WM Technology Inc., the Irvine-based software company (Nasdaq: MAPS) that serves the cannabis industry under the better-known Weedmaps name, is revamping its offerings, marketing strategy and operations as it faces several industry and economic headwinds.
The company, which went public last year via a reverse merger with a special purpose acquisition company, commonly known as a SPAC, this month released an updated Software-as-a-Service (SaaS) platform, under the new Weedmaps for Business name.
The program provides a variety of services, including an online marketplace where customers can scope out listings and deals, a pickup and delivery system that follows local regulations, an online ordering system specific to each business connected to in-store kiosks, and performance analytics.
Since WM Technology’s business customers operate under a heavily regulated landscape, the company’s all-in-one offerings are expected to take care of many of the day-to-day complexities of operating a cannabis business.
“Since 2008, we have been working to build a complete SaaS platform that provides a suite of compliant, data-driven solutions that enables our clients to reach, convert, and retain customers both online and in-store,” said Chris Beals, CEO of WM Technology.
“We believe our product offerings will help cannabis retailers and brands reach valuable consumers, streamline and simplify their operations extremely efficiently, which is critical in current market conditions.”
Those “current market conditions” are putting a crimp on the company’s operations, and the operations of its business clients, officials said in their latest earnings call earlier this month.
While the company grew revenue by 24% year-over-year, to $58 million, for the second quarter, “a number of our end markets saw year-over-year declines in licensed cannabis sales,” Beals said of the quarterly results, which fell short of analyst expectations.
Shares in the company dropped more than 20% this month after the earnings report, and were trading around $3 as of last week, well off the $10 price of its SPAC partner’s IPO price. WM Technology is valued around $544 million.
The company had a 52-week high of $15.42 last September.
Gas Price Impact
“While our results continue to exceed in market performance by a wide margin, we came short of our expectations. In the shortfall was a direct result of macro challenges, in particular the significant rise in gas prices and other inflationary pressures during the quarter. This particularly impacted our delivery clients more than we anticipated, specifically in California, a delivery-heavy market,” Beals said.
Because “of the limited number of licenses in California,” some delivery operators “are dispatching orders from Los Angeles down to San Diego, or other sort of similarly long distances,” Beals said.
With high gas prices, that’s having a real impact on the industry, he said.
The company’s had nearly 500 clients that were either removed from the Weedmaps platform or put on payment plans, because of troubles paying the bills, officials said.
“In this environment, we also understand the need for prudent operational and investment decision making and we have taken steps to ensure these remain the case,” Chief Financial Officer Arden Lee said. The company announced a 10% reduction in employee count early this month; it employed about 600 people at the start of the year, with nearly 250 in engineering and design positions.
The company ranks No. 9 on this week’s list of largest software companies based in Orange County.
Another area the company is looking to cut costs are in digital marketing, which currently is effective in promoting brand awareness, but limited in driving engagement, officials say.