This week, Leafly announced it was closing 56 jobs, which is 21%, at the online cannabis marketplace based in Seattle.
In a move designed to “improve operating performance,” Leafly said in a regulatory filing that its cost-cutting restructuring plan would trim the workforce through a combination of layoffs and attrition.
In order to cover the costs of layoffs in 2022, the company will incur a single-time cash restructuring cost of $500,000 for Q4 (2022).
“These reductions will help preserve our ability to respond to opportunities as this industry continues to mature and expand, and allow us to more effectively manage our capital,” Leafly CEO Yoko Miyashita said in a statement. “In addition to cutting costs, we have taken a close look at our structure to ensure we are prioritizing the most meaningful parts of the business.”
Founded in 2010, Leafly’s online marketplace lets customers shop and select cannabis products from licensed retailers. The startup also serves as an educational resource. The platform’s revenues are mainly generated by a monthly subscription fee, which is charged to cannabis retailers for listing on it and for access to e-commerce tools.
The company went public earlier this year in a SPAC deal. It reported revenue of $12.1 million in Q2, up 13.8% year-over-year.
The average monthly active user fell to 7.9million, or 28%, compared with the previous year. Total retail accounts also fell by 3% in the second quarter. Leafly cited challenges in less mature markets and “signs that customers are more cautious with their ad budgets.” It lowered full-year revenue expectations.
Leafly, which announced earlier this week that it would be partnering up with Uber in order to deliver cannabis in Toronto, said so. It’s the first time cannabis delivery is available on a major third-party delivery platform.