Biosteel has found a new owner and it’s Windsor entrepreneur Dan Crosby

Cannabis company Canopy Growth says it has found a buyer for its Biosteel sports drink business and received a court's approval to go ahead with the sale of the company.

The Smiths Falls, Ont.-based cannabis company said in a media release Friday morning that it has found buyers for its Biosteel subsidiary that went into creditor protection in September.

Founded in 2009 by entrepreneur John Celenza and then-NHLer Mike Cammalleri, Biosteel carved out a niche in the saturated sports drink market dominated by Gatorade and Powerade by signing sponsorship deals with NHL stars.

Canopy Growth bought the company in 2019 in a move to diversify its business into drinks, but in September of this year, it announced plans to try to sell the business that had been costing it hundreds of millions of dollars.

Court filings reveal that while sales have steadily grown, the pace has not been enough to offset the flashy, expensive sponsorship and marketing deals. Biosteel was burning through $15 million in cash every month at the time when Canopy sought creditor protection for the unit.

In its media release Friday, Canopy said "all or substantially all of the assets of BioSteel" will be sold in two transactions.

DC Holdings Ltd., which does business as Coachwood Group of Companies, has been selected as the winning bidder for the operational part of the business, including intellectual property of the Biosteel brand name in the U.S., Canada and around the world.

DC is a holding company owned by Windsor-based entrepreneur Dan Crosby, who owns a variety of businesses in southwestern Ontario including Coachwood Capital, and sports nutrition company Canadian Protein.

The Windsor-based company is not buying the U.S. manufacturing facilities, as they are being sold in a separate transaction. New Jersey-based Gregory Packaging Inc., which makes SunCup juice and snack cartons, won the bidding for those assets.

"We did not buy any part of Biosteel, we only purchased their factory and machinery assets from their facility in Virginia," Gregory Packaging's owner Ned Gregory told CBC News in an interview.

Financial terms for either deal have not been disclosed.

Canopy says the proceeds of the sales "are expected to improve Canopy Growth's balance sheet upon completion."