Auction marks end of beleaguered Michigan marijuana company’s grow operation
This story was republished with permission from Crain’s Detroit.
The remaining assets — ovens, centrifuges, laptops, lighting and a candy production line — of the state’s once-largest marijuana growing operation are up for auction.
Skymint, whose cultivation assets have been under the authority of a court-ordered receiver since March 2023, is auctioning off the remainder of its equipment as creditors prepare to walk away from the company.
The auction, which is being held online through Wednesday, features more than 1,000 items ranging in opening bid from $50 to $1,000.
The sale marks the true end of Skymint’s ambitious cultivation operations — the brand still exists in the form of retail stores, which were acquired out of receivership earlier this year.
Skymint, which primarily operates under the parent company of Green Peak Innovations Inc., entered receivership last year following a lawsuit from investors that said it owed more than $127 million to Canadian investment firm Tropics LP.
The lawsuit alleged Skymint was burning through $3 million in cash per month and generated only $110 million in revenue in 2022, $153 million below its forecast of $263 million in sales for the year. A second lawsuit was filed concurrently in Oakland County Circuit Court by New York-based cannabis investment firm Merida Capital Holdings and its affiliates against Green Peak and its executives alleging misrepresentation of financials and mismanagement.
A related lawsuit filed by New York-based cannabis investment firm Merida Capital Holdings, which lent $8 million to Skymint for it to acquire the Merida-controlled 3Fifteen Cannabis, made further allegations.
The case, filed in Oakland County Circuit Court, alleged Radway “operated (Skymint) as his personal piggybank, and made unilateral decisions on behalf of the company without board approval.”
Despite the rapid growth plans, Skymint could never get its growing operations to be profitable.
Skymint’s facilities averaged more than $1,000 per pound, too high to grow cannabis profitably at recent market prices, Jeff Donahue, Skymint’s executive vice president and general counsel, told Crain’s in July. Successful growers are targeting expenses of $450 per pound of cannabis.
This led Skymint to exit all of its growing operations this year, including shuttering its 56,000-square-foot Harvest Park facility at 10070 Harvest Park in Dimondale in March. That property has since been leased to Evart-based competitor Lume Cannabis.
Susan Radway, former spouse of embattled former chair, CEO and founder of Skymint, purchased the cannabis plants and processing equipment from a former Skymint facility at 1669 E. Jolly Road in Lansing.
Fantasy Farms LLC, a company founded by Susan Radway, acquired the assets out of receivership for $350,000. The Huntersville, N.C.-based company received prequalification approval from the state to operate the grow operation in January. It’s unclear if Radway has any connection to the business.
Tropics LP, under a new entity called Skymint Acquisition Co., acquired the assets of Green Peak Industries, doing business as Skymint, for $109.4 million in an auction under receivership. No other bidders reached Tropics’ bid.
However, that deal has yet to close as other lawsuits continue to play out and would need to be settled before Tropics can take over.
Skymint currently operates 19 stores across the state.
