Sports drink company BioSteel has initiated creditor protection proceedings in both Canada and the United States.
In a Thursday press release, the company said that the decision to seek bankruptcy protection in both Canada and the US was due to them no longer having access to funding for the brand “which continued to generate negative operating cash flow.”
As a result, the official sports hydration partner of the NHL has made the decision to “conserve cash and put the business into hibernation to preserve its assets.”
Canopy Growth, BioSteel’s majority stakeholder since 2019, also announced layoffs of 181 BioSteel employees. According to a company press release, Canopy Growth’s decision aligns with “eliminating cash burn” and realizing BioSteel’s asset value through a court-supervised sale process.
The cannabis enterprise also stated that BioSteel having creditor protection will limit its further funding obligations and help the company focus on its core cannabis operations.
Founded in Toronto by ex-NHLer Mike Cammalleri and John Celenza in 2009, BioSteel Sports Nutrition became one of the most popular drinks of its kind on the market in recent years, partnering with popular athletes like Connor McDavid and Connor Bedard.
The brand even counted NFL stars Patrick Mahomes and DeAndre Hopkins among its main group of investors.
However, its fortunes fell under Canopy Growth’s ownership, with BioSteel responsible for 60% of Canopy Growth’s fiscal losses.
Despite BioSteel’s reported $32 million in first-quarter sales, expenses exceeding $40 million, including $12 million in NHL sponsorship-related costs, resulted in losses on every unit they sold.
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