Green Peak Industries’ Financial High Goes Up in Smoke as Skymint is Placed Under Receivership Following a $127 Million Lawsuit
In a shocking turn of events, Green Peak Industries, better known by its brand name Skymint, has been placed under the control of a receiver following a lawsuit filed by Canadian-based Tropics LP. The lawsuit claims that the company owes Tropics more than $127 million, with Green Peak Industries and its subsidiaries in chronic default of their loan obligations since at least March 2022.
The lawsuit alleges that the cannabis company and its subsidiaries lack sufficient cash to operate their business, leading to an order to appoint a receiver last week. With over 600 employees, 24 open retail locations, and three indoor cultivation facilities, the lawsuit filed by Tropics LP states that Skymint’s sales and wholesale prices have been declining at a rapid pace, and the company has been burning cash at the rate of $37.5 million per year.
Moreover, the company is facing a lawsuit filed in Oakland County Circuit Court, claiming that Skymint and its subsidiaries “fraudulently” induced several companies into a purchase agreement to buy 3Fifteen, a marijuana company with stores in Michigan. The companies were given “materially false information” about Green Peak Industries’ financial condition, says the lawsuit, adding that Skymint withheld “material information regarding instances of gross mismanagement and various claims” against the company related to that mismanagement.
According to court records, Green Peak Industries obtained its Michigan license in 2018 and redeveloped the former Summit Sports and Ice Complex into a warehouse, distribution center, indoor grow space, and processing center. The 200,000-square-foot building is less than a mile from Harvest Park, the company’s marijuana industrial park just east of the Summit complex.
Skymint Brands CEO Jeff Radway provided a statement, saying that the company “consented to enter a receivership with our primary lender to improve our balance sheet and financial position, while maintaining day-to-day business operations and preserving long-term growth potential.” He added that the court-approved agreement would allow the company to focus on its debt obligations to address the financial challenges facing many in Michigan’s cannabis industry.
With a promising start, Skymint’s financial high has gone up in smoke, leaving many employees and investors in uncertainty. The receivership is a major blow to the cannabis industry, which is still facing challenges related to excess supply, decreasing prices, limited access to capital, and increasing costs of capital.
