This Newly Listed Cannabis Software Company Discusses Its Expansion Plans

Exclusive Interview with springbig Co-Founder and CEO Jeffrey Harris

Jeffrey Harris, the Co-Founder and CEO of springbig (NASDAQ: SBIG), last checked in with New Cannabis Ventures at the beginning of the year. Since then, the cannabis software company has begun trading on the NASDAQ and continued to focus on its key customer segments: retailers and brands. Harris spoke about the company’s listing and its plans for consolidation.

Listen to the entire interview or read the summary below:

NASDAQ Listing

The company is disappointed by the decline in its stock price since beginning to trade, but it is operating in the same macroeconomic environment as the rest of the cannabis industry. Cannabis stocks, in general, have been having a challenging time over the past year, according to Harris. But he is still optimistic about the benefits of going public.

springbig plans to continue growing and to demonstrate its ability to deliver. As it shows that consistency, Harris anticipates that the stock price will start to reflect the true value of the business. The company also plans to leverage is NASDAQ currency to consolidate marketing assets within the cannabis industry and outside of it.

While there is still competition for the public company, Harris believes springbig has remained a market leader following its public listing. The company continues to acquire new business and carve out brand recognition in the market.

The company has also maintained a stable leadership team over the past year. It added two senior positions, a finance executive and technology executive, about a year and a half ago. The company will likely add more talent as it grows, but thus far, the consistency of the team has proven to be a benefit, according to Harris.

springbig Team Members at MJBizCon in Las Vegas.

The Evolving springbig Platform

springbig is a customer loyalty and marketing platform serving the cannabis space in the U.S. and Canada, and it continues to build out its offerings to better serve its customers. The company is focused on giving its clients the ability to delve deeper into data to better understand their customers’ behavior. It recently introduced a platform enhancement that allows users to customize the measurement period for campaigns; they can compare how a campaign performed over different day and week-periods.

The company is also preparing to launch a custom segment builder, which will allow users to build unique audiences to target. It mimics the abilities of customer data platform (CDP) without the complexities, according to Harris.

The platform has also added the ability for customers to create their own apps in the Google and Apple app stores; it has close to 100 apps in the market now. This function allows the company’s customers to leverage push notifications in addition to email and text communication.

springbig Clients Can Leverage Three Different Communication Pathways to Reach Their Customers: Email, Text and Push Notifications.

Additionally, the company has enhanced the loyalty functionality of its platform. Clients now have the ability to mix and match bonuses to drive the desired behavior from their customers, according to Harris.

The company has more initiatives planned as well. It is preparing to launch Spring Pay, a payments method that will allow retailers to give their customers the ability to pay with points along with their preferred payment method.  That offering is being tested now, and it is slated to roll out in the first quarter. The company is also gearing up to offer consumer subscription products, as well as advertising opportunities for both its retailer and brand clients.

Market Reach

springbig has approximately 1,400 clients across 2,900 locations. It is also working with more than 100 brands. It works with the majority of large MSOs, according to Harris. Large clients like this can leverage the company’s platform in multiple ways. For example, one MSO with more than 100 locations uses the company’s platform for loyalty and communication on the retail side of its business. It also leverages the platform on the wholesale side of its business to build brand awareness in the stores to which it is selling products.

M&A Strategy

Consolidation was part of the impetus behind the company’s NASDAQ listing. The company wants to pursue M&A to grow its revenue streams and its ability to serve its customers. Currently, the team it talking to a number of companies within cannabis, and it is looking at other industries that it could enter to add to the value of its platform.

A Federally Legal Future

Federal legalization will open the door to more opportunities for springbig. That shift in the regulatory landscape will allow more capital to enter the industry, and it will allow the cannabis business to grow much faster. While the company has been able to grow this year, Harris pointed to the slowdown in store openings in 2022 as a challenge.

Funding and Investors

The company is comfortable with its current cash position and its ability to reach cash flow positivity, according to Harris. Any new capital the company goes out to raise will be primarily to support its acquisition strategy.

The team is considering a number of strategies for future fundraising efforts. If its stock price rises, it will have the opportunity to sell more equity. The company has a lock-up, set to expire in mid-December, which will open up more shares. It is examining other opportunities to increase its float and give more investors the ability to trade its shares.

The redemption rate was approximately 97 percent prior to the closing of the SPAC merger with Tuatara Capital Acquisition Corporation. Today, the company’s investor pool is made up of legacy springbig investors, its SPAC partner Tuatara Capital, and some new investors that did not redeem, according to Harris.

2022 Outlook

The company announced guidance of $26 to $29 million in revenue for this year, and it remains confident in that range, according to Harris. The company experienced an increase in client spending in the second half of Q2. The company will be announcing 2023 guidance with its year-end numbers in March.

The company closely follows metrics including number of customers, net dollar retention rate, and revenue growth. It further breaks revenue down into subscription revenue and overage revenue. Subscription revenue is locked in for the contract periods with its clients, while overage revenue accrues when clients spend above their subscription.

Like the rest of the cannabis industry, springbig is facing the macro challenges of the current economy. It cannot control those challenges, but it can focus on its chosen growth initiatives, execute and demonstrate that execution to the market.

To learn more, visit the springbig website. Listen to the entire interview:

Exclusive article by Carrie Pallardy
Carrie Pallardy, a Chicago-based writer and editor, began her career covering the healthcare industry and now writes, edits and interviews subject matter experts across multiple industries. As a published writer, Carrie continues to tell compelling, undiscovered stories to her network of readers. For more information contact us.

Get Our Sunday Newsletter