Skymint has announced the impending shutdown of its Harvest Park facility near Lansing, Michigan. This 56,000-square-foot cultivation plant is set to halt its operations, coinciding with the termination of approximately 180 employees by March 1st, 2024.
The decision to close the Harvest Park facility comes amid several industry-wide challenges that Skymint, like other players in the Michigan cannabis sector, has been grappling with. The company cites an oversupply in the market, falling prices, and escalating costs as key factors influencing this move. In a statement, Skymint expressed its view that this step is necessary to stay competitive and ensure the long-term success of its brands.
Despite the closure, Skymint maintains its presence in the state with 22 retail locations. However, the company has experienced a notable financial downturn, attributed to dropping marijuana prices and alleged internal mismanagement.
In a significant industry move, Tropics LP, a Canadian entity now known as Skymint Acquisition Co., acquired Skymint out of bankruptcy. The deal, valued at $109.4 million and finalized in October, was conducted through a stalking horse bid. Tropics LP, associated with SunStream Bancorp Inc. and SNDL Inc., took over Skymint's cultivation assets and the leases of 22 dispensaries. These dispensaries, as of September, were reported to generate about $68 million in annualized sales.
The upcoming layoffs at Harvest Park, slated to begin on February 12th, 2024, raise questions about the influence of Tropics LP, Skymint's new owner, in this decision. The acquisition process is expected to be fully completed in the early part of the following year.
Skymint's path to closure and layoffs can be traced back to financial and legal difficulties. The company faced a $127 million lawsuit from Tropics over breached agreements, stemming from a $70 million loan given in September 2021 for the acquisition of 3Fifteen Cannabis. Skymint's failure to meet its financial obligations led to additional loans and exacerbated its financial woes.
Court documents revealed a stark decline in Skymint's financial health, with falling daily sales and a monthly cash burn rate of $3 million. By 2022, revenues had dropped significantly to $110 million, far below the projected $263 million. The lawsuit also highlighted issues with unpaid taxes and fees.
Moreover, Skymint's decision to surrender the lease of the Summit Sports and Ice Complex to developers Innovative Industrial Properties Inc., a cannabis-focused property developer, further illustrated its fiscal struggles. IIP, which also owns the Harvest Park property, has not commented on the facility's future amidst Skymint's ongoing challenges.
LightSky Farms, a prominent cannabis cultivation company in Michigan, has established a unique approach to cannabis production that mirrors the meticulous methods of winemaking. Founded in 2013 by Shannon Walters, a seasoned vintner, LightSky Farms (LSF) has become a well-known name in the state for its high-quality cannabis products.
LSF's cultivation practices are deeply rooted in a 'flavor-first' philosophy, as explained by Brooke Widener, the company's IPM coordinator. This approach prioritizes creating a memorable and enjoyable experience for consumers, focusing on the quality and sensory aspects of cannabis rather than sheer production volume.
Originally part of Michigan's caregiver program, LSF transitioned to the regulated Metrc market in 2018, following a partnership with the Landaal family, operators of Landaal Packaging Systems in Flint. The company has earned over 40 awards in the cannabis industry, including several High Times' Cannabis Cups and three first-place trophies at the recent Michigan Zalympix, underscoring its commitment to superior product experiences.
At the heart of LSF's strategy is a unique cultivation method that enhances the natural production of aromatic compounds like terpenes and flavonoids. This method involves environmental manipulation techniques, such as controlled dry back farming, similar to those used in viticulture. Widener, with her background in dry farming at a cannabis farm, explains that stressing the plants through these techniques can boost cannabinoid and terpene levels, sometimes leading to the expression of profiles that wouldn't normally occur under standard conditions.
LSF also places a high emphasis on data collection and analysis in its cultivation process. This includes daily data collection on watering rates, fertigation runoff, and light intensity, enabling the team to make precise adjustments to their nutrient recipes and lighting conditions. For example, LSF's flower lead, Chris Koslowski, regularly checks the photosynthetic photon flux density (PPFD) to ensure even canopy lighting and adjust light intensity based on plant needs. This meticulous attention to detail allows LSF to fine-tune the growth conditions for different strains, maximizing their genetic potential.
The cultivation facility, an impressive 85,000-square-foot space, has been designed with efficiency and quality in mind. LSF has adopted Fluence's LED lighting systems, preferring them over the older high-intensity discharge lamps for their energy efficiency and lower thermal output. This choice reflects LSF's commitment to environmentally conscious production and cost-effectiveness, which is crucial in maintaining competitive pricing for their products.
Brittany Hertzberg, LSF's sales and marketing manager, emphasizes the importance of producing safe, high-quality products while navigating the challenges of the adult-use market and the COVID-19 pandemic. The use of high-efficiency LEDs and other resource-saving practices has allowed LSF to offer its products at more accessible prices, fulfilling their mission of providing high-quality cannabis to a broader customer base.
Looking ahead, LSF is positioned for further expansion. With four additional LED-equipped grow rooms ready for activation, the company anticipates increasing demand. This is evidenced by a 15% increase in market penetration on the wholesale side over the past nine months, marking a significant growth phase for LightSky Farms.
Medically prescribed marijuana use is permitted in 37 states and the District of Columbia, specifically for medical purposes. In addition, 19 states (Alaska, Arizona, California, Colorado, Connecticut, District of Columbia, Illinois, Maine, Massachusetts, Michigan, Montana, Nevada, New Jersey, New Mexico, Ohio, Oregon, Vermont, Virginia, and Washington) have also legalized recreational marijuana.
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Michigan's Occupational Safety and Health Administration (MIOSHA) has launched a state emphasis program aimed at safeguarding employees in the burgeoning cannabis industry. This initiative comes in response to the rapid growth of the sector following the legalization of recreational cannabis in Michigan in 2018. The state now boasts over 1,000 dispensaries, in excess of 1,000 growers, and 228 processors. MIOSHA has identified these areas as having the highest frequency of occupational safety and health risks.
To address these concerns, MIOSHA has developed a dedicated cannabis safety webpage, offering a plethora of free resources. These include informative fact sheets and educational video sessions, in collaboration with the Michigan Cannabis Regulatory Agency, which is responsible for overseeing adult-use marijuana establishments and licensing.
The educational material provided covers a wide range of topics, including an overview of MIOSHA's Consultation Education and Training Division, guidelines on hazard communication, and the proper use of personal protective equipment. Additionally, the program offers two PowerPoint presentations designed specifically for employers in the cannabis industry. These modules cover critical aspects such as:
Employers in the cannabis industry are encouraged to utilize MIOSHA's Consultative Assistance Program for help in identifying workplace hazards and training their workforce effectively. This proactive approach by MIOSHA is a significant step in ensuring the health and safety of workers in Michigan's rapidly evolving cannabis industry.
Upon entering LaCannaville, the newest cannabis dispensary in Midland County, Michigan, customers are immediately enveloped in a rich tapestry of scents ranging from the unmistakable aroma of marijuana to subtler floral and basil notes. This sensory introduction marks the beginning of a unique shopping experience, guided by knowledgeable budtenders who take the time to understand each customer's preferences and needs before recommending suitable products.
The dispensary, a venture by Sue LaBonville and her son, Kaleb, stands as a testament to an unexpected career turn for LaBonville, who retired in 2021. Initially distant from the world of cannabis, her perspective shifted after witnessing its therapeutic benefits for her sister, who has an autoimmune disease. Despite the surprise of her friends, LaBonville became a prominent figure in her community's cannabis industry.
The inspiration for LaCannaville was born out of the desire to contribute to the recovery of Sanford, their hometown, which was hit hard by COVID-19 and the 2020 floods. Kaleb's suggestion to explore the cannabis industry led to their mission of establishing a distinctive destination business, which they believed would help rejuvenate Sanford and attract visitors.
LaBonville's research revealed a diverse clientele, including professionals, working-class individuals, and a significant segment of older customers seeking relief from various ailments. This diversity is reflected in LaCannaville's customer base.
The journey culminated in the opening of LaCannaville in November, shortly before Thanksgiving. It became the second cannabis dispensary in Midland County, following the opening of Emerald Fire Provisioning Center in Coleman in 2022. Since its inception, LaCannaville has experienced a thriving business, drawing customers from local and neighboring areas for its convenience and selection.
LaBonville is particularly moved by the impact of her products on customers suffering from conditions like arthritis, ALS, and lupus. Her personal interactions with customers seeking relief are both poignant and affirming of her business's purpose.
The decision to open LaCannaville followed Sanford's village council voting to opt into state statutes allowing retail cannabis sales, with LaBonville's vision for the dispensary winning unanimous support from the council. However, navigating the cannabis industry in Michigan is challenging, with strict regulations, heavy taxation, and limited financial services due to cannabis's Schedule I status.
Despite these challenges, LaBonville's business acumen gives her an edge in Michigan's burgeoning marijuana market. The state's cannabis industry is expected to generate significant revenue, with Michigan poised to become the second-largest market in the U.S. LaBonville remains committed to maintaining her business's independence and contributing to her community, despite the competitive pricing and market pressures.
LaCannaville not only serves its customers but also aims to enhance Sanford's appeal. The dispensary's website features local attractions, encouraging visitors to explore the community further. This approach aligns with LaBonville's belief that every dollar spent on cannabis in Sanford could boost local businesses.
The dispensary, managed by Matt Dawson, a local who was part of the anti-drug DARE campaign, now sees cannabis as a unifying and healing element. He advocates for education about cannabis, challenging stereotypes and misconceptions, particularly those associated with the outdated notion of marijuana as a gateway drug. Research from the Michigan Cannabis Regulatory Agency supports this stance, indicating that marijuana use is not a primary factor in the choice to use illicit drugs.
LaCannaville represents more than just a cannabis dispensary; it's a symbol of resilience, community support, and a shift in societal attitudes towards cannabis. It's a place where education, healing, and community revitalization intersect, demonstrating the evolving role of cannabis in modern society.
Heather Robertson, an employee at Rize, a recreational marijuana dispensary in Menominee, Michigan, has experienced frequent police stops upon returning to her home in Wisconsin, where marijuana remains illegal. She suspects these stops are due to her association with the dispensary, as officers often inquire about the presence of marijuana in her vehicle. Despite not receiving any tickets, Robertson's experiences highlight the growing tension at the Michigan-Wisconsin border following the legalization of recreational marijuana in Michigan.
This tension is evident in the rising number of marijuana-related citations in border counties. For instance, Florence County saw an increase from four citations in 2019 to 83 last year, coinciding with the commencement of recreational marijuana sales in Michigan. Similarly, Marinette city police reported a significant jump in citations, from 129 in 2019 to 548 last year.
Local residents and marijuana enthusiasts believe Wisconsin police are closely monitoring dispensaries and customers, particularly those with Wisconsin license plates. This suspicion has led to frequent warnings among dispensary clients about potential police stops upon re-entering Wisconsin.
Despite these concerns, Wisconsin law enforcement officials deny any targeted surveillance or marijuana enforcement operations. Marinette County Sheriff Randy Miller emphasizes that their primary focus is on combating more severe drug issues, such as fentanyl, heroin, and methamphetamine.
The availability of marijuana in Michigan and its illegality in Wisconsin has created a unique challenge for law enforcement. Officers often encounter marijuana during routine traffic stops, especially when dispensary packaging is visible. Florence County Chief Deputy TJ Peterson acknowledges the ease of finding marijuana on travelers, given the dispensaries at both ends of the border.
Kay Lynn Olesen's experience exemplifies this situation. Pulled over for minor traffic violations, a deputy noticed a dispensary bag in her car and issued a citation. Olesen, a Green Bay resident, where small amounts of marijuana are decriminalized, contested her ticket, expressing her desire for Wisconsin to follow the legalization trend.
Marinette, a bustling city connected to Menominee, Michigan, is experiencing growth, with increased job opportunities and a rise in felony cases. Police Chief Jon Lacombe, emphasizing the city's busy law enforcement agenda, refutes any notion of targeting marijuana users.
Despite higher marijuana possession citation costs in Marinette, former Police Chief John Mabry clarifies that revenue generation is not the objective. The city's budget reflects a minor contribution from court fines, including those for marijuana offenses.
Lacombe, with deep roots in Marinette, recalls a focus on combating heroin in the mid-2000s. He acknowledges the benefits of marijuana legalization, citing reduced risks compared to illegal grow operations and potentially tainted products.
In nearby Peshtigo, Police Chief Fred Popp foresees marijuana legalization as inevitable. He notes a shift in law enforcement perspectives over time, with more experienced officers viewing the issue in shades of gray rather than black and white.
This sentiment is echoed in Florence County's decision to train their drug-sniffing dog without marijuana detection, anticipating future legalization. The county is willing to forego marijuana citations, considering the broader implications for law enforcement.
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