Leafly to go public via SPAC merger that values Seattle cannabis marketplace at $385M – GeekWire

Leafly to go public via SPAC merger that values Seattle cannabis marketplace at $385M – GeekWire

Leafly to go public via SPAC merger that values Seattle cannabis marketplace at $385M – GeekWire

(Leafly Image)

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 take on the Leafly name and the common stock will be listed on the NASDAQ under the ticker symbol LFLY. The transaction will value the combined company at a $385 million enterprise valuation.

Founded in 2010, Leafly’s online marketplace lets customers shop and select cannabis products from licensed retailers. The startup also serves as an educational resource, and its platform has more than 125 million annual visitors.

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Leafly is the latest Seattle company to take the SPAC investment route to going public. The mergers have become popular alternatives to the traditional process for initial public offerings, offering a faster path to going public. Seattle-based pet-sitting marketplace Rover began trading last week after its $1.35 billion SPAC deal.

“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,” Leafly CEO Yoko Miyashita said in a news release. “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.”

Miyashita, a former Getty Images exec who was previously the company’s general counsel after joining in 2019, took over as CEO in August 2020. Leafly spun out of Seattle marijuana investment firm Privateer Holdings in 2019.

The company, which employs around 160 employees now, weathered some cuts in January 2020, letting go of 18% of its staff, or 54 positions, which then-CEO Tim Leslie attributed to “market realities of the technology and cannabis sectors.” It cut 91 more employees two months later, citing the uncertainties caused by the 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 has raised $38 million to date.

Leafly’s revenue primarily comes from a monthly subscription fee paid by cannabis retailers to be listed on the platform and to access e-commerce tools. The company said more than 7,800 brands use its services. It also makes money from advertising.

Americans spent about $18.3 billion on cannabis products last year and marijuana legalization trends are accelerating the market, especially on the East Coast, where several states have legalized marijuana recently.

The cannabis boom is attracting investors. Dutchie, an Oregon-based cannabis e-commerce platform, announced $200 million in new funding in March. The company was valued at $1.7 billion. And Another cannabis company, Weedmaps, went public and officially began trading earlier this summer.

The Merida SPAC is sponsored by Merida Capital Holdings, and the proposed deal has been unanimously approved by the boards of directors of both Leafly and Merida, according to the news release. It’s expected to close in the fourth quarter of 2021, subject to customary closing conditions.

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