Weedmaps vs. Leafly – How Much Bigger is World Cup tech compared to its closest competition?

Now that Weedmaps, or WM Technology, is public and its closest competitor Leafly is about to go public and start releasing its quarterly results, we can finally go behind the scenes of the world’s two largest cannabis websites to see how big is big, how much money can you make with menu management and traffic and how big is the lead of weedmaps in the cannabis world? Let’s take a look!

Leafly’s latest results showed that the company had sales of $ 31.0 million and gross income of $ 27.4 million for the nine months ended September 30, 2021. Further highlights from the results report were:

• Realized annual revenue of $ 31.0 million, an increase of 14% compared to the nine months ended September 30, 2020.

• Reported gross margin of 88.5% on gross income of $ 27.4 million, up 16% compared to the nine months ended September 30, 2020.

• The total number of end customer accounts increased by 40% to 4,769 as of September 30, 2020.

Another interesting tidbit from the report in terms of size and traction:

Leafly cannabis discovery market aims to help more than 125 million visitors discover cannabis this year. Our powerful e-commerce tools help shoppers make informed purchasing decisions and empower cannabis companies to acquire and retain loyal customers through advertising and technology services.

Weedmaps, or WM Technology, is already publicly listed through a SPAC deal and is traded on NASDAQ. Their quarterly results are pretty impressive, despite the fact that stock prices have rocketed in the past few weeks.

Some of their financial highlights from the winning call are as follows:

• Revenue rose to $ 50.9 million, up 9% from Q3 2020 or 46% in the US (when adjusting the previous third quarter for sales related to Canada-based retailers who do not have valid license information and then from the Weedmaps marketplace).

  • The Monthly Active Users (“MAUs”) (1) (2) increased to 13.9 million as of September 30, 2021, or 37% compared to the same period last year (or 28% if the current period is adjusted to exclude the MAUs assigned to the session from weedmaps.com, which we were unable to track in the previous period).

  • Average monthly revenue per paying customer (1) (3) increased to $ 3,817, or 7% (or 18% if sales from Canada-based retailers that did not provide valid license information from the prior-year period are excluded) compared to the same period last year ).

  • The Average Monthly Paying Customer (1) (4) increased to 4,444, or 2%, compared to the same period last year (or 24% if Canada-based retailers that did not provide valid license information from the year-ago period are excluded).

• Gross profit was $ 48.8 million, a margin rate of 96%, reflecting a margin increase of 50 basis points year over year.

• Net income was $ 49.2 million compared to $ 15.5 million for the same period last year.

Interestingly, WM has been hammered on the predictions for the future and the stock has plummeted, but as the report says:

Based on the current business developments and framework conditions, the outlook for the fourth quarter of the year ending December 31, 2021 is expected as follows:

Leafly gives you a report for the 3rd quarter, but threads in numbers and sentences that also include full year financials under the heading “After 9 Months”. So we see a quarterly report that also contains 9-month figures. Why do companies do this? When they’re having a weak quarter or the numbers aren’t “wow,” companies tend to include the yearly history and those numbers look bigger. If you compare apples to apples, what do we have?

Leafly had approximately $ 31 million in revenue as of October 1, 2021, or basically the first 75% of the year. They retained $ 27.4 million in gross profit, or about 88.5% gross margin. Not bad at all for a website that monetizes traffic by displaying banner ads, directing orders to pharmacies through their platform, and making CBD sales.

Weedmaps, on the other hand, makes about $ 50 to 52 million per QUARTER of sales and keeps about 96% of that as gross profit. So in the first 9 months of 2021 Leafly had sales of $ 31 million and Weedmaps around $ 150 million in the same period. So is Weedmaps 5x bigger than Leafly?

Let’s look at the traffic.

Weedmaps says they have nearly 14 million monthly active users, but that’s 37% more than the same period last year. Weedmaps had around 9.4 million monthly visitors to the site last year. Leafly says they want to “help 125 million visitors discover cannabis this year.” Basic math would put Leafly’s monthly users at around 10.5 million per month, but note that Leafly doesn’t say they help 125 million users a year, they aim to help that many people this year. So the actual traffic count is unknown and Leafly leaves it unclear how many people actually come to the site each month, what is their “goal” or “goal” for 2021. Are they helping 10 million visitors a month or are they? you with 8 million a month with a “goal or goal” of being able to help 10.5 million a month?

In terms of traffic, it looks like Weedmaps has around 170 million users or individual visitors per year, most likely millions of unique visitors per year. They are by far the two largest cannabis websites in the world. It’s Michael or Lebron, then a big step down from the rest of the pack.

Another interesting point of view on growth is that Leafly Chief Executive Officer Yoko Miyashita said on the conference call, “As we accelerate our next phase of growth, entering the public markets through our partnership with Merida Capital will enable significant investments in our branded platform , robust advertising tools and unmatched insights and information – and strengthen our leadership position in the new legal east coast markets Future prognosis. As we pointed out in our WM Technology stock overview, basically not enough legal pharmacies are getting online fast enough to get Weedmap’s predictions right at the moment.

Leafly recently won a lawsuit in Florida for legal access to third-party technical platforms to facilitate ordering for Florida pharmacies. The rules were originally written to not allow third party platforms to be ordered or menu management.

Bottom line

Weedmaps generates roughly five times Leafly’s sales ($ 150 million to $ 31 million) with only 30% more traffic in any given quarter. Gross margins are comparable to Leafly at 88.5% and Weedmaps at 96%, both excellent numbers for software and website companies. What are the best moves for the future? As we discussed here in our WM Technology Review, weedmaps may be best served if you take the EAZE route and buy an MSO. While Chris Beals has stated that his suite of software products does not want his suite of software products to compete with the vendors on his website, he may have no choice if he wants to match WM Technology’s high ratings and predictions. For Leafly, traffic is catching up because the more traffic comes, the better the gross margins get. Leafly should buy up menu management groups and websites with traffic to grow their user base. Is Jane for sale? You have just received $ 100 million in funding but dealt directly with the Leafly marketplace. What about Fresh Toast, Cannabis.net or MJ BIZ Daily? Leafly will officially be a public entity trading on NASDAQ by the end of this quarter, so they will have some dry powder to do some deals.

In the end, the best way to monetize cannabis traffic is to sell it. That’s what 86% of Cannabis.net users want to do, which is buy weed. Federal laws and state restrictions make this difficult at this time, so the most common solution is to list menus and order options for the user area and then forward those orders to that pharmacy and get compensation. Not a great model for margins, but better than displaying banners and CBD ads. The future will sell cannabis directly to these users through a Shopify-type platform and ship it from warehouses across the country. The industry is not yet in the “Amazon of Weed” phase, but all of these groups are preparing for this moment in their own way.

The craziest predictions, Weedmaps will buy Leafly. In real life, it would never get past antitrust authorities as they would control 98% of cannabis orders and the cannabis trade, but since cannabis is a federal illegal drug, the deal might not come under legal scrutiny. Perhaps weemdaps should strike before federal legalization and all of the federal guidelines the government imposes on public corporations after full legalization. It won’t happen right now that Weedmaps has its own equity issues and has to go through a “distress” stock offering or issue to cover a negative equity position the company found last quarter, but what if Amazon would team up with WM? Background, then you would have a financially strong partner to close the deal.

CANNABIS TECH WILL PUBLIC, READ MORE ..

HAVE WEEMDAPS COMPLETED A SPAC DEAL TO GO IN PUBLIC?

OR..

WILL LEAVES START SELLING WEED, BRUCE BARCOTT TALKS ABOUT LEGALIZATION!