Blüm Holdings’ 2024 Profitability Hides Critical Liquidity Crisis

First, the phrase “Blum Capital on Losing Streak” suggests a WSJ story about the private equity firm Blum Capital. Based on searches through WSJ, Google News, and reputable finance databases, no such recent article could be located. Blum Capital Partners remains a private equity / growth capital firm founded in 1975, with no major public headline in early 2026 about performance slumps. In contrast, most “Blum-/Blüm” news concerns Blüm Holdings, a cannabis company trading OTC (ticker BLMH). It appears likely the primary article (linked) was mis-titled or mis-attributed; the known public data refers to Blüm Holdings. This analysis proceeds under the assumption the intended subject is Blüm Holdings, not Blum Capital.

Blüm Holdings’s recent financials reflect both milestone gains and deep risks. Highlights include turning a large net loss in 2023 into a net income of $33.1 million in 2024 after restructuring and asset sales; revenue up ~67 % to ~$13 million; liabilities reduced ~62 % year-over-year. More recent Q1 and Q2 2025 data, however, show operating losses continuing, widening net losses in Q2, and a dangerously low cash balance (~US$370,000). Even with gross margin improvements (~48-50 %) and SG&A (selling, general & administrative) expense cuts of 50-70 %, the company is burning cash, has a substantial working capital deficit (~US$20-21 million), liabilities exceeding assets, material weaknesses in financial reporting, and explicit going-concern risk. Cash generation remains elusive and survival depends on further financing and execution of retail acquisitions delivering cash returns.

Strategic implications: Blüm’s path forward requires balancing aggressive growth (via acquisitions and new retail locations), margin expansion, and curing financial structural weaknesses. The severity of the working capital and liquidity strain means the company is vulnerable to any adverse regulatory changes (e.g., in cannabis law / taxes), market price pressure, or delays in integration. Dilution risk via convertible debt and warrants is high. For investors, risk/reward is heavily skewed: there’s potential upside if the turnaround fully materializes, but downside if cash runs out or execution falters.

Open questions include: Is there a major capital raise in process, and under what terms? How reliable are revenue contributions from recent acquisitions (e.g. EWCR, Coastal Pine) in generating cash, not just GAAP revenue? What is management’s forecast for free cash flow, and what are the contingency plans if regulatory / tax burdens increase? What is the full exposure and outcome of outstanding bankruptcy and litigation matters (Unrivaled, Halladay, etc.)? And, crucially, how will dilution affect current shareholders if convertibles and warrants are exercised aggressively?