(Smiths Falls) Canopy Growth said Thursday it has obtained court protection from creditors for its BioSteel Sports Nutrition division, and intends to seek approval to sell the business.
The Smiths Falls, Ont., cannabis producer says it filed for protection from creditors in the Ontario Superior Court of Justice because its sports drink business, BioSteel, no longer had access to financing.
Canopy described BioSteel as a “significant drag” on its profitability and cash flow, saying that about 60% of the company’s adjusted loss before interest, taxes, depreciation and amortization was attributable to BioSteel.
BioSteel’s creditor protection will limit its additional financing obligations and help the company focus on its core cannabis businesses, Canopy argued.
The company also intends to initiate Chapter 15 proceedings in the United States to address BioSteel’s U.S. assets.
The move comes after Canopy said in June it had made changes to its management team and parted ways with some staff after discovering “material misstatements” in BioSteel’s past financial filings.
Company in this news report: (TSX: WEED)