Unity3D how to change sprite in SpriteRenderer at runtime with programaticly generated sprite

I'm having this problem with sprites in my Unity3D project. Basiclly I can't change sprite in SpriteRenderer component during runtime. During my research I've only seen solutions that require you to have the sprite pre-loaded, but I can't because it's generated based on the users input image. So what happens is the user can change the background of the "game" by inputing his own photo from his computer. I get the photo in and everything and I generate a sprite from it, but when I change the base sprite with his sprite, nothing happens. The base sprite is still showing. If I put the background sprite on a panel's Image in canvas, then everything works great, but if I do the same with SpriteRenderer then nothing happens. Here is my code:

public class UploadImage : MonoBehaviour
{
    public GameObject background;
    public Sprite sp;
    [DllImport("__Internal")]
    private static extern void ImageUploaderCaptureClick();

    public void setTexture(Texture2D texture)
    {
        sp = Sprite.Create(texture, new Rect(0, 0, texture.width, texture.height), new Vector2(texture.width / 2, texture.height / 2));
        background.GetComponent<SpriteRenderer>().sprite = sp;
    }


    IEnumerator LoadTexture(string url)
    {
        WWW image = new WWW(url);
        yield return image;
        Texture2D texture = new Texture2D(1, 1);
        image.LoadImageIntoTexture(texture);
        Debug.Log("Loaded image size: " + texture.width + "x" + texture.height);
        setTexture(texture);
    }

    void FileSelected(string url)
    {
        StartCoroutine(LoadTexture(url));
    }

    public void OnButtonPointerDown()
    {
#if UNITY_EDITOR
        string path = UnityEditor.EditorUtility.OpenFilePanel("Open image", "", "jpg,png,bmp");
        if (!System.String.IsNullOrEmpty(path))
            FileSelected("file:///" + path);
#else
        ImageUploaderCaptureClick ();
#endif
    }
}

I can't have the background on an image in canvas because other game objects lose transparency and if I set the alpha on image too low, then when game objects move, it leaves everything blurry. Thanks for your help