A generous amount of fresh cash flow enters cannabis-related businesses as more states legalize cannabis in the marketplace. Leafly, a Seattle-based online cannabis marketplace, closed $23 million worth of new funding. During the pandemic, related dispensaries were even declared as an essential business.
What’s Leafly?
Leafly is an online marketplace where you can buy or sell cannabis. It’s also a platform with educational resources about weed. Through the website, you can have a crash course about the type of weed strains. You can also use it to discover dispensaries near your location. Overall, the cannabis platform generates 120 million annual visits. We can say it’s an online cannabis empire.
2020’s Mass Layoff
Leafly’s management plans to use the funding and expand the company’s 160-person workforce. It’s a significant turn of events for the company as it breaks a series of layoffs over the years. Last January 2020, Leafly cut off 18% of its workers, laying off a total of 54 positions. The former CEO, Tim Leslie, cited the “market realities” that businesses in the cannabis sector experience.
Two months later, 91 more employees were cut off due to the uncertainties caused by the pandemic. However, Leafly’s budget blasted off the roof thanks to the recent legalization of cannabis in various states. As a result, the startup is currently under the new leadership of CEO Yoko Miyashita, a former executive from Getty Images. Meanwhile, Leslie, the former CEO, founded a non-profit farming organization called Living Roots.
The Cannabis Market
In 2019, Leafly spun out from Privateer Holdings, a marijuana investment firm. The company’s overall revenue comes from the monthly subscription fee of cannabis retailers on the platform. It’s more convenient to them as they have access to e-commerce tools and exposure to more than a million users. The platform also generates money from advertising on the website.
According to Leafly’s data, Americans spent $18 billion on cannabis back in 2020. Compared to 2019, the industry experienced an overwhelming increase of 71%. The main reason for this significant influx is the pandemic. As businesses lay off workers, the public brought cannabis to survive the chaos brought by the pandemic. In short, it’s genuinely for survival and mental health purposes.
At the same time, recent legalization across the stars is accelerating the growth of the cannabis market. Due to this, Leafly managed to generate more than $25 million funding to help survive the previous layoffs.
Aside from expanding the workforce, Leafly plans to take advantage and use it as a fuel to enter the east coast market. Yes, it’s where several states have recently legalized marijuana.
Cannabis Legalization
Did you know that recreational marijuana is legal for adult use in the District of Columbia and across 16 states? Meanwhile, medical marijuana is legal in more than 20 states. One of the most frequent citations, whenever cannabis legalization comes up, is its medical benefits.
This 2021, an unstoppable feat of legalization happened in at least three states.
Specifically, New York started legalizing cannabis last March. According to Insider, Virginia and New Mexico will undergo the same type of legalization. Here’s a list of states where marijuana is legalized:
Fully Legalized
- Washington
- Oregon
- Montana
- South Dakota
- Illinois
- Michigan
- New York
- Vermont
- Maine
- Massachusetts
- New Jersey
- Virginia
- Colorado
- New Mexico
- Arizona
- Alaska
- California
- Nevada
You can look at the complete overview here.
Due to the recent legalizations, companies are fast when it comes to responding to the cannabis trend. For example, the tech giant Amazon announced they’ll stop screening certain job applicants that use drugs. On another note, Amazon also announced that it would back “legal pot” and support federal legislation. The federal legislation plans to decriminalize and legalize cannabis.
Investors and Leafly
Of course, the investors will not let this opportunity pass. The investors are quick to ride the cannabis’ sudden boom. At the moment, Leafly has managed to raise a whopping total of $38 million in total funding.
Leafly’s Competitors
Dutchie is an Oregon-based cannabis e-commerce platform. They managed to scrape $200 million worth of new funding back in March. At that moment, the platform reached funding worth $1.7 billion.
Another cannabis company is called Weedmaps. It officially went public and began trading accessible cannabis for everyone. This cannabis platform is available as an application for every user’s convenience. You can start installing Weedmaps via Google Play or Apple’s App Store.
