Leafly Holdings Inc. (Nasdaq: LFLY) reported a $5.4 million loss for the first quarter this year, effectively wiping out the $5.1 million in profit the company turned for all of 2022, despite a 21% reduction in staff and other cost-saving measures.
Still, company leadership noted that losses have been shrinking, down from a $19.4 million loss in Q1 last year, and that its online monthly users continued to increase, up 4% year-over-year to 8,085 from 7,749 a year prior. The company also increased the number of paying retail accounts by 5%, to 5,702 from 5,422, it reported.
But the average monthly retailer revenue Leafly has brought in is down year-over-year by 4% to $553 from $576, and overall revenues were down for the same timeframe by 1.5% to $11.2 million.
The company blamed the decrease in monthly retailer revenue to “churning” retailers and its “overall strategy to enter markets with competitive pricing to drive increased market penetration in local markets.”
“Macro challenges have put overall pressure on the cannabis industry, particularly in our brand advertising business,” CEO Yoko Miyashita said in a press release. “We are focused on growing sales from existing clients and increasing our share of wallet. Just as importantly, we’ll continue to enhance the consumer experience, providing more value with deal types, delivery options and deeper search capabilities.”
Leafly also projected that its revenues are likely to decrease further in Q2, to around $10.5 million.
After the quarter ended, however, Leafly announced it was ramping up a partnership with Uber Eats in British Columbia, to allow customers to have marijuana products ordered and delivered via the popular mobile phone app. The same partnership has already launched in Ontario and includes roughly 100 dispensaries in that province.
Other than that, Leafly is focusing primarily on refining its online and technology services for clients, and on “aligning resources to the areas with the highest opportunity for returns,” said CFO Suresh Krishnaswamy in the release.