A leading online cannabis marketplace and resource company has joined with a blank check company to expand and go public.
Seattle, Washington-based Leafly Holdings Inc. (Leafly) today announced that it has entered into a definitive agreement with Merida Merger Corp. (Merida).
According to the company, Merida will adopt the Leafly name upon the completion of the proposed transaction.
Leafly expects its common stock to be listed on the NASDAQ stock exchange under the symbol LFLY.
A content-first, community-driven, three-sided marketplace, Leafly provides a subscription-based platform that boasts than 7,800 brands and 4,600 paying retail subscribers.
According to Leafly, approximately 55 percent of North American retail licensees subscribe to its marketplace and advertising services.
“For the past decade, we have focused on building a unique, legally compliant marketplace with an equal emphasis on educating consumers and enabling them to reserve cannabis products from legal, reputable providers,” says Leafly CEO Yoko Miyashita. “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.”
Regarding the proposed transaction, Merida believes the move will be an attractive investment opportunity for shareholders due to Leafly’s extensive content library, strain database, subscription and ad revenue, and audience of 10 million unique visitors each month.
Under the terms of the proposed transaction, the combined company is estimated to have an implied, fully-diluted enterprise value of $385 million and $532 million in equity value.
Shareholders will roll their existing Leafly stakes and should own approximately 72 percent of the company on a pro forma basis upon closing.
Leafly and Merida expect the transaction to generate up to $161.5 million in proceeds.
Leafly also expects the transaction and the proceeds of its $31.5 million capital raise to expand its marketplace and enhance its advertising and platform technology.
“Merida Capital is very excited to be in involved in this transformative event for Leafly,” says Merida President Peter Lee. “We have seen firsthand how consumers respond to Leafly’s innovative technology and proprietary insights. Leafly has a proven flywheel and clear and achievable growth plans, and we look forward to leveraging our team’s demonstrated track record with other high growth ancillary cannabis companies to support their transition to the public market.”
Leafly’s and Merida’s boards of directors have unanimously approved the transaction, which they expect to close in Q4 2021.
