Wednesday, December 6, 2023

Michigan pot giant Skymint offers deals amidst financial woes

April 18, 2023
<p>Photo Illustration by Madison Echlin. Photo by Matt Zubik.</p>

Photo Illustration by Madison Echlin. Photo by Matt Zubik.

Every day until Thursday, April 20,one of Michigan's largest marijuana brands, Skymint will be selecting a random winner to receive a monthly allowance of $500 to purchase Skymint products for a full year. The winner will also be given a weekend trip in a vacation rental home.

This isn't the first time Skymint has given away weed for a year. The chain also gave away a year’s worth of weed this past January.

But Skymint's situation has changed since then. Now, it faces two lawsuits and a supposed shortage of cash as it prepares and stocks up for the highly anticipated marijuana holiday of 4/20.

In late March, the chain's parent company, Green Peak Industries was sued for $127 million by Tropics, LP. The Canadian-based lender claims the company has repeatedly defaulted on their loan obligations for at least a year. As a result, Green Peak Industries has had a receiver appointed by the Ingham County Court. 

A receiver is a court-appointed official who is set to manage a company's finances and properties with the intent of repaying the creditors — in this case, Green Peak Industries repaying Tropics, LP.

The lawsuit by Tropics, LP alleges Green Peak Industries and its subsidiaries "lack sufficient cash to operate their business," according to court records. 

Green Peak Industries declined to comment for this story.

Further, Green Peak Industries and its subsidiaries owe more than $1 million in rent for property they are leasing in Dimondale — where the dispensary chain is based out of — and the landlord "has filed a complaint to evict" them.

Green Peak Industries and its subsidiaries are running out of business and losing money rapidly. The company has been burning cash at the rate of $37.5 million per year or $3 million per month. As of Feb. 10, the dispensary chain was projected to have just under $5.5 million in cash, according to a consulting firm's review of its financials per court records. 

The second lawsuit lawsuit filed in Oakland County Circuit Court by a New York investment firm, Merida Capital Holdings, alleges Green Peak Industries and its subsidiaries "fraudulently" induced several companies into a purchase agreement to buy the Ann Arbor-based marijuana and dispensary brand 3Fifteen.

The lawsuit alleges Green Peak Industries withheld "material information regarding instances of gross mismanagement, and various claims" and provided "materially false information" regarding the company's "financial condition." 

Both Tropics, LP, and Merida Capital Holdings were involved in Skymint acquiring 3Fifteen.

But Skymint reopened stores in Battle Creek, Camden and Grand Rapids on April 1 after an Ingham County Circuit Court judge ordered 3Fifteen to relinquish control of three dispensary locations after the company violated the court’s receivership order. 

Skymint isn't a stranger to mismanagement complaints though. 

The Cannabis Regulatory Agency, the state's regulatory body for the marijuana industry, filed a complaint against Green Peak Industries on Sept. 30, 2020, under the Medical Marihuana Facilities Licensing Act. 

The agency determined the company sold a marijuana product without proper verification of a registry identification card and did not verify the sale would surpass the individual's daily purchasing limit. 

Green Peak Industries was ordered to pay $4,000 in fines. 

A year later, the Cannabis Regulatory Agency filed a complaint against Greek Peak Industries on Sept. 22, 2021. The complaint found that Green Peak Industries violated the Michigan Regulation and Taxation of Marijuana Act because the company did not enter all its transactions, current inventory and other information into the statewide monitoring system. 

Green Peak Industries was ordered to pay $2,000 in fines.

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