After the Sports Nutrition brand BioSteel filed for creditor protection under the Company’s Creditor’s Arrangement Act (CCAA), there were rumors about “Is BioSteel Going Out Of Business 2024?”.
And why not? Since it came into the industry, it has become a favorite of all sports enthusiasts and investors. According to reports, the annual revenue of BioSteel Sports is estimated to be $26.2 million per year. The estimated revenue per employee is $176,000.
However, now that the news has surfaced, it has become important to debunk the rumors and present you with the actual facts of the company’s closure. So, keep reading this article to find out what is actually happening with BioSteel.
What Is BioSteel?
BioSteel Sports Nutrition Inc. is a Canadian company that specializes in producing dietary supplement products for athletes and exercise enthusiasts.
It was founded in 2009 by John Celenza and former professional Ice hockey player Mike Cammerlleri. It gained popularity in 2010 after Gary Roberts reported that ice hockey players were drinking BioSteel during a Hockey Night in Canada.
Is BioSteel Going Out Of Business 2024?
As we know, BioSteel was founded in the year 2009, and in 2019, Canopy Growth bought the company to diversify its business into drinks.
However, in September 2023, Canopy Growth decided to sell the business that has been costing it hundreds and millions of dollars.
It has also found new buyers for the BioSteel Sports Nutrition business and has received approval from the court to continue the sale of the company.
So, no, BioSteel is not going out of business in 2024, but yes, it has been bought out by a different company.
Why is BioSteel Closing?
The court filing of the Canopy Growth revealed that the sales of BioSteel have been steady. But the pace was not to compensate for the striking and expensive sponsorships and marketing deals.
BioSteel has positioned itself as a product for health and environmentally-conscious consumers, which should have been a decent foundation to build in the market. However, according to a former Canopy employee, the company didn’t understand how to scale the business.
Even the ex-BioSteel sales manager said that Canopy’s marketing plans for BioSteel are very outdated. Therefore, by selling the company, Canopy is shedding a money-losing brand and is expecting to strengthen its financial position through the removal of cash expenditures associated with funding BioSteel.
BioSteel reported $24 million in sales in the company’s first quarter compared to the $10.4 million sales a year earlier. But the problem is not the sales or the revenue but the operating loss of the company. It has more than tripled, causing a problem for Canopy.
According to David Klein, Canopy Growth’s CEO, the bankruptcy and sale of BioSteel is a major milestone in the company’s goal to achieve optimistic adjusted EBITDA.
He further added that the brand remains a significant, attractive asset and has shown year-over-year revenue growth. However, the brand doesn’t align with Canopy Growth’s cannabis-focused asset-light strategy.
Partnerships Of BioSteel
BioSteels Sports Nutrition Inc. is a company whose roots are in hockey. Therefore, the brand signed partnerships with stars such as Conor McDavid, Nathan McKinnon, and John Tavares. It also added Connor Bedard as an endorser months before he became the league’s top 2023 draft pick.
In 2022, BioSteel replaced Gatorade as the NHL’s official hydration partners in a multiyear deal. It then also signed separate agreements with 6 franchises, namely:
- Carolina Hurricanes
- Anaheim Ducks
- Tampa Bay Lightning
- Columbus Blue Jackets
- Pittsburgh Penguins
- Chicago Blackhawks
BioSteel also signed sponsorship deals with NBA teams as a part of its endorsement roster. This sponsorship deal includes:
- Brooklyn Nets
- Los Angeles Lakers
- Philadelphia 76ers
- Dallas Mavericks
The endorsement rosters include:
- Ezekiel Elliot
- Sophia Smith
- Patrick Mahomes
- Gleyber Torres and
- Andrew Wiggins
Who Owns BioSteel Now?
As we have discussed, Canopy Growth acquired BioSteel in 2019. However, the current scenario states that the company has found a new buyer for BioStell Sports Nutrition Inc.
So, the BioSteel Canada Business, which includes IP, formulas, and the bulk of its inventory, is being acquired by DC Holdings Ltd. It is a Canadian sports nutrition portfolio company that is in the business as Coachwood Group of Companies.
DC Holdings Ltd. is owned by Windsor-based entrepreneur Dan Crosby. He owns a variety of other businesses, including Coachwood Capital and sports nutrition company Canadian Protein.
On the other hand, BioSteel’s manufacturing assets include property and equipment from the Verona, Virginia production facility will be purchased by the New Jersey-based Gregory Packaging Inc., the producers of SunCup Juice.
The Gregory Packaging Inc. owner, Ned Gregory, said the purchase will only include the factory and machinery assets from the Virginia facility and will not own any part of the BioSteel brand itself.
Who Are The Competitors Of BioSteel?
The competitors of BioSteel include:
|Revenue (In millions)
|Bad Axe Throwing
|Toronto Pan Am Sports Center
BioSteel is a company which has been selling its products since 2009. But after it was acquired by Canopy Growth, the company didn’t align with the strategy of its parent company. This resulted in many problems for BioSteel. However, these problems left its admirers to wonder about is BioSteel going out of business 2024 or not.
But as you read this article, you might have come to the conclusion that the truth is so far from what people are talking about.
Is BioSteel in financial trouble?
In the last fiscal year, BioSteel had a net loss of $141 million. Canopy funded $11.1 million per month before it filed for bankruptcy.
Who bought BioSteel in Canada?
DC Holding, which also runs the business as Coachwood Group of Companies, has bought BioSteel in Canada.
Is BioSteel healthy?
BioSteel is formulated for the use of world-class athletes. It doesn’t compromise on any ingredients or health benefits and is the safest product of its kind on the market.