Leafly is joining the SPAC party.
The Seattle-based online cannabis marketplace plans to go public through a deal with New York-based Merida Merger Corp, a special purpose acquisition company, the companies announced Monday.
Merida will assume the Leafly brand name, and common stock will go on the NASDAQ with the ticker symbol LFLY. This transaction will bring the total enterprise value of the combined company to $385 million.
Leafly was founded in 2010 and allows customers to shop for cannabis products online from licensed sellers. The startup also serves as an educational resource, and its platform has more than 125 million annual visitors.
Leafly, a Seattle-based company that has recently taken the SPAC route to public offering, is not the first. Mergers are a popular alternative to traditional initial public offerings. They offer a quicker path to public listing. Seattle-based pet-sitting marketplace Rover began trading last week after its $1.35 billion SPAC deal.
Leafly CEO Yoko Mishashita stated in a press release that the company has been working hard to create a legal and unique marketplace. She also stressed education for consumers, enabling them access cannabis products from reputable, licensed providers. We are excited to enter the next stage of Leafly’s company’s growth with this transaction. This includes creating more customized consumer experiences, driving greater value to retail partners, amplifying brand presence on our platform and scaling up our presence in more local markets, as legalization continues.
Miyashita is a former Getty Images executive who served as the company’s general attorney after joining in 2019. She was appointed CEO of Leafly in August 2020. Privateer Holdings, a Seattle cannabis investment company, spun Leafly off in 2019.
Company, now employing around 160 people, had to make some drastic cuts. It let go 18% or 54 jobs in January 2020. This was due to the “market realities” of cannabis and technology sectors. Two months later it cut 91 employees, citing uncertainties caused by coronavirus pandemic.
The company raised $23 million in new funding in June as the cannabis market has seen an increase in sales as more states legalize pot and dispensaries were declared essential businesses during the pandemic. Leafly raised $38million to date.
Leafly makes its revenue principally from the monthly subscription fees paid by marijuana retailers in order to list on Leafly and access e-commerce tools. According to Leafly, more than 7,800 companies use their services. Advertising is another source of revenue.
Americans spent $18.3 trillion on marijuana products in the last year. The market is growing rapidly, particularly on the East Coast where many states recently legalized cannabis.
Investors are attracted to the cannabis boom. Dutchie, an Oregon-based cannabis e-commerce platform, announced $200 million in new funding in March. It was worth $1.7 billion. And Another cannabis company, Weedmaps, went public and officially began trading earlier this summer.
According to the release, the Merida Capital Holdings sponsored the Merida SPAC. The proposed deal was unanimously approved both by Leafly’s and Merida’s boards of directors. The deal is expected to close during the fourth quarter 2021 subject to usual closing conditions.
Publited at Mon, 9 Aug 2021 16:33:35 +0000