Cronos Group (NASDAQ:CRON) reported what executives described as a record year in 2025, with organic net revenue growth of 25% and record results for quarterly and full-year net revenue, full-year gross profit, and adjusted EBITDA. Management pointed to strong consumer demand in Canada, continued expansion in Israel, and growing contributions from other international markets as key drivers.
Record fourth quarter and full-year performance
Chief Financial Officer Anna Shlimak said consolidated net revenue in the fourth quarter totaled $44.5 million, up 47% year-over-year. She attributed the increase to higher cannabis flower sales in Israel, Canada, and other countries, along with higher cannabis extract sales in Canada.
However, Shlimak noted adjusted gross margin declined compared with the first three quarters of 2025. She said that was largely due to “adverse production quality mix” at GrowCo as the company worked through an expansion, along with expense timing that impacted cost of goods sold during the ramp-up.
For the full year, Shlimak said adjusted gross margin was 43% and that management views that level as a “reasonable margin” for the business going forward, while acknowledging there could be future margin expansion—but also potential compression in Europe.
Canada: Spinach momentum in vapes and edibles, flower constrained
Chairman, President, and CEO Mike Gorenstein said Cronos delivered record quarterly net revenue in Canada, up 42% year-over-year, with contributions from flower, vapes, and edibles. He highlighted Spinach as a key growth engine, calling it the second most popular brand nationally in Canada.
In vapes, Gorenstein said Spinach became the number two overall vape brand in Canada in December, up from number four share in the first quarter of 2025. Within vape cartridges, he said Spinach reached the number one market share in the fourth quarter, led by Cherry Crush and Blueberry Dynamite as the two best-selling vape cartridges nationwide.
Gorenstein also introduced Spinach PUFFERZ, an all-in-one vape device that launched in select Canadian markets late in the fourth quarter, with broader distribution expected in early 2026. He described PUFFERZ as liquid diamond-infused cannabis in a “palm-style format” with a dual ceramic coil.
In edibles, Gorenstein said SOURZ maintained category leadership with market share approaching 22% for the quarter, driven in part by “Fully Blasted” multi-packs launched mid-2025. He said those multi-packs accounted for four of the top 10 selling edibles SKUs in Canada in the fourth quarter, including the number one SKU nationwide.
In flower, Spinach remained the number four brand in the quarter, but Gorenstein said supply constraints limited growth. With GrowCo’s expansion now complete, he said Cronos expects constraints to ease in 2026 as the expanded cultivation space becomes more fully optimized.
International growth: Israel records and improved shipment timing elsewhere
International markets were another area of emphasis on the call. Gorenstein said Israel net revenue grew 52% year-over-year in the quarter, marking the company’s eighth consecutive quarter of record net revenue in the market. He said PEACE NATURALS remained the top-selling brand in Israel based on pharmacy data collected by Cronos, citing brand equity, product quality, and execution.
Outside of Israel, Gorenstein said PEACE NATURALS and Lit drove net revenue growth of 68% year-over-year in other international markets, led by Germany as shipment timing normalized and demand stayed strong. On a question about the quarterly revenue upside, Shlimak said some of the improvement outside Israel reflected timing shifts from Q3 into Q4, while also emphasizing underlying business growth.
Gorenstein added that Lord Jones remained the market leader in Canada in hash and live resin-infused pre-rolls, and noted the brand launched in Israel with premium flower offerings marketed as limited-time drops.
CanAdelaar acquisition: building a Netherlands foothold
Cronos also discussed a definitive agreement announced in December to acquire CanAdelaar, with closing expected in the first half of 2026. Gorenstein described CanAdelaar as the largest company operating within the Netherlands’ legal adult-use cannabis program based on CanAdelaar management data, and said it is the only industrial-scale greenhouse cultivator within the program.
Under the agreement, Cronos will acquire CanAdelaar for upfront consideration of EUR 57.5 million (approximately $67.5 million), subject to certain adjustments, plus additional consideration based on 0.5x CanAdelaar’s normalized EBITDA in 2026 and 2027.
Gorenstein outlined the structure of the Dutch legal adult-use program, including that it involves 10 participating municipalities and that 72 cannabis retailers in those municipalities are now required to source products exclusively from one of 10 licensed producers, including CanAdelaar. He cited Dutch government data indicating 562 total cannabis retailers in the Netherlands, and said the addressable market could expand if the program broadens beyond the initial municipalities. He said Cronos views the opportunity as aligned with its strategy, in part because the Netherlands is a closed market for import/export, making entry difficult without an acquisition.
Shlimak later clarified that her comments about maintaining margin expectations near Cronos’ 2025 full-year levels were for Cronos on a standalone basis and did not include potential benefits from CanAdelaar, which she said is profitable and has “very nice gross margins.”
Balance sheet, capital allocation, and 2026 priorities
Management emphasized Cronos’ liquidity position. Shlimak said the company ended the quarter with $832 million in cash equivalents and short-term investments, up $8 million from Q3 2025. She attributed the sequential increase primarily to positive cash flow from operations before working capital changes of $18 million and $3 million in proceeds from the sale of the Cronos fermentation facility, partially offset by a $7 million working capital outflow, $4 million in share repurchases, and $2 million of capital expenditures. She also noted $21 million of loans receivable and $8 million of other investments.
Gorenstein said the company has no debt and described Cronos as having an active share repurchase program that reduced its share count during 2025. He said Cronos remains committed to repurchases in 2026 while evaluating M&A opportunities in a disciplined way, including transactions that support its “borderless product strategy” and add brands or intellectual property.
In response to questions about production allocation as GrowCo capacity ramps, Gorenstein said the company has balanced meeting demand with margin considerations while supply was constrained, and expects more consistent supply quality going forward. He said additional supply should support increased product fulfillment in Canada and more aggressive scaling in Europe. Shlimak said headwinds that pressured Q4 gross margin—expansion-related production quality mix issues and one-time ramp-up expenses—are not expected to persist.
On capital spending, Shlimak indicated a lower run-rate, agreeing with an analyst that under $10 million of annual CapEx was a reasonable expectation based on current needs.
About Cronos Group (NASDAQ:CRON)
Cronos Group Inc is a Canadian cannabinoid company dedicated to the cultivation, production and distribution of cannabis and cannabidiol (CBD) products for both medical and adult-use markets. Headquartered in Toronto, Ontario, the company manages operations that span the full cannabis value chain, including breeding, greenhouse cultivation, extraction, product formulation and packaging. Cronos Group’s business model emphasizes innovation in product development and scalability in manufacturing to meet evolving regulatory and consumer demands.
The company’s branded portfolio includes Peace Naturals, which focuses on pharmaceutical-grade medical cannabis; Spinach, a line of adult-use cannabis oils and tinctures; and Cove, a range of wellness-oriented CBD offerings.
