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BioSteel files for bankruptcy protection, is trying to find a new buyer

By Chris Cerullo

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September 14, 2023 6:28 pm

Some interesting news broke on Thursday about one of the NHL’s main partners. BioSteel, the league’s official sports hydration partner since 2022, hopes to find a new owner after filing for bankruptcy protection.

This news comes just weeks after the company held their annual NHL camp, which brought together some of the game’s biggest names for preseason training and light competition. Cale Makar, Connor Bedard, Connor McDavid, Leon Draisaitl, Nathan MacKinnon, and John Tavares were just some of the names in attendance.

The company’s primary Twitter/X account has also been deleted and certain social media posts from their other accounts seem to have been scrubbed. Many of those posts, primarily on Instagram, come from the recent NHL camp.

The company was founded in 2009 by former NHL forward Mike Cammalleri and business partner John Celenza. It became official partners with the NHL and NHLPA just last season, signing a “multi-year” contract. The brand grew quickly in large part thanks to sponsorship deals with big-time athletes, including most of the NHL stars who attended their branded training camp.

Over the first season of the partnership, the brand was showcased heavily at events like the NHL Scouting Combine and NHL Draft. BioSteel was also expected be a presenting partner of a “marquee NHL social media platform” and served as the presenting partner of the Hobey Baker Award given out to the top NCAA men’s ice hockey player in the country.

Before replacing Gatorade and entering into full-scale business with the NHL, BioSteel also had existing deals with USA Hockey, USA Soccer, the Professional Women’s Hockey Players Association, and with six different NBA teams. The company is majority-owned by cannabis company Canopy Growth, who announced the creditor protection filing under the Canadian Companies Creditors Arrangement Act.

According to the CBC, “Companies undergo CCAA when they seek a court’s help to protect them from their creditors to ensure orderly proceedings while they either restructure or wind down operations.” The company will be doing similar in the States under Chapter 15 of the US’s bankruptcy code.

Canopy Growth says it ceased funding Biosteel due to its inability to generate positive cash flow. “BioSteel made the decision to conserve cash and put the business into hibernation to preserve its assets,” the company told the CBC. “BioSteel sought creditor protection under the CCAA to conduct a court-supervised sale process for its business and property for the benefit of its stakeholders.”

The CBC also reports that Canopy has spent about $366 million on BioSteel, with the company burning through about $15 million in cash every month. BioSteel was responsible for almost 60 per cent of Canopy’s financial losses this fiscal year. 181 employees will be laid off by the insolvency filing.

Perhaps most importantly for the NHL, the most recent payment due to the league on September 1 was not made. Between October and March of next year, the company still owes another $12 million for its various sponsorship agreements and there are no plans to make any of those payments.

The plan moving forward for the company is to find a buyer to run it as an independent company. They have received several proposals but have determined that, “none of the parties that submitted proposals fully committed financing necessary to meet BioSteel’s immediate operating needs.”

Screenshot via @NHL/X

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