation 13 107 307 Depreciation and amortization 13 58 71 Impairment loss on goodwill and indefinite-lived intangible assets — — 236,019 Impairment loss on long-lived assets (ii) 205 — 1,214 Total operating expenses 2,032 9,943 269,254 Interest income 10 23 4 Other, net (iii) (118) (169) 101 Total other loss (108) (146) 105 Loss before income taxes (4,114) (13,556) (269,125) Income tax expense (benefit) — — — Net loss from discontinued operations (4,114) (13,556) (269,125) (i) For the year ended December 31, 2023, Inventory write-down relates to the disposal of obsolete inventory as a result of the exit of the U.S. operations. (ii) During the year ended December 31, 2023, as a result of the exit of the U.S. operations, the Company recognized an impairment charge of $205 related to the right-of-use lease assets associated with the Company’s former U.S. manufacturing facility in Los Angeles, California. For the year ended December 31, 2021, the Company concluded that the carrying amount of the U.S. reporting unit exceeded its fair value, which resulted in the recognition of an impairment charge of $178,414 on goodwill and concluded the carrying amount of the Lord Jones® brand exceeded its fair value, which resulted in impairment charges of $57,500 on its Lord Jones® brand intangible asset. (iii) For the years ended December 31, 2023 and December 31, 2022, Other, net related to loss on disposal of assets that were part of the U.S. operations. For the year ended December 31, 2021, Other, net includes a gain on disposal of assets related to Original B.C. Ltd. (“OGBC”) as well as a loss from disposal of assets that were part of the U.S. operations. (iv) 2021 loss from discontinued operations includes amounts related to the discontinuance of OGBC. The following tables present the Company’s discontinued operations revenue by major product category: 2023 2022 2021 Cannabis extracts 1,029 5,155 9,874 Net revenue $ 1,029 $ 5,155 $ 9,874 The following table presents a reconciliation of assets and liabilities of the discontinued operations presented in the consolidated balance sheets: As of December 31, 2023 As of December 31, 2022 Assets Current assets Cash and cash equivalents $ — $ 2,300 Accounts receivable, net — 253 Other receivables — 775 Prepaids and other current assets — 464 Inventory, net — 934 Current assets of discontinued operations — 4,726 Non-current assets Property, plant and equipment, net — 254 Right-of-use assets — 430 Intangible assets, net — 1,594 Non-current assets of discontinued operations — 2,278 Liabilities Current liabilities Accounts payable — 166 Accrued liabilities — 807 Current portion of lease obligation — 415 Current liabilities of discontinued operations $ — $ 1,388 The following table presents information related to leases associated with the Company’s U.S. discontinued operations. As of December 31, 2023, the Company has no right-of-use assets or lease obligations associated with its U.S. discontinued operations. For the years ended December 31, 2023, 2022 and 2021, the aggregate depreciation expense on right-of-use assets associated with the Company’s U.S. discontinued operations was $198, $865 and $548, respectively, and was included in loss from discontinued operations on the consolidated statements of net loss and comprehensive loss. As of December 31, 2023 2022 2021 Lease cost Operating lease cost $ 213 $ 1,102 $ 837 Short-term lease cost — — — Total lease cost $ 213 $ 1,102 $ 837 Supplemental cash flow and other information Operating cash flows - cash paid for operating lease obligations $ 525 $ 1,050 $ 752 Non-cash activity - right-of-use assets obtained in exchange for lease obligations — 443 3,277 Weighted-average remaining lease term (years) – operating leases 0.0 1.0 3.8 Weighted-average discount rate – operating leases — % 5.62 % 7.65 % |
Schedule of Plan Information and Restructuring-Related Costs | The following tables summarize the Company’s discontinued operations restructuring activity for the years ended December 31, 2023 and 2022: Accrual as of January 1, 2023 Expenses Payments/Write-offs Accrual as of December 31, 2023 Employee Termination Benefits $ — $ 431 $ (431) $ — Other Restructuring Costs — 92 (92) — Total $ — $ 523 $ (523) $ — Accrual as of January 1, 2022 Expenses Payments/Write-offs Accrual as of December 31, 2022 Employee Termination Benefits $ — $ 1,788 $ (1,788) $ — Total $ — $ 1,788 $ (1,788) $ — The following table summarizes the Company’s restructuring activity for the years ended December 31, 2023 and 2022: As of January 1, 2023 Expenses Payments/Write-offs As of December 31, 2023 Employee Termination Benefits $ 403 $ 1,371 $ (1,624) $ 150 Other Restructuring Costs 21 153 (174) — Total $ 424 $ 1,524 $ (1,798) $ 150 As of January 1, 2022 Expenses Payments/Write-offs As of December 31, 2022 Employee Termination Benefits $ — $ 1,883 $ (1,480) $ 403 Other Restructuring Costs — 1,662 (1,641) 21 Total $ — $ 3,545 $ (3,121) $ 424 |
Inventory, net (Tables)
Inventory, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Inventory Disclosure [Abstract] | |
Schedule of Inventory | Inventory, net is comprised of the following items: As of December 31, 2023 2022 Raw materials $ 4,795 $ 7,421 Work-in-progress 10,593 15,646 Finished goods 14,819 13,503 Supplies and consumables 288 989 Total $ 30,495 $ 37,559 |
Investments (Tables)
Investments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Equity Method Investments and Joint Ventures [Abstract] | |
Schedule of Investments | A reconciliation of the carrying amount of the investments in equity method investments, net is as follows: Ownership interest As of December 31, 2023 2022 Cronos GrowCo 50% $ 19,488 $ 18,755 The following is a summary of the Company’s share of net income (losses) from equity investments accounted for under the equity method of accounting: Year ended December 31, 2023 2022 2021 Vitura (i) N/A N/A $ (48) Cronos GrowCo 1,583 3,114 (2,518) Natuera (ii) N/A N/A (3,747) $ 1,583 $ 3,114 $ (6,313) (i) As of December 31, 2023 and December 31, 2022, the Company held a 9.6% and 9.9% ownership interest, respectively, in Vitura, and Vitura was no longer considered an equity-method investment. As of and up to December 16, 2021, the Company held a 31% ownership interest in Vitura and was considered an equity-method investment. (ii) As of December 31, 2021, the combination of the Company’s share of accumulated net losses and impairment charges was in excess of its equity investment in Natuera, and the net book value of the investment was zero. The following is a summary of financial information for the Company’s equity method investments: As of December 31, 2023 2022 2021 Current assets $ 19,600 $ 21,158 $ 5,660 Non-current assets 99,227 104,227 125,777 Current liabilities 9,707 5,593 13,457 Non-current liabilities 64,814 73,779 81,594 Year ended December 31, 2023 2022 2021 Revenue $ 40,604 $ 39,110 $ 8,186 Gross profit 21,565 24,379 (5,059) Net income (loss) 3,051 6,569 (12,603) The following table summarizes the Company’s other investments activity: As of January 1, 2023 Unrealized loss Impairment charges Foreign exchange effect As of December 31, 2023 PharmaCann $ 49,000 $ — $ (23,350) $ — $ 25,650 Vitura 21,993 (12,096) — (296) 9,601 $ 70,993 $ (12,096) $ (23,350) $ (296) $ 35,251 As of January 1, 2022 Unrealized gain Impairment charges Foreign exchange effect As of December 31, 2022 PharmaCann $ 110,392 $ — $ (61,392) $ — $ 49,000 Vitura 8,000 14,739 — (746) 21,993 $ 118,392 $ 14,739 $ (61,392) $ (746) $ 70,993 |
Schedule of Variable Interest Entities | A reconciliation of the carrying amount of the investments in equity method investments, net is as follows: Ownership interest As of December 31, 2023 2022 Cronos GrowCo 50% $ 19,488 $ 18,755 The following is a summary of the Company’s share of net income (losses) from equity investments accounted for under the equity method of accounting: Year ended December 31, 2023 2022 2021 Vitura (i) N/A N/A $ (48) Cronos GrowCo 1,583 3,114 (2,518) Natuera (ii) N/A N/A (3,747) $ 1,583 $ 3,114 $ (6,313) (i) As of December 31, 2023 and December 31, 2022, the Company held a 9.6% and 9.9% ownership interest, respectively, in Vitura, and Vitura was no longer considered an equity-method investment. As of and up to December 16, 2021, the Company held a 31% ownership interest in Vitura and was considered an equity-method investment. (ii) As of December 31, 2021, the combination of the Company’s share of accumulated net losses and impairment charges was in excess of its equity investment in Natuera, and the net book value of the investment was zero. The following is a summary of financial information for the Company’s equity method investments: As of December 31, 2023 2022 2021 Current assets $ 19,600 $ 21,158 $ 5,660 Non-current assets 99,227 104,227 125,777 Current liabilities 9,707 5,593 13,457 Non-current liabilities 64,814 73,779 81,594 Year ended December 31, 2023 2022 2021 Revenue $ 40,604 $ 39,110 $ 8,186 Gross profit 21,565 24,379 (5,059) Net income (loss) 3,051 6,569 (12,603) The following is a summary of the maximum exposure to loss from the Company’s investments in equity method investments: Ownership interest Other Net Assets (Liabilities) Maximum Exposure to Loss Cronos GrowCo 50% $ 44,306 $ 19,488 Balance as of December 31, 2023 $ 44,306 $ 19,488 Ownership interest Other Net Assets (Liabilities) Maximum Exposure to Loss Cronos GrowCo 50% $ 46,013 $ 18,755 Balance as of December 31, 2022 $ 46,013 $ 18,755 The Company’s maximum exposure to loss is equal to the carrying amount of the investment. |
Loans Receivable, net (Tables)
Loans Receivable, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Receivables [Abstract] | |
Schedule of Loan Receivable | Loans receivable, net consists of the following: As of December 31, 2023 2022 GrowCo Credit Facility $ 5,034 $ 4,427 Add: Accrued interest 507 4,463 Total current portion of loans receivable 5,541 8,890 GrowCo Credit Facility 53,638 56,898 Mucci Promissory Note 13,379 13,438 Cannasoul Collaboration Loan 1,771 1,837 Add: Long-term portion of accrued interest 248 172 Total long-term portion of loans receivable 69,036 72,345 Total loans receivable $ 74,577 $ 81,235 |
Financing Receivable, Allowance for Credit Loss | Expected credit loss allowances on the Company’s long-term financial assets were comprised of the following items: As of January 1, 2023 Increase (decrease) (i) Foreign exchange effect As of December 31, 2023 GrowCo Credit Facility $ 12,455 $ (1,542) $ 263 $ 11,176 Mucci Promissory Note 89 (2) 2 89 Cannasoul Collaboration Loan 522 16 (14) 524 $ 13,066 $ (1,528) $ 251 $ 11,789 As of January 1, 2022 Increase (decrease) (i) Foreign exchange effect As of December 31, 2022 GrowCo Credit Facility $ 14,089 $ (827) $ (807) $ 12,455 Mucci Promissory Note 90 4 (5) 89 Cannasoul Collaboration Loan 415 161 (54) 522 $ 14,594 $ (662) $ (866) $ 13,066 (i) During the years ended December 31, 2023 and 2022, $(1,528) and $(662), respectively, were recorded to general and administrative expenses on the consolidated statements of net loss and comprehensive loss as a result of adjustments to our expected credit losses. |
Property, Plant and Equipment_2
Property, Plant and Equipment, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Property, Plant and Equipment [Abstract] | |
Schedule of Property, Plant and Equipment | Depreciation is computed using the straight-line method over the estimated useful lives of the assets as follows: Rate Building and leasehold improvements 15 to 20 years Machinery and equipment 5 to 7 years Furniture and fixtures 5 years Property, plant and equipment, net consisted of the following: As of December 31, 2023 2022 Cost Land $ 2,764 $ 2,556 Building and leasehold improvements 168,498 177,095 Machinery and equipment 21,322 19,130 Furniture and fixtures 3,385 5,345 Construction in progress 3,269 841 Less: accumulated depreciation (30,707) (35,347) Less: accumulated impairment charges (109,063) (109,063) Property, plant and equipment, net $ 59,468 $ 60,557 |
Goodwill and Intangible Asset_2
Goodwill and Intangible Assets, net (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Goodwill and Intangible Assets Disclosure [Abstract] | |
Schedule of Goodwill | Goodwill is comprised of the following items: As of December 31, 2023 Cost Accumulated impairment charges Net Peace Naturals $ 1,057 $ — $ 1,057 $ 1,057 $ — $ 1,057 As of December 31, 2022 Cost Accumulated impairment charges Net Peace Naturals $ 1,033 $ — $ 1,033 $ 1,033 $ — $ 1,033 |
Schedule of Finite-Lived Intangible Assets | Intangible assets with definite useful lives are amortized over their estimated useful lives using the following methods and rates: Method Rate Software Straight-line 5 years Health Canada licenses Straight-line Useful life of corresponding facilities Ginkgo exclusive licenses Straight-line 10 years Israeli codes (i) Straight-line Useful life of corresponding facilities (i) The preliminary licenses granted to Kibbutz Gan Shmuel (the Cronos Israel joint venture partner) by the Medical Cannabis Unit of the Israeli Ministry of Health in early 2017 (the “Israeli codes”) were transferred by non-controlling interests to Cronos Israel in exchange for equity interests in the Cronos Israel entities specified above. Intangible assets, net are comprised of the following items: As of December 31, 2023 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,860 $ (3,508) $ (78) $ 3,274 Health Canada licenses 8,463 (1,813) (6,650) — Ginkgo exclusive licenses 28,326 (4,276) (7,968) 16,082 Israeli codes (i) 284 (62) — 222 Total definite-lived intangible assets 43,933 (9,659) (14,696) 19,578 Lord Jones ® brand 64,000 — (62,500) 1,500 Trademarks 142 — (142) — Total intangible assets $ 108,075 $ (9,659) $ (77,338) $ 21,078 As of December 31, 2022 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,037 $ (2,388) $ (76) $ 3,573 Health Canada licenses 8,269 (1,771) (6,498) — Ginkgo exclusive licenses 27,676 (1,854) (4,434) 21,388 Israeli codes (i) 292 (49) — 243 Total definite-lived intangible assets 42,274 (6,062) (11,008) 25,204 Lord Jones ® brand 64,000 (62,500) 1,500 Trademarks 142 (142) — Total intangible assets $ 106,416 $ (6,062) $ (73,650) $ 26,704 (i) The Israeli codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities. Accumulated impairment charges on intangible assets, net consist of: As of January 1, 2023 Impairment charges Foreign exchange effect As of December 31, 2023 Software $ (76) $ — $ (2) $ (78) Health Canada licenses (6,498) — (152) (6,650) Ginkgo exclusive licenses (4,434) (3,366) (168) (7,968) Lord Jones ® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (73,650) $ (3,366) $ (322) $ (77,338) As of January 1, 2022 Impairment charges Foreign exchange effect As of December 31, 2022 Software $ (4) $ (76) $ 4 $ (76) Health Canada licenses (6,910) — 412 (6,498) Ginkgo exclusive licenses (4,752) — 318 (4,434) Lord Jones® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (74,308) $ (76) $ 734 $ (73,650) As of January 1, 2021 Impairment charges Foreign exchange effect As of December 31, 2021 Software $ — $ (4) $ — $ (4) Health Canada licenses (1,053) (5,951) 94 (6,910) Ginkgo exclusive licenses — (4,792) 40 (4,752) Lord Jones® brand (5,000) (57,500) — (62,500) Trademarks — (142) — (142) $ (6,053) $ (68,389) $ 134 $ (74,308) |
Schedule of Indefinite-Lived Intangible Assets | Intangible assets, net are comprised of the following items: As of December 31, 2023 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,860 $ (3,508) $ (78) $ 3,274 Health Canada licenses 8,463 (1,813) (6,650) — Ginkgo exclusive licenses 28,326 (4,276) (7,968) 16,082 Israeli codes (i) 284 (62) — 222 Total definite-lived intangible assets 43,933 (9,659) (14,696) 19,578 Lord Jones ® brand 64,000 — (62,500) 1,500 Trademarks 142 — (142) — Total intangible assets $ 108,075 $ (9,659) $ (77,338) $ 21,078 As of December 31, 2022 Cost Accumulated amortization Accumulated impairment charges Net Software $ 6,037 $ (2,388) $ (76) $ 3,573 Health Canada licenses 8,269 (1,771) (6,498) — Ginkgo exclusive licenses 27,676 (1,854) (4,434) 21,388 Israeli codes (i) 292 (49) — 243 Total definite-lived intangible assets 42,274 (6,062) (11,008) 25,204 Lord Jones ® brand 64,000 (62,500) 1,500 Trademarks 142 (142) — Total intangible assets $ 106,416 $ (6,062) $ (73,650) $ 26,704 (i) The Israeli codes were transferred by non-controlling interests to Cronos Israel in exchange for their equity interests in the Cronos Israel entities. Accumulated impairment charges on intangible assets, net consist of: As of January 1, 2023 Impairment charges Foreign exchange effect As of December 31, 2023 Software $ (76) $ — $ (2) $ (78) Health Canada licenses (6,498) — (152) (6,650) Ginkgo exclusive licenses (4,434) (3,366) (168) (7,968) Lord Jones ® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (73,650) $ (3,366) $ (322) $ (77,338) As of January 1, 2022 Impairment charges Foreign exchange effect As of December 31, 2022 Software $ (4) $ (76) $ 4 $ (76) Health Canada licenses (6,910) — 412 (6,498) Ginkgo exclusive licenses (4,752) — 318 (4,434) Lord Jones® brand (62,500) — — (62,500) Trademarks (142) — — (142) $ (74,308) $ (76) $ 734 $ (73,650) As of January 1, 2021 Impairment charges Foreign exchange effect As of December 31, 2021 Software $ — $ (4) $ — $ (4) Health Canada licenses (1,053) (5,951) 94 (6,910) Ginkgo exclusive licenses — (4,792) 40 (4,752) Lord Jones® brand (5,000) (57,500) — (62,500) Trademarks — (142) — (142) $ (6,053) $ (68,389) $ 134 $ (74,308) |
Schedule of Estimated Future Amortization of Definite-Lived Intangible Assets | The estimated future amortization of definite-lived intangible assets is as follows: As of December 31, 2023 2024 $ 3,365 2025 3,020 2026 2,498 2027 2,297 2028 2,156 Thereafter 6,242 $ 19,578 |
Leases (Tables)
Leases (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Leases [Abstract] | |
Schedule of Lease Cost and Other Information | As of December 31, 2023 2022 2021 Lease cost Operating lease cost $ 685 $ 1,107 $ 1,693 Short-term lease cost — — 10 Total lease cost $ 685 $ 1,107 $ 1,703 Supplemental cash flow and other information Operating cash flows - cash paid for operating lease obligations $ 1,124 $ 1,441 $ 1,706 Non-cash activity - right-of-use assets obtained in exchange for lease obligations — — — Weighted-average remaining lease term (years) – operating leases 3.6 4.3 4.7 Weighted-average discount rate – operating leases 7.62 % 7.39 % 7.62 % |
Schedule of Future Minimum Lease Payments for Operating Leases | The following is a summary of the Company’s future minimum lease payments under operating leases for its premises due in future fiscal years: As of December 31, 2023 2024 $ 1,132 2025 1,006 2026 247 2027 95 2028 95 Thereafter 412 Total lease payments 2,987 Less: imputed interest (434) Present value of lease liabilities $ 2,553 |
Derivative Liabilities (Tables)
Derivative Liabilities (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Derivative Instruments and Hedging Activities Disclosure [Abstract] | |
Schedule of Reconciliation of Carrying Amounts | Reconciliations of the carrying amounts of the derivative liability are presented below: As of January 1, 2023 Loss (gain) on revaluation Foreign exchange effect As of December 31, 2023 Pre-emptive Rights — 100 2 102 Top-up Rights 15 (15) — — $ 15 $ 85 $ 2 $ 102 As of January 1, 2022 Gain on revaluation Foreign exchange effect As of December 31, 2022 Altria Warrant $ 13,720 $ (13,431) $ (289) $ — Pre-emptive Rights 180 (179) (1) — Top-up Rights 475 (450) (10) 15 $ 14,375 $ (14,060) $ (300) $ 15 |
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 December 31, 2023 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $2.77 $2.77 Subscription price (per share in C$) $16.25 $16.25 Weighted average risk-free interest rate (i) 3.99% 4.76% Weight average expected life (in years) (ii) 1.75 0.60 Expected annualized volatility (iii) 60% 58% Expected dividend yield —% —% As of December 31, 2022 Pre-emptive Rights Top-up Rights Share price at valuation date (per share in C$) $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% Weight 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 December 31, 2023 and December 31, 2022, the risk-free interest rate uses a range of approximately 3.99% to 4.82% 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 December 31, 2023 and December 31, 2022, the expected life uses a range of approximately 0.50 years to 1.75 years and 0.25 years to 2.75 years, respectively. (iii) Volatility was based on an equally weighted blended historical and implied volatility level of the underlying equity securities of the Company. |
Share-based Compensation (Table
Share-based Compensation (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Share-Based Payment Arrangement [Abstract] | |
Summary of Stock-based Compensation Expense | The following table summarizes the total share-based compensation associated with the Company’s stock options and RSUs: Year ended December 31, 2023 2022 2021 Stock options $ 1,175 $ 6,778 $ 7,604 RSUs 7,581 7,633 2,240 Liability-classified awards (i) — 597 — Total share-based compensation $ 8,756 $ 15,008 $ 9,844 (i) Represents share-based compensation awards conditionally approved for grant to one of the Company’s former executives for a fixed monetary value, but a variable number of shares. These awards were liability-classified until the number of shares was determined. |
Summary of the Changes in Options | The following is a summary of the changes in options: 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 7.75 (3,435,716) Balance as of December 31, 2023 $ 14.50 2,103,201 1.84 Exercisable as of December 31, 2023 $ 15.89 1,864,732 1.29 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 Issuance of options 4.20 113,947 Exercise of options 2.79 (2,735,985) Cancellation, forfeiture and expiry of options 5.74 (966,692) Balance as of December 31, 2022 $ 10.57 5,350,600 0.73 Exercisable as of December 31, 2022 $ 11.48 3,867,887 0.66 (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: Options outstanding as of December 31, 2023 2022 2021 2020 Omnibus Plan 702,264 2,788,947 2,900,000 2018 Stock Option Plan 1,400,937 1,422,069 1,550,074 2015 Stock Option Plan — 1,139,584 4,489,256 Total stock options outstanding 2,103,201 5,350,600 8,939,330 |
Fair Value of Options Issued | The fair value of the options issued during the year was determined using the Black-Scholes option pricing model, using the following inputs: 2023 2022 Share price at grant date (per share) C$2.96 C$4.20 Exercise price (per option) C$2.96 C$4.20 Risk-free interest rate (i) 3.22% 3.14% Expected life of options (in years) (i) 7 7 Expected annualized volatility (i) 73% 73% Expected dividend yield — — Weighted average Black-Scholes value at grant date (per option) C$2.07 C$2.94 Forfeiture rate — — (i) |
Summary of Restricted Share Units Activity | The following is a summary of the changes in RSUs: Weighted average grant date fair value (C$) (iii) Number of RSUs Balance as of January 1, 2023 $ 4.63 5,725,470 Granted (i) 2.64 3,292,586 Vested and issued 5.00 (1,041,097) Cancellation and forfeitures 3.60 (595,418) Balance as of December 31, 2023 $ 3.77 7,381,541 Weighted average grant date fair value (C$) (iii) Number of RSUs Balance as of January 1, 2022 $ 9.22 1,225,870 Granted (i)(ii) 4.27 6,140,492 Vested and issued 7.40 (1,151,292) Cancellation and forfeitures 5.08 (489,600) Balance as of December 31, 2022 $ 4.63 5,725,470 (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) Equity grants for 2020, 2021 and 2022 were held back for certain executives of the Company in connection with ongoing investigations by the SEC and the OSC, which were subsequently settled on October 24, 2022. On August 5, 2022, the Compensation Committee approved the release of these held-back equity grants conditioned upon settlement of the SEC and OSC investigations. These RSUs vest in equal installments over a period of three years from what would have been their original grant dates had the grants not been withheld. (iii) 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. |
Summary of Changes in Warrants and DSUs | The following is a summary of the changes in DSUs: Financial liability Number of DSUs Balance as of January 1, 2023 $ 674 265,732 Granting and vesting of DSUs 450 255,947 Gain on revaluation (32) — Balance as of December 31, 2023 $ 1,092 521,679 Financial liability Number of DSUs Balance as of January 1, 2022 $ 408 104,442 Granting and vesting of DSUs 443 161,290 Loss on revaluation (177) — Balance as of December 31, 2022 $ 674 265,732 |
Summary of Liability-Classified Awards | Financial liability Balance as of January 1, 2022 $ — Grants 597 Transfers to equity awards (597) Balance as of December 31, 2022 $ — |
Income Taxes (Tables)
Income Taxes (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Income Tax Disclosure [Abstract] | |
Schedule of Income (Loss) before Income Taxes | For financial reporting purposes, loss from continuing operations before income taxes includes the following components: Year ended December 31, 2023 2022 2021 Loss before income taxes $ (73,669) $ (121,003) $ (128,510) |
Schedule of Expense for Income Taxes | Income tax expense (benefit) consists of the following components: Year Ended December 31, 2023 2022 2021 Current $ (3,375) $ 34,416 $ (471) Deferred 145 (241) 40 Total $ (3,230) $ 34,175 $ (431) |
Schedule of Effective Income Tax Rate Reconciliation | Reconciliation of the expected income tax to the effective tax rate in continuing operations is as follows: Year ended December 31, 2023 2022 2021 Loss before income taxes $ (73,669) $ (121,003) $ $ (128,510) Effective income tax rate 26.5 % 26.5 % 26.5 % Expected income tax benefit $ (19,522) $ (32,066) $ (34,055) Non-taxable income (loss) 1,077 (2,140) 39 Non-deductible share-based compensation 525 1,198 1,667 Non-deductible expenses 459 836 53 Non-deductible transaction costs 351 1,625 2,917 Effect of provincial tax rate difference (9) (15) (1) Effect of tax rates outside of Canada 816 1,848 (1,869) Effect of change in tax rates 4,601 11,041 — Fair value gain (loss) on financial liabilities 23 (3,726) (40,111) Changes in valuation allowance 7,930 (10,466) 70,453 Capital gain on financial liabilities 106 66,193 — Other 413 (153) 476 Income tax expense (benefit), net $ (3,230) $ 34,175 $ (431) |
Schedule of Deferred Tax Assets and Liabilities | The following table summarizes the significant components of the Company’s deferred tax assets and liabilities: As of December 31, 2023 2022 Deferred assets: Tax loss carryforwards $ 111,516 $ 98,074 Interest expense carryforwards 2,688 2,533 Deferred financing costs — 1,311 Share issuance cost — 196 Finance lease obligation 519 690 Plant and equipment 36,697 37,662 Investment 19,745 13,359 Intangible asset 37,203 53,365 Inventory 556 1,287 Reserve 2,430 2,972 Unrealized foreign exchange 275 — R&D investment tax credits 567 293 Other 4,271 3,099 Total deferred tax assets 216,467 214,841 Less valuation allowance (216,241) (214,199) Net deferred tax assets 226 642 Deferred tax liabilities: Right-of-use assets (181) (365) Unrealized foreign exchange — (84) Total deferred tax liabilities (181) (449) Net deferred tax asset (liability) (i) $ 45 $ 193 (i) Net deferred tax asset (liability) is reported as Other assets within our consolidated balance sheet. |
Summary of Income Tax Examinations | Jurisdiction Open Years Canada 2019 – 2023 United States 2020 – 2023 Israel 2020 – 2023 |
Loss per Share (Tables)
Loss per Share (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Earnings Per Share [Abstract] | |
Schedule of Earnings (Loss) Per Share | Basic and diluted earnings (loss) per share from continued and discontinued operations are calculated as follows: Year ended December 31, 2023 2022 2021 Basic loss per share computation Net loss from continuing operations attributable to the shareholders of Cronos Group $ (69,849) $ (155,178) $ (126,982) Weighted-average number of common shares outstanding for computation for basic and diluted earnings per share (i) 380,964,739 376,961,797 370,390,965 Basic loss from continuing operations per share $ (0.18) $ (0.41) $ (0.34) Diluted loss per share from continuing operations $ (0.18) $ (0.41) $ (0.34) Loss from discontinued operations attributable to the shareholders of Cronos Group $ (4,114) $ (13,556) $ (269,125) Weighted-average number of common shares outstanding from computation for basic and diluted earnings per share (i) 380,964,739 376,961,797 370,390,965 Basic loss from discontinued operations per share $ (0.01) $ (0.04) $ (0.73) Diluted loss from discontinued operations per share $ (0.01) $ (0.04) $ (0.73) (i) In computing diluted earnings per share, incremental common shares are not considered in periods in which a net loss is reported, as the inclusion of the common share equivalents would be anti-dilutive. |
Financial Instruments (Tables)
Financial Instruments (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Risks and Uncertainties [Abstract] | |
Schedule of Fair Value of Assets on Recurring Basis | The following tables present information about the Company’s assets that are measured at fair value on a recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: As of December 31, 2023 Level 1 Level 2 Level 3 Total Cash and cash equivalents $ 669,291 $ — $ — $ 669,291 Short-term investments 192,237 — — 192,237 Other investments (i) 9,601 — — 9,601 Derivative liabilities — — 102 102 As of 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 December 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 4 “Investments” for additional information. |
Schedule of Fair Value of Assets on Nonrecurring Basis | The following tables present information about the Company’s assets that are measured at fair value on a non-recurring basis and indicates the fair value hierarchy of the valuation techniques the Company utilized to determine such fair value: As of December 31, 2023 Level 1 Level 2 Level 3 Total Other investments (i) — — 25,650 25,650 As of December 31, 2022 Level 1 Level 2 Level 3 Total Other investments (i) — — 49,000 49,000 (i) On June 14, 2021, the Company purchased an option to acquire 473,787 shares of Class A Common Stock of PharmaCann, a vertically integrated cannabis company in the United States, at an exercise price of $0.0001 per share, representing approximately 10.5% of PharmaCann’s issued and outstanding capital stock on a fully diluted basis as of the date of the PharmaCann Option, for an aggregate purchase price of approximately $110,392. On February 28, 2022, PharmaCann closed its previously announced transaction with LivWell pursuant to which PharmaCann acquired LivWell. As a result of the LivWell Transaction, the Company’s ownership percentage in PharmaCann on a fully diluted basis decreased to approximately 6.4%. As of December 31, 2023 and December 31, 2022, the Company’s ownership percentage in PharmaCann on a fully diluted basis was approximately 5.9% and 6.3%, respectively. See Note 4 “Investments”. |
Related Party Transactions (Tab
Related Party Transactions (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Related Party Transactions [Abstract] | |
Schedule of Related Party Transactions | The Company incurred the following expenses for consulting services from Altria Pinnacle LLC, a subsidiary of Altria (“Altria Pinnacle”): Year ended December 31, 2023 2022 2021 Altria Pinnacle – expense $ — $ — $ 436 The Company made the following purchases of cannabis products from Cronos GrowCo: Year ended December 31, 2023 2022 2021 Cronos GrowCo – purchases $ 21,335 $ 18,144 $ 4,820 |
Restructuring (Tables)
Restructuring (Tables) | 12 Months Ended |
Dec. 31, 2023 | |
Restructuring and Related Activities [Abstract] | |
Schedule of Plan Information and Restructuring-Related Costs | The following tables summarize the Company’s discontinued operations restructuring activity for the years ended December 31, 2023 and 2022: Accrual as of January 1, 2023 Expenses Payments/Write-offs Accrual as of December 31, 2023 Employee Termination Benefits $ — $ 431 $ (431) $ — Other Restructuring Costs — 92 (92) — Total $ — $ 523 $ (523) $ — Accrual as of January 1, 2022 Expenses Payments/Write-offs Accrual as of December 31, 2022 Employee Termination Benefits $ — $ 1,788 $ (1,788) $ — Total $ — $ 1,788 $ (1,788) $ — The following table summarizes the Company’s restructuring activity for the years ended December 31, 2023 and 2022: As of January 1, 2023 Expenses Payments/Write-offs As of December 31, 2023 Employee Termination Benefits $ 403 $ 1,371 $ (1,624) $ 150 Other Restructuring Costs 21 153 (174) — Total $ 424 $ 1,524 $ (1,798) $ 150 As of January 1, 2022 Expenses Payments/Write-offs As of December 31, 2022 Employee Termination Benefits $ — $ 1,883 $ (1,480) $ 403 Other Restructuring Costs — 1,662 (1,641) 21 Total $ — $ 3,545 $ (3,121) $ 424 |
Background, Basis of Presenta_4
Background, Basis of Presentation, and Summary of Significant Accounting Policies - Schedule of Consolidated Entities (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Cronos Israel G.S. Cultivations Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 70% |
Cronos Israel G.S. Manufacturing Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 90% |
Cronos Israel G.S. Store Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 90% |
Cronos Israel G.S. Pharmacy Ltd. | |
Subsidiary or Equity Method Investee [Line Items] | |
Ownership interest | 90% |
Background, Basis of Presenta_5
Background, Basis of Presentation, and Summary of Significant Accounting Policies - Schedule of Property, Plant & Equipment, Useful Lives (Details) | Dec. 31, 2023 |
Building and leasehold improvements | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant & equipment, useful life | 15 years |
Building and leasehold improvements | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant & equipment, useful life | 20 years |
Machinery and equipment | Minimum | |
Property, Plant and Equipment [Line Items] | |
Property, plant & equipment, useful life | 5 years |
Machinery and equipment | Maximum | |
Property, Plant and Equipment [Line Items] | |
Property, plant & equipment, useful life | 7 years |
Furniture and fixtures | |
Property, Plant and Equipment [Line Items] | |
Property, plant & equipment, useful life | 5 years |
Background, Basis of Presenta_6
Background, Basis of Presentation, and Summary of Significant Accounting Policies - Schedule of Intangible Assets Amortization Methods and Rates (Details) | Dec. 31, 2023 |
Software | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful life | 5 years |
Ginkgo exclusive licenses | |
Finite-Lived Intangible Assets [Line Items] | |
Intangible assets, useful life | 10 years |
Background, Basis of Presenta_7
Background, Basis of Presentation, and Summary of Significant Accounting Policies - Accrued Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Accounting Policies [Abstract] | ||
Accrued payroll and related expenses | $ 8,970 | $ 11,492 |
Accrued professional fees | 2,525 | 2,414 |
Accrued taxes | 11,695 | 4,132 |
Other accrued expenses | 4,546 | 4,230 |
Total accrued liabilities | $ 27,736 | $ 22,268 |
Background, Basis of Presenta_8
Background, Basis of Presentation, and Summary of Significant Accounting Policies - Narrative (Details) $ in Thousands | 3 Months Ended | 12 Months Ended | |||
Jun. 30, 2023 segment | Mar. 31, 2023 segment | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | |
Accounting Policies [Abstract] | |||||
Impairment Of Intangible Asset, Finite-Lived, Statement Of Income Or Comprehensive Income, Extensible Enumeration, Not Disclosed Flag | consolidated statements of net loss and comprehensive loss | ||||
Fair Value, Recurring Basis, Unobservable Input Reconciliation, Net Derivative Asset (Liability) Gain (Loss), Statement Of Income, Extensible List, Not Disclosed Flag | consolidated statements of net loss | ||||
Fair Value, Recurring Basis, Unobservable Input Reconciliation, Net Derivative, Asset (Liability) Gain (Loss), Statement Of Other Comprehensive Income, Extensible List, Not Disclosed Flag | comprehensive loss | ||||
Advertising costs | $ | $ 1,382 | $ 889 | $ 2,229 | ||
Number of reportable segments | 1 | 2 | |||
Number of operating segments | 1 |
Background, Basis of Presenta_9
Background, Basis of Presentation, and Summary of Significant Accounting Policies - Revenue Recognition (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Segment Reporting Information [Line Items] | |||
Revenue | $ 87,241 | $ 86,749 | $ 64,561 |
Canada | |||
Segment Reporting Information [Line Items] | |||
Revenue | 64,702 | 56,233 | 50,294 |
Israel | |||
Segment Reporting Information [Line Items] | |||
Revenue | 21,134 | 30,516 | 13,376 |
Other countries | |||
Segment Reporting Information [Line Items] | |||
Revenue | 1,405 | 0 | 891 |
Cannabis flower | |||
Segment Reporting Information [Line Items] | |||
Revenue | 62,070 | 63,593 | 55,194 |
Cannabis extracts | |||
Segment Reporting Information [Line Items] | |||
Revenue | 24,569 | 22,522 | 8,807 |
Other | |||
Segment Reporting Information [Line Items] | |||
Revenue | $ 602 | $ 634 | $ 560 |
Discontinued Operations - Major
Discontinued Operations - Major Components Comprising Loss from Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Operating expenses | |||
Net loss from discontinued operations | $ (4,114) | $ (13,556) | $ (269,125) |
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net revenue | 1,029 | 5,155 | 9,874 |
Cost of sales | 2,164 | 8,622 | 9,850 |
Inventory write-down | 839 | 0 | 0 |
Gross profit | (1,974) | (3,467) | 24 |
Operating expenses | |||
Sales and marketing | 578 | 4,236 | 24,020 |
Research and development | 32 | 250 | 1,490 |
General and administrative | 668 | 3,504 | 6,133 |
Restructuring costs | 523 | 1,788 | 0 |
Share-based compensation | 13 | 107 | 307 |
Depreciation and amortization | 13 | 58 | 71 |
Impairment loss on goodwill and indefinite-lived intangible assets | 0 | 0 | 236,019 |
Impairment loss on long-lived assets | 205 | 0 | 1,214 |
Total operating expenses | 2,032 | 9,943 | 269,254 |
Interest income | 10 | 23 | 4 |
Other, net | (118) | (169) | 101 |
Total other loss | (108) | (146) | 105 |
Loss before income taxes | (4,114) | (13,556) | (269,125) |
Income tax expense (benefit) | 0 | 0 | 0 |
Net loss from discontinued operations | (4,114) | $ (13,556) | (269,125) |
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | United States | |||
Operating expenses | |||
Goodwill impairment | 178,414 | ||
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | United States | Lord Jones brand | |||
Operating expenses | |||
Intangible asset impairment | $ 57,500 | ||
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | Facility in Los Angeles, California | |||
Operating expenses | |||
Impairment loss on long-lived assets | $ 205 |
Discontinued Operations - Reven
Discontinued Operations - Revenue by Major Product Category (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net revenue | $ 1,029 | $ 5,155 | $ 9,874 |
Cannabis extracts | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Net revenue | $ 1,029 | $ 5,155 | $ 9,874 |
Discontinued Operations - Restr
Discontinued Operations - Restructuring Activity (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, Beginning Balance | $ 0 | $ 0 | |
Expenses | 523 | 1,788 | $ 0 |
Payments/Write-offs | (523) | (1,788) | |
Restructuring Reserve, Ending Balance | 0 | 0 | 0 |
Employee Termination Benefits | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, Beginning Balance | 0 | 0 | |
Expenses | 431 | 1,788 | |
Payments/Write-offs | (431) | (1,788) | |
Restructuring Reserve, Ending Balance | 0 | 0 | $ 0 |
Other Restructuring Costs | |||
Restructuring Reserve [Roll Forward] | |||
Restructuring Reserve, Beginning Balance | 0 | ||
Expenses | 92 | ||
Payments/Write-offs | (92) | ||
Restructuring Reserve, Ending Balance | $ 0 | $ 0 |
Discontinued Operations - Recon
Discontinued Operations - Reconciliation of Assets and Liabilities of Discontinued Operations (Details) - Discontinued Operations, Disposed of by Means Other than Sale, Abandonment - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Current assets | ||
Cash and cash equivalents | $ 0 | $ 2,300 |
Accounts receivable, net | 0 | 253 |
Other receivables | 0 | 775 |
Prepaids and other current assets | 0 | 464 |
Inventory, net | 0 | 934 |
Current assets of discontinued operations | 0 | 4,726 |
Non-current assets | ||
Property, plant and equipment, net | 0 | 254 |
Right-of-use assets | 0 | 430 |
Intangible assets, net | 0 | 1,594 |
Non-current assets of discontinued operations | 0 | 2,278 |
Current liabilities | ||
Accounts payable | 0 | 166 |
Accrued liabilities | 0 | 807 |
Current portion of lease obligation | 0 | 415 |
Current liabilities of discontinued operations | $ 0 | $ 1,388 |
Discontinued Operations - Narra
Discontinued Operations - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Purchase of property, plant and equipment | $ 2,505 | $ 3,451 | $ 11,144 |
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | |||
Income Statement, Balance Sheet and Additional Disclosures by Disposal Groups, Including Discontinued Operations [Line Items] | |||
Purchase of property, plant and equipment | 67 | 183 | 971 |
Depreciation expense on right-of-use assets | 198 | 865 | 548 |
Restructuring costs | $ 523 | $ 1,788 | $ 0 |
Discontinued Operations - Lease
Discontinued Operations - Lease Information Associated with Discontinued Operations (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lease cost | |||
Operating lease cost | $ 685 | $ 1,107 | $ 1,693 |
Short-term lease cost | 0 | 0 | 10 |
Total lease cost | 685 | 1,107 | 1,703 |
Supplemental cash flow and other information | |||
Operating cash flows - cash paid for operating lease obligations | 1,124 | 1,441 | 1,706 |
Non-cash activity - right-of-use assets obtained in exchange for lease obligations | $ 0 | $ 0 | $ 0 |
Weighted-average remaining lease term (years) – operating leases | 3 years 7 months 6 days | 4 years 3 months 18 days | 4 years 8 months 12 days |
Weighted-average discount rate – operating leases | 7.62% | 7.39% | 7.62% |
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | |||
Lease cost | |||
Operating lease cost | $ 213 | $ 1,102 | $ 837 |
Short-term lease cost | 0 | 0 | 0 |
Total lease cost | 213 | 1,102 | 837 |
Supplemental cash flow and other information | |||
Operating cash flows - cash paid for operating lease obligations | 525 | 1,050 | 752 |
Non-cash activity - right-of-use assets obtained in exchange for lease obligations | $ 0 | $ 443 | $ 3,277 |
Weighted-average remaining lease term (years) – operating leases | 0 years | 1 year | 3 years 9 months 18 days |
Weighted-average discount rate – operating leases | 0% | 5.62% | 7.65% |
Inventory, net (Details)
Inventory, net (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Inventory Disclosure [Abstract] | ||
Raw materials | $ 4,795 | $ 7,421 |
Work-in-progress | 10,593 | 15,646 |
Finished goods | 14,819 | 13,503 |
Supplies and consumables | 288 | 989 |
Total | $ 30,495 | $ 37,559 |
Investments - Narrative (Detail
Investments - Narrative (Details) $ / shares in Units, ₪ in Thousands, $ in Thousands | 3 Months Ended | 12 Months Ended | |||||||||||||
Jun. 14, 2021 USD ($) $ / shares shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Sep. 30, 2022 USD ($) | Mar. 31, 2022 USD ($) | Sep. 30, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 ILS (₪) | Feb. 28, 2022 | Dec. 16, 2021 seat | Dec. 15, 2021 seat | Oct. 12, 2021 | Sep. 14, 2021 AUD ($) | |
Variable Interest Entity [Line Items] | |||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||||
Percentage of ownership after transaction | 10.50% | ||||||||||||||
Payments to acquire other investments | $ 110,392,000 | ||||||||||||||
Impairment charges | $ 23,350,000 | $ 61,392,000 | $ 0 | ||||||||||||
Gain (loss) on revaluation of financial instruments | (12,042,000) | 14,739,000 | $ 8,611,000 | ||||||||||||
Other investments | $ 35,251,000 | $ 70,993,000 | $ 35,251,000 | $ 70,993,000 | |||||||||||
Pharmacann | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Ownership interest | 5.90% | 6.30% | 5.90% | 6.30% | 5.90% | 6.40% | |||||||||
Pharmacann | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Sale of stock, number of shares issued in transaction (in shares) | shares | 473,787 | ||||||||||||||
Cronos GrowCo | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Ownership interest | 50% | 50% | 50% | 50% | 50% | ||||||||||
Cronos GrowCo | Variable Interest Entity, Not Primary Beneficiary | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Impairment loss | $ 0 | ||||||||||||||
Cannasoul Analytics Ltd. | Variable Interest Entity, Not Primary Beneficiary | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Collaborative arrangement, percentage of profits to be received | 70% | 70% | 70% | ||||||||||||
Collaborative arrangement, profits to be received, maximum percentage of amounts advanced | 150% | 150% | 150% | ||||||||||||
Collaborative arrangement, percentage of profits to be received, triggering event, subsequent to maximum percentage of amounts advanced being met | 50% | 50% | 50% | ||||||||||||
Cannasoul Analytics Ltd. | Variable Interest Entity, Not Primary Beneficiary | Collaborative Arrangement, Transaction with Party to Collaborative Arrangement | Cannasoul Collaboration Loan | Loans Receivable | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Collaboration agreement, amount of advances | $ 2,664,000 | $ 2,664,000 | ₪ 8,297 | ||||||||||||
Collaborative arrangement, term of agreement | 2 years | ||||||||||||||
Interest rate | 3.50% | 3.50% | 3.50% | ||||||||||||
Pharmacann | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Impairment charges | $ 23,350,000 | $ 21,182,000 | $ 28,972,000 | $ 11,238,000 | $ 23,350,000 | $ 61,392,000 | |||||||||
Pharmacann | LivWell Holdings, Inc. | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Merger agreement, threshold ownership percentage | 6% | ||||||||||||||
Vitura | |||||||||||||||
Variable Interest Entity [Line Items] | |||||||||||||||
Impairment charges | 0 | 0 | |||||||||||||
Unsecured loan | $ 1,500 | ||||||||||||||
Ownership interest | 10% | 31% | |||||||||||||
Number of seats on board of directors | seat | 0 | 2 | |||||||||||||
Gain (loss) on revaluation of financial instruments | (12,096,000) | 14,739,000 | |||||||||||||
Other investments | $ 9,601,000 | $ 21,993,000 | $ 9,601,000 | $ 21,993,000 |
Investments - Schedule of Inves
Investments - Schedule of Investments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 16, 2021 | Dec. 15, 2021 | |
Schedule of Equity Method Investments [Line Items] | |||||
Equity method investments, net | $ 19,488 | $ 18,755 | |||
Share of income (loss) from equity method investments | 1,583 | 3,114 | $ (6,313) | ||
Equity Method Investment, Summarized Financial Information [Abstract] | |||||
Current assets | 933,306 | 960,156 | |||
Current liabilities | 41,399 | 68,116 | |||
Income Statement [Abstract] | |||||
Revenue | 87,241 | 86,749 | 64,561 | ||
Gross profit | 11,909 | 15,436 | (17,593) | ||
Net income (loss) | (74,553) | (168,734) | (397,204) | ||
Equity Method Investments | |||||
Equity Method Investment, Summarized Financial Information [Abstract] | |||||
Current assets | 19,600 | 21,158 | 5,660 | ||
Non-current assets | 99,227 | 104,227 | 125,777 | ||
Current liabilities | 9,707 | 5,593 | 13,457 | ||
Non-current liabilities | 64,814 | 73,779 | 81,594 | ||
Income Statement [Abstract] | |||||
Revenue | 40,604 | 39,110 | 8,186 | ||
Gross profit | 21,565 | 24,379 | (5,059) | ||
Net income (loss) | $ 3,051 | $ 6,569 | (12,603) | ||
Vitura | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest | 10% | 31% | |||
Share of income (loss) from equity method investments | (48) | ||||
Ownership interest | 9.60% | 9.90% | |||
Cronos GrowCo | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Ownership interest | 50% | 50% | |||
Equity method investments, net | $ 19,488 | $ 18,755 | |||
Share of income (loss) from equity method investments | $ 1,583 | $ 3,114 | (2,518) | ||
Natuera | |||||
Schedule of Equity Method Investments [Line Items] | |||||
Share of income (loss) from equity method investments | $ (3,747) |
Investments - Schedule of Varia
Investments - Schedule of Variable Interest Entities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Variable Interest Entity [Line Items] | ||
Other Net Assets (Liabilities) | $ 44,306 | $ 46,013 |
Maximum Exposure to Loss | $ 19,488 | $ 18,755 |
Cronos GrowCo | ||
Variable Interest Entity [Line Items] | ||
Ownership interest | 50% | 50% |
Cronos GrowCo | Variable Interest Entity, Not Primary Beneficiary | ||
Variable Interest Entity [Line Items] | ||
Other Net Assets (Liabilities) | $ 44,306 | $ 46,013 |
Maximum Exposure to Loss | $ 19,488 | $ 18,755 |
Investments - Revaluation of Ot
Investments - Revaluation of Other Investments (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | |||||
Dec. 31, 2023 | Dec. 31, 2022 | Sep. 30, 2022 | Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Other Investments [Roll Forward] | |||||||
Other Investments, beginning balance | $ 118,392 | $ 70,993 | $ 118,392 | ||||
Unrealized gain (loss) | (12,096) | 14,739 | |||||
Impairment charges | (23,350) | (61,392) | $ 0 | ||||
Foreign exchange effect | (296) | (746) | |||||
Other Investments, ending balance | $ 35,251 | $ 70,993 | 35,251 | 70,993 | 118,392 | ||
Pharmacann | |||||||
Other Investments [Roll Forward] | |||||||
Other Investments, beginning balance | 110,392 | 49,000 | 110,392 | ||||
Unrealized gain (loss) | 0 | 0 | |||||
Impairment charges | (23,350) | (21,182) | $ (28,972) | (11,238) | (23,350) | (61,392) | |
Foreign exchange effect | 0 | 0 | |||||
Other Investments, ending balance | 25,650 | 49,000 | 25,650 | 49,000 | 110,392 | ||
Vitura | |||||||
Other Investments [Roll Forward] | |||||||
Other Investments, beginning balance | $ 8,000 | 21,993 | 8,000 | ||||
Unrealized gain (loss) | (12,096) | 14,739 | |||||
Impairment charges | 0 | 0 | |||||
Foreign exchange effect | (296) | (746) | |||||
Other Investments, ending balance | $ 9,601 | $ 21,993 | $ 9,601 | $ 21,993 | $ 8,000 |
Loans Receivable, net - Schedul
Loans Receivable, net - Schedule of Loan Receivable (Details) ₪ in Thousands | 12 Months Ended | 52 Months Ended | ||||||||||||
Dec. 31, 2023 USD ($) | Dec. 31, 2023 CAD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2022 CAD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2023 USD ($) | Dec. 31, 2023 CAD ($) | Dec. 31, 2023 ILS (₪) | Dec. 31, 2022 ILS (₪) | Sep. 30, 2022 | Aug. 31, 2021 CAD ($) | 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 | $ 5,541,000 | $ 8,890,000 | $ 5,541,000 | |||||||||||
Total long-term portion of loans receivable | 69,036,000 | 72,345,000 | 69,036,000 | |||||||||||
Increase in the allowance | (1,528,000) | (662,000) | ||||||||||||
Loans Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Add: Accrued interest | 507,000 | 4,463,000 | 507,000 | |||||||||||
Total current portion of loans receivable | 5,541,000 | 8,890,000 | 5,541,000 | |||||||||||
Add: Long-term portion of accrued interest | 248,000 | 172,000 | 248,000 | |||||||||||
Total long-term portion of loans receivable | 69,036,000 | 72,345,000 | 69,036,000 | |||||||||||
Total loans receivable | 74,577,000 | 81,235,000 | 74,577,000 | |||||||||||
GrowCo Credit Facility | Loans Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Current portion of loans receivable, before accrued interest | 5,034,000 | 4,427,000 | 5,034,000 | |||||||||||
Long term portion of loans receivable, before accrued interest | 53,638,000 | 56,898,000 | 53,638,000 | |||||||||||
Face amount | $ 105,000,000 | $ 100,000,000 | ||||||||||||
Increase in the allowance | (1,542,000) | (827,000) | $ (12,748,000) | |||||||||||
Draw downs | 78,532,000 | $ 104,000,000 | 76,730,000 | $ 104,000,000 | ||||||||||
Proceeds from loans receivable | 5,612,000 | 7,500,000 | 3,073,000 | 4,000,000 | 8,685,000 | $ 11,500,000 | ||||||||
Interest received | 10,287,000 | 13,462,000 | 5,209,000 | $ 7,060,000 | 15,496,000 | $ 20,522,000 | ||||||||
Mucci Promissory Note | Loans Receivable | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Long term portion of loans receivable, before accrued interest | 13,379,000 | 13,438,000 | 13,379,000 | |||||||||||
Face amount | $ 12,063,000 | $ 16,350,000 | ||||||||||||
Increase in the allowance | (2,000) | 4,000 | ||||||||||||
Interest received | 897,000 | 1,187,000 | ||||||||||||
Stated interest rate | 3.95% | 3.95% | ||||||||||||
Proceeds from repayment on loan outstanding principal | 425,000 | $ 563,000 | ||||||||||||
Mucci Promissory Note | Loans Receivable | Canadian Prime Rate | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Loans receivable, basis spread on variable 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 | 1,771,000 | 1,837,000 | 1,771,000 | |||||||||||
Increase in the allowance | 16,000 | 161,000 | ||||||||||||
Cannasoul Collaboration Loan | Loans Receivable | Establishment of a Commercial Cannabis Analytical Testing Laboratoy | Cannasoul Analytics Ltd. | Variable Interest Entity, Not Primary Beneficiary | ||||||||||||||
Accounts, Notes, Loans and Financing Receivable [Line Items] | ||||||||||||||
Collaborative arrangement, installment received | $ 2,294,000 | $ 2,359,000 | $ 2,294,000 | ₪ 8,297 | ₪ 8,297 |
Loans Receivable, net - Sched_2
Loans Receivable, net - Schedule of Expected Credit Loss Allowances (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | $ 13,066 | $ 14,594 | |
Increase (decrease) | (1,528) | (662) | |
Foreign exchange effect | 251 | (866) | |
Ending balance | 11,789 | 13,066 | $ 14,594 |
Financing receivable, credit loss, expense, including transferred into investment | (1,528) | (662) | |
GrowCo Credit Facility | Loans Receivable | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | 12,455 | 14,089 | |
Increase (decrease) | (1,542) | (827) | (12,748) |
Foreign exchange effect | 263 | (807) | |
Ending balance | 11,176 | 12,455 | 14,089 |
Mucci Promissory Note | Loans Receivable | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | 89 | 90 | |
Increase (decrease) | (2) | 4 | |
Foreign exchange effect | 2 | (5) | |
Ending balance | 89 | 89 | 90 |
Cannasoul Collaboration Loan | Loans Receivable | |||
Allowance for Loan and Lease Losses [Roll Forward] | |||
Beginning balance | 522 | 415 | |
Increase (decrease) | 16 | 161 | |
Foreign exchange effect | (14) | (54) | |
Ending balance | $ 524 | $ 522 | $ 415 |
Property, Plant and Equipment_3
Property, Plant and Equipment, net - Schedule of Property, Plant & Equipment (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Property, Plant and Equipment [Line Items] | ||
Less: accumulated depreciation | $ (30,707) | $ (35,347) |
Less: accumulated impairment charges | (109,063) | (109,063) |
Property, plant and equipment, net | 59,468 | 60,557 |
Land | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 2,764 | 2,556 |
Building and leasehold improvements | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 168,498 | 177,095 |
Machinery and equipment | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 21,322 | 19,130 |
Furniture and fixtures | ||
Property, Plant and Equipment [Line Items] | ||
Cost | 3,385 | 5,345 |
Construction in progress | ||
Property, Plant and Equipment [Line Items] | ||
Cost | $ 3,269 | $ 841 |
Property, Plant and Equipment_4
Property, Plant and Equipment, net - Narrative (Details) - USD ($) $ in Thousands | 3 Months Ended | 12 Months Ended | ||
Mar. 31, 2022 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Property, Plant and Equipment [Line Items] | ||||
Aggregate depreciation expense | $ 3,913 | $ 8,667 | $ 11,668 | |
Impairment loss on long-lived assets | $ 3,366 | $ 3,493 | 126,405 | |
Leasehold Improvements | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment loss on long-lived assets | $ 1,507 | |||
Facility in Stayner, Ontario, Canada | ||||
Property, Plant and Equipment [Line Items] | ||||
Impairment loss on long-lived assets | $ 113,917 |
Goodwill and Intangible Asset_3
Goodwill and Intangible Assets, net - Schedule of Goodwill (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Goodwill [Line Items] | ||
Cost | $ 1,057 | $ 1,033 |
Accumulated impairment charges | 0 | 0 |
Net | 1,057 | 1,033 |
Peace Naturals | ||
Goodwill [Line Items] | ||
Cost | 1,057 | 1,033 |
Accumulated impairment charges | 0 | 0 |
Net | $ 1,057 | $ 1,033 |
Goodwill and Intangible Asset_4
Goodwill and Intangible Assets, net - Schedule of Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 |
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | $ 43,933 | $ 42,274 | ||
Accumulated amortization | (9,659) | (6,062) | ||
Accumulated impairment charges | (14,696) | (11,008) | ||
Net | 19,578 | 25,204 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Cost | 108,075 | 106,416 | ||
Accumulated amortization | (9,659) | (6,062) | ||
Accumulated impairment charges | (77,338) | (73,650) | $ (74,308) | $ (6,053) |
Total intangible assets | 21,078 | 26,704 | ||
Lord Jones brand | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Cost | 64,000 | 64,000 | ||
Accumulated impairment charges | (62,500) | (62,500) | (62,500) | (5,000) |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Total | 1,500 | 1,500 | ||
Trademarks | ||||
Indefinite-lived Intangible Assets [Line Items] | ||||
Cost | 142 | 142 | ||
Accumulated impairment charges | (142) | (142) | (142) | 0 |
Indefinite-Lived Intangible Assets (Excluding Goodwill), Total | 0 | 0 | ||
Software | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 6,860 | 6,037 | ||
Accumulated amortization | (3,508) | (2,388) | ||
Accumulated impairment charges | (78) | (76) | (4) | 0 |
Net | 3,274 | 3,573 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Accumulated amortization | (3,508) | (2,388) | ||
Health Canada licenses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 8,463 | 8,269 | ||
Accumulated amortization | (1,813) | (1,771) | ||
Accumulated impairment charges | (6,650) | (6,498) | (6,910) | (1,053) |
Net | 0 | 0 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Accumulated amortization | (1,813) | (1,771) | ||
Ginkgo exclusive licenses | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 28,326 | 27,676 | ||
Accumulated amortization | (4,276) | (1,854) | ||
Accumulated impairment charges | (7,968) | (4,434) | $ (4,752) | $ 0 |
Net | 16,082 | 21,388 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Accumulated amortization | (4,276) | (1,854) | ||
Israeli codes | ||||
Finite-Lived Intangible Assets [Line Items] | ||||
Cost | 284 | 292 | ||
Accumulated amortization | (62) | (49) | ||
Net | 222 | 243 | ||
Intangible Assets, Net (Excluding Goodwill) [Abstract] | ||||
Accumulated amortization | $ (62) | $ (49) |
Goodwill and Intangible Asset_5
Goodwill and Intangible Assets, net - Narrative (Details) $ / shares in Units, $ / shares in Units, $ in Thousands | 1 Months Ended | 12 Months Ended | |||||||||||||||
Nov. 12, 2021 USD ($) shares | Nov. 12, 2021 CAD ($) shares | Aug. 21, 2021 USD ($) shares | Aug. 21, 2021 CAD ($) shares | Dec. 31, 2022 USD ($) shares | Dec. 31, 2022 CAD ($) shares | Nov. 30, 2022 USD ($) shares | Nov. 30, 2022 CAD ($) $ / shares shares | Jun. 30, 2022 USD ($) shares | Jun. 30, 2022 CAD ($) $ / shares shares | Dec. 31, 2023 USD ($) | Dec. 31, 2022 USD ($) | Dec. 31, 2021 USD ($) | Dec. 31, 2022 $ / shares | Nov. 12, 2021 $ / shares | Aug. 21, 2021 $ / shares | Jun. 14, 2021 $ / shares | |
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 0.0001 | ||||||||||||||||
Purchase of intangible assets | $ 918,000 | $ 1,581,000 | $ 1,118,000 | ||||||||||||||
Finite-lived intangible assets, net | $ 25,204,000 | 19,578,000 | 25,204,000 | ||||||||||||||
Amortization of intangible assets | 3,514,000 | 2,751,000 | 1,800,000 | ||||||||||||||
CBGA Licensing Agreement | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 7.90 | ||||||||||||||||
Consideration given | $ 9,042,000 | $ 11,593 | |||||||||||||||
Fair value | $ 7,300,000 | ||||||||||||||||
Useful life (in years) | 10 years | ||||||||||||||||
Period decrease | 1,784,000 | ||||||||||||||||
CBGA Licensing Agreement | Common Shares | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Shares issued (in shares) | shares | 1,467,490 | 1,467,490 | |||||||||||||||
CBGVA Licensing Agreement | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 7.12 | ||||||||||||||||
Consideration given | $ 8,150,000 | $ 10,449 | |||||||||||||||
Fair value | $ 5,300,000 | ||||||||||||||||
Useful life (in years) | 10 years | ||||||||||||||||
Period decrease | 3,008,000 | ||||||||||||||||
CBGVA Licensing Agreement | Common Shares | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Shares issued (in shares) | shares | 1,467,490 | 1,467,490 | |||||||||||||||
Ginkgo exclusive licenses | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 3.47 | ||||||||||||||||
Consideration given | $ 6,522,000 | $ 8,412 | |||||||||||||||
Useful life (in years) | 10 years | ||||||||||||||||
Purchase of intangible assets | $ 600,000 | ||||||||||||||||
Impairment charges | 3,366,000 | 0 | $ 4,792,000 | ||||||||||||||
Finite-lived intangible assets, net | 21,388,000 | 16,082,000 | $ 21,388,000 | ||||||||||||||
Ginkgo exclusive licenses | Common Shares | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Shares issued (in shares) | shares | 2,201,236 | 2,201,236 | |||||||||||||||
CBCA Licensing Agreement | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Consideration given | $ 1,473,000 | $ 2,010 | |||||||||||||||
Useful life (in years) | 10 years | ||||||||||||||||
CBCA Licensing Agreement | Common Shares | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Shares issued (in shares) | shares | 489,163 | 489,163 | |||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 4.11 | ||||||||||||||||
CBCVA Licensing Agreement | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Consideration given | $ 3,724,000 | $ 5,048 | |||||||||||||||
Impairment charges | 3,366,000 | ||||||||||||||||
Finite-lived intangible assets, net | $ 0 | ||||||||||||||||
CBCVA Licensing Agreement | Common Shares | |||||||||||||||||
Finite-Lived Intangible Assets [Line Items] | |||||||||||||||||
Shares issued (in shares) | shares | 1,467,490 | 1,467,490 | |||||||||||||||
Sale of stock, price per share (in dollars per share) | $ / shares | $ 3.44 |
Goodwill and Intangible Asset_6
Goodwill and Intangible Assets, net - Schedule of Estimated Future Amortization of Definite-Lived Intangible Assets (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Finite-Lived Intangible Assets, Net, Amortization Expense, Fiscal Year Maturity [Abstract] | ||
2024 | $ 3,365 | |
2025 | 3,020 | |
2026 | 2,498 | |
2027 | 2,297 | |
2028 | 2,156 | |
Thereafter | 6,242 | |
Net | $ 19,578 | $ 25,204 |
Goodwill and Intangible Asset_7
Goodwill and Intangible Assets, net - Impairment Charges on Intangible Assets, Net (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | $ (11,008) | ||
Ending balance | (14,696) | $ (11,008) | |
Indefinite-Lived Intangible Assets [Roll Forward] | |||
Beginning balance | (73,650) | (74,308) | $ (6,053) |
Impairment charges | (3,366) | (76) | (68,389) |
Foreign exchange effect | (322) | 734 | 134 |
Ending balance | (77,338) | (73,650) | (74,308) |
Lord Jones brand | |||
Indefinite-Lived Intangible Assets [Roll Forward] | |||
Beginning balance | (62,500) | (62,500) | (5,000) |
Impairment charges | 0 | 0 | (57,500) |
Ending balance | (62,500) | (62,500) | (62,500) |
Trademarks | |||
Indefinite-Lived Intangible Assets [Roll Forward] | |||
Beginning balance | (142) | (142) | 0 |
Impairment charges | 0 | 0 | (142) |
Ending balance | (142) | (142) | (142) |
Software | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | (76) | (4) | 0 |
Impairment charges | 0 | 76 | 4 |
Foreign exchange effect | (2) | 4 | 0 |
Ending balance | (78) | (76) | (4) |
Health Canada licenses | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | (6,498) | (6,910) | (1,053) |
Impairment charges | 0 | 0 | 5,951 |
Foreign exchange effect | (152) | 412 | 94 |
Ending balance | (6,650) | (6,498) | (6,910) |
Ginkgo exclusive licenses | |||
Finite-lived Intangible Assets [Roll Forward] | |||
Beginning balance | (4,434) | (4,752) | 0 |
Impairment charges | 3,366 | 0 | 4,792 |
Foreign exchange effect | (168) | 318 | 40 |
Ending balance | $ (7,968) | $ (4,434) | $ (4,752) |
Leases - Narrative (Details)
Leases - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lessee, Lease, Description [Line Items] | |||
Operating lease, extension term | 10 years | ||
Operating lease, impairment loss | $ 1,986 | ||
General and Administrative Expense | |||
Lessee, Lease, Description [Line Items] | |||
Depreciation expense on right-of-use assets | $ 455 | $ 839 | $ 1,386 |
Land | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, term | 15 years | ||
Minimum | Office Premises and Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, term | 3 years | ||
Maximum | Office Premises and Equipment | |||
Lessee, Lease, Description [Line Items] | |||
Operating lease, term | 6 years |
Leases - Schedule of Lease Cost
Leases - Schedule of Lease Cost and Other Information (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Lease cost | |||
Operating lease cost | $ 685 | $ 1,107 | $ 1,693 |
Short-term lease cost | 0 | 0 | 10 |
Total lease cost | 685 | 1,107 | 1,703 |
Supplemental cash flow and other information | |||
Operating cash flows - cash paid for operating lease obligations | 1,124 | 1,441 | 1,706 |
Non-cash activity - right-of-use assets obtained in exchange for lease obligations | $ 0 | $ 0 | $ 0 |
Weighted-average remaining lease term (years) – operating leases | 3 years 7 months 6 days | 4 years 3 months 18 days | 4 years 8 months 12 days |
Weighted-average discount rate – operating leases | 7.62% | 7.39% | 7.62% |
Leases - Schedule of Future Min
Leases - Schedule of Future Minimum Lease Payments for Operating Leases (Details) $ in Thousands | Dec. 31, 2023 USD ($) |
Leases [Abstract] | |
2024 | $ 1,132 |
2025 | 1,006 |
2026 | 247 |
2027 | 95 |
2028 | 95 |
Thereafter | 412 |
Total lease payments | 2,987 |
Less: imputed interest | (434) |
Present value of lease liabilities | $ 2,553 |
Derivative Liabilities - Narrat
Derivative Liabilities - Narrative (Details) $ in Thousands | Mar. 08, 2019 warrant $ / shares shares | Dec. 31, 2023 shares | Dec. 31, 2022 USD ($) |
Altria Group, Inc. | Cronos Group, Inc. | |||
Derivative [Line Items] | |||
Ownership interest | 45% | 41.10% | |
Balance held (in shares) | shares | 156,573,537 | ||
Altria Investment | |||
Derivative [Line Items] | |||
Shares issued (in shares) | shares | 149,831,154 | ||
Altria Warrant | |||
Derivative [Line Items] | |||
Number of warrants issued | warrant | 1 | ||
Derivative liability | $ | $ 0 | ||
Pre-emptive Rights | |||
Derivative [Line Items] | |||
Exercise price (in dollars per share) | $ / shares | $ 16.25 | ||
Exercise rights, minimum ownership percentage | 20% | ||
Top-up Rights | |||
Derivative [Line Items] | |||
Exercise price (in dollars per share) | $ / shares | $ 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 | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Derivative Instruments [Roll Forward] | ||
Beginning balance | $ 15 | $ 14,375 |
Loss (gain) on revaluation | 85 | (14,060) |
Foreign exchange effect | 2 | (300) |
Ending balance | 102 | 15 |
Altria Warrant | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 0 | 13,720 |
Loss (gain) on revaluation | (13,431) | |
Foreign exchange effect | (289) | |
Ending balance | 0 | |
Pre-emptive Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 0 | 180 |
Loss (gain) on revaluation | 100 | (179) |
Foreign exchange effect | 2 | (1) |
Ending balance | 102 | 0 |
Top-up Rights | ||
Derivative Instruments [Roll Forward] | ||
Beginning balance | 15 | 475 |
Loss (gain) on revaluation | (15) | (450) |
Foreign exchange effect | 0 | (10) |
Ending balance | $ 0 | $ 15 |
Derivative Liabilities - Sche_2
Derivative Liabilities - Schedule of Fair Values of Derivative Liabilities (Details) | 12 Months Ended | |
Dec. 31, 2023 $ / shares | Dec. 31, 2022 $ / shares | |
Pre-emptive Rights | Share price at valuation date (in canadian dollars per share) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 2.77 | 3.44 |
Pre-emptive Rights | Subscription price (in canadian dollars per share) | ||
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 | 0.0399 | 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 (in canadian dollars per share) | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Derivative liability, measurement input | 2.77 | 3.44 |
Top-up Rights | Subscription price (in canadian dollars per share) | ||
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 | 0.58 | 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 | 0.0476 | 0.0428 |
Top-up Rights | Weighted Average | Weight average expected life | ||
Fair Value Measurement Inputs and Valuation Techniques [Line Items] | ||
Expected life | 7 months 6 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 | 0.0399 | 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 | 6 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 | 0.0482 | 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 | 1 year 9 months | 2 years 9 months |
Commitments and Contingencies -
Commitments and Contingencies - R&D Commitments (Details) - USD ($) $ in Thousands | 12 Months Ended | ||||||
Feb. 18, 2019 | Sep. 04, 2018 | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Dec. 31, 2020 | Jul. 17, 2018 | |
Common Shares | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Share issuance pursuant to research and development milestone (in shares) | 4,157,888 | 2,934,980 | |||||
Ginkgo | Common Shares | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Share issuance pursuant to research and development milestone (in shares) | 4,157,888 | 2,934,980 | 0 | ||||
Ginkgo | Research and Development Arrangement | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Common shares issuable (up to) (in shares) | 14,674,903 | ||||||
Common shares issuable, value assigned | $ 100,000 | ||||||
Payments subject to milestones | $ 22,000 | ||||||
Altria Ventures | Consulting Services Arrangement | |||||||
Long-term Purchase Commitment [Line Items] | |||||||
Monthly fee, percentage of direct and indirect service costs | 105% |
Commitments and Contingencies_2
Commitments and Contingencies - Contingencies (Details) $ in Thousands, ₪ in Millions | Apr. 17, 2023 ILS (₪) defendant | Oct. 24, 2022 CAD ($) | Mar. 12, 2020 complaint shareholder |
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 | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 26 | ||
Damages sought | ₪ | ₪ 420 | ||
Green Leaf Vs. Cronos | Cronos Group, Inc. | |||
Loss Contingencies [Line Items] | |||
Number of defendants | 3 |
Share-based Compensation - Summ
Share-based Compensation - Summary of Stock-based Compensation Expense (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | $ 8,756 | $ 15,008 | $ 9,844 |
Stock options | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | 1,175 | 6,778 | 7,604 |
Restricted Stock Units (RSUs) | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | 7,581 | 7,633 | 2,240 |
Liability Classified Awards | |||
Share-based Payment Arrangement, Expensed and Capitalized, Amount [Line Items] | |||
Share-based compensation | $ 0 | $ 597 | $ 0 |
Share-based Compensation - Stoc
Share-based Compensation - Stock Options Narrative (Details) - Stock options - $ / shares | Mar. 29, 2020 | Dec. 31, 2023 | Dec. 31, 2022 | Jun. 25, 2020 | Jun. 28, 2018 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Share price at grant date (in Canadian dollars per share) | $ 2.96 | $ 4.2 | |||
2015 Stock Option Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Future awards to be granted (in shares) | 0 | ||||
2018 Stock Option Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Future awards to be granted (in shares) | 0 | ||||
2020 Omnibus Plan | |||||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||||
Vesting 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 Canadian dollars per share) | $ 2.07 | $ 2.94 |
Share-based Compensation - Su_2
Share-based Compensation - Summary of the Changes in Options (Details) - $ / shares | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average exercise price | |||
Balance at beginning of period (in dollars per share) | $ 10.57 | $ 7.75 | |
Issuance of options (in dollars per share) | 2.96 | 4.20 | |
Exercised (in dollars per share) | 2.79 | ||
Cancellation, forfeiture and expiry of options (in dollars per share) | 7.75 | 5.74 | |
Balance at end of period (in dollars per share) | 14.50 | 10.57 | $ 7.75 |
Exercisable (in dollars per share) | $ 15.89 | $ 11.48 | |
Number of options | |||
Balance at beginning of period (in shares) | 5,350,600 | 8,939,330 | |
Issuance of options (in shares) | 188,317 | 113,947 | |
Exercised (in shares) | (2,735,985) | ||
Cancellation of options (in shares) | (3,435,716) | (966,692) | |
Balance at end of period (in shares) | 2,103,201 | 5,350,600 | 8,939,330 |
Exercisable (in shares) | 1,864,732 | 3,867,887 | |
Weighted average remaining contractual term (years) | |||
Outstanding | 1 year 10 months 2 days | 8 months 23 days | 2 years 8 months 12 days |
Exercisable | 1 year 3 months 14 days | 7 months 28 days |
Share-based Compensation - Fair
Share-based Compensation - Fair Value of Options Issued (Details) - Stock options - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | ||
Share price at grant date (in Canadian dollars per share) | $ 2.96 | $ 4.2 |
Exercise price (per option) (in Canadian dollars per share) | $ 2.96 | $ 4.2 |
Risk-free interest rate | 3.22% | 3.14% |
Expected life of options | 7 years | 7 years |
Expected annualized volatility | 73% | 73% |
Expected dividend yield | 0% | 0% |
Weighted average Black-Scholes value at grant date (per option) (in Canadian dollars per share) | $ 2.07 | $ 2.94 |
Forfeiture rate | 0% | 0% |
Share-based Compensation - Sche
Share-based Compensation - Schedule of Stock Options Outstanding (Details) - shares | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of options outstanding (in shares) | 2,103,201 | 5,350,600 | 8,939,330 |
2020 Omnibus Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of options outstanding (in shares) | 702,264 | 2,788,947 | 2,900,000 |
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 | 1,550,074 |
2015 Stock Option Plan | |||
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |||
Number of options outstanding (in shares) | 0 | 1,139,584 | 4,489,256 |
Share-based Compensation - Rest
Share-based Compensation - Restricted Share Units Narrative (Details) | 12 Months Ended |
Dec. 31, 2023 | |
Restricted Stock Units (RSUs) | |
Share-based Compensation Arrangement by Share-based Payment Award [Line Items] | |
Vesting period | 3 years |
Share-based Compensation - Su_3
Share-based Compensation - Summary of Restricted Share Units Activity (Details) - $ / shares | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Weighted average grant date fair value | ||
Exercised (in dollars per share) | $ 2.79 | |
Number of RSUs | ||
Exercised (in shares) | (2,735,985) | |
Restricted Stock Units (RSUs) | ||
Weighted average grant date fair value | ||
Balance at beginning of period (in dollars per share) | $ 4.63 | $ 9.22 |
Granted (in dollars per share) | 2.64 | 4.27 |
Exercised (in dollars per share) | 5 | 7.40 |
Cancellation and forfeitures (in dollars per share) | 3.60 | 5.08 |
Balance at end of period (in dollars per share) | $ 3.77 | $ 4.63 |
Number of RSUs | ||
Balance at beginning of period (in shares) | 5,725,470 | 1,225,870 |
Granted (in shares) | 3,292,586 | 6,140,492 |
Exercised (in shares) | (1,041,097) | (1,151,292) |
Cancellation and forfeitures (in shares) | (595,418) | (489,600) |
Balance at end of period (in shares) | 7,381,541 | 5,725,470 |
Vesting period | 3 years | |
Restricted Stock Units (RSUs) | Minimum | ||
Number of RSUs | ||
Cliff period | 3 years | |
Restricted Stock Units (RSUs) | Maximum | ||
Number of RSUs | ||
Cliff period | 5 years |
Share-based Compensation - Su_4
Share-based Compensation - Summary of Deferred Share Units Activity (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Weighted average grant date fair value | |||
Grants | $ 8,756 | $ 15,008 | $ 9,844 |
Deferred Share Units (DSUs) | |||
Weighted average grant date fair value | |||
Balance at beginning of period | 674 | 408 | |
Grants | 450 | 443 | |
Gain on revaluation | (32) | (177) | |
Balance at end of period | $ 1,092 | $ 674 | $ 408 |
Number of DSUs | |||
Balance at beginning of period (in shares) | 265,732 | 104,442 | |
Granting and vesting of DSUs (in shares) | 255,947 | 161,290 | |
Balance at end of period (in shares) | 521,679 | 265,732 | 104,442 |
Share-based Compensation - Liab
Share-based Compensation - Liability-Classified Awards (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Share-Based Payment Arrangement [Abstract] | |||
Grants | $ 8,756 | $ 15,008 | $ 9,844 |
Liability Classified Awards | |||
Share-Based Payment Arrangement [Abstract] | |||
Balance at beginning of period | 0 | 0 | |
Grants | $ 0 | 597 | 0 |
Transfers to equity awards | (597) | ||
Balance at end of period | $ 0 | $ 0 |
Income Taxes - Schedule of Inco
Income Taxes - Schedule of Income (Loss) before Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Loss before income taxes | $ (73,669) | $ (121,003) | $ (128,510) |
Income Taxes - Narrative (Detai
Income Taxes - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Valuation Allowance [Line Items] | |||
Loss from discontinued operations | $ (4,114) | $ (13,556) | $ (269,125) |
Taxes payable, current | 64 | 32,956 | 105 |
Taxes receivable, current | 3,374 | 40 | 543 |
Valuation allowance | 216,241 | 214,199 | |
Research Tax Credit Carryforward | |||
Valuation Allowance [Line Items] | |||
Tax credit carryforward | 683 | ||
Canada | |||
Valuation Allowance [Line Items] | |||
Operating loss carryforwards | 253,521 | 216,120 | |
Untied States | |||
Valuation Allowance [Line Items] | |||
Operating loss carryforwards | 144,219 | 134,593 | |
Israel | |||
Valuation Allowance [Line Items] | |||
Operating loss carryforwards | 20,794 | 18,739 | |
SEC Schedule, 12-09, Valuation Allowance, Deferred Tax Asset | |||
Valuation Allowance [Line Items] | |||
Valuation allowance increase (decrease) | 2,042 | (10,577) | |
Altria Warrant | |||
Valuation Allowance [Line Items] | |||
Capital gain on relinquishment of warrant | 479,800 | ||
Discontinued Operations, Disposed of by Means Other than Sale, Abandonment | |||
Valuation Allowance [Line Items] | |||
Loss from discontinued operations | $ (4,114) | $ (13,556) | $ (269,125) |
Income Taxes - Expense for Inco
Income Taxes - Expense for Income Taxes (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Current | $ (3,375) | $ 34,416 | $ (471) |
Deferred | 145 | (241) | 40 |
Income tax expense (benefit), net | $ (3,230) | $ 34,175 | $ (431) |
Income Taxes - Effective Tax Ra
Income Taxes - Effective Tax Rate Reconciliation (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Income Tax Disclosure [Abstract] | |||
Loss before income taxes | $ (73,669) | $ (121,003) | $ (128,510) |
Effective income tax rate | 26.50% | 26.50% | 26.50% |
Expected income tax benefit | $ (19,522) | $ (32,066) | $ (34,055) |
Non-taxable income (loss) | 1,077 | (2,140) | 39 |
Non-deductible share-based compensation | 525 | 1,198 | 1,667 |
Non-deductible expenses | 459 | 836 | 53 |
Non-deductible transaction costs | 351 | 1,625 | 2,917 |
Effect of provincial tax rate difference | (9) | (15) | (1) |
Effect of tax rates outside of Canada | 816 | 1,848 | (1,869) |
Effect of change in tax rates | 4,601 | 11,041 | 0 |
Fair value gain (loss) on financial liabilities | 23 | (3,726) | (40,111) |
Changes in valuation allowance | 7,930 | (10,466) | 70,453 |
Capital gain on financial liabilities | 106 | 66,193 | 0 |
Other | 413 | (153) | 476 |
Income tax expense (benefit), net | $ (3,230) | $ 34,175 | $ (431) |
Income Taxes - Schedule of Defe
Income Taxes - Schedule of Deferred Tax Assets and Liabilities (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 |
Deferred assets: | ||
Tax loss carryforwards | $ 111,516 | $ 98,074 |
Interest expense carryforwards | 2,688 | 2,533 |
Deferred financing costs | 0 | 1,311 |
Share issuance cost | 0 | 196 |
Finance lease obligation | 519 | 690 |
Plant and equipment | 36,697 | 37,662 |
Investment | 19,745 | 13,359 |
Intangible asset | 37,203 | 53,365 |
Inventory | 556 | 1,287 |
Reserve | 2,430 | 2,972 |
Unrealized foreign exchange | 275 | 0 |
R&D investment tax credits | 567 | 293 |
Other | 4,271 | 3,099 |
Total deferred tax assets | 216,467 | 214,841 |
Less valuation allowance | (216,241) | (214,199) |
Net deferred tax assets | 226 | 642 |
Deferred tax liabilities: | ||
Right-of-use assets | (181) | (365) |
Unrealized foreign exchange | 0 | (84) |
Total deferred tax liabilities | (181) | (449) |
Net deferred tax assets | $ 45 | $ 193 |
Loss per Share - Schedule of Ea
Loss per Share - Schedule of Earnings (Loss) Per Share (Details) - USD ($) $ / shares in Units, $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Basic loss per share computation | |||
Net loss from continuing operations attributable to the shareholders of Cronos Group | $ (69,849) | $ (155,178) | $ (126,982) |
Weighted-average number of common shares outstanding for computation for basic earnings per share (in shares) | 380,964,739 | 376,961,797 | 370,390,965 |
Weighted-average number of common shares outstanding from computation for diluted earnings per share (in shares) | 380,964,739 | 376,961,797 | 370,390,965 |
Basic loss from continuing operations per share (in dollars per share) | $ (0.18) | $ (0.41) | $ (0.34) |
Diluted loss per share from continuing operations (in dollars per share) | $ (0.18) | $ (0.41) | $ (0.34) |
Loss from discontinued operations attributable to the shareholders of Cronos Group | $ (4,114) | $ (13,556) | $ (269,125) |
Weighted-average number of common shares outstanding from computation for basic earnings per share (in shares) | 380,964,739 | 376,961,797 | 370,390,965 |
Basic loss from discontinued operations per share (in dollars per share) | $ (0.01) | $ (0.04) | $ (0.73) |
Diluted loss from discontinued operations per share (in dollars per share) | $ (0.01) | $ (0.04) | $ (0.73) |
Total anti-dilutive securities (in shares) | 25,426,119 | 112,612,579 | 125,195,001 |
Financial Instruments - Schedul
Financial Instruments - Schedule of Fair Value of Assets on Recurring Basis (Details) - USD ($) $ in Thousands | Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Other investments | $ 35,251 | $ 70,993 | $ 118,392 |
Derivative liabilities | 102 | 15 | |
Fair Value, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 669,291 | 764,644 | |
Short-term investments | 192,237 | 113,077 | |
Other investments | 9,601 | 21,993 | |
Derivative liabilities | 102 | 15 | |
Level 1 | Fair Value, Recurring | |||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||
Cash and cash equivalents | 669,291 | 764,644 | |
Short-term investments | 192,237 | 113,077 | |
Other investments | 9,601 | 21,993 | |
Derivative liabilities | 0 | 0 | |
Level 2 | Fair Value, Recurring | |||
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, Recurring | |||
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 | $ 102 | $ 15 |
Financial Instruments - Sched_2
Financial Instruments - Schedule of Fair Value of Assets on Nonrecurring Basis (Details) - USD ($) $ / shares in Units, $ in Thousands | Jun. 14, 2021 | Dec. 31, 2023 | Dec. 31, 2022 | Feb. 28, 2022 | Dec. 31, 2021 |
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other investments | $ 35,251 | $ 70,993 | $ 118,392 | ||
Sale of stock, price per share (in dollars per share) | $ 0.0001 | ||||
Percentage of ownership after transaction | 10.50% | ||||
Payments to acquire other investments | $ 110,392 | ||||
Pharmacann | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Ownership interest | 5.90% | 6.30% | 6.40% | ||
Pharmacann | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Sale of stock, number of shares issued in transaction (in shares) | 473,787 | ||||
Fair Value, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other investments | $ 25,650 | $ 49,000 | |||
Level 1 | Fair Value, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other investments | 0 | 0 | |||
Level 2 | Fair Value, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other investments | 0 | 0 | |||
Level 3 | Fair Value, Nonrecurring | |||||
Fair Value, Assets and Liabilities Measured on Recurring and Nonrecurring Basis [Line Items] | |||||
Other investments | $ 25,650 | $ 49,000 |
Financial Instruments - Credit
Financial Instruments - Credit Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Concentration Risk [Line Items] | |||
Maximum exposure to credit risk | $ 966,442 | $ 987,836 | |
Accounts receivable, net | $ 13,984 | 23,113 | |
Accounts receivable, threshold period past due, writeoff | 120 days | ||
Net revenue, before excise taxes | $ 120,270 | 109,301 | $ 79,612 |
Cash and cash equivalents | 669,291 | 764,644 | |
Short-term investments | 192,237 | 113,077 | |
Accounts payable, trade, current | 8,887 | 8,599 | |
United States | |||
Concentration Risk [Line Items] | |||
Current expected credit loss | $ 3 | $ 219 | |
One Major Customer | Accounts Receivable | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 37% | ||
Three Major Customers | Rest of World | |||
Concentration Risk [Line Items] | |||
Net revenue, before excise taxes | $ 79,503 | $ 41,603 | |
Three Major Customers | Accounts Receivable | Customer Concentration Risk | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 55% | ||
Three Major Customers | Revenue from Contract with Customer Benchmark | Customer Concentration Risk | Rest of World | |||
Concentration Risk [Line Items] | |||
Concentration risk, percentage | 66% | 55% | 56% |
Net revenue, before excise taxes | $ 63,509 |
Financial Instruments - Liquidi
Financial Instruments - Liquidity Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Concentration Risk [Line Items] | ||
Accounts payable, trade, current | $ 8,887 | $ 8,599 |
Accounts Payable | Supplier Concentration Risk | One Vendor | ||
Concentration Risk [Line Items] | ||
Concentration risk, percentage | 26% | 27% |
Financial Instruments - Interes
Financial Instruments - Interest Rate Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Investments, All Other Investments [Abstract] | |||
Effect of 10% change in interest rate on interest income, net | $ 5,400 | ||
Interest income, net | $ 51,235 | $ 22,514 | $ 9,068 |
Impact of change in average variable rate, percent | 1.45% | 3.50% |
Financial Instruments - Foreign
Financial Instruments - Foreign Currency Risk (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Risks and Uncertainties [Abstract] | |||
Foreign exchange gain (loss) on translation | $ 21,539 | $ (50,616) | $ 8,192 |
Impact of ten percent change in exchange rate | $ 97,678 | $ 77,414 |
Related Party Transactions - Na
Related Party Transactions - Narrative (Details) - USD ($) | 12 Months Ended | |||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | Mar. 08, 2019 | |
Related Party Transaction [Line Items] | ||||
Accounts payable | $ 12,130,000 | $ 11,163,000 | ||
Related Party | ||||
Related Party Transaction [Line Items] | ||||
Carrying value of held for sale assets sold | 332,000 | |||
Proceeds from sale of assets | 761,000 | |||
Gain on sale of assets | 436,000 | |||
Related Party | Consulting Services | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable | 0 | 0 | ||
Related party transaction amount | 0 | 0 | $ 436,000 | |
Related Party | Cannabis Purchases | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable | 2,267,000 | 2,519,000 | ||
Purchases | 21,335,000 | 18,144,000 | $ 4,820,000 | |
Related Party | Cannabis Germplasm Supply Agreement | ||||
Related Party Transaction [Line Items] | ||||
Related party transaction amount | 1,114,000 | |||
Related Party | Manufacturing Services | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable | 11,000 | |||
Purchases | 42,000 | |||
Immediate Family Member of Management or Principal Owner | Manufacturing Services | ||||
Related Party Transaction [Line Items] | ||||
Accounts payable | 28,000 | 0 | ||
Purchases | $ 2,310,000 | $ 645,000 | ||
Cronos Group, Inc. | Altria Group, Inc. | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 41.10% | 45% | ||
Cronos GrowCo | ||||
Related Party Transaction [Line Items] | ||||
Ownership interest | 50% | 50% |
Related Party Transactions - Sc
Related Party Transactions - Schedule of Related Party Transactions (Details) - Related Party - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Consulting Services | |||
Related Party Transaction [Line Items] | |||
Expense | $ 0 | $ 0 | $ 436 |
Cannabis Purchases | |||
Related Party Transaction [Line Items] | |||
Purchases | $ 21,335 | $ 18,144 | $ 4,820 |
Restructuring - Narrative (Deta
Restructuring - Narrative (Details) - USD ($) $ in Thousands | 12 Months Ended | ||
Dec. 31, 2023 | Dec. 31, 2022 | Dec. 31, 2021 | |
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 1,524 | $ 3,545 | $ 0 |
Inventory write-down | 805 | 0 | $ 11,961 |
Realignment | |||
Restructuring Cost and Reserve [Line Items] | |||
Restructuring costs | $ 3,545 | ||
Inventory write-down | $ 805 |
Restructuring - Restructuring A
Restructuring - Restructuring Activity (Details) - Realignment - USD ($) $ in Thousands | 12 Months Ended | |
Dec. 31, 2023 | Dec. 31, 2022 | |
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | $ 424 | $ 0 |
Expenses | 1,524 | 3,545 |
Payments/Write-offs | (1,798) | (3,121) |
Restructuring Reserve, Ending Balance | 150 | 424 |
Employee Termination Benefits | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | 403 | 0 |
Expenses | 1,371 | 1,883 |
Payments/Write-offs | (1,624) | (1,480) |
Restructuring Reserve, Ending Balance | 150 | 403 |
Other Restructuring Costs | ||
Restructuring Reserve [Roll Forward] | ||
Restructuring Reserve, Beginning Balance | 21 | 0 |
Expenses | 153 | 1,662 |
Payments/Write-offs | (174) | (1,641) |
Restructuring Reserve, Ending Balance | $ 0 | $ 21 |