I’m not sure if the Canadian bankruptcy courts are just wildly more efficient than in the United States, but we already have a major announcement in the BioSteel court-supervised sale process. For those that haven’t been following my previous content on this business activity…and recognize BioSteel probably from all the prominent sports marketing deals (e.g. NHL sponsorship), you might be wondering why previous owner Canopy Growth didn’t just find a potential buyer itself? It did two separate times in the last year but Canopy Growth still didn’t receive any satisfactory bids for Biosteel...likely because the potential buyers looked under the hood and weren’t able to see a short enough path to profitability. But don’t get it twisted…that doesn’t mean the BioSteel assets were worth nothing. There were interested parties waiting…they just needed the bankruptcy process to essentially erase all the Canopy Growth mistakes, thus making the acquisition opportunity much more attractive. Of those interested parties, BioSteel received eight total bids, but only six of which substantially complied with the terms and were considered qualified. The winner of the BioSteel bankruptcy process was DC Holdings Limited, which does business as Coachwood Group. This Canadian holding company primarily specializes in the nutraceutical, sports nutrition, and health product sectors, but it also has a portfolio of real estate investments. Admittedly, when I saw the deal news…I didn’t recognize the holding company, its Founder/CEO Dan Crosby, or its main brand asset called Canadian Protein. Now…that doesn’t mean anything, as I have blind spots like everyone, especially when you consider Dan Crosby creates a significant amount of entrepreneur content online, Canadian Protein is one of Canada's largest e-commerce supplement brands, its products are also sold in Costco Canada, and it looks to manufacture most (if not all) its own products. While the new ownership hasn't released any public information on the BioSteel turnaround plans yet, I'll breakdown where the likely strategic path. Just to get this out of the way…any thoughts that BioSteel would quickly bounce back to recent revenue levels is absurd. This isn’t a knock-on the new ownership, but how that recent BioSteel revenue was generated matters.BioSteel won’t go back to playing the sports marketing game (at the highest levels) that Gatorade invented/mastered and BodyArmor emulated. Yes, BioSteel got to a level of sales in the Coke/Pepsi dominated beverage category that few brands ever reach, but I’m not even certain packaged RTD beverages will be a core focus of the new company. If so, maybe they make it available exclusively through Costco Canada…as rebuilding out a full-on North American beverage team and strategy seems too risky right now. My guess is that BioSteel will be rolled back to something that looks more familiar to the times before Canopy Growth initially invested in the brand and went all in on sports drinks. So, with Canadian Protein as our guide…BioSteel will likely get a revamped (and streamlined) supplement lineup and it will be mostly sold online.

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