Michigan-based cannabis cultivator and retailer Skymint is in receivership after a Canadian investment firm filed a lawsuit claiming the company owes more than $127 million.
According to Crain’s Detroit Business, Calgary, Alberta-based Tropics LP alleges that Green Peak Innovations, which operates as Skymint, generated $153 million less than what it forecast in 2022.
The lawsuit, filed March 3, claims the company was spending $3 million per month.
The suit also alleges that subsidiaries have borrowed more than $81 million from Tropics since 2021 and have been “chronically in default of their loan obligations,” the Lansing State Journal reported.
In a concurrent lawsuit, New York investment firm Merida Capital Holdings filed a complaint in Oakland County Circuit Court alleging that Green Peak misrepresented its financial standing and was mismanaged, according to Crain’s.
Both Tropics and Merida were involved in a $78 million funding that allowed Skymint to acquire Michigan retailer 3Fifteen Cannabis in September 2021.
Ingham County Circuit Court in Lansing placed the company under control of receiver Gene Kohut of Trust Street Advisors in Detroit.
According to Crain’s, Skymint said in a statement Wednesday that the receivership would give the company an opportunity to reorganize its debt and meet its financial obligations.
“This was a difficult decision, but a necessary one that we believe will create future opportunities for our employees, other stakeholders and the company,” the Ann Arbor-based company said.
Because marijuana is federally illegal, cannabis companies cannot turn to bankruptcy to escape financial entanglements such as Skymint’s.
But financially troubled marijuana operations do have options such as receiverships.
To that end, Michigan Gov. Gretchen Whitmer in 2020 extended the state’s receivership law to cannabis businesses.