Canopy Growth Corp T.WEED

New Press Release - Canopy Growth Announces that BioSteel Obtains Court Approval of Successful Bids in Sale and Investment Solicitation Process

Court approves combination of transactions resulting in the sale of all or substantially all of the assets of Biosteel Canada and Biosteel ManufacturingElimination of funding obligation to BioSteel consistent with Canopy Growth's cannabis focus and transformation to a simplified, asset-light...read article.

[charlie007]

Does anyone remember why Canopy got into the whole Biosteel endeavor in the first place?    Were they hoping to eventually add cannabis to it?   What is their plan of action now, to grow high quality strains at relatively low cost?   Hasn't that been everyone's plan of action all along?   Its just their latest excuse to keep up hope in the company

[lou64]

Notice they NEGLECTED to add what kind of money these bidders are willing to fork out on a company that needed to be subdivided ?? or What will be the posted LOSS once settled on Canopy's property - business purchase/ investment - updating / outstanding debts vs the very reduced funds the company says will help out finances ??? mere penny on the dollar is a given when any company reneging in

[charlie007]

quin will be here any moment to set us all straight, meanwhile i've never seen anyone purchase it at costco or whole foods, so it's probably expiring, that's too bad, they gave it their best

[Apprentice]

Yes, very well done - not :-( BioSteel remains “significantly” cash-flow negative and had required continued support from Canopy in the estimated amount of CA$15 million per month, per the court documents. In the fiscal year 2023, covering April 2022 through March 2023, the entire BioSteel segment generated CA$69.6 million in sales, more than double the previous year’s total of CA$34.6

[Apprentice]

If DK still got money out of this, then he is a true magician. Will see!

[Coloradobuff]

That's kind of my thinking. The 15 million per month is 180 million per annum. That is a significant savings now and going forward. That alone is a win. 

[Apprentice]

I used to work a few years in a regulated industry (medical technology).  If you consider the 15 million per month (180 million per year) purely theoretically as profit, such a company would have to have a annual revenue of at least 800 to 1000 million.  Approx. 18-22% net margin (65-75 gross) otherwise it doesn’t work with all the S&A, development, operations, etc. I think

[Coloradobuff]

Yeah they were spending 15 million to make 10 gross lol. It was crazy 

[Apprentice]

Exactly - what a nonsense!   Achieved Q2 FY2024 net revenue of $70 MM. Consolidated gross margin was 34% in Q2 FY2024   Assume that the net margin is somewhere at 10% resulting in about 7 mio   Imagine the 15 Mio cost avoidance per month (45 p.q.) would be calculated as earnings - what they surely will not do due to the taxes.   That would catapult the gross

[Coloradobuff]

I see the 15 million monthly as a vampiric drain. They will be a lot better without this. That is also a fact.

[quinlash]

I was hoping they could turn BioSteel into a profitable branch of the company, offloading it and making a notable reduction in expenses is the best alternative IMHO From reading the press release it sounds as if they will be banking cash on the deal as well. I guess in the coming week or so we will get to hear more about the actual numbers. They seem to be doing the best job possible considering

[Coloradobuff]

Agree it was a good move.  question for you: how troubling is it that you have a former cfo in Klein running canopy and he didn't catch that biosteel was vampiricly draining the company? I have always stated as soon as he got hired he needed to slash and burn. 

[quinlash]

Klein would not have done the financial review himself and whichever team did the work would have relied (to some degree) on the forecasting numbers provided by BioSteel. My understanding is that the major drain on BioSteel (thereby Canopy) came from ongoing sponsorship payments to NFL players to promote the brand. I expect the BioSteel team projected much higher sales in a shorter timeframe

[charlie007]

so 180 million saved is like 800-1000 million earned?    smoke another joint ,man lol

[Apprentice]

Hi charlie007 In Germany there is a phrase that says „those who can read and write have a clear advantage". I think you certainly have a lot that guide you through the rough patches in life. And I am a non-smoker  GL charlie007

[charlie007]

Don't be fooled by the pumpers on this board who are trying to recover their losses and who make it sound like canopy is the only horse in the race.  They've been proven wrong again and again, all the way down from $60 to 70 cents. 

[quinlash]

Oh Charlie, lighten up, no harm in putting a few bucks down on a pony with long odds, besides, the payouts are bigger if they finish in the top Three.  Enjoy your weekend

[quinlash]

The cash burn of BioSteel doesn't matter to Canopy now, they have a buyer for it, going forward, it's money that can be directed elsewhere like paying down debt, sustaining the business and rolling out new products. It removes a question mark that was hanging over the operation and (by the sounds of it) puts cash in their pocket. I am curious to know who the two bidders were though.

[Coloradobuff]

The cash burn totally matters. They were paying 15 million a month to fund this pig. Now they are spending zero. That's an improvement of 180 million a year. How can you say that doesn't matter? 

[quinlash]

Sounds like they got an offer big enough to get extra cash out of it, bit surprising to me but good news none the less  Good work Dave

[Coloradobuff]

Agreed good for them. They need to use proceeds to pay down debt. Any guesses on how much? I would hope at least double what they paid. Not holding my breath. When do they have to disclose terms?