When Canopy Growth Corp. announced it took a controlling stake in a near-insolvent BioSteel Sports Nutrition Inc. nearly three years ago to help make a line of CBD-infused sports drinks, investors cheered the move, pushing its stock up as much as five percent that day.
Now, that same investment has suddenly emerged as an albatross for the stumbling cannabis player, forcing Canopy to announce the embarrassing move of restating its financial statements for its 2022 fiscal year while former employees paint a picture of a dysfunctional organization rife with overspending.
Late Wednesday, Canopy released a filing stating a review of BioSteel's sales in 2022 found numerous "material misstatements" and accounting errors in its financial statements for its 2022 first-quarter, second-quarter, and third-quarter results as well as its audited statements for the fiscal year ended 2022, which should no longer be relied upon. It said it would re-file those statements as soon as possible, a company spokesperson said.
In addition to that revelation that sent Canopy's stock plunging by more than 14 percent on Thursday, the company's once-lauded acquisition has been caught in a sweeping re-organization that's seen its co-founder John Celenza ousted following a testy exchange with Canopy's Chief Executive Officer David Klein in March, two people familiar with the situation told BNN Bloomberg.
Read more at bnnbloomberg.ca