Webpacker failing to compile environment.js after upgrade to webpacker 5.0 gem

For some odd reason, I receive "Invalid configuration object. Webpack has been initialised using a configuration object that does not match the API schema. - configuration has an unknown property 'resolvedModules'. These properties are valid:" Has anyone seen this error before?

package.json 
{
  "name": "sample_app",
  "private": true,
  "dependencies": {
    "@client-side-validations/client-side-validations": "^0.1.1",
    "@client-side-validations/simple-form": "^0.1.1",
    "@fortawesome/fontawesome-free": "^5.12.1",
    "@rails/actioncable": "^6.0.0-alpha",
    "@rails/activestorage": "^6.0.0-alpha",
    "@rails/webpacker": "^5.0.0",
    "@yaireo/tagify": "yaireo/tagify",
    "active_storage_drag_and_drop": "^0.4.1",
    "chart.js": "^2.9.3",
    "chartkick": "^3.2.0",
    "cocoon": "github:nathanvda/cocoon#c24ba53",
    "flow-webpack-plugin": "^1.2.0",
    "jquery": "^3.4.1",
    "jquery-ujs": "latest",
    "moment": "^2.24.0",
    "owl.carousel": "^2.3.4",
    "stimulus": "^1.1.1",
    "webpack": "^4.42.1"
  },
  "version": "0.1.0",
  "devDependencies": {
    "webpack-dev-server": "^3.9.0"
  }
}
webpacker.yml

# Note: You must restart bin/webpack-dev-server for changes to take effect

default: &default
  source_path: app/javascript
  source_entry_path: packs
  public_root_path: public
  public_output_path: packs
  cache_path: tmp/cache/webpacker
  check_yarn_integrity: false
  webpack_compile_output: false

  # Additional paths webpack should lookup modules
  # ['app/assets', 'engine/foo/app/assets']
  resolved_paths: ['app/assets']

  # Reload manifest.json on all requests so we reload latest compiled packs
  cache_manifest: false

  # Extract and emit a css file
  extract_css: false

  static_assets_extensions:
    - .jpg
    - .jpeg
    - .png
    - .gif
    - .tiff
    - .ico
    - .svg
    - .eot
    - .otf
    - .ttf
    - .woff
    - .woff2

  extensions:
    - .erb
    - .mjs
    - .js
    - .sass
    - .scss
    - .css
    - .module.sass
    - .module.scss
    - .module.css
    - .png
    - .svg
    - .gif
    - .jpeg
    - .jpg

development:
  <<: *default
  compile: true

  # Verifies that correct packages and versions are installed by inspecting package.json, yarn.lock, and node_modules
  check_yarn_integrity: true

  # Reference: https://webpack.js.org/configuration/dev-server/
  dev_server:
    https: false
    host: localhost
    port: 3035
    public: localhost:3035
    hmr: false
    # Inline should be set to true if using HMR
    inline: true
    overlay: true
    compress: true
    disable_host_check: true
    use_local_ip: false
    quiet: false
    headers:
      'Access-Control-Allow-Origin': '*'
    watch_options:
      ignored: '**/node_modules/**'


test:
  <<: *default
  compile: true

  # Compile test packs to a separate directory
  public_output_path: packs-test

production:
  <<: *default

  # Production depends on precompilation of packs prior to booting for performance.
  compile: false

  # Extract and emit a css file
  extract_css: true

  # Cache manifest.json for performance
  cache_manifest: true

production.js

process.env.NODE_ENV = process.env.NODE_ENV || 'production';

const environment = require('./environment');

module.exports = environment;

It is happening to me as well but really cant sort it out at the moment. In my case what makes everything break is a npm package called active_storage_drag_and_drop