Cronos Group (NASDAQ:CRON) reported record second-quarter net revenue, gross profit and adjusted EBITDA for 2026, supported by growth in Israel, Canada and other international markets, including Germany.
Consolidated net revenue rose 58% year over year to $53 million, while gross profit increased 96% to $28.5 million. Adjusted EBITDA reached a record $13.1 million, improving by $11.4 million from the prior-year period.
Margin gains supported by mix, volumes and growing conditions
Shlimak said gross-profit growth was driven by higher average selling prices, sales mix shifting toward Israel and other international markets that do not carry excise taxes, and higher volumes that improved overhead-cost absorption. She also pointed to seasonally favorable growing conditions, which contributed to higher yields and more Grade A flower available for sale.
“This quarter’s gross margin demonstrates what our business looks like when it’s firing on all cylinders,” Shlimak said, while cautioning that quarterly margins can vary based on seasonality, geographic and product mix, production volumes, and potential price compression. She said the company believes trailing 12-month gross-margin performance provides more useful context than any one quarter.
Operating expenses totaled $21 million, up $1.2 million year over year. The increase reflected higher sales and marketing, research and development, and general and administrative spending. About $500,000 of the increase was related to transaction costs, primarily tied to Cronos’ pending acquisition of CanAdelaar in the Netherlands.
Israel posts 10th consecutive quarter of record revenue
Cronos Israel delivered its 10th consecutive quarter of record net revenue, with sales rising 60% year over year, or 32% on a constant-currency basis, according to Gorenstein. He said the company’s PEACE NATURALS brand continued to extend its lead in Israel’s medical cannabis market based on pharmacy data collected by Cronos.
Lord Jones, meanwhile, completed its second quarter of sales in Israel and was gaining momentum in the premium flower segment, Gorenstein said.
The company also addressed a newly announced investigation by the Trade Levies Commissioner of Israel’s Ministry of Economy and Industry into alleged dumping of medical cannabis imports from Canada. Gorenstein said Cronos disputes the allegations and will cooperate with the ministry. He noted that a previous investigation into similar claims did not result in an anti-dumping duty.
“Cronos does not engage in dumping,” Gorenstein said, adding that the company previously submitted pricing and cost data showing its Israeli pricing was not below its Canadian pricing.
Despite geopolitical and regulatory challenges in Israel, Gorenstein said Cronos remains committed to the market. The company has invested more than ILS 100 million in a greenhouse, manufacturing facility and cannabinoid research-and-development laboratory, and employs approximately 80 people in the country.
Spinach gains share across Canadian categories
In Canada, Cronos recorded its highest quarterly net revenue, while its brands generated 25% year-over-year retail sales growth compared with 1% industry-wide sales growth, according to Hifyre data cited by the company.
The Spinach brand retained its No. 1 position in vapes for the second consecutive quarter, expanding total vape market share to 10.6%. In vape cartridges, Spinach remained No. 1 for the third consecutive quarter, with 11.8% share. The brand ranked second in disposable vapes, where its share increased to 8.2%, aided by the PUFFERZ all-in-one offering launched late in 2025.
Cronos launched three PUFFERZ flavors during the quarter: Strawberry Burst, Peach Iced Tea and Grape Gas. It also introduced the Spinach Orange Vanilla Twist one-gram cartridge as the brand’s first limited-time summer vape cartridge offering.
Spinach remained Canada’s top edible brand for the eighth consecutive quarter, with 20.8% market share and 22.5% share within gummies. Five SOURZ by Spinach Fully Blasted products ranked among Canada’s top 10 edible stock-keeping units, including the Fully Blasted Blue Raspberry Watermelon 10-pack, which ranked first nationally.
In flower, Spinach ranked third with a 5.4% market share. GMO Cookies and OG Kush were among the country’s six top-selling flower products during the quarter. Spinach also rose to seventh place in pre-rolls, with a 3.1% share, while gaining ground in infused and traditional pre-rolls.
Germany growth and Netherlands acquisition remain in focus
Outside Israel, Cronos’ international net revenue increased 88% year over year, led by demand in Germany. Gorenstein said the company’s additional supply capacity has allowed it to place greater focus on Europe, while its approach remains centered on delivering a competitive product offering rather than avoiding competitive markets.
Gorenstein also said GrowCo is fully online and that Cronos expects further operational efficiencies as it continues refining the facility, manufacturing processes and genetic breeding program. He said the added flower supply has supported gains across flower, pre-rolls and vapes while helping the company maintain its edible-market leadership.
Regarding CanAdelaar, Gorenstein said the Netherlands business was performing in line with Cronos’ expectations. The company expects to close the acquisition in the second half of 2026, subject to Dutch regulatory clearance and remaining closing conditions. Cronos has not been informed of specific issues with its regulatory submission, he said.
CanAdelaar is the largest company participating in the Netherlands’ legal adult-use cannabis program, according to Cronos. Gorenstein said the acquisition could create an opportunity to introduce adult-use products such as SOURZ by Spinach and PUFFERZ into the Dutch market.
Cronos ended the quarter with $827 million in cash equivalents, short-term investments and non-current interest-bearing deposits, up $5 million from the first quarter. The increase reflected $24 million in positive operating cash flow, partly offset by $60 million in share repurchases and $2 million in capital expenditures.
The company also held a $17 million loan receivable, a $15 million current income tax receivable and $5 million in other investments. Gorenstein said Cronos remains active under its share repurchase program and views buybacks as an attractive use of capital while maintaining flexibility to invest in growth opportunities.
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.
