The chairman and CEO of troubled Skymint is out as the company battles through court-ordered receivership.
“We can confirm that Jeff Radway is no longer with Skymint,” the company said in an emailed statement Tuesday. “As we work through this transition, our focus remains on ensuring we are providing exceptional products and unmatched service to our customers.”
On April 7, Jeff Donahue, executive vice president and general counsel of Skymint, told employees in an email obtained by Crain’s that Radway is on an “indefinite leave of absence” from the company,
The company declined to comment on the situation.
In multiple lawsuits, Radway, who founded the Lansing-based vertically-integrated marijuana company in 2018, is accused of mismanagement of funds.
In an email to employees dated April 18, Radway said his goodbyes.
“I’m writing to you one last time to thank you for the memories and the ride of a lifetime — it’s now time for me to move on,” Radway wrote in the email obtained by Crain’s. “I’m so proud of what we all built as a team. The amount of heart, passion, dedication and incredible effort it took to launch Skymint in a new industry and then build it into one of the leaders in what would turn out to be one of the toughest cannabis markets in the U.S. I’m fortunate to have been a part of it with all of you. I’m incredibly proud of our people, products and the guest experience we built together. I take with me some incredible relationships and a profound respect for what a talented and dedicated team can do when working together. Believe me, I know it was never easy … but it was worth the ride.”
Radway did not respond to a request for comment from Crain’s.
A Troubled Company
Skymint, which primarily operates under the parent company of Green Peak Innovations Inc., owes more than $127 million to Canadian investment firm Tropics LP, according to the lawsuit brought by the lender.
The lawsuit alleges Skymint was burning through $3 million in cash per month and generated only $110 million in revenue in 2022, $153 million below its forecast of $263 million in sales for the year. A second lawsuit was filed concurrently in Oakland County Circuit Court 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.
A related lawsuit filed by New York-based cannabis investment firm Merida Capital Holdings, which lent $8 million to Skymint for it to acquire the Merida-controlled 3Fifteen Cannabis, alleges deeper misdeeds by Radway.
The case, filed in Oakland County Circuit Court, alleges Radway “operated (Skymint) as his personal piggybank, and made unilateral decisions on behalf of the company without board approval.”
Merida also alleges Radway had multiple extramarital affairs with employees and on at least one occasion, reached a settlement using company funds with said employee in exchange for silence about the relationship, the lawsuit claims. The plaintiffs also allege Radway promoted the woman he was having an affair with and fired another employee for reporting that relationship to the company’s human resources.
Merida and 3Fifteen, however, have also behaved against the court’s wishes during the receivership.
3Fifteen retook control of several stores acquired in the deal, including dispensaries in Hamtramck, Grand Rapids, Camden and two in Battle Creek, according to court records.
The Ingham County Circuit Court judge overseeing the suit, however, ruled last week that 3Fifteen must cede control of those stores back to Skymint, determining representatives from 3Fifteen violated the court’s receivership order. 3Fifteen must also return $494,045.24 in funds removed from the 3Fifteen bank accounts at Live Life Credit Union. The court also ordered Live Life to return access of those accounts to Skymint employees. (Full Story)