Who Will Become The Leading Cannabis Marketplace?
The battle to become the number one marketplace for cannabis consumers is heating up with Weedmaps, Leafly & Dutchie all raising capital.
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In July 2008 Weedmaps was founded — the company is now valued at $2.99 billion USD as of this morning’s share price on the New York Stock Exchange.
The company has an estimated 430 employees based on their S1 filing and they made $39 million in net income from $162 million in revenue in 2020.
Leafly, a company founded 2 years later in March 2010 has since become one of Weedmaps biggest competitors with both companies aiming to become the most successful cannabis media company & cannabis marketplaces.
Being a media company allows Weedmaps and Leafly to attract a large number of cannabis consumers to their marketplaces (data from similar web):
Leafly received 17.02 million visitors to their website in May.
Weedmaps received 13.59 million visitors to their website in May.
Dutchie received 2.26 million visitors to their website in May.
As a result of receiving this traffic, both Leafly & Weedmaps are able to charge cannabis retailers fees for being listed on their platform.
The Rise Of Dutchie
Dutchie, a company founded in 2017 has taken a very different approach.
Unlike Weedmaps & Leafly, cannabis retailers don’t pay Dutchie fees for being listed in their marketplace.
Instead, Dutchie provides cannabis retailers with an e-commerce solution.
Dutchie also provides consumers a “central marketplace” where they can access each of the stores using their solution, however, their primary value proposition remains their e-commerce solution.
To date, Dutchie has remained focused on providing software solutions to cannabis retailers, and although they recently expanded this offering with the acquisition of Greebits (point of sale) & LeafLogix (seed to sale) they have so far not ventured into cannabis media.
It appears both strategies are working.
Weedmaps has 18,000 businesses listed on their platform, they are growing at 40% annually, and have access to over $100 million USD which should allow the company to grow even faster with increased budgets.
Dutchie may have significantly fewer visitors coming to its website today, however, the company has very clearly become the market leader in cannabis e-commerce solutions for cannabis retailers.
With this lead, Dutchie secured a $1.7 billion dollar valuation in March and raised $200 million USD from one of the leading VCs — Tiger Global.
Although Leafly has raised $23 million USD this month following $15.5 million USD in May 2020 — when compared to Dutchie or Weedmaps, Leafly’s valuation has fallen far behind in recent times.
With a war chest of capital at their disposal, it seems both Weedmaps & Dutchie would have the means to purchase Leafly.
Weedmaps & Dutchie both offer point-of-sale software, both are competing to become the #1 cannabis marketplace and both would benefit from the consumers they could bring into their marketplaces if they owned Leafly.
With a wave of mergers and acquisitions having occurred in cannabis production in recent months, I expect to see this same wave reaching cannabis media & marketplaces in the not-so-distant future as both Dutchie & Weedmaps race to become the #1 cannabis marketplace in the world.
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