Canopy Growth finds buyers and gets court OK for sale of Biosteel
Cannabis company Canopy Growth says it has found buyers for its Biosteel sports drink subsidiary and received a court’s approval to go ahead with the sale of the insolvent company.
The Smiths Falls, Ont.-based company said in a media release Friday morning that it has found unnamed buyers for the business that went into creditor protection in September.
Founded in 2009 by entrepreneur John Celenza and then-NHLer Mike Cammalleri, Biosteel carved out a niche in the saturated sports drink market dominated by Gatorade and Powerade by signing sponsorship deals with NHL stars.
Canopy Growth bought the company in 2019 in a move to diversify its business into drinks, but in September of this year, it announced plans to try to sell the business that had been costing it hundreds of millions of dollars.
Court filings reveal that while sales have steadily grown, the pace has not been enough to offset the flashy, expensive sponsorship and marketing deals. Biosteel was burning through $15 million in cash every month at the time when Canopy sought creditor protection for the unit.
In its media release Friday, Canopy did not reveal who the buyers of the business are, but said “all or substantially all of the assets of BioSteel” will be sold in two transactions.
The Canadian business, known as BioSteel Canada, and the U.S. operations, called BioSteel Manufacturing LLC, will be sold in separate transactions.
Financial terms were not disclosed, but Canopy says the proceeds of the sales “are expected to improve Canopy Growth’s balance sheet upon completion.”
