BioSteel Sports Nutrition, Inc., the Toronto-based sports drink manufacturer, filed for creditor protection in the U.S. and Canada and plans to pursue a sale.
The filing comes as Ontario-based Canopy Growth, the largest cannabis company in North America, said it had ceased funding the company.
BioSteel was founded in Toronto in 2009 by John Celenza and then-NHL’er Mike Cammalleri. The business grew quickly, working closely with branding, sponsorship and marketing partnerships, pro athletes, including NHL players Connor McDavid, Nathan MacKinnon, John Tavares, and recently No. 1 NHL draft pick Connor Bedard. Kansas City Chiefs quarterback Patrick Mahomes, Dallas Mavericks Luka Dončić and UConn’s women’s basketballer Azzi Fudd received equity as part of deals with BioSteel.
Canopy Growth, which trades on the NASDAQ exchange, acquired BioSteel in 2019 as part of a plan by the cannabis company to diversify its products into more beverages; however, the company said that BioSteel’s business was a significant drag on the company’s profitability and cash flow, representing approximately 60 percent of its Q124 adjusted EBITDA loss.
Canopy Growth had previously announced that it was reviewing strategic options for the BioSteel business, including a potential sale.
“Canopy Growth has marked yet another major milestone in our transformation plan, as while BioSteel’s business has shown significant year-over-year revenue growth, and we believe the brand remains an attractive asset, it does not align with Canopy Growth’s cannabis-focused asset-light strategy. We have repeatedly demonstrated that we will take decisive action to enhance our profitability and ensure we are focused and positioned to be a leader in the North American cannabis sector,” said David Klein, CEO, in a statement.
According to court filings, BioSteel’s unsecured creditors are owed more than $45 million. Major unsecured creditors include The Los Angeles Lakers, owed $2.5 million; the Miami Heat, $1 million; and The U.S. Soccer Federation, $675,000.
Photo courtesy BioSteel
