The following discussion and analysis should be read together with other
information, including Cronos Group's condensed consolidated interim financial
statements and the related notes to those statements, included in Part I, Item 1
of this Quarterly Report on Form 10-Q for the quarterly period ended June 30,
2022 (this "Quarterly Report"), consolidated financial statements appearing in
the Company's Annual Report on Form 10-K for the year ended December 31, 2021
(the "Annual Report"), Part I, Item 1A, Risk Factors, of the Annual Report and
Part II, Item 1A, Risk Factors, of this Quarterly Report.

Forward-Looking Statements



This Quarterly Report, the documents incorporated into this Quarterly Report by
reference, other reports we file with, or furnish to, the U.S. Securities and
Exchange Commission ("SEC") and other regulatory agencies, and statements by our
directors, officers, other employees and other persons authorized to speak on
our behalf contain information that may constitute forward-looking information
and forward-looking statements within the meaning of applicable securities laws
(collectively, "Forward-Looking Statements"), which are based upon our current
internal expectations, estimates, projections, assumptions and beliefs. All
information that is not clearly historical in nature may constitute
Forward-Looking Statements. In some cases, Forward-Looking Statements can be
identified by the use of forward-looking terminology, such as "expect",
"likely", "may", "will", "should", "intend", "anticipate", "potential",
"proposed", "estimate" and other similar words, expressions and phrases,
including negative and grammatical variations thereof, or statements that
certain events or conditions "may" or "will" happen, or by discussion of
strategy. Forward-Looking Statements include estimates, plans, expectations,
opinions, forecasts, projections, targets, guidance or other statements that are
not statements of historical fact.

Forward-Looking Statements include, but are not limited to, statements with respect to:

•the impact of the ongoing military conflict between Russia and Ukraine (and resulting sanctions) on our business, financial condition and results of operations or cash flows;



•the uncertainties associated with the COVID-19 pandemic, including our ability,
and the abilities of our joint ventures and our suppliers and distributors, to
effectively deal with the restrictions, limitations and health issues presented
by the COVID-19 pandemic, the ability to continue our production, distribution
and sale of our products, and demand for and the use of our products by
consumers;

•laws and regulations and any amendments thereto applicable to our business and
the impact thereof, including uncertainty regarding the application of United
States ("U.S.") state and federal law to U.S. hemp (including CBD and other U.S.
hemp-derived cannabinoids) products and the scope of any regulations by the U.S.
Food and Drug Administration (the "FDA"), the U.S. Drug Enforcement
Administration (the "DEA"), the U.S. Federal Trade Commission (the "FTC"), the
U.S. Patent and Trademark Office (the "PTO") and any state equivalent regulatory
agencies over U.S. hemp (including CBD and other U.S. hemp-derived cannabinoids)
products;

•the laws and regulations and any amendments thereto relating to the U.S. hemp
industry in the U.S., including the promulgation of regulations for the U.S.
hemp industry by the U.S. Department of Agriculture (the "USDA") and relevant
state regulatory authorities;

•expectations related to our announced realignment (the "Realignment") and any
progress, challenges and effects related thereto as well as changes in strategy,
metrics, investments, reporting structure, costs, operating expenses, employee
turnover and other changes with respect thereto;

•the timing of our exit from our facility in Stayner, Ontario (the "Stayner
Facility") and the expected costs and benefits from the wind-down of the Stayner
Facility;

•our ability to effectively wind-down the Stayner Facility in an organized
fashion and acquire raw materials from other suppliers, including Cronos Growing
Company Inc. ("Cronos GrowCo") and the costs and timing associated therewith;

•the grant, renewal and impact of any license or supplemental license to conduct activities with cannabis or any amendments thereof;



•our international activities and joint venture interests, including required
regulatory approvals and licensing, anticipated costs and timing, and expected
impact;

•our ability to successfully create and launch brands and further create, launch and scale U.S. hemp-derived cannabinoid consumer products and cannabis products;

•the benefits, viability, safety, efficacy, dosing and social acceptance of cannabis, including CBD and other cannabinoids;

•expectations regarding the implementation and effectiveness of key personnel changes;



•the anticipated benefits and impact of Altria Group Inc.'s investment in the
Company (the "Altria Investment"), pursuant to a subscription agreement dated
December 7, 2018;

•the potential exercise of one warrant of the Company included as part of the
Altria Investment (the "Altria Warrant"), pre-emptive rights and/or top-up
rights in connection with the Altria Investment, including proceeds to us that
may result therefrom;

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•expectations regarding the use of proceeds of equity financings, including the proceeds from the Altria Investment;

•the legalization of the use of cannabis for medical or adult-use in jurisdictions outside of Canada, the related timing and impact thereof and our intentions to participate in such markets, if and when such use is legalized;



•expectations regarding the potential success of, and the costs and benefits
associated with, our joint ventures, strategic alliances and equity investments,
including the strategic partnership (the "Ginkgo Strategic Partnership") with
Ginkgo Bioworks Holdings, Inc. ("Ginkgo");

•our ability to execute on our strategy and the anticipated benefits of such strategy;

•expectations of the amount or frequency of impairment losses, including as a result of the write-down of intangible assets, including goodwill;



•the ongoing impact of the legalization of additional cannabis product types and
forms for adult-use in Canada, including federal, provincial, territorial and
municipal regulations pertaining thereto, the related timing and impact thereof
and our intentions to participate in such markets;

•the future performance of our business and operations;

•our competitive advantages and business strategies;

•the competitive conditions of the industry;

•the expected growth in the number of customers using our products;

•our ability or plans to identify, develop, commercialize or expand our technology and research and development ("R&D") initiatives in cannabinoids, or the success thereof;

•expectations regarding acquisitions and dispositions and the anticipated benefits therefrom;



•uncertainties as to our ability to exercise our option (the "PharmaCann
Option") in PharmaCann Inc. ("PharmaCann"), in the near term or the future, in
full or in part, including the uncertainties as to the status and future
development of federal legalization of cannabis in the U.S. and our ability to
realize the anticipated benefits of the transaction with PharmaCann;

•expectations regarding revenues, expenses and anticipated cash needs;

•expectations regarding cash flow, liquidity and sources of funding;

•expectations regarding capital expenditures;

•expectations regarding our future production and manufacturing strategy and operations, the costs and timing associated therewith and the receipt of applicable production and sale licenses;

•expectations regarding our growing, production and supply chain capacities;

•expectations regarding the resolution of litigation and other legal and regulatory proceedings, reviews and investigations;

•expectations with respect to future production costs;

•expectations with respect to future sales and distribution channels and networks;

•the expected methods to be used to distribute and sell our products;

•the anticipated future gross margins of our operations;

•accounting standards and estimates;

•our ability to timely and effectively remediate any material weaknesses in our internal control over financial reporting; and

•expectations regarding the costs and benefits associated with our contracts and agreements with third parties, including under our third party supply and manufacturing agreements.



Certain of the Forward-Looking Statements contained herein concerning the
industries in which we conduct our business are based on estimates prepared by
us using data from publicly available governmental sources, market research,
industry analysis and on assumptions based on data and knowledge of these
industries, which we believe to be reasonable. However, although generally
indicative of relative market positions, market shares and performance
characteristics, such data is inherently imprecise. The industries in which we
conduct our business involve risks and uncertainties that are subject to change
based on various factors, which are described further below.

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The Forward-Looking Statements contained herein are based upon certain material
assumptions that were applied in drawing a conclusion or making a forecast or
projection, including: (i) our ability to efficiently and effectively exit the
Stayner Facility, receive the benefits of the Stayner Facility wind down and
acquire raw materials on a timely and cost-effective basis from third parties,
including Cronos GrowCo; (ii) our ability, and the abilities of our joint
ventures and our suppliers and distributors, to effectively deal with the
restrictions, limitations and health issues presented by the COVID-19 pandemic
and the ability to continue our production, distribution and sale of our
products and customer demand for and use of our products; (iii) management's
perceptions of historical trends, current conditions and expected future
developments; (iv) our ability to generate cash flow from operations; (v)
general economic, financial market, regulatory and political conditions in which
we operate; (vi) the production and manufacturing capabilities and output from
our facilities and our joint ventures, strategic alliances and equity
investments; (vii) consumer interest in our products; (viii) competition; (ix)
anticipated and unanticipated costs; (x) government regulation of our activities
and products including, but not limited to, the areas of taxation and
environmental protection; (xi) the timely receipt of any required regulatory
authorizations, approvals, consents, permits and/or licenses; (xii) our ability
to obtain qualified staff, equipment and services in a timely and cost-efficient
manner; (xiii) our ability to conduct operations in a safe, efficient and
effective manner; (xiv) our ability to realize anticipated benefits, synergies
or generate revenue, profits or value from our recent acquisitions into our
existing operations; (xv) our ability to realize the expected cost-savings,
efficiencies and other benefits of our Realignment and employee turnover related
thereto; (xvi) our ability to complete planned dispositions, and, if completed,
obtain our anticipated sales price; (xvii) our ability to exercise the
PharmaCann Option and realize the anticipated benefits of the transaction with
PharmaCann; and (xviii) other considerations that management believes to be
appropriate in the circumstances. While our management considers these
assumptions to be reasonable based on information currently available to
management, there is no assurance that such expectations will prove to be
correct.

By their nature, Forward-Looking Statements are subject to inherent risks and
uncertainties that may be general or specific and which give rise to the
possibility that expectations, forecasts, predictions, projections or
conclusions will not prove to be accurate, that assumptions may not be correct
and that objectives, strategic goals and priorities will not be achieved. A
variety of factors, including known and unknown risks, many of which are beyond
our control, could cause actual results to differ materially from the
Forward-Looking Statements in this Quarterly Report and other reports we file
with, or furnish to, the SEC and other regulatory agencies and made by our
directors, officers, other employees and other persons authorized to speak on
our behalf. Such factors include, without limitation, that we may not be able to
exit the Stayner Facility in an organized fashion or achieve the anticipated
benefits of the exit or be able to access raw materials on a timely and
cost-effective basis from third parties, including Cronos GrowCo; the risk that
the COVID-19 pandemic and the military conflict between Russia and Ukraine may
disrupt our operations and those of our suppliers and distribution channels and
negatively impact the demand for and use of our products; the risk that cost
savings and any other synergies from the Altria Investment may not be fully
realized or may take longer to realize than expected; the risk that we will not
complete planned dispositions, or, if completed, obtain our anticipated sales
price; the implementation and effectiveness of key personnel changes; the risks
that our Realignment, the closure of the Stayner Facility and our further
leveraging of our strategic partnerships will not result in the expected
cost-savings, efficiencies and other benefits or will result in greater than
anticipated turnover in personnel; future levels of revenues; consumer demand
for cannabis and U.S. hemp products; our ability to manage disruptions in credit
markets or changes to our credit ratings; future levels of capital,
environmental or maintenance expenditures, general and administrative and other
expenses; the success or timing of completion of ongoing or anticipated capital
or maintenance projects; business strategies, growth opportunities and expected
investment; the adequacy of our capital resources and liquidity, including but
not limited to, availability of sufficient cash flow to execute our business
plan (either within the expected timeframe or at all); the potential effects of
judicial, regulatory or other proceedings, or threatened litigation or
proceedings, on our business, financial condition, results of operations and
cash flows; volatility in and/or degradation of general economic, market,
industry or business conditions; compliance with applicable environmental,
economic, health and safety, energy and other policies and regulations and in
particular health concerns with respect to vaping and the use of cannabis and
U.S. hemp products in vaping devices; the anticipated effects of actions of
third parties such as competitors, activist investors or federal (including U.S.
federal), state, provincial, territorial or local regulatory authorities or
self-regulatory organizations; changes in regulatory requirements in relation to
our business and products; legal or regulatory obstacles that could prevent us
from being able to exercise the PharmaCann Option and thereby realizing the
anticipated benefits of the transaction with PharmaCann; dilution of our
fully-diluted ownership of PharmaCann and the loss of our rights as a result of
that dilution; our remediation of material weaknesses in our internal control
over financial reporting and the improvement of our control environment and our
systems, processes and procedures; and the factors discussed under Part I, Item
1A "Risk Factors" of the Annual Report. Readers are cautioned to consider these
and other factors, uncertainties and potential events carefully and not to put
undue reliance on Forward-Looking Statements.

Forward-Looking Statements are provided for the purposes of assisting the reader
in understanding our financial performance, financial position and cash flows as
of and for periods ended on certain dates and to present information about
management's current expectations and plans relating to the future, and the
reader is cautioned not to place undue reliance on these Forward-Looking
Statements because of their inherent uncertainty and to appreciate the limited
purposes for which they are being used by management. While we believe that the
assumptions and expectations reflected in the Forward-Looking Statements are
reasonable based on information currently available to management, there is no
assurance that such assumptions and expectations will prove to have been
correct. Forward-Looking Statements are made as of the date they are made and
are based on the beliefs, estimates, expectations and opinions of management on
that date. We undertake no obligation to update or revise any Forward-Looking
Statements, whether as a result of new information, estimates or opinions,
future events or results or otherwise or to explain any material difference
between subsequent actual events and such Forward-Looking Statements. The
Forward-Looking Statements contained in this Quarterly Report

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and other reports we file with, or furnish to, the SEC and other regulatory
agencies and made by our directors, officers, other employees and other persons
authorized to speak on our behalf are expressly qualified in their entirety by
these cautionary statements.

Foreign currency exchange rates



All currency amounts in this Quarterly Report are stated in U.S. dollars, which
is our reporting currency, unless otherwise noted. All references to "dollars"
or "$" are to U.S. dollars. The assets and liabilities of our foreign operations
are translated into dollars at the exchange rate in effect as of June 30, 2022,
June 30, 2021 and December 31, 2021. Transactions affecting the shareholders'
equity (deficit) are translated at historical foreign exchange rates. The
condensed consolidated statements of net income (loss) and comprehensive income
(loss) and condensed consolidated statements of cash flows of our foreign
operations are translated into dollars by applying the average foreign exchange
rate in effect for the reporting period as reported on Bloomberg.

The exchange rates used to translate from Canadian dollars ("C$") to dollars is shown below:



(Exchange rates are shown as C$ per $)                                                   As of
                                                        June 30, 2022               June 30, 2021              December 31, 2021
Quarter-to-date average rate                                       1.2765                      1.2293                           N/A
Spot rate                                                          1.2874                      1.2395                        1.2746

Year-to-date average rate                                          1.2715                      1.2481                        1.2541



Business Overview

Cronos Group is an innovative global cannabinoid company committed to building
disruptive intellectual property by advancing cannabis research, technology and
product development and are seeking to build an iconic brand portfolio. Cronos
Group's diverse international brand portfolio includes Spinach®, PEACE
NATURALS®, Lord Jones®, Happy Dance® and PEACE+®.

Strategy

Cronos Group seeks to create value for shareholders by focusing on four core strategic priorities:

•growing a portfolio of iconic brands that responsibly elevate the consumer experience;

•developing a diversified global sales and distribution network;

•establishing an efficient global supply chain; and

•creating and monetizing disruptive intellectual property.

Business segments

We report through two segments: "United States" (the "U.S. segment") and "Rest of World" (the "ROW segment"). These two segments represent the geographic regions in which we operate and the different product offerings within each geographic region.



The U.S. segment manufactures, markets and distributes U.S. hemp-derived
supplements and cosmetic products through e-commerce, retail and hospitality
partner channels in the United States under the brands Lord Jones®, Happy Dance®
and PEACE+®.

The ROW segment is involved in the cultivation, manufacture, and marketing of
cannabis and cannabis-derived products for the medical and adult-use markets. In
Canada, Cronos Group operates two wholly owned license holders under the
Cannabis Act (Canada) (the "Cannabis Act"), Peace Naturals Project Inc. ("Peace
Naturals"), which has production facilities near Stayner, Ontario (the "Stayner
Facility"), and Thanos Holdings Ltd., known as Cronos Fermentation ("Cronos
Fermentation"), which has a production facility in Winnipeg, Manitoba. In
Israel, the Company operates under the IMC-GAP, IMC-GMP and IMC-GDP
certifications required for the cultivation, production and marketing of dried
flower, pre-rolls and cannabis oils in the Israeli medical market. Cronos Group
has established three strategic joint ventures in Canada, Israel and Colombia.
Additionally, as of June 30, 2022, Cronos Group held approximately 10% of the
issued capital of Cronos Australia Limited ("Cronos Australia"), which is listed
on the Australian Securities Exchange under the trading symbol "CAU." Cronos
Group currently exports cannabis products to two of the countries that permit
the import of such products: Germany and Israel.


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Recent Developments

COVID-19 update

In December 2019, an outbreak of a novel strain of coronavirus, COVID-19, was
identified in Wuhan, China. Since then, COVID-19 has spread across the globe,
including the U.S., Canada and Israel, and other countries in which Cronos Group
or its affiliates operate (including Australia and Colombia) and was recognized
as a pandemic by the World Health Organization. The COVID-19 pandemic resulted
in a sharp contraction in many areas of the global economy and increased
volatility and uncertainty in the capital markets. In response to the pandemic,
the governments of many countries, provinces, states, municipalities, and other
geographic regions took preventative or protective actions, including closures
of certain businesses, mandatory quarantines, limits on individuals' time
outside of their homes, travel restrictions and social distancing or other
preventative measures. Such measures were eased or lifted in varying degrees by
different governments of various countries, states and municipalities since
implementation in 2020, but the continued spread of COVID-19 and increased
infection rates has caused, and may continue to cause, some jurisdictions to
roll back reopening plans that had been underway and re-impose quarantines,
border closures, closure of certain businesses and stay-at-home orders.

The COVID-19 pandemic continues to impact the global economy and, specifically,
the U.S., Canada, Israel, and the other countries in which Cronos Group or its
affiliates operate (including Australia and Colombia). We continue to closely
monitor and respond, where possible, to the ongoing COVID-19 pandemic. As the
global situation continues to change rapidly, ensuring the health and safety of
our employees remains one of our top priorities.

In the U.S., numerous states have continued to remove their COVID-19 related
restrictions. This has resulted in the re-opening of, and increased occupancy
capacities in, retail outlets, including those that sell our products. Any
reinstatement of restrictions on the operations of retail outlets could
negatively impact our short-term results of operations in the U.S. Recently in
the U.S., there have been a number of supply chain challenges, such as container
ships facing delays due to congestion in ports, impacting many industries,
including the industries in which we operate. Although we have not yet seen a
significant impact from supply chain disruptions, we continue to monitor our
supply chain closely.

In Canada, COVID-19 restrictions began gradually easing at the end of June 2021
as the vaccination rate increased. The lockdown measures taken in the first six
months of 2021 to slow infection rates negatively impacted our short-term
revenue growth in Canada in 2021. The increase in cases related to the Omicron
variant of COVID-19 beginning in December 2021 caused the reinstatement of some
restrictions on non-essential retail stores in some provinces, including Quebec,
in early 2022; however, those restrictions have eased in most other provinces.
Each province is responsible for implementing re-opening plans and certain
provinces, including Ontario, are progressing through phases of re-opening which
may permit continued increases to the allowance of in-person shopping, typically
in the form of percentage of store capacity. All provinces have some form of
cannabis retail open to consumers, whether it be restricted in-person shopping,
curb-side pickup or delivery. Most provinces have lifted the requirement that
retail shoppers show proof of vaccination before entering retail stores. The
potential for recurring retail restrictions is ongoing, which could negatively
impact our results of operations.

In Israel, most COVID-19 restrictions have been removed as vaccination rates
have increased. Occupancy limitations in retail outlets have been removed,
including those that sell our products. We do not expect the remaining COVID-19
restrictions to have a material impact on our short-term revenue growth in
Israel.

Collectively, the effects of the COVID-19 pandemic have adversely affected our
results of operations and, if the effects continue unabated, could continue to
do so as long as measures to combat the COVID-19 pandemic remain in effect or
supply chains continue to be challenged. At this time, neither the duration nor
scope of the disruption can be predicted; therefore, the ultimate impact to our
business cannot be reasonably estimated, but such impact could materially
adversely affect our business, financial condition and results of operations.

Despite the impacts of the COVID-19 pandemic, we believe that our significant
cash on hand and short-term investments will be adequate to meet liquidity and
capital requirements for at least the next twelve months.

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Strategic and Organizational Update



In the second quarter of 2022, following an evaluation of the U.S. business as
part of the Company's Realignment, the Company began a phased exit of the
wholesale beauty category to focus the portfolio on adult-use product formats
within the direct-to-consumer channel. As a result, the Company reduced sales
and marketing headcount in the U.S. to better align the business structure with
the new strategy. Due to the restructuring of the U.S. business and other newly
identified cost savings opportunities, the Company now expects to incur
approximately $6.4 million in expenses in connection with the Realignment, an
increase from the previously stated $5.8 million.

In addition, the Company anticipates capital expenditures as a result of the
Realignment of approximately $2.2 million to modernize information technology
systems and build distribution capabilities. As of June 30, 2022, related
capital expenditures were $0.3 million. As the Company continues its transition
through the second half of 2022, it anticipates that it will begin to incur the
majority of the expected capital expenditures as part of the Realignment.

Brand and Product Portfolio



Subsequent to the second quarter, in July and August 2022, the Company launched
two rare cannabinoid products featuring cannabinol ("CBN") across select markets
in Canada with intentions to expand across Canada over time. The first was a
gummy featuring CBN under the Spinach FEELZ™ brand, Deep Dreamz Blueberry
Pomegranate (2:1 THC|CBN), featuring 2 gummies per pack with 10mg
tetrahydrocannabinol ("THC") and 5mg CBN per pack. The addition of a CBN-focused
gummy further builds on our rare cannabinoid portfolio. Additionally, the
Company complemented the CBN gummy launch with an offering in the vape category,
the Spinach FEELZ™ Deep Dreamz Blackberry Kush (7:1 THC|CBN) 1-gram vape.

Intellectual property initiatives



In June 2022, Cronos announced the achievement of the final productivity target
for tetrahydrocannabivarin ("THCV") under its strategic partnership (the "Ginkgo
Strategic Partnership") with Ginkgo Bioworks Holdings, Inc. (NYSE:DNA)
("Ginkgo"). THCV is hypothesized to reduce the appetite-enhancing property of
THC.

Appointments

In August 2022, the Company appointed Arye Weigensberg as Senior Vice President,
Head of Research & Development, after serving in an interim capacity since
November 2021. Prior to serving as interim Head of Research and Development, Mr.
Weigensberg was the General Manager and Vice President of Research and
Technology at Cronos Research Labs. Before joining the Company, Mr. Weigensberg
was the CEO of Altria Israel Ltd (an Altria research and development hub). Since
joining Cronos, Mr. Weigensberg has played a foundational role developing the
scope of our rare cannabinoid work, while advancing our research capabilities to
forge new strategies for differentiated cannabis products.


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