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 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 said “all or substantially all of the assets of BioSteel” will be sold in two transactions.
DC Holdings Ltd., which does business as Coachwood Group of Companies, has been selected as the winning bidder for the Canadian business.
The U.S division will be bought by Gregory Packaging Inc.
Financial terms were not disclosed, as court filings say both applicants “are seeking to seal the purchase price” but they have each paid a 10 per cent deposit of the purchase price.
Canopy says the proceeds of the sales “are expected to improve Canopy Growth’s balance sheet upon completion.”