An interesting ‘inside the ropes’ moment here about GnomeStar Craft Cannabis ($GNOM).

It’s interesting to me, because it reveals a couple of things. Most of all, it reinforces a phrase I’ve used recently….’it’s not what you are, it’s what you are seen to be’.

Dr. Earl Oliver resigned from $GNOM today in a pretty public way, with a pretty odd description of the departure: From Twitter:

“On February 5, 2021, I requested Mark Lotz (CEO, CFO, and sole Director) to repay an $18,000 loan I made in 2018 or consider this my resignation. After receiving adequate funds from Shelter to easily repay the loan, I was paid a $5,501.61 instalment in early March.— Dr. Earl Oliver (@eaoliver) March 26, 2021“

He goes on to talk about swallowing his pride, and takes a swipe at how a ‘pubco’ accepted his resignation while on vacation. How they didn’t pay him what was owed. All that’s missing is a curtain dropping, some wet handkerchiefs, and a round of applause.

Permit me to unpack this. I’ve managed a ton of people and situations in my professional life, and this situation’s an easy read to myself, particularly since I know the financials of $GNOM, having recently done a structure on them.

So Earl….having lent $18k 3 years ago under terms that loans due to and from related parties are ‘unsecured, non-interest bearing and have no fixed terms of repayment’…..makes a demand for full repayment from a company that just got a $200k cheque and has $600k of accounts payable to douse it with. A company he’s been with for 3 years, led, marketed, and put himself forward as the face of.

And then – after only getting a third – torches the outfit on the way out the door.

He’s suggesting he can’t read financials. He’s suggesting he doesn’t understand what ‘no fixed terms of repayment’ means. This company – unless it’s incredibly adroit at negotiating credit or finds a benefactor – is heading down a dark alley as it is.

And that’s what I think this is about: Earl pulled the demand loan stunt to manufacture an exit rather than own the coming explosion.

Hey – I really don’t care. What nudged me to write about this is how discordant reality can be with perception. For investors in legal cannabis (or any sector for that matter), please reflect on how much bullshit there is out there in the world.

I think it’s a great illustration of why TheCannalysts focus is on financial statements and what they say. Trying to divine the ‘meanings’ of a line in a press release – or believing every word you hear from an executive – will put you at risk of accepting bullshit.

And I’m not picking on Earl (an awfully easy target though). I’m picking on the narrative he plainly set out just a year ago…compared to the public swipes he’s now taking. Look up the current Twitter feed: the tears and commiseration coming from small producers and retailers and craft outfits about how public companies ‘screw the little guy’ is epic. And way cute. Most of it centres on the ‘evils’ of corporate types and all. As in the corporate leadership role he actually took – responsibilities and all – and as owner as well.

My opinions would land cross-eyed in that land (they usually do anyhow). But I left middle school a long time ago, and as a businessman, the narrative Earl’s pushing sounds like it comes straight out of one, and completely self-serving.

Just a note to you as investor: Be skeptical. Challenge assumptions. And if conditions change, be prepared for change in your investments.

Perhaps what’s driven me to point this all out is that I’d actually believed him.

The preceding is the opinion of the author, and is in no way intended to be a recommendation to buy or sell any security or derivative. The author holds no position in $GNOM