Yo, peeps! Check it out, ’cause the game is changing for the big dogs in the online cannabis world. I’m talkin’ about Weedmaps and Leafly. We all know these giants hold it down in the cannabis industry, but with Google Maps now gettin’ in on the dispensary and review game, things ain’t lookin’ too good for our OGs. Weedmaps and Leafly are takin’ hits to their organic search traffic, and that ain’t a good sign for their future in the game.
So, let’s break it down. In the third quarter of 2023, Weedmaps’ parent company, WM Technology Inc., reported a loss of $2.5 million. Now, that might sound like a lot, but compared to last year’s Q3 loss of $10.5 million and an annual loss of $82 million, there’s a small glimmer of hope. But still, the numbers don’t lie. Weedmaps’ total revenue dropped from $50.5 million to $47.7 million year-over-year. And get this, their average monthly paying clients went from 5,576 to 5,414. That’s a decline we can’t ignore. Even the average revenue per client took a dip from $3,019 to $2,938.
Damn, it’s not lookin’ good for Weedmaps. But hold up, they did see some gains in one area – their WM Ad solutions made up 8% of their total revenue. So at least they got somethin’ goin’ for ’em. To try and bounce back from these losses, Weedmaps had to tighten their belts and cut costs. They reduced their operating expenses from $70.1 million to $53.2 million year-over-year. Gotta give ’em props for tryin’ to turn things around.
But wait, there’s more! Weedmaps ain’t all doom and gloom. They still got that positive mindset, ya know? Executive Chairman Doug Francis ain’t lettin’ the setbacks get to him. He’s all about that operational efficiency, even in a tough market. At the end of the quarter, Weedmaps had $27.7 million in cash and $63.9 million in total liabilities. So they’re playin’ it safe and steady, tryin’ to find their way back to profitability.
Now let’s turn our attention to Leafly. These guys ain’t doin’ so hot either. They reported a loss of $2.2 million in the third quarter, addin’ to their annual deficits of over $9 million. Ouch. Leafly’s overall revenue dropped from $11.8 million to $10.6 million year-over-year. And here’s the kicker – they lost a whopping 795 retail clientele accounts from the second quarter, goin’ from 5,261 to 4,466. That’s a major blow to their customer base.
But don’t count Leafly out just yet. They got a little somethin’ goin’ for ’em too. Despite losin’ clients left and right, they managed to increase the average paying client’s monthly bill from $556 to $644 year-over-year. They did this by implementin’ new rate cards and gettin’ rid of them low-revenue accounts. Leafly knows they gotta adapt to survive, so they made some cost-cutting moves like layin’ off peeps and restructurin’ their marijuana news division. Their operating expenses went down by 33% from $16.3 million to $10.9 million year-over-year.
Leafly’s CFO, Suresh Krishnaswamy, wants y’all to know that despite the tough times, they’re still focused on operatin’ efficiently and managin’ costs. Their gross margin even improved by 2% to 89%. So they ain’t givin’ up without a fight.
So, what’s the plan for the future, you ask? Weedmaps and Leafly got some strategies in mind. Weedmaps is all about cuttin’ costs and makin’ sure they stay in compliance with Nasdaq. They reduced their operating expenses and achieved Nasdaq compliance with the minimum bid price rule. As for Leafly, they’re adjustin’ their pricing and enhancin’ their services to better meet market demands. They’re also givin’ customers more options like scheduled delivery to keep ’em comin’ back for more.
But let’s keep it real, peeps. The future ain’t lookin’ too bright for these online cannabis giants. Weedmaps is projectin’ a decrease in revenue for the fourth quarter, with an adjusted EBITDA loss of around $1.3 million. And Leafly? Well, they’re expectin’ their revenue to be around $9.5 million for the rest of 2023, but that’s still a decrease from before.
So there you have it, folks. Weedmaps and Leafly are takin’ some serious hits in the online cannabis game. It’s a tough world out there, but these giants ain’t goin’ down without a fight. They’re tryin’ to adapt, cut costs, and find new ways to bring in that green. Only time will tell if they can bounce back and reclaim their spots at the top of the cannabis industry. But until then, we’ll be watchin’ closely to see what happens next. Stay tuned!