WM Technology Inc. is feeling the strain of recent pressures in the cannabis industry.
The Irvine-based company, which operates the Weedmaps marketplace platform for consumers and businesses, this month reported declining revenue in both the fourth quarter and full year as its customers reduced their marketing expenses amid industry pricing pressures.
Revenue fell to $43.1 million in the fourth quarter, down 10% from the same period last year. For the full year, sales also decreased 5% to $174.7 million. It’s the third consecutive year of sales decline.
“We are navigating a survival and balance sheet management mindset across the sector, but our strong liquidity allows us to invest thoughtfully,” Chief Executive Doug Francis said during the company’s earnings call on March 12.
While the Trump administration may reduce federal restrictions on cannabis, the prior rush to decriminalize it nationwide has stalled. Critics noted the potency level of cannabis is far greater than in prior years, questions have arisen about its link to psychosis in teens, and illegal growers who don’t pay taxes have undercut legalized companies.
WM said it expects first-quarter revenue to decline by “mid- to high-single digit percentages” from the fourth quarter, and that it would not be providing adjusted EBITDA guidance at this time.
After the report, shares dropped 10% to 67 cents, continuing a declining trend in the five years since it went public in 2021 when it almost hit $30 a share. Its current market cap of $114 million is a far cry from the $2.6 billion mark it reached in 2021 (Nasdaq: MAPS).
WM Sees Decline in Core Markets
Founded in 2008, WM’s Weedmaps became known as the “Yelp” of the marijuana industry by permitting its users to review the pot they bought and rank the businesses from one to five stars. Pot shops use Weedmaps to provide menus of their products, complete with daily discounts.
The company also supplies eCommerce and compliance software solutions for cannabis businesses and brands in U.S. state-legal markets.
In the most recent fourth quarter, average monthly revenue per paying client dropped more than 7% as clients in WM’s core markets cut back on spending, according to Chief Financial Officer Susan Echard.
These regions, particularly California and Michigan, face severe pricing compression, competition from the illicit market and elevated excise tax burdens, Echard said in the company’s earnings call.
California, the country’s largest market for cannabis, reported $3.9 billion in cannabis sales for 2025, down 7% from $4.2 billion in 2024.
Meanwhile, Echard said the company saw growth in newer markets, such as Ohio and New York, where client counts nearly doubled compared with the prior year.
“While this growth did not offset the pressure in our more mature markets, we are pleased with the early momentum we have seen in these states,” she said.
Despite the headwinds, the company is “optimistic about several growth levers,” according to Francis, including product updates for its Weedmaps platform.
“We believe this mode of engagement with the platform will allow retailers and brands to offer consumers an e-commerce experience more similar to what they find when shopping in other industries,” Francis said.
Co-Founders Sought to Take WM Private
Ongoing challenges of consolidation and declining sales volumes led WM’s co-founders Francis and Justin Hartfield to offer a buyout that’d take the company private for $1.70 a share in late 2024. They said the move was prompted by “significant headwinds” affecting the cannabis market.
“When we first decided to take the company public, there was an expectation that the tailwinds emerging in 2020-2021 across the licensed cannabis end-markets, coupled with the support of institutional public equity investors gained with a Nasdaq listing, would allow WM to capitalize on growth opportunities in an accelerated manner and create sustainable long-term stockholder value,” Francis and Hartfield wrote in a note to the board of directors.
“Today, however, WM is facing significant headwinds, with licensed end-markets continuing to decline from the peak volumes achieved at the time of the company’s SPAC transaction in 2021.”
By June, 2025, however, Francis and Hartfield withdrew their offer, citing “certain external factors.”
Company Faces Nasdaq Delisting
The company went public at $10 a share in 2021 via a reverse merger with a special purpose acquisition company, commonly known as a SPAC, raising $579 million in proceeds.
Since almost reaching $30, shares have been on a steady downward slope and lately have been trading below $1, resulting in the company last month receiving a notice that it has fallen below Nasdaq’s minimum bid price of $1 for 30 consecutive days.
The company has until Aug. 30 to regain compliance, with a possible additional 180-day extension through a transfer to the Nasdaq Capital Market.
Previously, the company ranked third on the Business Journal’s annual list of fastest-growing publicly traded companies with revenue between $100 million and $500 million. Its revenue over a two-year-period ended June 30, 2023, soared 323% to $198.6 million.
WM is also the 12th largest software company locally with an estimated 180 employees in Orange County and 477 companywide.
