Leafly Archives - Green Market Report

Julie AitchesonFebruary 23, 2022
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The U.S. economy gained 467,000 jobs in January 2022 according to the US Bureau of Labor Statistics, which is down by 2.9 million since February 2020. In brighter news for cannabis, Leafly’s (NASDAQ: LFLY) sixth annual Cannabis Jobs Report (developed in partnership with Whitney Economics) reveals that the legal cannabis industry added 107,059 new jobs in 2021 and is poised to hold on to its distinction in 2022 as the most prolific job creator in America.  According to the report, as of January 2022 there are now 428,059 full-time equivalent jobs supported by the legal cannabis industry in the United States. This figure does not include employment in hemp, unregulated products made with hemp cannabinoids like delta-8 THC or “induced jobs”, aka jobs created by the wages paid to cannabis workers. 

The cannabis industry’s ranking as America’s number one job creator is not a new and surprising development. In fact, the industry has seen an annual job growth rate higher than 27% for five years running, with promising future gains as big adult-use markets in states like New Mexico and New York prepare to come online in the months to come. In comparison with the entire financial sector, which added 145,000 jobs last year, and construction, which has been seeing steady gains in states like Colorado and added 165,000 jobs coast-to-coast, the legal cannabis industry is indisputably the United States’ leading job-maker, particularly in California, where it provides 83,407 jobs, and Colorado, where it provides 38,337 to date.

Sales of cannabis products in adult-use and medically legal states are up more than $6 billion dollars from the previous year, necessitating more willing and skilled workers at every point on the development, production, and sales continuum. But the legal cannabis industry is not immune to the larger problem plaguing the economy right now, which is the difficulty of finding and attracting sufficient workers to fill those jobs. In 2021, the legal cannabis industry created more than 280 new jobs every day, but employers across sectors are struggling to staff their businesses, particularly in the hourly wage jobs. Job growth and employment rates are not syncing up in predictable ways, even for the bullish cannabis industry.

Cannabis job growth rates, while expected to remain robust, will falter somewhat in 2022 according to the Leafly and Whitney Economics’ forecast. Constricted medical schemes, state regulations, the growth of illicit markets and the slowing of more mature markets are all contributing factors to this likely deceleration. Still, studies have allowed researchers to identify and predict market trends and patterns, including the surge of growth that typically occurs two to five years after the opening of a state’s adult-use stores. This currently includes Massachusetts, Illinois, and Michigan, while Arizona’s recreational market, for example, is still in its infancy and can be expected to post higher numbers in a year or more. 

Overall, the Leafly’s report paints a rosy picture for cannabis jobs in the U.S., if less evenly so in the coming year. Whether hiring rates are able to keep pace with the demand for workers, however, remains an open question across every sector of the U.S. economy.


Debra BorchardtFebruary 7, 2022
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Online cannabis company Leafly Holdings Inc. and Merida Merger Corp. I (NASDAQ: MCMJ), a SPAC (special purpose acquisition company) sponsored by Merida Capital Holdings, closed their previously announced business combination on Friday. In connection with the closing, Merida has adopted the Leafly name, and Leafly’s common stock will begin trading on the NASDAQ Stock Market on February 7, 2022, under the ticker symbol “LFLY.”

The deal looked like it might be facing trouble when in January when Merida’s special meeting to vote on the proposed business combination, was postponed to give Merida stockholders sufficient time to evaluate the terms of the note financing and certain additional information. Merida had announced in August that it had chosen Leafly as its qualifying transaction for the SPAC. The combined company’s transaction values at an implied, fully diluted enterprise value of approximately $385 million and equity value of approximately $532 million, subject to any redemptions by Merida stockholders. The company is projecting revenue of approximately $43 million in 2021 and $65 million in 2022, representing a roughly 52% annual growth with gross margins of roughly 88% as Leafly further penetrates current markets and capitalizes on its strong position in the newly legalized East Coast.

“Backed by substantial funding, tremendous advancements in cannabis legalization, and e-commerce tailwinds, we are relentlessly focused on investing in our technology, talent, and content to execute our growth strategy and create value for all stakeholders,” said Yoko Miyashita, Chief Executive Officer of Leafly. “Becoming a public company is an important milestone for the entire Leafly team and we thank Merida for their continued support and look forward to working with them and future shareholders to achieve new heights.”

Leafly reported a significant acceleration in year-over-year revenue growth and gross margin, as well as a 40% increase in total ending retail accounts, in the third quarter of 2021. Leafly has introduced new value-driving tools for brands subscribers and enhanced its iPhone and iPad app to enable users to place pickup orders for cannabis products in legal state markets. The Company has also announced a post-combination Board of Directors with wide-ranging expertise and bolstered its executive leadership team with highly experienced hires for Chief Financial Officer, General Counsel, SVP of Sales, and SVP of Engineering.

Peter Lee, former President of Merida Merger Corp. I who will continue to serve as a member of the board of directors of the combined company, said, “Leafly has long been a critical resource in the cannabis ecosystem. With its three-sided marketplace and unparalleled content library, Leafly makes cannabis understandable and accessible for consumers, retailers, and brands alike – driving an incredible flywheel effect and tremendous brand loyalty across the country. Now, with an experienced management team and substantial funding, Leafly is poised to take the next step in its journey, and we are excited to continue to play a role.”


Debra BorchardtJanuary 12, 2022
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Leafly Holdings Inc. and cannabis SPAC Merida Merger Corp. I (NASDAQ: MCMJ) (a special purpose acquisition company sponsored by Merida Capital Holdings) announced that it has entered into a $30 million convertible note purchase agreement with new investors led by Cohanzick Management LLC and affiliates, an investment management firm. This supplemental financing, which will close immediately prior to the closing of the proposed business combination between Leafly and Merida, will help to ensure full funding of Leafly’s current multi-year business plan. The stock was jumping almost 18% in pre-market reading to lately sell at $9.97.

In addition, Merida announced that Merida’s special meeting to vote on the proposed business combination, originally scheduled for January 14, 2022, will be postponed to give Merida stockholders sufficient time to evaluate the terms of the note financing and certain additional information. It was originally   expected to close in the fourth quarter of 2021. As a result, the date for holders of Merida public shares to request redemption will be extended to two business days prior to the date that the meeting is held to vote on the proposed business combination. Merida and Leafly entered into a second amendment to the Merger Agreement so that the proceeds to be received from the note purchase agreement would be counted towards Merida meeting the minimum cash condition required by the Merger Agreement.

“This agreement provides additional funding certainty as Leafly enters the next phase of our journey as a public company,” said Yoko Miyashita, Chief Executive Officer of Leafly. “Having accelerated our growth trajectory in 2021, we look forward to using this significant new capital to expand our leading cannabis marketplace and further enhance our technology platform, delivering more personalized consumer shopping experiences and driving more value to our retail partners.”

“Leafly is a rapidly growing platform with tremendous brand loyalty and market leadership,” said David Sherman, President and Founder of Cohanzick. “This investment demonstrates our confidence in the Leafly team and in the strategy they are implementing to create significant long-term value for stakeholders across the cannabis ecosystem.”

Details of the Transaction and Notes

The $30 million financing will be in the form of unsecured convertible senior notes due 2025. The notes will bear interest at a rate of 8.00% per annum, paid in cash semi-annually in arrears on July 31 and January 31 of each year. The notes will be convertible at the option of the holders at any time before maturity at an initial conversion share price of $12.50 (80 shares of the company common stock per $1,000 principal amount of notes or accrued and unpaid interest, if any, thereon). In addition, the company has the option after one year to redeem all or a portion of the notes for cash equal to the principal or force the conversion of the notes after two years based on pre-agreed share price thresholds.

Original Transaction

Merida has announced in August that it had chosen Leafly as its qualifying transaction for the SPAC. Ther Merida Merger Corp. is slated to adopt the Leafly name and its common stock is expected to be listed on the NASDAQ under the ticker symbol LFLY. The combined company’s transaction values at an implied, fully diluted enterprise value of approximately $385 million and equity value of approximately $532 million, subject to any redemptions by Merida stockholders. The company is projecting revenue of approximately $43 million in 2021 and $65 million in 2022, representing  a roughly 52% annual growth with gross margins of roughly 88% as Leafly further penetrates current markets and capitalizes on its strong position in the newly legalized East Coast.

Leafly struggled at the beginning of the pandemic and laid off 91 employees. It had been a part of the private equity Privateer Holdings portfolio, but then the company was spun out to be independent. In its early days, former Leafly founders Cy ScottBrian Wansolich and Scott Vickers departed Leafly to launch another Seattle-area marijuana data company, Headset.  Leafly had created a back-office product to help dispensaries run their business called Leafly Insights and Headset was essentially the business that Leafly Insights looked to be emulating. The company raised $2.3 million in October 2019 even as it was announcing plans to scale back its growth. Overall the company has raised approximately $38 million.

Headset recently completed a raise of $3 million of new capital led by Althea, a private equity investment firm. According to Geekwire, Headset has raised about $23 million.

 

 


Debra BorchardtDecember 7, 2021
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Wholesale cannabis prices have fallen this year and the impact was felt by several companies and in particular – those in California. Cannabis Benchmarks data shows that California’s Spot prices have been on a freefall since June. Cannabis Benchmarks said that prices have dropped by as much as 30% this year. Plus, as outdoor harvests have ended that product is hitting dispensary shelves, which could cause prices to go even lower. 

Leafly’s Cannabis Harvest Report said that in the 11 legal adult-use US states, cannabis supports 13,042 licensed farms that annually harvest 2,278 metric tons of marijuana or more than 5 million pounds of weed. The wholesale cannabis crop brings in $6.2 billion annually, ranking it as the fifth most valuable crop in the United States. Only corn, soybeans, hay, and wheat bring in more money to American farmers. The report also stated that legal cannabis is the single most valuable agricultural crop in Alaska, Colorado, Massachusetts, Nevada, and Oregon, but remains completely uncounted and ignored by state agriculture officials. 

Alex Feldman General Manager, Insights & Marketing Services at LeafLink said, “California prices are still depressed as of early December due to a number of factors. Growing conditions were more favorable this year compared to last, new entrants came into the market anticipating a post-pandemic recovery, and there is continued downward pressure from the black market.” 

Too Much Marijuana

Although demand for freshly-harvested material could help steady price initially, as has been the case in some previous years, the rumblings in California have suggested that an early harvest price bump may not be in the cards this year due to inventory hangover from 2020 and this summer’s light-deprivation crops swamping the market.

Jonathan Rubin, Founder and CEO of Cannabis Benchmarks said that in addition to California, Oregon and Colorado were also seeing a significant drop in wholesale flower prices. “For the West Coast states, there was a significant amount of inventory that remained unsold deep into this year from a big outdoor harvest in 2020. In California, it seems that 2020 and 2021’s harvests were similarly robust. Additionally, cultivators that had spent previous years getting through the state’s stringent licensing process came online and started producing this year, including larger light deprivation operations outside of northern California, and generated a surge of supply beginning this summer, which caused prices to start to fall ahead of the autumn crop.”

In addition to California, Rubin said that in Oregon it seems that growers took record-breaking demand during the first summer of the Covid pandemic as a signal to ramp up production. “Even before the fall harvest, from roughly January through August this year, indoor and light deprivation growers were bringing in harvests that were a good bit larger than in 2020. Regarding the fall outdoor harvest this year, recent data from Oregon shows that outdoor growers have harvested about 55% more wet weight than they did in 2020, a huge increase in output,” he added. With regards to Colorado Rubin said that cultivators also ramped up production in 2020. “Data from the state MED shows that licensed growers in Colorado produced 40% more flower in 2020 than was purchased by adult-use consumers and medical patients, leaving a large inventory overhang,” said Rubin.

Low Prices Hurting Companies

Cannabis companies began to inform investors about the impact of the low prices during the last earnings season. Some were pretty upfront about the situation, while others just dropped hints. 

TPCO also known as The Parent Company (OTC: GRAMF) was one of the companies to deliver sobering news to investors. It reported that sales in the third quarter dropped by 26.7 % from the second-quarter revenue of approximately $54.2 million and blamed the decline on a decrease in bulk wholesale flower and bulk wholesale oil prices during the third quarter.  Wholesale revenue fell to $26.9 million versus $42.3 million in the second quarter and this was attributed to the decrease in whole flower pricing during the quarter. TPCO said that the charge was based on the softening of the California cannabis market. The company also insisted that the challenges it faced were not unique and that the entire California market was experiencing these issues, however, few other companies announced taking a $570 million charge during the quarter. 

Similarly, Harborside (OTC: HBORF) said it was withdrawing its previous revenue guidance for 2021. A variety of reasons were given including a decline in wholesale pricing for bulk products in the California market and the beginning of a commoditization decrease in wholesale revenues as a result of a decline in wholesale pricing for bulk products in the California market. Harborside also said that the California retail market was experiencing a softening in consumer demand. Operationally, the company said it implemented a change in its harvest procedures which delayed flower production in the third quarter of 2021 to allow for the adoption of a perpetual harvest schedule beginning in the fourth quarter. 

Glass House Brands (OTC: GLASF) CEO Kyle Kazan said during its recent earnings announcement that the California wholesale market faced considerable pricing challenges, as a result of overproduction in the third quarter. “While we expect the weakness in pricing to persist in the near term, we have proven the strength of our efficient operating model and the ability of our team to navigate a rapidly changing industry,” he said. The company reported that wholesale biomass revenue fell 18% despite a more than doubling of unit volume sales as flower wholesale prices fell by 48%, negatively impacting revenue by $4.1 million. Glass House also said it no longer expects to achieve the 2021 and 2022 revenue and profitability targets it had previously announced. The company now expects fourth-quarter revenues to be flat to down slightly compared to the third quarter in 2021 revenues of $17.2M. Kazan seemed to take the challenge in stride saying, “In Q3, our revenue (and that of everyone else of size in our market), took a hit from the significant drop in California’s wholesale flower pricing, and we think the difficult pricing environment will stick around for a while. “

Columbia Care (OTC: CCHWF) opted to just drop hints saying during its earnings announcement that there were some “wholesale pricing dynamics in some markets, such as California and Pennsylvania, and competitive market share dynamics in Florida.” After reading the other company comments, Col-Care’s soft pedal is really downplaying the situation. 

Slowing Sales

Of course, no one wants to suggest that sales could be maturing in some states. Rubin also said Cannabis Benchmarks noted that the expanded production coincided with slowing sales after the initial pandemic boom in 2020. “Beginning this spring and summer, sales began to plateau and then began to decline in late summer, continuing into the autumn and early winter. So in contrast to 2020 when demand was spiking and sales were breaking records in many legal cannabis markets, that has slowed in the second half of 2021 and recent month’s sales in the states under discussion are down year-on-year.” That statement agrees with Harborside’s assessment. 

Higher Energy Prices

Not only are these companies facing slowing sales, too much inventory, and falling prices, but they are also getting squeezed by higher energy costs, Granted if you’re an outside grower in California, you likely encounter water pressures. The recent Consumer Price Index (CPI) for all items jumped 0.9% in October and there were notable increases in the energy and energy services (utilities) sectors. Energy prices rose 4.8% in October with gasoline up 6.1%, fuel oil up 12.3%, and electricity up 1.8% on the month.

Indoor growers rely heavily on electricity to run lights and massive HVAC systems. They are known to be energy hogs. Over the past 12 months, the CPI reports that overall energy prices have risen 30%, with energy commodities, gasoline, and fuel oil, up 49.6% and 59.1%, respectively. Energy services (utilities) are up 11.2% year-on-year. 

In Closing

The question will be who can weather this storm of low prices, high energy costs, and slowing demand in legal dispensaries? LeafLink’s Feldman noted, “We’ve seen wholesale bulk flower pricing declines through October in key states including Michigan, Oregon, Colorado, and Arizona, but are seeing the trend improve as early December average prices in three of the four states are increasing, with the exception of Colorado.” So there could be light at the end of the tunnel. 

However, some cannabis industry vultures say they are already circling to look for those smaller players who are in distress and don’t have the reserves to ride this out. The larger companies can cut costs in the challenging states while relying on sales in states where wholesale prices have stayed steady. These dynamics are just part of the overall portfolio in a larger company. The California-only companies will see the crushing need for diversification. 

Kazan concluded, “To us, that’s not all bad news — the best strategy for weathering commoditization is producing the highest quality product at the lowest cost, and that’s basically a description of Glass House Brands’ strategy. In other words, we’re ready. Price compression is expected in every evolving industry and it makes strong companies stronger, though it unfortunately also removes others from the playing field. We’ve been preparing for this for a long time, and we think these market conditions will see the best-in-class companies thrive.


Kaitlin DomangueNovember 3, 2021
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Cannabis is the fifth most valuable crop in the United States, effectively beating cotton. 

Farmers grew $6.175 billion worth of cannabis last year. That’s enough to fill 57 Olympic-sized swimming pools. Or, you can fill more than 11,000 dump trucks, stretching more than 36 miles. And that’s only across 11 adult-use states, not even including medical marijuana! 

With a crop this huge, you’d expect more data to be collected. The USDA Research Service keeps track of all non-cannabis crops, but they don’t account for cannabis produced in legal states because it’s illegal at the federal level. 

That’s why Leafly is stepping in to try and keep track of what’s being grown in the United States. Their new Cannabis Harvest Report for 2021 proves just how valuable American cannabis is to consumers and farmers alike. Leafly does the same thing with cannabis jobs, which are not tracked by the Department of Labor. 

Quick Data for the United States

  • This report analyzes 13,042 cannabis farms across 11 adult-use states. All of the states in the report have an active recreational program and operational retail stores.
  • Cannabis’ value in the United States is beating cotton, rice and peanuts. Cotton was worth $4.7 billion in America last year.
  • Corn, the nation’s leading crop, was valued at a whopping $61 billion last year. Corn, soybeans, hay, and wheat are the four crops that beat cannabis in value.
  • Cannabis is the #1 most valuable crop in Alaska, Colorado, Massachusetts, Nevada, and Oregon. 
  • Cannabis is currently worth between $500-$3,000 per wholesale pound across the United States. 

Alaska

  • The cannabis crop is worth more than twice as much as all other agricultural products combined in Alaska, including livestock and crops. 
  • Alaska’s 356 licensed cannabis farms produced 21 metric tons of cannabis during the fiscal year ending June 2021, which was worth $104 million wholesale.
  • Hay, Alaska’s second most valuable crop, generated $9 million annually during the last fiscal year. 

California

  • There’s an estimated seven cannabis farm licenses for every adult-use store in California, creating a lopsided cannabis market in the state. There’s more product than there are stores to sell it. 
  • California harvested 514 metric tons of cannabis last year, yielding a wholesale crop of $1.66 billion. Big numbers, but Colorado farmers are growing more cannabis than California farmers and bringing in approximately the same amount of money.

Colorado 

  • Colorado farmers produced an estimated 627 metric tons of cannabis in 2020, according to the Colorado Enforcement Division’s 2020 year-end report
  • Colorado has 1,245 cannabis farm licenses.
  • Colorado’s cannabis was valued at $1.03 billion last year.

Oregon

  • Oregon has an estimated 1,319 cannabis farm licenses, which produced 344 metric tons of cannabis last year.
  • The crop was valued at $602 million last year.
  • It’s the most valuable crop in Oregon, beating hay, wheat, potatoes, and cherries.

What’s a pound worth? 

Leafly found that using Nevada’s rules set forth by state regulators to be the most clear-cut way to break down just how much a pound is worth in the United States. 

Nevada taxes cannabis farmers according to a pre-set “Fair Market Value at Wholesale.” Flower is $2,398/lb, small bud is $1,696/lb, flower approved for extraction is $568, trim approved for extraction is $546, trim is $550, wet whole plant is $297, and immature plants are $51. Leafly rounded up and adapted Nevada’s numbers to create a per-pound formula. Every pound of dry, harvested cannabis yields: 

Flower, ½ pound: $2,400 x ½ = $1,200 

Smalls, ¼ pound: $1,700 x ¼ = $425 

Trim, ¼ pound: $550 x ¼ = $138 

Each harvested dry pound of cannabis equals $1,763 of wholesale crop value. 

Let’s treat cannabis farmers like other farmers

Cannabis farmers did not receive any of the $35 billion in emergency pandemic aid to American farmers in 2020, nor do they get to claim any of the $10 billion already given in usual farm subsidies, despite generating billions of dollars in legal revenue to U.S. states each year. 

  • There’s an entire council dedicated to iceberg lettuce in Arizona, but no such council or research group exists for cannabis, which is Arizona’s second most valuable crop generating $360 million in revenue each year.
  • Strawberry farmers pay no cultivation tax in California, unlike cannabis farmers who pay $9.65 per ounce just to cultivate. 
  • 19 towns have banned cannabis farming in New Jersey, including processing and retail. 

Leafly’s annual reports continue to shed light on the dollar value cannabis brings to state governments and communities, while simultaneously not being awarded the same benefits as other farmers in the United States. 


Debra BorchardtAugust 9, 2021
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Cannabis online marketplace company Leafly Holdings Inc. and the SPAC (special purpose acquisition company) Merida Merger Corp. I (NASDAQ: MCMJ) sponsored by Merida Capital Holdings have signed a definitive agreement for a business combination. When the transaction is complete, Merida will adopt the Leafly name and its common stock is expected to be listed on the NASDAQ under the ticker symbol LFLY. The combined company’s transaction values at an implied, fully diluted enterprise value of approximately $385 million and equity value of approximately $532 million, subject to any redemptions by Merida stockholders. It is expected to close in the fourth quarter of 2021.

Leafly provides a subscription-based platform for more than 7,800 brands and 4,600 paying retail subscribers. Approximately 55% of North American retail licensees are currently subscribed to its marketplace and advertising services. As a non-plant touching platform with leading brand recognition, a user-friendly experience, and an established position in core growth markets, Leafly is well-positioned to capitalize on accelerating legalization trends and e-commerce adoption across North America. Based in Seattle, Washington, Leafly has a highly engaged audience of more than 125 million annual visitors to understand, select, and reserve cannabis products from licensed retailers.

Existing Leafly shareholders will roll 100% of their existing stake in Leafly and, upon closing, are expected to own approximately 72% of the combined company on a pro forma basis, assuming the company receives 100% of the proceeds currently held in trust. The transaction is expected to generate proceeds of up to $161.5 million, subject to any redemptions by Merida stockholders. This follows and is inclusive of Leafly’s recent $31.5 million capital raise led by leading cannabis-focused investors, including Merida Capital Holdings, Delta Emerald Ventures, SOJE Capital, and Leafly’s existing shareholder base. The proceeds of the capital raise and transaction provide Leafly with substantial capital to enhance its advertising and platform technology, expand its marketplace, and execute customer acquisition initiatives.

Peter Lee, President of Merida Merger Corp. I said, “Merida Capital is very excited to be involved in this transformative event for Leafly. We have seen firsthand how consumers respond to Leafly’s innovative technology and proprietary insights. Leafly has a proven flywheel and clear and achievable growth plans, and we look forward to leveraging our team’s demonstrated track record with other high growth ancillary cannabis companies to support their transition to the public market.”

Leafly plans to accelerate retailer monetization with retailers seeing 14x Return on Ad Spend and in the early stages of monetizing the more than 7,800 brands on the Leafly platform. The company is projecting revenue of approximately $43 million in 2021 and $65 million in 2022, representing  a roughly 52% annual growth with gross margins of roughly 88% as Leafly further penetrates current markets and capitalizes on its strong position in the newly legalized East Coast

Leafly struggled at the beginning of the pandemic and laid off 91 employees. It had been a part of the private equity Privateer Holdings portfolio, but then the company was spun out to be independent. In its early days, former Leafly founders Cy ScottBrian Wansolich and Scott Vickers departed Leafly to launch another Seattle-area marijuana data company, Headset.  Leafly had created a back-office product to help dispensaries run their business called Leafly Insights and Headset was essentially the business that Leafly Insights looked to be emulating. The company raised $2.3 million in October 2019 even as it was announcing plans to scale back its growth. Overall the company has raised approximately $38 million.

Yoko Miyashita, Chief Executive Officer of Leafly, said, “For the past decade, we have focused on building a unique, legally compliant marketplace with an equal emphasis on educating consumers and enabling them to reserve cannabis products from legal, reputable providers. With this transaction, we are looking forward to entering the next phase of our company’s journey – creating more personalized consumer experiences, driving more value to our retail partners, amplifying brands on our platform, and further scaling our presence in local markets as legalization continues. Our consumers recognize Leafly as one of the most trusted brands in cannabis, and we do not take that trust for granted. We are excited to partner with Merida’s deeply experienced team to create even more value for our consumers, partners, and shareholders.”

 


Julie AitchesonJune 30, 2021
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The Seeds of Change Report, released by Leafly for the first time this month, is an examination of how social justice, equity, and inclusion policies are implemented across the United States’ 19 legal cannabis markets as well as how cannabis legalization can implement eight key strategies to make the industry more fair and equitable. One of the most glaring statistics found in the report reflects that while Black people make up 14 percent of the population of the United States, only 2 percent of America’s estimated 30,000 cannabis companies are Black-owned.

This type of data is hardly shocking considering the systemic inequalities that disadvantage people of color at consumer, production and entrepreneurial levels within the industry. Leafly’s report offers context to these inequalities by providing a history of race and cannabis in the US as well as policy recommendations, academic resources for legislators, and actionable strategies that consumers can implement to advocate for changes within the industry.

Aside from ranking 18 states and the District of Columbia according to social justice, equity, and inclusion (SJEI), The Seeds of Change Report identifies eight distinct SJEI strategies for lawmakers to incorporate within cannabis legislation. States were ranked based on the degree to which they are implementing these eight strategies, which include: a mandate for automatic expungement of cannabis records; safeguarding rights and accessibility for medical patients; allowing reasonably regulated home growing operations; dedicating cannabis tax revenue to healing rather than harm; gathering robust data and sharing it widely; reducing stigma through proactive programs and supporting cannabis career development opportunities.

Findings from the report showed that although 1 in 20 Black Americans holds business equity in any company, Black Americans hold business equity in only 1 in 50 cannabis companies.  It also found that the criminal justice system, historical economic persecution, and healthcare access are the three leading barriers to cannabis opportunity in the US. Of the eight SJEI strategies identified by Leafly, homegrow and medical cannabis programs were the two most popular employed by states where cannabis is legal, though only 53 percent of legal use states are effectively implementing equity-focused licensing initiatives. There is a near-universal deficit in public health resources to help destigmatize cannabis, with 89 percent of legal use states posting low numbers in that regard. 63 percent of legal-use states are not reinvesting into disproportionately harmed communities with their cannabis revenue and/or taxes.  

The highest SJEI strategy rankings go to Colorado, California, Illinois, and New York, while Alaska, Maine, Montana, and South Dakota garnered the four lowest spots. Even given the rampant nature of systemic inequality in the US, Leafly’s numbers are sobering and point to an ongoing need to confront the fact that, according to Seeds of Change author Janessa Bailey, “Black and brown communities continue to pay the highest price for cannabis prohibition.” She is hopeful, though, that the eight SJEI strategies proposed by the report “lay out eight real strategies that any state can include within cannabis legalization to build an industry that is as accessible as it is profitable.”

 


Debra BorchardtMarch 24, 2020
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Private cannabis company Leafly laid off 91 employees this week amid the COVID-19 pandemic. Former Leafly editor Ben Adlin announced on Twitter that he had heard Leafly had made the layoffs which were later confirmed by the company. Adlin also noted the company still owed him $6,700. Adlin’s employment was prior to the pandemic layoffs.

“Today Leafly eliminated the roles of 91 employees across the company, 39% of our workforce. We’re heartbroken to have let so many talented people go in such an uncertain time. Although Leafly continues to grow and rapidly deploy pickup and delivery services for retailers and brands across North America, COVID-19 has rocked global financial markets and put further capital investments we were expecting on pause. This workforce reduction will allow us to be financially self-sufficient so we can continue to help consumers and patients learn about and order cannabis online while providing cannabis retailers and brands the services they need during this global crisis,” said CEO  Tim Leslie in a statement.

The company said it would provide one week of severance pay for the laid-off employees and two months of health insurance

Viridian Capital has acknowledged the slowdown in capital raises for the cannabis industry. The company recently wrote, “Capital raise activity for the week ended March 6th remained slow for the third week in a row, bucking the trend of increased capital raise activity that we’ve been reporting on since the beginning of 2020.”

Leafly had established itself as a provider of news and reviews for cannabis companies. It boasted strong traffic numbers, which allowed the company to charge top dollar for its reviews. In 2019, the company embarked on an expansion project to create a CBD e-commerce element to the website as well. It quickly increased the number of employees to as many as 300 with workers based in Seattle as well as Austin TX.

Green Market Report interviewed Leafly during the MJ Biz conference in December in which the company described its growth and plans for future data including data mining from user searches. There was also a back-office product to help dispensaries run their business called Leafly Insights. One month later in January, Leafly cut 54 employees.

Formerly With Privateer

Leafly had been a part of the private equity Privateer Holdings portfolio, but then the company was spun out to be independent. Former Leafly founders Cy ScottBrian Wansolich and Scott Vickers departed to launch another Seattle-area marijuana company, Headset. Headset is essentially the business that Leafly Insights looks to be emulating.

The company raised $2.3 million in October even as it was announcing plans to scale back its growth. Leafly still lists several jobs available on the company’s website.


Video StaffDecember 18, 2019

5min11240

The Green Market Report had a chance to sit down with Leafly’s Dave Cotter at the recent MJ Biz Conference in Las Vegas Nevada.

Debra Borchardt:             Leafly is known for its strain reviews and locating dispensaries. Now the company has an online eCommerce marketplace.

Dave Cotter:                       Leafly Market is an eCommerce site for purchasing the largest selection of CBD products. We just launched that and it’s really the beginning of us expanding from what we’ve done around news, what we’ve done with strains into a full marketplace for not only CBD but as a way for individuals to also get connected very easily to dispensary’s and the brands that they love.

So if you think of our portfolio from a product perspective, we have the consumer-facing piece, which is really kind of the news and our cannabis guide and content. You then have this marketplace piece, which is the eCommerce funnel. As you come out of learning about something, you find a product and you’re able to purchase it. And then we have this back-office suite and those are the tools that are used by a dispensary and you know, brands to help them run their business.

And as part of that suite, we make data available to them. And so we launched Leafly Insights, which is a data package that allows the dispensary, whether it’s a mom and pop or a large MSO, to understand that what strains are popular, what pricing you have happening in your area. And for a lot of those dispensary’s because they’re competing in very tight geographic areas. Understanding how much to charge, understanding what’s popular is super, super critical for them to remain competitive. And so we made that available and make that announcement today as well.

We announced our partnership with the American Marijuana Medical Physicians Association and it’s really the beginning of us working with them to really push the science forward as far as cannabis and the medical community. As part of that, we’ll be working on joint curriculum, so we’ll be coming out with different curriculum pieces for doctors. We also are making it easy for patients to be connected to doctors if they’re looking to cannabis or understanding what the cannabis do potentially for them. So it’s really, really exciting to be able to partner.

Debra Borchardt:             Leafly felt that it was an organic move to provide eCommerce. The customers were already coming onto the website and reading about specific strains in dispensary’s or reading news about different products. They just naturally wanted to make purchases.

Dave Cotter:                       What we have done is really just kind of responded to where our customers are pulling us, which is now that I understand or now that I’m educated, I now want to buy something. And so we’re creating a platform that allows them to do so. And as part of that continuing to make certain that we’re giving, you know, really easy to use tools for our dispensary partners to help them better run their business. So it’s really an extension of what we’ve already done. And so we’re super excited to really, to kind of unveil a lot of it today.

We basically settled in the Seattle area we knew that we wanted to make our expansion and so, you know, we onboarded more developers in our Seattle office. We have an awesome team down in Austin and they were really the backbone for creating this new marketplace experience. And it’s been a really cool kind of addition I think to the Leafly culture. Because you’ve got, you know, individuals who are deep in investigative reporting. You have individuals who are really deep at the science and now you have this kind of software culture as well. And it’s a really cool kind of mix of professions all really striving for kind of a higher power and a bigger opportunity. So it’s been really, really fun.


StaffJanuary 15, 2019
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Top cannabis database now offers consumers precise product location and pricing information through the Flowhub API

Seattle, WA – January 15, 2019 /AxisWire/ Leafly, the world’s leading cannabis information resource, and Flowhub, the award-winning cannabis compliance and point of sale provider, are today announcing their new, real-time integration to help cannabis dispensaries drive visibility and automate online menus.

As the world’s leading source for consumers to find cannabis, Leafly.com sees more than 16 million monthly visits and offers localized dispensary listings in legal cannabis markets. Now Leafly is partnering with Flowhub in order to show real-time dispensary inventory and pricing for every strain and product.

Updating online menus is a huge part of marketing for cannabis retailers, a task which can often be time consuming and inefficient. With the new Leafly and Flowhub integration, dispensaries can now automatically update their online menus on Leafly to match their live inventory in Flowhub’s industry-leading POS system. The Flowhub solution allows retailers and managers to save time on manual data entry, while providing accurate information and a seamless shopping experience for their potential customers on Leafly.

“Everyone can relate to the disappointment of showing up to a store only to learn that the product you want isn’t available. Our integration with Leafly prevents this type of poor customer experience from happening. Leafly has long been considered a top community website in the global cannabis movement and Flowhub has experienced rapid growth, with hundreds of dispensaries using our software to process over $1B in cannabis sales annually. Together with Leafly, we’re bringing the way consumers find and buy cannabis into the digital age.” says Kyle Sherman, CEO of Flowhub.

“By integrating with Flowhub, Leafly continues to offer the best point-of-sale integrations to partner dispensaries,” said Jason Makuch, Chief Product Officer at Leafly. “Leafly’s goal is to create a world-class user experience for product discovery while helping dispensaries grow their businesses at the same time.”

Consolidation of high-tech tools such as these is important for the future of legal cannabis. The industry faces unique challenges compared to any other industry, and business owners require a suite of products that are custom-built for the cannabis space which work seamlessly with one another.

The integration between the two technologies is officially live as of today. To learn more or to request a demo of Flowhub, visit flowhub.com.

About Flowhub

Powering the largest retailers in the industry, Flowhub is the leading compliance and point of sale software for cannabis dispensaries in the United States. Built specifically to serve the highly regulated industry, Flowhub is helping nearly 500 cannabis retailers grow revenue, stay compliant, and manage inventory. Founded in 2015 by former Compliance Officer, Kyle Sherman, Denver-based Flowhub processes over $1B in cannabis sales annually and is backed by industry investors like Poseidon Asset Management, Green Lion Partners, Phyto Partners, and Altitude. Learn more at flowhub.com.

About Leafly

As the world’s leading source for consumers to find cannabis, Leafly’s mission is to help patients and consumers make informed choices about cannabis and to empower cannabis businesses to attract and retain loyal customers through advertising and technology services. Learn more at www.leafly.comand download the five-star rated Leafly mobile app through Apple’s App Store or Google Play. Visit Leafly.com, Leafly Canada at Leafly.ca, Leafly Germany at Leafly.de, Leafly in Spanish at Leafly.es, and Leafly in French at Fr.Leafly.ca.


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