© Reuters. FILE PHOTO: Cannabis stickers on a Weed World store window are pictured the day New York State legalized recreational marijuana use amid the coronavirus disease (COVID-19) pandemic in the Manhattan borough of New York City, New York, U.S., March 31, 2021.
By Shariq Khan
(Reuters) – Top cannabis-focused website Leafly is in talks to merge with blank-check company Merida Merger Corp I in a deal that would value the combined company at more than $530 million, three people familiar with the matter told Reuters.
The blank-check firm is owned by Merida Capital Holdings, one of the biggest backers of Leafly, whose site visits have seen a meteoric rise thanks to easing regulations in the United States and rising weed use.
A deal could be announced as soon as next week, the source said, cautioning that talks could still fall apart.
Following the merger, Merida will take at least one seat on the combined company’s board, while Leafly’s team will continue to be led by Chief Executive Yoko Miyashita, the sources said, declining to be named as talks were still confidential.
Leafly and Merida did not immediately respond to a comment.
The company plans use the proceeds from the deal partly to invest more into its east coast business, the sources said.
Founded in 2010, Leafly was owned by cannabis-focused private equity group Privateer Holdings between 2012 and 2019.
The company offers consumers ways to find weed stores to buy the cannabis strains they want, runs a pickup and delivery service and posts reviews on different cannabis products.
More than half of all North American cannabis dispensaries use Leafly’s platform for e-commerce, advertising and other services.
Prospects of federal legalization and pandemic-led lockdowns have pushed up Leafly’s site visits to more than 220 million last year, up 12% from 2019, making it the world’s most visited website on weeds.
(For graphic on Marijuana Legalization by State – https://graphics.reuters.com/USA-CANNABIS/zgvomwdqxvd/chart.png)
The deal, if completed, would be the latest in a nascent sector that has caught the blank-check frenzy. Rival Weedmaps’ parent company struck a blank-check deal in December to list on the Nasdaq.
Leafly intends to list on the Nasdaq under the ticker symbol ‘LFLY’, one of the people said.
Blank-check firms are publicly traded companies that use the funds from their initial public offerings to buy private firms, taking them public in the process.
Billionaire William “Beau” Wrigley Jr’s Parallel and Jay-Z backed Californian pot producer TPCO Holdings have also struck similar deals to list their shares.
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