Once the darling of the red-hot cannabis space, Canopy Growth has recently been fighting for its survival.
The Canadian company has shed hundreds of jobs, shut down and sold its Smiths Falls, Ontario, headquarters, and implemented other cost-saving measures. In June, Canopy Growth's auditor disclosed it had "substantial doubt about [Canopy's] ability to continue as a going concern."
In seeking bankruptcy for BioSteel, Canopy Growth is shedding a money-losing brand that has been a major obstacle in its efforts to become profitable. BioSteel also is an outlier in Canopy' Growth's otherwise cannabis-intensive business.
Canopy Growth said its financial position is expected to be strengthened through the immediate removal of the cash expenditures associated with funding the BioSteel and the potential cash proceeds from a sale of the brand's assets.
BioSteel posted C$32.5 million ($24 million) in sales in the company's fiscal first quarter compared to C$13.7 ($10.4 million) a year earlier, according to Canopy Growth. The ready-to-drink sports beverage leans into popular trends, including being sugar-free, having premium ingredients and natural flavors, and electrolytes to support physical activity.
David Klein, Canopy Growth's CEO, said the bankruptcy and sale of BioSteel is a "major milestone" in the company's goal to achieve positive adjusted EBITDA.
Read more at fooddive.com