Bluma Wellness Inc. Provides End-of-Month Operations Update and Financial Highlights for February 2021

Rhea-AI Summary

Bluma Wellness Inc. (CSE: BWEL.U) (OTCQX: BMWLF) reported strong financial results for February 2021, showcasing gross revenue of $2,733,756 and approximately $1,125,000 after costs. The Company sold 4,704.46 ounces of dried medical cannabis flower and achieved a gross price of $8,817.79 per pound. One Plant Florida ranked third among Florida's Medical Marijuana Treatment Centers for dried cannabis flower sales. The Company plans to open additional retail dispensaries in 2021 and has settled certain legal claims for $3.64 million.

Positive

• Gross revenue of $2,733,756 in February 2021.
• Approximately $1,125,000 in revenues after cost of sales.
• Sold 4,704.46 ounces of dried medical cannabis flower.
• Ranked third in Florida MMTCs for flower sales per dispensary.
• Plans to open additional dispensaries in 2021.

Negative

• Settlement of $3.64 million to resolve claims, potentially impacting cash flow.

Bluma Wellness Inc. (the “Company” or “Bluma Wellness”) (CSE: BWEL.U) (OTCQX:BMWLF) is pleased to provide its patients and investors with an end-of-month sales and operations report for the month ended February 28, 2021. The financial highlights disclosed in this press release are management prepared and have not been audited or reviewed by the Company’s auditors. Unless otherwise indicated, all amounts are expressed in U.S. dollars.

Financial Highlights, February 2021

Bluma Wellness is pleased to provide the following sales and financial highlights from the month of February 2021:

• Gross Revenue¹: $2,733,756
• Revenues less cost of sales before fair value adjustments: approx. $1,125,000
• Gross Price Per Pound²: $8,817.79
• Ounces of Dried Medical Cannabis Flower Sold: 4,704.46 oz
• Milligrams (mg) of tetrahydrocannabinol (THC) Sold: 6,205,730 mg

During the month of February, 3 Boys Farm, LLC, doing business as One Plant Florida (“One Plant Florida”), the Company’s wholly-owned, licensed operating subsidiary, averaged sales of 672 ounces of dried medical cannabis flower per retail dispensary, and 886,533 mg of distillate/oil sold per retail dispensary. One Plant Florida’s February sales positioned it third in ounces of dried medical cannabis flower sold per retail dispensary when compared against all other Medical Marijuana Treatment Centers (“MMTCs”) in Florida, and ninth in mg of THC sold per retail dispensary when compared against all MMTCs in Florida, in each case according to published data from the Florida Office of Medical Marijuana Use (“OMMU”).

Additionally, Bluma Wellness is pleased to share that One Plant Florida closed the month of February with $461,000 in gross revenue between Friday, February 26 and Sunday, February 28.

THC Sold (mg)/average oz sold per retail dispensary compared to competitors, February 2021³

• Trulieve: 1,432 oz of dried medical cannabis flower / 4,557,160 mg of THC sold per dispensary, number one in average ounces of medical cannabis flower sold per dispensary
• Grow Healthy: 936 oz of dried medical cannabis flower / 1,882,693 mg of THC sold per dispensary, number two in average ounces of medical cannabis flower sold per dispensary
• One Plant: 672 oz of dried medical cannabis flower / 886,533 mg of THC sold per dispensary, number three in average ounces of medical cannabis flower sold per dispensary
• Surterra Wellness: 643 oz of dried medical cannabis flower / 1,972,197 mg of THC sold per dispensary, number four in average ounces of medical cannabis flower sold per dispensary
• Harvest: 621 oz of dried medical cannabis flower / 1,341,494 mg of THC sold per dispensary, number five in average ounces of medical cannabis flower sold per dispensary
• GTI: 523 oz of dried medical cannabis flower / 630,475 mg of THC sold per dispensary, number six in average ounces of medical cannabis flower sold per dispensary
• Curaleaf: 503 oz of dried medical cannabis flower / 1,641,869 mg of THC sold per dispensary, number seven in average ounces of medical cannabis flower sold per dispensary
• AltMed Florida (MuV): 490 oz of dried medical cannabis flower / 2,300,998 mg of THC sold per dispensary, number eight in average ounces of medical cannabis flower sold per dispensary

Looking Ahead (Winter 2021)

Bluma Wellness is pleased to announce that One Plant Florida expects to open its eighth retail dispensary and delivery hub, to be located in Bonita Springs, FL, on March 12, 2021, subject to the receipt of all required municipal and regulatory approvals, including from the OMMU. The retail dispensary will be located at 28500 Bonita Crossings, Bonita Springs, FL, 34135.

One Plant Florida opened its seventh retail dispensary and delivery hub location in the State of Florida, in Fern Park (Orlando), in December 2020.

Bluma Wellness intends to open additional One Plant Florida retail dispensaries and/or delivery hubs in North Miami (April 2021), Fort Lauderdale (May 2021), Oakland Park (June 2021) and Tallahassee (late June 2021), in each case subject to the receipt of all required municipal and regulatory approvals, including from the OMMU.

Shareholder Meeting

As previously announced, the Company will hold a special meeting of its shareholders (“Bluma Shareholders”) to be held virtually at https://web.lumiagm.com/294537536, beginning at 10:00 a.m. (Toronto time) on March 19, 2021 (the “Meeting”). The Meeting is being held to consider and approve, among other things, the Company’s proposed arrangement with Cresco Labs Inc. (“Cresco”) (CSE:CL) (OTCQX:CRLBF) to be completed by way of a plan of arrangement under Division 5 of Part 9 of the Business Corporations Act (British Columbia), pursuant to the arrangement agreement entered into between the Company and Cresco on January 13, 2021. The Meeting will be held in accordance with the terms of an interim order of the Supreme Court of British Columbia obtained on February 11, 2021. Bluma Shareholders of record at the close of business on February 8, 2021 will be entitled to attend and vote at the Meeting.

For more information about the Meeting, please see the Company’s news release dated February 26, 2021 and the management information circular of the Company dated February 12, 2021 (the “Circular”). The Circular and related meeting materials are available on the Company’s SEDAR profile at www.sedar.com.

Settlement Agreements

The Company also announces that it has agreed to settle certain contractual claims made by certain arm’s-length third parties (the “Claimants”) in the State of Florida against the Company and its indirect, wholly-owned subsidiaries Cannabis Cures Investments, LLC (“Cannabis Cures”) and, in certain cases against One Plant Florida, relating to legacy obligations that flowed from an indemnification agreement entered into by Cannabis Cures in December 2018, in connection with Cannabis Cures’ acquisition of 100% of the membership interests and assets of One Plant Florida (the “Contractual Claims”). One of the Claimants also asserted claims relating to the alleged breach of an employment agreement entered into between the Claimant and One Plant Florida in August 2018 (together with the Contractual Claims, the “Claims”). The Company vehemently opposes the Claims, and was prepared to litigate both the Claims and its own counterclaims, however in the interests of avoiding costly, burdensome and distracting litigation, the parties elected to amicably resolve the Claims. In accordance with the terms of binding settlement agreements entered into between the Company, the Claimants, Cannabis Cures, and in certain cases One Plant Florida, among other parties (the “Settlement Agreements”), the Company will settle the Claims for the aggregate net amount of US$3,639,564.71, of which US$1,840,860.39 will be paid in cash and US$1,798,704.32 will be satisfied by the issuance of 1,605,986 Common Shares to the Claimants at a deemed price of US$1.12 per Common Share, in full and final satisfaction of the Claims. Pursuant to the terms of the Settlement Agreements, each of the parties has agreed to a mutual release of claims and the Claimants have agreed to dismiss all Claims against the Company and its subsidiaries with prejudice or have promised not to file a complaint in respect of such Claims, as applicable.

The Common Shares issued to the Claimants pursuant to the Settlement Agreement will be subject to a statutory hold period which will expire four months and one day from the date of issuance in accordance with applicable securities laws.

About Bluma Wellness Inc.

Bluma Wellness Inc. owns and operates a vertically-integrated, licensed medical cannabis company in the State of Florida doing business as “One Plant Florida.” One Plant Florida cultivates, processes, dispenses and retails medical cannabis to qualified patients in the State of Florida through multiple retail dispensaries and an innovative next-day door-to-door e-commerce home delivery service, thereby offering convenient access for its customers and meeting the demands of an evolving retail landscape. Bluma Wellness plans to continue expanding its cultivation and distribution operations as the Florida market grows.

Additional Information

The Company’s securities have not been and will not be registered under the U.S. Securities Act and may not be offered or sold in the United States or to a U.S. Person absent registration or an applicable exemption from the registration requirement. This press release shall not constitute an offer to sell or the solicitation of an offer to buy nor shall there be any sale of the securities in any jurisdiction in which such offer, solicitation or sale would be unlawful.

Forward-Looking Information

This news release contains “forward-looking information” within the meaning of applicable Canadian securities laws including information relating to the planned opening of additional One Plant Florida retail dispensaries and delivery hubs in Florida, information relating to the date, time and format of the Meeting, the business to be conducted at the Meeting, the settlement and dismissal of the Claims, the issuance of the Common Shares to the Claimants and the Company’s strategic business plans. Although the Company believes, in light of the experience of its officers and directors, current conditions and expected future developments and other factors that have been considered appropriate, that the expectations reflected in this forward-looking information are reasonable, undue reliance should not be placed on them because the Company can give no assurance that they will prove to be correct. Readers are cautioned to not place undue reliance on forward-looking information. Actual results and developments may differ materially from those contemplated by these statements due to a variety of known and unknown risks and uncertainties including, without limitation: risks relating to cannabis being illegal under US federal law and risks of US federal enforcement actions related to cannabis activities; the Company's ability to comply with all applicable governmental regulations in a highly regulated business; negative changes in the political environment or in the regulation of medical cannabis in the state of Florida; the risk of any disruptions to the Company’s business and operations as a result of the COVID-19 pandemic; negative shifts in public opinion and perception of the cannabis industry and cannabis consumption; increasing competition in the industry; risks of product liability and other safety-related liability as a result of usage of the Company’s cannabis products; the Company’s limited operating history with no assurance of profitability; the ability of the Company to access future financing if needed or on terms acceptable to the Company; the risk of defaulting on its existing debt; risk of shortages of or price increases in key inputs, suppliers and skilled labor; the risks inherent in running agricultural operations such as pests and crop failure; loss of licenses; reliance on key personnel; cybersecurity risks; constraints on marketing products; fraudulent activity by employees, contractors and consultants; tax and insurance related risks and risk of litigation.

The forward-looking information in this press release are made as of the date of this release. The Company does not undertake any obligation to update forward-looking information except as required by applicable securities laws.

¹ IFRS
² Gross Price per Pound is calculated as total revenue divided by total pounds of dried medical cannabis flower sold.
³ https://knowthefactsmmj.com/about/weekly-updates/

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FAQ

What were Bluma Wellness's financial highlights for February 2021?

Bluma Wellness reported gross revenue of $2,733,756, with approximately $1,125,000 in net revenues after sales costs.

How much medical cannabis did Bluma Wellness sell in February 2021?

In February 2021, Bluma Wellness sold 4,704.46 ounces of dried medical cannabis flower.

What is the significance of One Plant Florida's sales ranking?

One Plant Florida ranked third among Florida's Medical Marijuana Treatment Centers in average ounces sold per retail dispensary.

What are the implications of the settlement agreements announced by Bluma Wellness?

Bluma Wellness agreed to settle claims for $3.64 million, which includes a cash payment and issuance of shares, potentially affecting cash reserves.

When does Bluma Wellness plan to open new retail dispensaries?

Bluma Wellness plans to open additional dispensaries throughout 2021, starting with a location in Bonita Springs on March 12, 2021.