Blum Holdings Inc (BLMH)

[IndustryParticipant]

My personal opinion differs from most (usually does) for various reasons, but I'm glad to offer my personal opinion.

1. What do you make of the VanVrede drama? From what I can tell, the VV’s messed up. Curious on your perspective and the overhang it represents. The downside is I don’t see an outcome where TRTC retains the NJ greenhouse, as it is beyond reconciliation with VV’s and the building sits on the land they own... its weird and messy.

2. In the earnings transcript, I see Derek was asked about that greenhouse and it’s cannabis potential. He quoted wholesale and high end prices per pound and then said the NJ greenhouse is estimated to be able to do $30M annually if converted. Seems much lower than out estimates. Please advise.

3. The Q1 revenue numbers were a bit underwhelming. What, $10M? $40M run rate for the year with CA now legal, NV full year rec, add’l dispensary in Santa Ana... Guidance last year called for $38-$42M in 2017 and they came close but missed the low end. What gives? Whats happening out there on the front lines?

1. Haven't read through entire suit, not care or need to, seems like nonsense but my understanding (and that may be incorrect) is that the original structure was procured, moved and reassembled on current site.

If you own the land my structures sit upon, whose future is in more jeopardy? Yours or mine?

You breach our deal, and your left with nothing. I'm left with a similar structure on another parcel. (Albeit with an enormous expense to do such, but yet still cheaper than from scratch.)

Your left with an empty parcel which used to house a potential 8 figure operation which you could have had a piece of..

2. I did hear call and segments addressing future potential revenues and out of personal curiosity, listed carefully, and was not surprised most numbers seem to be deliberately reduced.

I would do the same if in a similar position given the markets knee jerk reactions to any and everything. As previous, 3 different schools of thought and approaches. Management, production, and providing a statement on the behalf of a public company on record that you will be bound to for a while to come.

250k, 1 ton per 10k, 25 tons (50k units (lbs), even assuming $1k a unit that's $50MM. 2k per, $100MM. ($1,500 unit, $75MM)

I would have said exactly the same. (low end estimate guaranteed to surpass). Not worth the drama. Basic approach: Under promise, over deliver.....expenses high, yields/wholesale low, etc.....

On every project I/we do, we go 50% higher on expenses, 50% lower on production and wholesale values. (Not necessarily always those specific, but that is the general approach I prefer specifically/personally. Eliminates the need to backtrack when and if there is a problem and we always come out ahead. ;)

3. Corrections:
NV at the time was 6 months in, not 1 year. 1 year in will be the 2018 Q2. CA Q1.

I've been through this all personally, many times.

Every state (adult use) has experienced give or take up to a 1,000% increase over their first 24 months, and NV and CA are superior markets, so.....90 days in (CA), 6 months in (NV).....NV without cultivation as well and CA not even scratching the surface as far as "settling in"...ie: wholesale relationships throughout the state established)....there's nothing but upside.

I'm a long term guy....I've addressed projects from blank page per application through commencement of operations, through growth of the same over 3-6-12-16-24 months.

I think, and my personal opinion only is people have become far too demanding (industry/nationwide) in their expectations which take into consideration zero growth, and has been, and is seen here quite often....ie: A refusal to acknowledge the process of growth.

I don't care if your opening up a rec dispo in the middle of NYC times square: Your day 1 numbers aren't going to be your month 2, which aren't going to be your month 6, 12, 16 and so on.....

Sometimes you have a combination of the above aspects.....ie: open is great, things settle down, then you return to slow and steady build over time, with each quarter growing.....

I see it all in a slightly different way:
They really didn't get started until about 1 year ago.....(got the NV dispo's up for medical, med program was weak, transitioned into rec, no cultivation....CA Oakland a solid base, but then added the reserve, then other applications as well as cultivation now seems to be under control (as far as development and process/planning).....

I do this every day......I listen to people complain every day......I watch the impatient pacing every day.....but we always keep proceeding regardless of the nonsense, and I love my "I told ya so" moments once everything stable and under control....(in real life).....

Those always come...always.

They're not doing bad..seems like they now have the focus on cultivation, and while the various possible approaches could be forever debated (dispo first, cultivation first, and so on)....there is always a lot of altering and adjusting your approaches when addressing simultaneous development of numerous combined ops.....

I wouldn't have done and launched the San Leandro under medical months before adult use for various reasons, and myself would have chosen to focus on NV cultivation (They did, NuLeaf), allowed CA to launch and then backtracked back to it...

In all honesty....most here probably don't understand the industry, processes, and actual mechanics of all.... but I do, and I'm used to all the nonsense from every direction, and everyone wanting to do armchair management and quarterbacking....

Personally, I'd like to see NV pulls to start (harvests), ground broke on NV (Spanish springs?), and one of the CA (Carnegie/Dyer) built out....

In the end, and again, I think something people don't understand, is (state) licensing aside, anything anywhere can be done...the only issue is funding it...That's all. Is the money there to do it. Local and county issues, engineering, local (building) permits...no problem. Do this, do that? No problem. The only issue is: Is the money there to do it.

I think (as always) an issue as well is the "losses" aren't spelled out, which I did not was mentioned. (location by location breakdowns in the future of financials, which would be quite interesting)...

I've been in (live there lol) those positions before.....ie: we have xxMM, and we want to design, build, and launch 10 facilities, etc.....well....your going to be in the red for a long time into the future until you finally catch up, commencement of operations, and stabilize the op(s).

Once they're up and running your good. Period.

Honestly, I think the majority of all drama is nonsense....I go through it every week, month, quarter, year....(estimates for next week, next month, annuals, targets, etc......different months, holidays, surges in business, declines, etc......it's all always a moving target to adjust sometimes daily.

Example:
This month it's Memorial day weekend. Not bad. June has 5 operational weekends, but then July 4th falls in the middle of the week which doesn't hurt as bad as a long 4 day weekend, so sandwiched between 2 "party" weekends, and so on....(all having to do with monthly projections)

If I had to throw out a yearly estimate that I'd be pelted with rocks if I missed, I wouldn't lol. (or I would just estimate much lower knowing we'd beat it.)

Industry is great, building by the day. Political looks the same. All is well.

It's really tiring to work with/for the impatient, the skittish, etc, and wish such would just stay out of the industry and let us all just work :) lol....(while we do what we do, and do it well.....;)

I can also personally relate to "We have this one in design, engineering, we just submitted permits for these 2....we're underway on this one....looks like we might be able to submit on those locations.....then we have this/that coming up and are prepping for apps......have this one underway and doing well....growth on those are good, and so on....."

I love that kind of stuff, so :) lol........but most don't thrive on "chaos" I think :) lol....