Michigan Cannabis Firm Skymint Placed Into Receivership By Court Order

MICHIGAN– Skymint, the brand name for Green Peak Innovations Inc., has been placed into receivership by a Michigan judge after the company failed to pay back loans provided by SunStream’s affiliate Tropics LP since March last year. Skymint owes investors at least $135 million, and several investors have sued the company, alleging that it had mismanaged their investments and engaged in fraudulent activity. The Michigan court has appointed an independent third party to oversee the financial management of Skymint, taking control of the company’s financial affairs and assets to protect the interests of creditors. The third party will now decide whether to liquidate the company or enable its reorganization.

The cannabis industry in Michigan has been growing rapidly in recent years, but it is becoming highly saturated with too many businesses competing for a limited customer base across patchwork local regulations. The oversupply of product is exacerbating plummeting prices and diminishing profit margins. At least four other cannabis firms in Michigan are being managed by court-ordered receivers.

Cannabis remains a Schedule 1 drug at the federal level, preventing firms from using federal bankruptcy courts to settle debts and leaving state circuit courts as the only means for financial protection. In addition, rising interest rates will only continue to make capital even pricier for struggling companies.

SunStream, Skymint’s financial supporter, intends to continue providing financial support during the receivership process, with existing employees and management staying in place to provide operational and management services. SunStream believes there will be limited disruption to the business and operations of Skymint during the receivership. The company said that it will provide further updates on its loan interests as the receivership process progresses.