As Canopy Growth seeks a sale of the financially-strapped sports drink BioSteel, Lake 88’s confirmed it made a significant dent in the Smiths Falls-based company, which purchased majority shares of the drink in 2019.
The company said the drink has accounted for approximately 60% of Canopy’s Q1FY24 Adjusted EBITDA loss – a value of about $35 million, in just three months.
Adjusted EBITDA measures the recurring revenue a company brings in prior to expenses, such as taxes.
Overall, BioSteel, which held high-end contracts with major sports teams and leagues including the NHL, finds itself about $440 million in debt to its creditors, according to reports.
“Canopy Growth has marked yet another major milestone in our transformation plan, as while BioSteel’s business has shown significant year-over-year revenue growth, and we believe the brand remains an attractive asset, it does not align with Canopy Growth’s cannabis focused asset-light strategy,” Canopy Growth CEO David Klein said in a statement.
“We have repeatedly demonstrated that we will take decisive action to enhance our profitability and ensure we are focused and positioned to be a leader in the North American cannabis sector.”
Last week, Canopy Growth held a ribbon cutting ceremony in Smiths Falls, spreading the message of a new chapter for the company.
Story by Grant Deme