Benzinga - Cannabis company Skymint has been going through a rough patch lately.
Its CEO and chairman, Jeff Radway, who founded Skymint in 2018, bid farewell to his team in an email on April 18, thanking them for the memories and the ride of a lifetime, as first reported by Crain’s Detroit.
Radway has been on an indefinite leave of absence since April 7 and has now officially left the company as it battles through court-ordered receivership.
The Michigan-based company currently owes more than $127 million to Canadian investment firm Tropics LP, a subsidiary of Calgary-based Sundial Growers Inc.(NASDAQ: SNDL), and has reportedly been burning through $3 million in cash per month.
The situation grew worse with multiple lawsuits against Radway, who is accused of mismanagement of funds, including allegations that he operated the company "as his personal piggybank" and engaged in multiple extramarital affairs with employees, according to the case, filed in Oakland County Circuit Court.
Skymint operates primarily under the parent company of Green Peak Innovations Inc.
The lawsuit brought by Tropics LP alleges that Skymint generated $110 million in revenue in 2022 — $153 million below its forecast of $263 million in sales for the year.
Another lawsuit was filed concurrently 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.
An Ingham County Circuit Court judge sent Skymint into receivership in March due to the company's financial woes. As a result, Skymint is struggling to keep its stores running, with 3Fifteen, a company it acquired, taking control of several stores in violation of the court's receivership order. The court has since ordered 3Fifteen to cede control of those stores back to Skymint and to return funds removed from the 3Fifteen bank accounts to Skymint employees.
Skymint's situation underscores the need for prudent financial management in the rapidly evolving cannabis industry.
The news comes on the heels of Flora Growth Corp. (NASDAQ: FLGC) also naming a new CEO. Hussein Rakine's appointment was confirmed Tuesday after former CEO Luis Merchan announced his resignation.
As the industry continues to mature, it will become increasingly important for cannabis companies to have a solid financial plan in place and to operate transparently to gain and maintain the trust of investors and customers alike.
Next: Elon Muck To Launch Rocket On Symbolic Cannabis Date 4/20
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