Lume Cannabis Co. has announced its intention to take control of a significant cultivation facility near Lansing, previously operated by Skymint, its industry rival. This move is part of Lume's strategic expansion efforts in the state's cannabis sector.
Recently, Lume expressed its commitment through a letter of intent, signaling its plans to lease the 56,000-square-foot cultivation space located within Harvest Park at 10070 Harvest Park in Dimondale. This decision comes as Skymint prepares to exit the facility by March 1st, amidst a restructuring initiative following a period of receivership. The facility, owned by Innovative Industrial Properties, marks the end of Skymint's cultivation operations in Michigan. Skymint plans to shift its focus towards sourcing cannabis products from other growers while maintaining its retail presence through 22 stores across the state.
Doug Hellyar, President and COO of Lume, highlighted the company's ambition to solidify its presence in Michigan by occupying the facility within the next 90 days, pending further due diligence and the finalization of a long-term lease agreement with Innovative Industrial Properties. Additionally, Lume is in the process of securing a local license from the village of Dimondale.
The transition to the Harvest Park facility is a strategic move for Lume, with plans to commence its first harvest by August. The harvested plants are slated for flash-freezing and subsequent shipment to Lume's processing site in Evart. The company envisions stabilizing operations before relocating its solventless extraction processes to Dimondale, earmarking the facility as the exclusive production site for its highly sought-after Lume Gold Label live rosin product. This product, known for its use in vapes and smokable forms, has seen a surge in demand that Lume aims to meet through this expansion.
Hellyar projects that, once fully operational, the Dimondale site will become the state's, if not the nation's, largest dedicated live rosin facility. To achieve this, Lume is set to invest significantly in the facility's infrastructure, including a state-of-the-art lighting system and other critical upgrades. This strategic move also allows Lume to enhance its cultivation capacity at its extensive facility in Evart.
The acquisition of the Harvest Park facility, which formerly employed 143 workers under Skymint, may offer employment opportunities for some of these individuals, though the exact number remains undetermined. This development occurs as Skymint initiates layoffs at the facility.
Skymint's challenges culminated in receivership in March of the previous year, following a lawsuit from its primary lender, Tropics LP, a subsidiary of Sunstream Bancorp., affiliated with SNDL Inc. (NASDAQ: SNDL), over a substantial debt. The acquisition of Skymint's assets, including cultivation and retail leases, was finalized in October for $109.4 million by Tropics, now operating under Skymint Acquisition Co.
In a separate move, Skymint relinquished its lease on the Summit Sports and Ice Complex near Lansing earlier in April, abandoning plans to expand its marijuana production capabilities.
Amid these industry shifts, Lume continues to project significant growth, with revenue expectations surpassing $200 million for the current year. The company's operations encompass a cultivation facility in Evart and 38 dispensaries throughout Michigan, reinforcing its stature in the state's cannabis market.
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