Exclusive Interview with Leafly CEO Yoko Miyashita
For the past 12 years, Leafly (NASDAQ: LFLY) has been on a mission to help consumers navigate the cannabis industry. The platform provides educational content, strains data and connections with licensed retailers and brands to guide consumers through their cannabis shopping experience. CEO Yoko Miyashita spoke with New Cannabis Ventures about the Leafly platform, the company’s public listing and how the company plans to continue growth.
The Leafly Model
Leafly monetizes its platform through retailer and brand subscription fees and advertising fees. With approximately 10,000 cannabis retailers across North America, Leafly has more than 50 percent market penetration, according to Miyashita. The way the regulatory environment stands today, cannabis is a local market business, and the company takes a market-by-market approach. The more stores it brings onto its platform in a market, the more consumer engagement.
The brand side of Leafly’s business is still relatively nascent, but with a potential addressable market of thousands of brands, the company is looking to revamp its brand subscription products and drive more engagement.
Consumers are Leafly’s third bucket of customers. They come to the platform to learn about cannabis, and they can use Leafly’s pickup and delivery offerings. Leafly launched its pickup offering back in 2018. Consumers can place an order through the Leafly platform and pick it up in-store. This year, the company has launched delivery in states where it is legal.
The delivery side of the business requires working with different POS providers. As a core part of the value it offers retailers, Leafly has focused on integrations. Today, the company has more than 50 integrations, according to Miyashita.
Miyashita served as General Counsel at Leafly before assuming the CEO role in 2020. She has spent 14 years in the digital media space. Her background as a lawyer trained in policy and intellectual property has laid the groundwork for her involvement in the highly regulated cannabis industry. She is passionate about leveraging her experience to understand the cannabis market. She is also attracted by the wide-ranging opportunities presented by the industry, from social justice to economic development.
Over the past year, Leafly has been building out its executive team. Miyashita highlighted COO Sam Martin, who has been with the company for six years, as well as a number of new members. The company has brought Kimberly Boler on board as General Counsel and Suresh Krishnaswamy as CFO. It has been bringing on leaders with experience in cannabis as well as other regulated industries.
Last year, Leafly announced plans to go public via a SPAC merger with Merida Merger Corp. I. The company made its NASDAQ debut earlier this year. Miyashita pointed out the company achieved this with a relatively small team; the company has approximately 260 people. The company has been subject to the same market volatility as other players in the cannabis space, but Miyashita has a long-term vision. She is mindful of the markets, but that doesn’t change Leafly’s strategy and its goal to build a lasting company.
Leafly’s Long-Term Vision
When the Leafly team considers the competition, it looks across cannabis-adjacent and cannabis technology companies. Other cannabis marketplaces have different strategies than Leafly, according to Miyashita. Leafly focuses on leveraging data to decomplexify cannabis. The company has a strains database with more than 6,000 entries, more than 1 million consumer reviews and more than 11,000 stories. Leafly uses data to create unique consumer experiences that lead to the doorsteps of retailers and brands. Cognizant of the M&A activity in the space, the Leafly team will look at opportunities with the potential to help the company move forward.
Early on in its history, Leafly was a Privateer Holdings-funded portfolio company. The company was spun out in 2019, and it did a small Series A round in 2020. As a part of the SPAC process, the company did a convertible note that put cash on the balance sheet, according to Miyashita.
The company takes a highly disciplined approach to deploying capital and drive growth. In 2019 and 2020, Leafly had a series of layoffs, which have helped the company to form that financial discipline. Leafly took the path to a U.S. listing as a way to control its destiny, according to Miyashita.
Leafly announced revenue expectations of $53 to $58 million for 2022. The company will be focused on increasing its subscription base on both the retailer and brand sides of its business, which generates recurring revenue. It ultimately wants to continue enhancing the consumer experience to create a more highly engaged and retentive platform.
The Leafly team tracks the platform’s success through a series of highly detailed KPIs across each customer segment: retailers, brands and consumers. It follows these metrics at the local market level to understand key trends.
Like many other cannabis companies, Leafly is looking to the opportunities in the East Coast markets coming online. Regardless of how the regulatory environment evolves, the company will continue to leverage its platform to educate consumers and build opportunities for retailers and brands through the normalization of cannabis.
To learn more, visit the Leafly website. Listen to the entire interview:
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