Cannabis Review Site Weedmaps Plans IPO After Closing $1.5 Billion SPAC Merger
WM Holding Company (WMH) is planning to go public following a $1.5 billion merger deal with special purpose acquisition company (SPAC) Silver Spike Acquisition Corp.
Founded in 2008, WMH operates Weedmaps, a digital site for marijuana businesses and their customers. It also provides software-as-a-service (SaaS) to cannabis retailers and brands.
“We passionately believe in the power of cannabis and the importance of enabling safe, legal access to cannabis for consumers worldwide. 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,” Chris Beals, chief executive officer of WMH, said in a press release on Thursday (Dec. 10).
He added that by teaming with Silver Spike, the company will have a solid foundation to advance advocacy for marijuana legalization as well as “social equity and licensing in many jurisdictions” while also providing tools that the cannabis industry needs for success “in a highly complex world of regulations.”
The combined company is expected to be listed on Nasdaq and will be led by Beals and managed by the existing team. Scott Gordon, Silver Spike’s CEO and chairman, will join the merged company’s board of directors upon completion of the transaction.
WMH has grown revenue at a CAGR of 40 percent over the last five years and is anticipated to deliver $160 million in revenue and $35 million in EBITDA this year.
The cannabis market in the U.S. is expected to double over the next five years but retail density is still low in most states. Over the past 12 years, Weedmaps has grown to more than 10 million monthly active users and over 18,000 business listings, the press release said.
The Marijuana Opportunity Reinvestment and Expungement Act of 2019 (known as the MORE Act) would legalize cannabis by removing it from the Controlled Substances Act. The House of Representatives passed a bill earlier this month to legalize cannabis.
In July, the country’s marijuana regulator said that financial institutions should treat the $500 million hemp industry as it would any other business.