Cannabis Giant Canopy Growth Ditches Sports Drinks Unit, Finds Buyers For BioSteel

Author: Jelena Martinovic | November 17, 2023 12:05pm

Canopy Growth Corporation (TSX:WEED) (NASDAQ:CGC) said on Friday that under the companies' Creditors Arrangement Act involving BioSteel Sports Nutrition Inc., the Ontario Superior Court of Justice has approved two transactions to sell all or substantially all of the assets of BioSteel Canada and BioSteel Manufacturing, LLC and that pending the closing of the transactions, Canopy Growth expects to realize proceeds which will improve the company's balance sheet.

On Sept. 21, 2023, the CCAA Court granted an order authorizing BioSteel Canada to conduct, under the oversight of KSV Restructuring Inc., in its capacity as court-appointed monitor of BioSteel Canada, a sale and investment solicitation process by the terms and conditions relating thereto.

Under the SISP, two transactions were identified as the successful bids:

A sale of substantially all of the assets of BioSteel Canada under an asset purchase agreement dated Nov. 9, 2023, including all intangible assets and intellectual property; all of BioSteel Canada's formulas and recipes; all inventory of BioSteel Canada, other than excluded inventory and certain specified fixed assets, furniture and fixtures.
A sale of all or substantially all of the assets of BioSteel Canada's U.S. affiliate, BioSteel Manufacturing under an asset purchase agreement dated Nov. 9, 2023, including the property, plant and equipment and other fixed assets; all inventories of BioSteel Manufacturing, including spare parts located at the leased facility located in Verona, Virginia; and all production reports and records, equipment logs, operating guides and manuals relating to the foregoing assets.

The CCAA Court has approved the successful bids and granted authority to consummate the transactions contemplated therein under the terms of approval and vestings order issued by the CCAA Court in respect of each of the sale transactions.

“The elimination of the operating loss and cash burn as a result of ceasing to fund BioSteel has already significantly enhanced Canopy Growth's financial position, and the anticipated proceeds of the sale transactions are expected to improve Canopy Growth's balance sheet upon completion," said Judy Hong, CFO at the Ontario-based company.