## Blüm Holdings Reports Strong Q3 Revenue Growth Amid Unrivaled Brands Bankruptcy
California-based cannabis retailer Blüm Holdings, Inc. (BLMH) is making waves in the industry, reporting a substantial 182% surge in revenue for the third quarter ended September 30, 2024. This impressive growth, reaching $4.36 million compared to $1.55 million in the same period last year, can be attributed to the strategic consolidation of Northern California stores and the continued success of the Korova brand.
“The Northern California stores and the implementation of consistent operational practices have significantly strengthened our financial and operational foundation,” stated CFO Patty Chan. “We are confident that these enhancements position us well for continued growth and profitability.”
The company’s Q3 financial highlights showcase a positive trend, with gross profit reaching $2.45 million compared to $526,000 in the same period of 2023. This translates to a robust gross margin of 56.1% compared to 34% in the previous year. Despite the impressive growth, the company still recorded a net loss of $3.74 million, a slight decrease from the $3.36 million loss in the corresponding quarter of 2023. Total operating expenses for the period reached $4.65 million, a significant reduction from the $6.45 million incurred in the same period of 2023.
## Unrivaled Brands Files for Chapter 11 Bankruptcy
While Blüm Holdings celebrates its financial success, a dark cloud hangs over the company’s subsidiary, Unrivaled Brands. The company has filed for Chapter 11 bankruptcy due to ongoing legal battles initiated by People’s California LLC and activist investor Frank Kavanaugh. These lawsuits, which began in 2022, allege various breaches, including corporate waste and unjust enrichment.
Despite the “implacable” litigation, Blüm’s management successfully reduced total liabilities by a net of $90.8 million, a significant achievement considering the challenges. They also executed a corporate reorganization and managed to pay many deserving vendors. However, the relentless legal actions ultimately destabilized the company, leading to the bankruptcy filing.
The most recent lawsuit comes after People’s received over $60 million in value from Unrivaled since 2021, including $9 million in July 2024, as part of a settlement agreement meant to end all litigation. Despite this settlement, People’s continues to pursue legal action.
“Kavanaugh’s history of destabilizing companies to seize control and extract assets is well-documented. Unrivaled paid deserving vendors to the best of its abilities while withstanding the barrage of litigation by People’s. Unrivaled saved jobs for two years and operated in communities where businesses deserve to keep their doors open. If you or your company have had a similar experience with Frank Kavanaugh, Fort Ashford Funds, or any of his other affiliates, please reach out,” stated CEO Sabas Carrillo.
The bankruptcy filing only affects Unrivaled and Halladay Holding, with the estimated value of their assets at approximately $6.0 million and total liabilities at around $35.0 million. Blüm Holdings, along with all other operations, remains unaffected by this filing and continues its business as usual.
## Price Action and Future Outlook
Blüm Holdings shares closed Tuesday’s market session down 42.50% at 23 cents per share. While the bankruptcy filing of Unrivaled Brands has undoubtedly impacted the company’s stock price, investors will be watching closely to see how Blüm Holdings navigates this challenging situation and continues to drive growth. The company’s strong Q3 performance and its commitment to operational efficiency suggest a promising future, despite the current legal hurdles.
