The deal will see the cannabis giant acquire a 72 per cent stake in the Toronto-based energy sports drink maker with an agreed upon path to total ownership. Financial terms of the deal were not immediately released.
â€śThis 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,â€ť Canopy Growth CEO Mark Zekulin said in a statement Wednesday.
â€śWe view the adoption of CBD in future BioSteel offerings as a potentially significant and disruptive growth driver for our business.â€ť
Founded in 2009, BioSteel is best known for its pink sports drink used by professional athletes. The companyâ€™s products have been purchased by over 70 per cent of the teams in North Americaâ€™s four major sports leagues. Brand ambassadors include Ezekiel Elliott of the Dallas Cowboys, Connor McDavid of the Edmonton Oilers, tennis player Eugenie Bouchard, Andrew Wiggins with the Minnesota Timberwolves and NHL Hall of Famer Wayne Gretzky.
Non-intoxicating cannabidiol, or CBD, has long been touted as the next big trend in sports beverages and wellness. The cannabis compound is widely-believed to have therapeutic qualities beneficial to athletes.
“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,â€ť said Michael Cammalleri, co-founder and co-CEO of BioSteel. â€śIts presence is already commonplace amongst NHL players and as a regular CBD user myself, I couldnâ€™t be more proud to champion BioSteelâ€™s evolution and leadership in this space.â€ť
The global sports drinks market was valued at US$22.37 billion in 2018, according to Grand View Research. The firm expects the segment will see a 7.8 per cent compound annual growth rate in the United States alone. Sales of CBD-infused drinks are expected to rise to US$1.4 billion in 2023 from US$227 million this year, according toÂ food and drink consulting firm Zenith Global.
Canopy Growth said it sees the BioSteel acquisition as laying the groundwork for future CBD-based product offerings globally. BioSteel claims to have more than 10,000 points of distribution in Canada and the U.S., as well as expansion into Europe.
While the latest U.S. Farm Bill legally separated hemp from cannabis containing significant amounts of psychoactive THC, the U.S. Food and Drug Administration maintains that food and drink products containing CBD remain illegal. The cannabis sector is awaiting regulatory clarity on hemp-sourced CBD from U.S. authorities.
â€śJoining 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,â€ť said John Celenza, co-founder and co-CEO of BioSteel Sports Nutrition in the release.
â€śThe 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.â€ť
Canopy Growth is also nearing the release of THC-infused beverages under its Tweed banner. Those products are expected to become available in Canada in mid-December.