On September 14, 2023, following a review of the strategic options for the BioSteel business unit, Canopy Growth ceased funding the operations of BioSteel Sports Nutrition Inc. ("BioSteel Canada") and commenced proceedings (the "CCAA Proceedings") under the Companies' Creditors Arrangement Act (the "CCAA") in the Ontario Superior Court of Justice (Commercial List) (the "CCAA Court") and sought and obtained recognition of that proceeding under Chapter 15 of the United States Bankruptcy Code. To assist with the sale process, the Court approved the appointment of a monitor.

As a result of the CCAA Proceedings, the most relevant activity of BioSteel Canada became the liquidation and sale of assets. Management concluded that Canopy Growth ceased to have the power to direct the relevant activity of BioSteel Canada because the liquidation and sale transactions required approval from the CCAA Court. Thus, Canopy Growth no longer has a controlling interest in BioSteel Canada and has deconsolidated the entity effective September 14, 2023. The deconsolidation of BioSteel Canada and related impairment charges are classified under losses from discontinued operations.

The strategic decisions made encompassed all operations of the BioSteel business unit, including those of BioSteel Canada. For this reason, the BioSteel segment results for all periods prior to the September 14, 2023 deconsolidation of BioSteel Canada, including costs to exit, are classified as discontinued operations.

On November 16, 2023, BioSteel Sports Nutrition USA LLC ("BioSteel US") and BioSteel Manufacturing LLC ("BioSteel Manufacturing" and collectively with BioSteel Canada and BioSteel US, the “BioSteel Entities”) were added as additional applicants in the CCAA Proceedings. As a result, the most relevant activity of both entities became the liquidation and sale of assets and distribution of cash and proceeds to their respective stakeholders and management concluded that Canopy Growth ceased to have the power to direct the relevant activities of BioSteel US and BioSteel Manufacturing because those activities required approval from the CCAA Court. Thus, Canopy Growth no longer has a controlling interest in either entity and has deconsolidated both entities effective November 16, 2023. The deconsolidation of BioSteel US and BioSteel Manufacturing and related impairment charges are classified under losses from discontinued operations.


	Years ended
	March 31,			March 31,			March 31,
	2024			2023			2022
Net revenue	$	56,610		$	69,651		$	34,622
Cost of goods sold		145,625			110,262			50,344
Operating expenses		97,851			177,171			58,235
Operating loss		(186,866	)		(217,782	)		(73,957	)
Other income (expense), net1		(6,183	)		(10,380	)		2,300
Income tax (expense) recovery		936			(954	)		-
Net loss on discontinued operations, net of tax	$	(192,113	)	$	(229,116	)	$	(71,657	)

1 Included in Other income (expense), net for the year ended March 31, 2024 is a loss on deconsolidation of $9,820.

Canopy Growth continues to have a 90.4% ownership interest in BioSteel Canada and 100% ownership interests in each of BioSteel US and BioSteel Manufacturing, but has deconsolidated the BioSteel Entities because it no longer has a controlling interest in them. Since the estimated amount of the liabilities of the BioSteel Entities exceeds the estimated fair value of the assets available for distribution to its creditors, the fair value of Canopy Growth's equity investment in the BioSteel Entities approximates zero.

Prior to Canopy Growth's deconsolidation of BioSteel Canada, Canopy Growth made significant secured loans to BioSteel Canada for purposes of funding its operations. The secured loans and corresponding interest were considered intercompany transactions and eliminated in Canopy Growth's consolidated financial statements prior to September 14, 2023, being the deconsolidation date. As of the deconsolidation date, the secured loans and corresponding interest are now considered related party transactions and have been recognized in Canopy Growth's consolidated financial statements at their estimated fair value of $29,000.

As of the deconsolidation date for BioSteel US and BioSteel Manufacturing, Canopy Growth has recorded remaining amounts legally receivable from BioSteel US and BioSteel Manufacturing at their estimated fair value.

The remaining amounts legally receivable from the BioSteel Entities are measured at their expected recoverable amounts. The assets and liabilities related to the BioSteel Entities business units are classified as discontinued operations and the major categories are as follows:


	March 31,		March 31,
	2024		2023
Cash	$	-	$	9,314
Short-term investments		-		69
Amounts receivable, net		-		25,528
Receivable from BioSteel Entities		8,038		-
Inventory		-		65,671
Prepaid expenses and other assets		-		15,709
Property, plant and equipment		-		28,195
Intangible assets		-		27,969
Other assets		-		405
Total assets of discontinued operations	$	8,038	$	172,860

Accounts payable		-		44,399
Other accrued expenses and liabilities		-		22,248
Other current liabilities		-		977
Deferred income tax liabilities		-		954
Other liabilities		-		2,463
Total liabilities of discontinued operations	$	-	$	71,041

On December 18, 2023, the Company entered into an agreement to divest all of its interest in This Works to a London-based investment firm (the “This Works Divestiture”). The Company completed the This Works Divestiture on December 18, 2023, pursuant to which the Company received a cash payment of $2,249 (£1,333) and a loan note of $5,240 (£3,106) with a maturity date of December 18, 2027. The Company may receive an earnout payment of up to $5,905 (£3,500), subject to certain financial targets.

Prior to closing of the This Works Divestiture, the net assets of This Works were recorded as held for sale and the Company recorded asset impairment and restructuring charges of $28,144. Upon the completion of the This Works Divestiture, the Company no longer controls This Works and derecognized the assets and liabilities on the closing date:


Current assets1	$	13,793
Intangible assets		16,828
Less: valuation allowance		(20,154	)
Current liabilities		(6,661	)
Cumulative translation adjustment		2,322
Net assets disposed	$	6,128

Consideration received in cash	$	2,249
Future cash consideration		7,286
Costs to sell		(3,407	)
Total consideration	$	6,128

Gain on disposal of consolidated entity	$	-

1 Included in current assets is $5,968 of cash.

The gain calculated on the derecognition of the assets and liabilities of This Works is the difference between the carrying amounts of the derecognized assets and liabilities, and the fair value of consideration received, net of costs to sell.

On September 27, 2022, the Company entered into the following two agreements to divest its retail business in Canada, which includes the retail stores operating under the Tweed and Tokyo Smoke banners:

In the three months ended December 31, 2022, upon closing of the OEGRC Transaction and the FOUR20 Transaction, the Company received a cash payment of $88. At December 31, 2022, the Company was also entitled to deferred consideration of $5,500, and an earn-out payment of $6,099, subject to the achievement of certain revenue targets by the divested retail stores. In the three months ended March 31, 2023, $2,500 of deferred consideration was received.

Following the divestiture of the retail stores pursuant to the OEGRC Transaction and the FOUR20 Transaction, the Company derecognized the assets and liabilities of the associated retail stores from these consolidated financial statements at their carrying amounts on their respective closing dates, as follows:


Current assets	$	6,461
Property, plant and equipment		7,990
Other long-term assets		144
Current liabilities		(9,492	)
Net assets disposed	$	5,103

Consideration received in cash	$	88
Future cash consideration		11,599
Costs to sell		(2,442	)
Total consideration	$	9,245

Gain on disposal of consolidated entity	$	4,142

The gain calculated on the derecognition of the assets and liabilities of the retail stores is the difference between the carrying amounts of the derecognized assets and liabilities, and the fair value of consideration received, net of costs to sell.

On December 15, 2021, the Company entered into an agreement to divest all of its interest in C3 to a European pharmaceutical company headquartered in Germany. C3 develops and manufactures cannabinoid-based pharmaceutical products for distribution in Germany and certain other European countries.

The C3 Divestiture was completed on January 31, 2022, pursuant to which the Company received a cash payment of $128,316 (€88,698), inclusive of cash, working capital and debt adjustments. The Company will also be entitled to an earnout payment of up to €42,600, subject to the achievement of certain milestones by C3.

Following the C3 Divestiture, the Company no longer controls C3 and the Company derecognized the assets and liabilities of C3 from these consolidated financial statements at their carrying amounts, including $53,541 of goodwill allocated to the C3 reporting unit. The derecognized assets and liabilities on January 31, 2022, were as follows:


Current assets1	$	44,568
Property, plant and equipment		9,216
Intangible assets		15,548
Goodwill		53,541
Current liabilities		(3,089	)
Deferred income tax liabilities		(6,029	)
Cumulative translation adjustment		19,178
Net assets disposed	$	132,933

Consideration received in cash	$	128,316
Future cash consideration		7,233
Costs to sell		(1,153	)
Total consideration	$	134,396

Gain on disposal of consolidated entity	$	1,463

1 Included in current assets is $19,338 of cash.

The gain calculated on the derecognition of C3’s assets and liabilities is the difference between the carrying amounts of the derecognized assets and liabilities, inclusive of any cumulative translation adjustment amounts, and the fair value of consideration received, net of costs to sell.