Cannabis sales in Michigan hit record highs last year, with companies profiting more than $221 million in the month of December alone, according to a state report. But as the fast-growing industry continues to expand, some companies are beginning to fall behind.
Just last week, Skymint, one of the biggest cannabis producers in the state, entered into receivership after defaulting on a $127 million loan. Receivership is a process where a court-appointed official takes over a business to help a company avoid bankruptcy. As reported by Crain's Detroit Business, this is the fifth cannabis company to recently enter into receivership.
While the rise in receiverships has concerned some, many in the industry say it was expected. "I think it’s a natural part of the ebbs, flow, and growth of an emerging industry. In any new industry, and certainly, any industry at all, when you get an influx of dozens of businesses, not all of them are going to succeed," said attorney Denise Pollicella.
Pollicella is the managing partner at Cannabis Attorneys of Michigan in Howell and Troy. She says she began representing cannabis companies in 2009. Pollicella says a nearly 90% price drop in wholesale cannabis prices over the last 18-24 months also made making money challenging for some cannabis companies.
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