Accounting errors, overspending lead Canopy Growth to sour on its $50M BioSteel investment - BNN Bloomberg

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Accounting errors, overspending lead Canopy Growth to sour on its $50M BioSteel investment

Now, that same investment has suddenly emerged as an albatross for the stumbling cannabis player, forcing Canopy to announce the embarrassing move of restating its financial statements for its 2022 fiscal year while former employees paint a picture of a dysfunctional organization rife with overspending.

Celenza -- who started BioSteel in 2009 with former NHL star Mike Cammalleri to find a nutritional recovery drink that wouldn't fall afoul of new NHL drug testing rules -- was described by one source as a high-energy leader who clashed with Klein. Canopy acquired a 72 per cent stake in BioSteel in Oct. 2019 for $50.7 million.

While BioSteel's revenue has purportedly climbed 56 per cent in 2022 to $44.6 million, a rare bright spot in Canopy's floundering Canadian cannabis business, those sales may have come at a steep cost with costly endorsement deals awarded to a slew of NHL, NFL, MLB, and NBA players, the source said. Industry sources suggested endorsement deals with well-known athletes could start at $100,000, while contracts with professional teams could often be at least triple that amount.

 

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