The transaction provides Canopy Growth with a significant platform to enter the sports nutrition and hydration segment, and lays the groundwork for the adoption of cannabidiol (“CBD”) in future product offerings in accordance with regulations globally including products to be sold in the U.S. containing CBD sourced from federally permissible industrial hemp.
Founded in 2009, BioSteel’s focus on premium natural ingredients, product transparency, and identifying the essential nutrients needed to power physical activity has led to the brand achieving a reputation for being the hydration product provider of choice for high performance athletes. BioSteel products have been purchased by over 70% of the teams in North America’s four major sports leagues and ambassadors of the brand include: Ezekiel Elliott, of the Dallas Cowboys; Connor McDavid, of the Edmonton Oilers; WTA player, Eugenie Bouchard; Andrew Wiggins with the Minnesota Timberwolves; Tyler Seguin with the Dallas Stars; Jalen Ramsey, with the Jacksonville Jaguars; NHL Hall of Famer, Wayne Gretzky; Gleyber Torres, with the New York Yankees; and Smiths Falls very own, LPGA golfer Brooke Henderson. In particular, Elliott’s agreement with BioSteel allows them to activate the star running back as the leading endorser of CBD products once permitted by the NFL. To date no active player has been able to do so.
In addition, BioSteel has national organizational partnerships with USA Hockey, Canada Basketball, Athletics Canada and the Professional Hockey Players Association. The company has 10,000+ points of distribution in Canada and the U.S. and continues to expand in both markets and into Europe.
“BioSteel has a reputation for being a best-in-class provider of natural sports nutrition products and all of its products are well positioned to benefit from the increasing trend of plant-based and all-natural products, preferred not only by professional athletes, but active consumers as well,” commented Mark Zekulin, CEO, Canopy Growth. “This acquisition allows us to enter the sports nutrition space with a strong and growing brand as we continue towards a regulated market of food and beverage products that contain cannabis. We view the adoption of CBD in future BioSteel offerings as a potentially significant and disruptive growth driver for our business.”
“The use and acceptance of CBD-based products in the professional sports landscape has changed. We have witnessed the negative effects of prescription painkillers and athletes are looking for healthier alternatives,” said Michael Cammalleri, Co-Founder and Co-CEO, BioSteel Sports Nutrition. “Its presence is already commonplace amongst NHL players and as a regular CBD user myself, I couldn’t be more proud to champion BioSteel’s evolution and leadership in this space.”
“Since inception, BioSteel has taken great pride in being at the forefront of healthy and natural sports nutrition. Joining Canopy Growth, the world leader in cannabis research, development and production, reflects the natural evolution of our brand and will allow us to expand our product offering and global distribution,” said John Celenza, Co-Founder and Co-CEO, BioSteel Sports Nutrition. “The consumer market and many of our athletes have a growing knowledge of cannabis and CBD products and this partnership ensures that we will continue to raise the bar in the sports nutrition field.”
Today’s announcement further advances Canopy Growth’s ongoing multi-faceted strategy to enter new markets with a platform spanning production, distribution and marketing of CBD products derived from hemp and cannabis in accordance with regulations across a number of different verticals. The transaction gives Canopy Growth a 72% stake in BioSteel with an agreed upon path to 100% ownership.
Paradigm Capital Inc. has acted as BioSteel’s financial advisor and McCarthy Tetrault LLP has acted as BioSteel’s legal counsel in connection with the transaction.