Canopy Growth acquires majority stake in BioSteel

The cannabis producer "lays the groundwork" for the creation of CBD-infused sports nutrition products.

Cannabis producer Canopy Growth has bought a majority stake in sports nutrition company BioSteel, its latest investment to gain a foothold in new categories with CBD-infused products.

Mark Zekulin, CEO of Canopy Growth, said in an announcement that the acquisition “lays the groundwork” for the company to enter the sports nutrition space, in accordance with regulations in markets where they will be sold. BioSteel, he said, allows it to do so with “a strong and growing brand” in the lead-up to the legalized sales of more products that contain cannabis, saying CBD-infused BioSteel products could be “a potentially significant and disruptive growth driver.”

BioSteel started in 2009 by selling sports hydration products. Its portfolio has since expanded to include protein products and supplements, both for everyday and athletic use. It currently has over 10,000 points of distribution across Canada and the U.S., a number that continues to expand, as well as plans to move further into Europe. BioSteel also has partnerships with USA Hockey, Canada Basketball, Athletics Canada and the Professional Hockey Players Association.

A key part of BioSteel’s marketing has been “Team BioSteel,” the roster of professional athletes who endorse its products. They include Ezekiel Elliott of the Dallas Cowboys, Connor McDavid of the Edmonton Oilers, tennis player Eugenie Bouchard, Andrew Wiggins of the Minnesota Timberwolves and Wayne Gretzky. Canopy specifically noted the relationship with Elliott in its announcement, as the agreement the running back has with BioSteel will allow him to endorse CBD products once the NFL allows players to do so, something that has yet to be done by an active player.

Following recreational cannabis legalization, Canopy Growth has been making investments to extend its expertise with cannabanoids – namely CBD – into new product categories, with some of the biggest going beyond food and beverage products. In February, it announced a partnership with Martha Stewart to develop CBD products, specifically ones aimed at pets. In the spring, it acquired U.K.-based skincare and sleep brand This Works, with plans to create CBD- and hemp-based products in the beauty and wellness categories.