Blüm Holdings Inc. Annual report pursuant to Section 13 and 15(d)

Annual report pursuant to Section 13 and 15(d)

Note 20 - Fair Value Measurements

Note 20 - Fair Value Measurements

12 Months Ended

Dec. 31, 2023

NOTE 20 – FAIR VALUE MEASUREMENTS

As of December 31, 2022, the Company held shares of common stock in Edible Garden which were recorded at fair value. Refer to "Note 7 - Investments" for further information. In November 2022, the lock-up restriction on the Company's shares in Edible Garden expired and accordingly, the Company's investment transferred from Level 2 to Level 1 fair value measurement. During the year ended December 31, 2023, the Company sold all its shares in Edible Garden.

As of December 31, 2023, the Company held 8,323,764 shares of common stock in Mystic and 8,332 shares of Series A preferred stock in Mystic. Refer to "Note 7 - Investments" for further information. In accordance with ASC 321, the Company recorded the investment in equity securities at fair value based upon the quoted price of the shares in active trading markets (Level 1).

The following tables present the Company’s financial instruments that are measured and recorded at fair value on the Company’s balance sheets on a recurring basis, and their level within the fair value hierarchy as of December 31, 2023 and 2022:

	(in thousands)
	*December 31, 2023*
	*Amount*		*Level 1*		*Level 2*		*Level 3*
Investment in Mystic Holdings, Inc.	$	667	$	667	$	—	$	—
Investment in Edible Garden Corp.		—		—		—		—
Total	$	667	$	667	$	—	$	—

	(in thousands)
	*December 31, 2022*
	*Amount*		*Level 1*		*Level 2*		*Level 3*
Investment in Mystic Holdings, Inc.	$	—	$	—	$	—	$	—
Investment in Edible Garden Corp.		210		210		—		—
Total	$	210	$	210	$	—	$	—

- Definition

The entire disclosure for the fair value of financial instruments (as defined), including financial assets and financial liabilities (collectively, as defined), and the measurements of those instruments as well as disclosures related to the fair value of non-financial assets and liabilities. Such disclosures about the financial instruments, assets, and liabilities would include: (1) the fair value of the required items together with their carrying amounts (as appropriate); (2) for items for which it is not practicable to estimate fair value, disclosure would include: (a) information pertinent to estimating fair value (including, carrying amount, effective interest rate, and maturity, and (b) the reasons why it is not practicable to estimate fair value; (3) significant concentrations of credit risk including: (a) information about the activity, region, or economic characteristics identifying a concentration, (b) the maximum amount of loss the entity is exposed to based on the gross fair value of the related item, (c) policy for requiring collateral or other security and information as to accessing such collateral or security, and (d) the nature and brief description of such collateral or security; (4) quantitative information about market risks and how such risks are managed; (5) for items measured on both a recurring and nonrecurring basis information regarding the inputs used to develop the fair value measurement; and (6) for items presented in the financial statement for which fair value measurement is elected: (a) information necessary to understand the reasons for the election, (b) discussion of the effect of fair value changes on earnings, (c) a description of [similar groups] items for which the election is made and the relation thereof to the balance sheet, the aggregate carrying value of items included in the balance sheet that are not eligible for the election; (7) all other required (as defined) and desired information.

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