Canopy Growth Seeks Bankruptcy Protection for BioSteel to Trim Costs

Canada's Canopy Growth said yesterday that it would seek bankruptcy protection for its sports nutrition products' segment BioSteel, in the pot producer's latest attempt to rein in costs. Canopy's shares rose 9.6% in early trade after the company said it expects to lower debt by C$95 million over the next two quarters after starting legal proceedings under the Companies' Creditors Arrangement Act in a Canadian court in Ontario and seeking recognition under chapter 15 of the U.S. Bankruptcy Code. The company has been grappling with liquidity issues and has taken several steps to turn profitable including job cuts, exits from some international markets, store closures and divestiture of its retail business across Canada. Canopy first raised doubts about its ability to continue as a going concern in June and reiterated in August. The Smiths Fall, Ontario-based company had been exploring options for a while for BioSteel, which accounted for about 60% of its fiscal first-quarter adjusted core loss. Canopy had said in June it was facing an investigation from the U.S. Securities and Exchange Commission over the reporting of revenue from BioSteel. Read more.