On Monday, Seattle-based cannabis startup Leafly announced that it’s going public through a SPAC merger with Merida Merger Corp. The deal values Leafly’s enterprise at $385 million and equity at about $532 million. Once the transaction closes, Leafly will be listed on the NASDAQ under the “LFLY” ticker symbol.
Mergers via SPAC — which stands for “special purpose acquisition company” — have become an increasingly popular way for private companies to become publicly traded while raising funding at the same time. Because of this, there has been a growing number of companies taking the SPAC route instead of the more traditional IPO.
For Leafly, momentum in the cannabis industry helped guide this decision to become a public company. Leafly operates an online marketplace and discovery resource that helps customers learn about all the cannabis products on the market, while allowing cannabis businesses to market their products. The legal cannabis industry is still relatively new and rapidly evolving. Because of this, it’s important for people to learn about which cannabis products are the best fit for them, in terms of safety, effects and quality. Meanwhile, it’s important for cannabis brands to stand out in a crowded industry and build a loyal customer base.
Founded in 2010, Leafly has built a reputable brand across the North American legal cannabis market. Its platform has over 125 million annual visitors, and it works with 7,800 brands and 4,600 paying retail subscribers. The company says that 55 percent of all North American cannabis retail licensees are currently subscribed to its services.
Leafly hopes to grow as more U.S. states legalize recreational cannabis, and this SPAC merger will help it do that. In addition to helping Leafly go public, the merger is also estimated to provide proceeds of up to $161.5 million for its business. This will help Leafly invest in growing its platform, expanding its marketplace and pursuing more customer acquisitions.
“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,” Leafly CEO Yoko Miyashita said in a statement. “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.”
The deal is expected to close during Q4 of this year.