Weedmaps, founded in 2008 and profitable every single year, is going public via a deal that values the company at $1.5 billion (yes; with a ‘B’).
According to a news release, WM Holding Co. will merge with blank-check acquisition firm Silver Spike Acquisition Corp. and get the coveted Nasdaq listing. The company expects to see $160 million in revenue this year and estimates that revenues in 2021 will hit $205 million..
The company boasts 10 million monthly users, and this transaction will provide up to $575 million in gross proceeds, including $325 million through a common stock known as a PIPE (private investment in public equity) transaction.
Weedmaps has been a source of controversy from its start, but it’s success cannot be denied. The business model has two solid sources of revenue. It generates ad revenue from pot retailers that pay to reach customers via the site’s dispensary search tool. On the flip side, it sells cloud-based operating systems to marijuana businesses.
Weedmaps pulled in at least $439 million in revenue from 2015 through 2019, according to U.S. Securities. Despite the profits, Weedmaps has had a hard go of it with its connections to unlicensed marijuana shops in California. In early 2018, state authorities issued Weedmaps a cease-and-desist letter, which effectively ordered the company to stop providing an advertising platform for illegal weed operations. In response, the company started requiring California state license numbers for listed advertisements on Weedmaps.
The company, which got its start in California, has 18,000 business listings between the U.S. and Puerto Rico. It has business listings in nine counties total, including Canada. The company’s CEO, Chris Beals, will continue in his role after the merger.
“With this merger, we will be able to continue scaling the Weedmaps marketplace in the U.S. and internationally in service of our users while expanding the functionality of our WM Business SaaS offerings in service of our clients,” Beals said in the release.