Canopy Growth ceases funding BioSteel business unit

Canopy Growth has ceased funding BioSteel Sports Nutrition and BioSteel has commenced proceedings under the companies’ Creditors Arrangement Act in the Ontario Superior Court of Justice and will seek recognition of that proceeding under Chapter 15 of the U.S. Bankruptcy Code as part of its efforts to simplify its business and reduce cash burn. BioSteel represented approximately 60% of the company’s Q1 FY2024 Adjusted EBITDA loss. The decision by BioSteel to seek creditor protection means that Canopy Growth will limit the further funding obligations in respect of the BioSteel business unit. Canopy Growth aims to transform to a simplified, asset-light operating model and focus on its core cannabis operations. With BioSteel’s operating loss and cash burn eliminated, Canopy Growth reiterates its expectation to achieve positive Adjusted EBITDA across its remaining business units exiting FY2024. Since July 1, reduction of the company’s overall debt by approximately C$349M, with further reductions totalling approximately C$95M expected over the next two quarters. Management continues to expect restructuring initiatives in FY2023 to deliver combined Selling, General & Administrative Expense and Cost of Goods Sold reduction of C$240M-$310M by the end of FY2024.