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1. Company Snapshot

1.a. Company Description

Cronos Group Inc.operates as a cannabinoid company.It manufactures, markets, and distributes hemp-derived supplements and cosmetic products through e-commerce, retail, and hospitality partner channels under the Lord Jones and Happy Dance brands in the United States.


The company is also involved in the cultivation, manufacture, and marketing of cannabis and cannabis-derived products for the medical and adult-use markets.It sells cannabis and cannabis products, including dried cannabis, pre-rolls, edibles, concentrates, and cannabis extracts through wholesale and direct-to-client channels under its wellness platform, PEACE NATURALS; and operates under adult-use brands, Spinach.It also exports dried cannabis and cannabis oils to Germany, Israel, and Australia.


Cronos Group Inc.was founded in 2012 and is based in Toronto, Canada.

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1.b. Last Insights on CRON

Cronos Group Inc.'s recent performance faced challenges due to increasing competition in the cannabis industry. Despite achieving record levels of consolidated net revenue, gross profit, and Adjusted EBITDA in Q3 2025, the company's growth rate slowed, with net revenue increasing by 9% quarter-over-quarter and 6% year-over-year. Additionally, the company's reliance on its Israeli market, where PEACE NATURALS remains the number one cannabis brand, may pose risks. With $824 million in total cash and cash equivalents and short-term investments, Cronos' balance sheet remains strong.

1.c. Company Highlights

2. Cronos Group's Q3 2025 Earnings: A Strong Quarter Driven by Robust Demand

Cronos Group delivered a record quarter in Q3 2025, with net revenue increasing by 6% year-over-year to $36.3 million. The growth was driven by higher cannabis flower sales in Israel and higher cannabis extract sales in the Canadian market. Gross profit and adjusted gross profit in the third quarter were $18.3 million, equating to a 50% gross margin, a 19 percentage point improvement from 31% adjusted gross margins in Q3 2024. The company's actual EPS came out at $0.09749, in line with estimates. The strong financial performance was driven by the company's robust brand portfolio, including Spinach, which ended the quarter as the #2 cannabis brand in Canada.

Publication Date: Nov -18

📋 Highlights
  • Record Q3 Net Revenue:: Increased by 6% YoY to $36.3 million, driven by Israel and Canadian cannabis extract sales.
  • Gross Margin Improvement:: Adjusted gross margin rose to 50% ($18.3M) from 31% in Q3 2024, a 19-percentage-point increase.
  • Spinach Brand Growth:: Became #2 cannabis brand in Canada with 4.5% market share, top flower and vape seller.
  • Strong Balance Sheet:: $824 million in cash, cash equivalents, and short-term investments for growth and innovation.
  • GrowCo Expansion Impact:: Sales from the facility began in late Q3, expected to boost margins and output in 2026.

Brand Performance and Market Share

Mike Gorenstein highlighted the strong performance of Cronos' brands, including Spinach, which achieved 4.5% overall market share in Canada. In Israel, Cronos achieved another quarter of record net revenue, delivering exceptional growth across both the flagship PEACE NATURALS brand and the value-focused Lit brand. The company's ability to drive growth across multiple brands and markets is a testament to its strong product portfolio and effective marketing strategies.

Balance Sheet and Growth Initiatives

The company's balance sheet remains strong, with $824 million in cash, cash equivalents, and short-term investments, providing flexibility to invest in growth, innovation, and global expansion. The GrowCo expansion is expected to drive sales growth in 2026, with Anna Shlimak noting that the blended adjusted gross margins over Q2 and Q3 are indicative of the current underlying margins of the business.

Valuation and Growth Expectations

With analysts estimating next year's revenue growth at 30.8%, the company's valuation metrics are worth examining. The stock trades at a P/S Ratio of 7.11 and an EV/EBITDA of -8.13, indicating that the market is pricing in significant growth expectations. The company's ROE is 1.72%, and the ROIC is -5.2%, indicating that the company is not yet generating strong returns on its investments. As the company continues to invest in growth initiatives, investors will be watching to see if the company can deliver on its growth expectations.

3. NewsRoom

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Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Dec -01

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Cronos Launches Premium Lord Jones Live Resin Fusions™ in Canada

Nov -25

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Weekly Roundup on the Cannabis Sector & Psychedelic Sector

Nov -10

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Aurora Cannabis: Medical Sales Boom Worldwide, Cash Flow to Swing Positive – Quarterly Update Report

Nov -10

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TSX Opportunities: Lion Copper and Gold Among 3 Promising Penny Stocks

Nov -07

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Cronos: Q3 Earnings Snapshot

Nov -06

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Cronos Group Reports 2025 Third Quarter Results

Nov -06

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Cronos Brings Back Popular, Limited-Edition Spinach® Green Apple-Flavored Products for the Fall Season

Oct -28

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4. Business Breakdown

4.a. Revenues by Country

4.b. Revenues by Segment

5. Expected revenues mid-term growth (21.88%)

6. Segments

Cannabis Flower

Expected Growth: 21.97%

Cronos Group Inc.'s Cannabis Flower segment growth of 21.97% is driven by increasing demand for recreational cannabis, strategic partnerships, and expansion into new markets. Additionally, the company's focus on product innovation, quality, and branding has contributed to its market share growth.

Cannabis Extracts

Expected Growth: 21.97%

Cronos Group Inc.'s Cannabis Extracts segment growth of 21.97% is driven by increasing demand for vaporizable products, expansion into new markets, and strategic partnerships. Additionally, the company's focus on R&D and innovation in extraction technologies has improved efficiency and quality, leading to higher sales volumes and revenue growth.

Other

Expected Growth: 11.6%

Cronos Group Inc.'s 11.6% growth is driven by increasing demand for cannabis products, strategic partnerships, and expansion into new markets. The company's diversified product portfolio, including vaporizers and edibles, also contributes to its growth. Additionally, Cronos' strong brand recognition and marketing efforts have helped to increase sales and revenue.

7. Detailed Products

Cannabis Flowers

High-quality, indoor-grown cannabis flowers for recreational and medicinal use

Vapes and Concentrates

Portable and convenient cannabis products for on-the-go consumption

Edibles and Beverages

Cannabis-infused food and drink products for a unique consumption experience

Topicals and Tinctures

Cannabis-based products for localized relief and wellness

CBD Products

Non-psychoactive cannabis products for wellness and self-care

Cannabis Oils

High-quality cannabis oils for medicinal and recreational use

8. Cronos Group Inc.'s Porter Forces

Forces Ranking

Threat Of Substitutes

Cronos Group Inc. operates in the cannabis industry, which has a moderate threat of substitutes. While there are alternative products available, such as pharmaceuticals and recreational drugs, cannabis has a unique value proposition that differentiates it from substitutes.

Bargaining Power Of Customers

Cronos Group Inc. has a diverse customer base, including recreational and medical cannabis users. However, the company's products are differentiated, and customers have limited bargaining power due to the regulated nature of the industry.

Bargaining Power Of Suppliers

Cronos Group Inc. relies on suppliers for inputs such as seeds, fertilizers, and equipment. While the company has some bargaining power due to its size, suppliers also have some leverage due to the specialized nature of the industry.

Threat Of New Entrants

The cannabis industry has a high threat of new entrants due to the growing demand and the relatively low barriers to entry. However, Cronos Group Inc. has a strong brand and established operations, which provide some protection against new entrants.

Intensity Of Rivalry

The cannabis industry is highly competitive, with many established players and new entrants vying for market share. Cronos Group Inc. faces intense competition from other licensed producers, which can lead to pricing pressure and reduced market share.

9. SWOT Analysis

Strength

Weaknesses

Opportunities

Threats

10. Capital Structure

10.a. Balance Sheet

10.b. Weighted Average Cost of capital

Value
Debt Weight 0.23%
Debt Cost 3.95%
Equity Weight 99.77%
Equity Cost 9.33%
WACC 9.32%
Leverage 0.23%

11. Quality Control: Cronos Group Inc. passed 4 out of 9 key points

12.a Historical Valuation

12.b Price/Earnings Ratio

12.c Margin Valuation

12.d Peers Valuation

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Peers Metrics

12.e Scoring Insights

12.f DCF BETA

Parameters

Short Term Growth

Short term Time

Long-Term Growth

WACC

Target Price

0.84$

Current Price

3.46$

Potential

-75.79%

Expected Cash-Flows